Lithium explorer and developer Winsome Resources (ASX: WR1) announced Thursday the signing of an option agreement to expand its Adina lithium project in Quebec to 44 sq. km, a 50% increase, as it prepares for an initial resource this year.
The agreement would allow Winsome to acquire the 29 claims in the bordering Jackpot property and expand its total tenure in the James Bay area to more than 871.5 sq. km, the Perth-headquartered firm said in a release.
“With Adina moving into a development phase later this year, taking an option on attractive terms over the Jackpot property is a strategic move to not only give us access to further exploration upside around Adina but also flexibility in future design of site layout and infrastructure footprints,” said Winsome managing director Chris Evans. “Work continues apace with plans for mobilization of the fourth rig to the Adina site and we look forward to further drilling results in the near future as we look towards our maiden resource later in 2023.”
Winsome plans to define targets for field exploration at Jackpot this summer and is currently compiling publicly available geological data. Jackpot covers 14.9 sq. km and is located immediately north of Adina and 300 km east of James Bay.
Under the option agreement, Winsome will pay $150,000 in cash and 250,000 shares to Andrew Sostad and Christopher Sostad, who own the Jackpot property, and give the same in cash and shares up to one year after the agreement is made. Winsome will also incur $150,000 in exploration work at Jackpot a year after signing the deal.
Winsome will issue the optioners 100,000 additional shares if, within 24 months of exercising the option, it collects five or more rock chip samples containing at least 1% lithium oxide (Li2O) from sites at least 100 metres apart at Jackpot. The same will apply if the company completes a drill program and intersects at least 5 metres at more than 1% Li2O in three or more holes.
Finally, if the option is exercised, the optioners will retain a 2% net smelter returns royalty over any commercial production from the project. Winsome maintains the right to buy half of the royalty for $1 million at any time.