Winsome Resource Limited (ASX:WR1) has agreed to acquire shares in TSXV listed Power Metals Corp (TSXV:PWM) that are currently owned by Hong Kong-based Sinomine Rare Metals Resources Co Ltd.
Under this agreement, Winsome has also agreed to acquire Sinomine’s offtake rights for the lithium, caesium and tantalum from the highly prospective Case Lake Project, located in Ontario, Canada.
The Project is owned by Power Metals and hosts high-grade deposits of caesium, lithium and tantalum. All three minerals are included on the latest US and Canadian critical minerals lists.
Located in north-eastern Ontario region approximately 100km north of Kirkland Lake, the Project is accessible year-round via the Translimit Road which connects Ontario and Quebec.
As a Chinese-owned entity, Sinomine is required by recent changes to Canadian law to divest its interests in the Project.
Under the terms of the agreement, for a total cash consideration of C$2,000,000 (A$2.211m) Winsome will acquire Sinomine’s total interests in Power Metals and the Case Lake Project, including:
• 7,500,000 common shares (representing 5.72% of PWM’s issued capital); and
• 7,500,000 share purchase warrants, which can be converted into shares on a one-for-
one basis at C$0.40 per Share, expiring on 17 March 2025.
Winsome has also agreed to assume all of Sinomine’s rights and obligations under the offtake agreement that was signed between Sinomine and Power Metals dated 16 March 2022.
Offtake:
• Sinomine will have off-take rights for all future lithium, caesium and tantalum extracted or otherwise produced by PWM and any of its agents, employees, successors, assigns, associates, affiliates, subsidiaries, parents or partners or any of them within the Case Lake Area, or any operations directly related thereto.
a. Sinomine will pay to PWM for all lithium, caesium and tantalum 95% of the market value of such resources, as determined with reference to the Asian Metal Market.
• If Sinomine elects not to purchase the lithium, caesium or tantalum, PWM may sell those materials to a third party at a rate which is not lower than the rate that Sinomine would have paid for such materials.
Term:
• The term of the Agreement shall remain in effect for a period of three years from the date of the original offtake agreement and shall continue thereafter so long as Sinomine holds not less than 2.5% of the issued and outstanding common shares of PWM on a non-diluted basis.
a. In the event that PWM issues additional common shares, PWM must provide Sinomine with an option to purchase such common shares on the same conditions as they are being issued to any other party.
b. In any event, if Sinomine at any time will hold less than 2.5% of the issued and outstanding common shares of PWM as the result of any private offering, Sinomine will be provided an option to purchase such common shares as would be necessary to retain a minimum of 2.5% of the issued and outstanding common shares of PWM on a non-diluted basis.
Winsome and Power Metals have commenced strategic discussions aimed at utilising the resources available to both companies to facilitate the rapid development of the Case Lake Project and build upon the >13,000m of drilling already completed at the site to publish a maiden resource as soon as possible. Additionally, the companies are in negotiations regarding Winsome assuming the position currently held by Sinomine on the Power Metals Board of Directors.
“This is an exciting opportunity for Winsome to expand its interests in the Canadian critical minerals space and to enter the established mining province of Ontario, which neighbours Quebec,” Winsome Resources Managing Director, Chris Evans, said.
“The Case Lake Project is located in relatively close proximity to a number of our assets, in particular Mazerac and Decelles, with similar geological characteristics and strong drill results showing high- grade caesium, lithium and tantalum mineralisation.
“The minerals are all in high demand within North America and the rights to the offtake agreement are another positive step in the Winsome journey. We look forward to working with Power Metals to assist in developing this impressive project”
“However, it is important to note our current plans are for this to remain a passive investment with potential to generate longer term returns. The company’s immediate focus
is to continue exploration and development of our flagship Cancet and Adina projects.”
For further information please visit: https://winsomeresources.com.au/
