By Stuart Condie
Sydney-Canada-focused lithium explorer Winsome Resources Ltd will list on the Australian stock market next week, pitching its ability to help meet growing US demand for battery materials without severing supply lines.
Winsome’s initial public offering raised Australian dollars (US$12.9 million) for further exploration of three lithium projects in the James Bay area of Quebec. Production is somewhat off-limits, but Winsome’s ambition is to benefit from US demand for a metal vital to the development of electric cars.
According to IHS Markit, demand for lithium is expected to double by 2025, as countries aim to reduce reliance on fossil fuels and cut carbon emissions. Yet the US remains largely dependent on other countries for lithium, lagging far behind in mining and refining it.
Winsome chief executive Chris Evans said Canadian lithium is extremely attractive to American manufacturers, with most lithium currently produced in Australia, South America and China.
“It is partly these environmental pledges that makes it common sense to do so, and partly a geopolitical risk offset,” Mr. Evans told Dow Jones Newswires, adding that manufacturers depend only on certain areas where they Can source lithium.
Winsome’s assets were divested of ASX-listed Metalstech Ltd. in March. A month ago US President Biden signed an executive order to review the supply chain for critical materials, including those needed for electric cars.
Drilling in Cansett, one of Winsome’s three hard-rock lithium projects, has shown 3.7% lithium oxide about 17 meters (55 feet) below the surface, Mr Evans said on Wednesday. He said companies generally consider anything above 1% as economically viable.
“We need to do more drilling to turn it into a resource, but it’s not a lot and it looks really promising,” Mr. Evans said.
Metalstec will distribute its stake in Winsome to its shareholders and focus on its Starek gold mine in Slovakia.
Mr. Evans said Winsome had targeted to raise between A$12 million and A$18 million during the IPO process. He said it raised the full A$18 million but was offered four times that amount.
Winsome is listed in Australia due to the relatively low valuation the Toronto Exchange typically puts on early-stage battery-materials-focused exploration plays, Mr. Evans said.
Shares of Green Technology Metals Ltd., another Canada-focused lithium explorer, are up more than 60% since the ASX’s listing nearly two weeks ago. Shares of Lithium Energy Ltd. and Global Lithium Ltd., which focus on Argentina and Australia respectively, have more than doubled since being listed on the ASX earlier in the year.
Mr Evans said Winsome would immediately pursue an over-the-counter offering in Canada following Tuesday’s ASX listing, with dual Canadian listings likely within 12-24 months.
Write to Stuart Condie at [email protected]