Australia’s Winsome Resources has announced that a scoping study for its $259 million Adina lithium project in Quebec, Canada, highlights the asset’s potential as a capital-efficient operation with a productive life of 17 years.
In April, the company signed an agreement to acquire the Renard diamond mine and plant in northern Quebec, aiming to repurpose the existing infrastructure for processing ore from Adina. Winsome secured an additional three months in August to decide on the acquisition, and the latest findings suggest a favorable direction.
The study indicates that upgrading the existing dense media separation (DMS) and ore sorting facilities at Renard would be significantly cheaper than building a new processing facility for Adina. This would involve a straightforward upgrade to produce 282,000 tonnes per annum of 5.5% spodumene concentrate, equating to 38,000 tonnes per annum of lithium carbonate over the mine’s lifespan.
Managing Director Chris Evans noted that the initial low-strip open-pit mining method and the simple DMS process result in competitive operating costs that could improve further with optimization. The plant is expected to provide a commercial edge compared to other proposed projects in Canada, particularly amid current lithium market challenges.
The scoping study estimates a post-tax net present value of $743 million, an internal rate of return of 43%, and a payback period of just 1.8 years. Additionally, the project could generate an estimated $1.8 billion in post-tax free cash flow over its lifetime.
Key financial metrics are based on an all-in sustaining cost of $693 per tonne and a projected spodumene concentrate price of $1,375 per tonne, which aligns with estimates from nearby competitor Patriot Battery Metals at its Shaakichiuwaanaan project.
The Renard facility boasts a processing capacity of 2.2 million tonnes per annum, with a potential run rate of 1.7 million tonnes per annum and an average head grade of 1.24%, targeting recoveries of 67%.
The Adina project holds a resource of 77.9 million tonnes at a grade of 1.15%, with 35.8 million tonnes included in the production target. Winsome is currently advancing the permitting process and conducting due diligence on Renard, which received approximately C$900 million in infrastructure investments between 2016 and 2023 before the diamond market downturn led to the bankruptcy of its previous owner, Stornoway Diamonds.
The Adina lithium project is expected to create around 500 jobs during operation and could generate over $7.5 billion in gross revenue, along with an estimated $1.1 billion in corporate taxes for Quebec and Canada, benefiting local communities.
Following the announcement, Winsome Resources’ shares rose, closing at A$0.52, giving the company a market capitalization of A$112.5 million ($76 million).
