Winsome To Raise A$6.8m To Advance Lithium Projects At Cancet And Adina

Western Australian-based lithium exploration and development company Winsome Resources (ASX:WR1; “Winsome” or “Company”) is pleased to provide an update with respect to its ongoing exploration initiatives and a flow-through share placement (“Placement”)

HIGHLIGHTS

• A$6.8m to be raised utilising the “Flow-Through Shares” provisions under Canadian tax law. The Flow-Through Shares will be placed at A$1.67 per share, representing a 98% premium to Winsome’s last close price.
• The Flow-Through Shares will be immediately on sold through a block trade agreement to select high-quality domestic and offshore institutional investors.
• Use of the flow-through provisions enables Winsome to significantly minimise the dilution of issued capital and increase the scope of ongoing exploration programs at Cancet and Adina.
• Strengthened balance sheet provides Winsome with a significant runway to aggressively fast track exploration activities at the emerging Cancet and Adina projects.

“This capital raise comes at an ideal time for the Company and allows us to secure funds under a very attractive arrangement facilitated through the Canadian Government’s generous tax incentives for mining exploration companies.

It allows us to raise capital at a premium price without the level of dilution that would occur via a standard, share placement offer. It also allows Winsome to facilitate the introduction of select high-quality institutional investors to the Company’s share register.

The funds raised will enable us to continue the exploration work at Cancet and Adina without delay, strengthen cash reserves and work towards our intention to announce maiden resources next year”.

Winsome is currently undertaking drill programs at the Cancet and Adina projects, and the capital raised under the Placement will be used to fund extensions to these programs throughout the Canadian winter and into calendar year 2023.

As previously announced to the ASX, the Company encountered significant pegmatite intersections immediately below a mineralised outcrop at Adina (refer to announcements entitled “Significant Pegmatite Intercept at Adina From Early Drill Holes” and “Clarification on Drilling – Update”, dated 28 October 2022 and “Update on Adina Drilling”, dated 1 November 2022).

Pending assay results, which are expected to be returned from SGS Global in the coming weeks, the Company intends to secure permitting to further advance the Adina discovery. In addition, the expanded program aims to complete further infill and extension drilling at both Adina and Cancet, as well as continue other exploration activities into 2023.

Winsome is now working towards being in a position to announce maiden Mineral Resources for both projects in the first half of the 2023 calendar year.

Placement Details

The offer is facilitated by Canadian flow-through share dealer, PearTree Securities Inc (“PearTree”), pursuant to a subscription and renunciation agreement with the Company, and the end buyer block trade is being facilitated by Canaccord Genuity (Australia) Limited (“Canaccord”) who is acting as Lead Manager to the transaction. PearTree will not receive any fees or commissions from the Company for its role in respect of the Placement.

Funds raised from the Placement will be specifically applied as follows:

• Expedited follow-up drilling at priority targets at both Cancet and Adina;
  
• Surveys, field work and preliminary drilling campaigns at Winsome’s other projects including Sirmac and Decelles.

The Company has now received firm commitments to undertake the Placement to raise approximately C$6,000,000 (A$6,818,461 before costs) through the issue of approximately 4,078,027 shares at an issue price of C$1.4713 (A$1.6721) per share (“Flow-Through Shares” or “New Shares”). The Canadian “Flow Through Shares” provide tax incentives to those investors for expenditures which qualify as flow through critical mineral mining expenditures under the Income Tax Act (Canada). The Flow-Through Shares will be issued at a 98% premium to the last closing price of Winsome pursuant to the Canadian flow-through shares regime. The “Flow-Through Share” is a defined term in the Income Tax Act (Canada) and is not a special class of share under corporate law.

Pursuant to a block trade agreement between PearTree and Canaccord, Canaccord will facilitate the secondary sale of the Flow-Through Shares acquired by PearTree clients under the Flow-Through Share Placement to select institutional investors by way of a block trade at $0.80 per share. The Flow-Through Shares will cease to be flow- through shares on the completion of the Flow-Through Share Placement and end buyers taking the Flow-Through Shares in the block trade will not take the Flow-Through Shares as flow-through shares.

A prospectus prepared in accordance with section 713 of the Corporations Act 2001 (Cth) will be issued in connection with the Placement to facilitate secondary trading of the New Shares.

The tax benefits associated with the Flow-Through Shares are available only to the investors (who are Canadian residents) and not to any other person who acquires the Flow-Through Shares through the on-sale or transfer of those Flow-Through Shares.

Additional Details

An issue price of A$1.672 per share represents an implied:

• 98.8% premium to the last closing price of A$0.84 on 10 November 2022; and
  
• 111.4% premium to the 10-day volume weighted average price of A$0.79 as of 10 November 2022.

The New Shares will be issued under the Company’s existing placement capacity under ASX Listing Rule 7.1. Settlement of the Placement is expected to occur on Tuesday, 22 November 2022 and the New Shares will rank equally with the Company’s existing shares on issue.

Click here for the full ASX Release

This article includes content from Winsome Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.