Li-FT Power expands in Quebec with $87M acquisition of Winsome

Li-FT Power (TSXV: LIFT) has significantly expanded its presence in Quebec with a proposed acquisition of Australia’s Winsome Resources (ASX: WR1) and a deal to grab a majority stake in a project held jointly by Azimut Exploration (TSXV: AZM) and SOQUEM.

In a statement on Monday, the Canadian lithium developer said it has signed a binding scheme implementation deed to acquire all issued shares of Winsome, offering 0.107 of a common share for each Winsome share acquired. This exchange ratio implies a per-share value of A$0.501 for Winsome, calculated using a five-day volume-weighted average price for Li-FT shares on the TSX Venture Exchange.

The per-share consideration represents a 62% premium to Winsome’s closing price on the day prior to the announcement, and values the Australian lithium miner at A$130.8 million ($86.8 million) on a fully diluted, in-the-money basis.

Winsome’s shares closed the Australian trading session 8% higher at A$0.40, with a market capitalization of A$97.5 million. Li-FT, meanwhile, fell about 8.5% by midday in Toronto to C$4.60 a share, for a market capitalization of C$217.8 million ($158.2 million).

Expanded Quebec footprint

The acquisition significantly bolsters Li-FT’s footprint in Quebec with the addition of Winsome’s lithium portfolio, led by its 100%-owned Adina project in the Eeyou Istchee James Bay region. With a resource of 1.4 million tonnes at 1.14% Li₂O (indicated) and 16.5 million tonnes at 1.19% Li₂O (inferred), the Adina project is considered to be one of the top five largest lithium resources in North America.

In addition to acquiring Winsome, Li-FT said it would also acquire a 75% interest in the Galinée property in Quebec from Azimut and SOQUEM. The project lies next to Adina and hosts multiple well-defined prospects.

Total consideration comprises 2 million shares upfront and $1.5 million in deferred payments going to Azimut for its 50% stake, and 1 million shares upfront to SOQUEM for a 25% stake. SOQUEM will retain a 25% interest in the joint venture.

‘Transformative’ deals

Li-FT’s President and CEO, Francis MacDonald, calls these deals “transformative” moves that would create one of the largest hard rock lithium developers in Canada. Specifically, the Winsome transaction places Adina “on an exciting path to potentially enhance its scale, resource profile and project economics in the near term,” he said in a press release.

The company is currently developing the Yellowknife project located in Northwest Territories and also holds three exploration-stage lithium projects in Quebec. The acquisition of Adina adds a potential 20-plus-year hard-rock lithium operation with annual output of 280,000 tonnes in spodumene concentrates to its production pipeline.

According to a 2024 scoping study, the project is expected to have a start-up capital cost of $259 million and a net present value of $743 million at an 8% discount rate.

Voting in April

“The combined company is expected to have a market-leading position in the James Bay region of Quebec,” Winsome managing director Chris Evans also noted.

The proposed combination remains subject to various conditions, including a vote by Winsome shareholders, which is expected to take place in early April 2026, as well as completion of the Galinée transaction.

Upon closing the Galinée transaction, existing Winsome shareholders will own approximately 35.3% of the combined company on a fully diluted in-the-money basis. The transactions are supported by Li-FT’s strategic shareholder, Avenir Minerals, as well as Winsome’s largest shareholder, Waratah Capital Advisors, which intends to vote in favour of the deal.

However, Christopher Williams, analyst at Adamas Intelligence, said the deal undervalues Winsome, noting in an X post that the Australian company could have acquired Galinée without Li-FT.

In relation to these deals, Li-FT plans to conduct a private placement of C$30 million to fund the exploration and development of Adina-Galinée, and another C$10 million financing for its Yellowknife project. The company also plans to apply for a listing on the Australian Securities Exchange.