Lithium Royalty Corp. (LRC) has announced a significant development for its portfolio with Winsome Resources Limited’s (ASX: WR1) completion of a scoping study for the Adina Lithium Project in Québec, Canada. The study highlights the Adina Project as one of North America’s most capital-efficient hard-rock lithium ventures, solidifying its future as a promising contributor to the lithium supply chain. This milestone comes at a critical time as global demand for lithium, a key component in battery technology, continues to surge.
Capital Efficiency and Strategic Infrastructure Leverage
The Adina Project stands out due to its capital efficiency, largely thanks to Winsome Resources’ ability to repurpose existing infrastructure from the Renard mine, which was previously under insolvency. Winsome has secured an option to acquire and use Renard’s state-of-the-art facilities, allowing them to sidestep the significant construction costs associated with new greenfield development. As a result, the Adina Project’s start-up capital cost is pegged at just US$260 million, an exceptionally low figure for the industry.
“Repurposing the Renard mine infrastructure is a game-changer for Adina,” said Ernie Ortiz, CEO of LRC. “This move significantly reduces the initial financial burden and enhances the project’s competitiveness in a tightening lithium market.”
By leveraging existing infrastructure, the Adina Project is positioned to be one of the most attractive lithium projects in North America, particularly as demand for battery metals accelerates amid the global transition to electric vehicles.
Scalable Production and Growth Potential
The scoping study estimates that Adina will mine 31.2 million tonnes of indicated mineral resource, drawn from a total indicated resource of 61.4 million tonnes. Moreover, the study contemplates the extraction of 4.6 million tonnes of inferred resource, signaling that the project’s capacity could increase substantially. With an anticipated annual production rate of 1.7 million tonnes, Winsome’s Adina Project operates below the Renard facility’s 2.2 million tonne processing capacity, suggesting ample room for scaling up production.
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Notably, Winsome anticipates upgrading its mineral resource estimate in early 2025, which could unlock even greater production potential. This positions the project for extended mine life and increased throughput, factors that could drive significant future returns for LRC.
Operating Costs Below Industry Standards
The Adina Project’s competitiveness is further underscored by its projected low operational costs. The scoping study forecasts a C1 operating cost of US$598 per tonne (FOB) of spodumene concentrate, which positions it favorably against other North American lithium projects. All-In Sustaining Costs (AISC) are also projected at US$693 per tonne (FOB), which includes ongoing mining, processing, and transportation expenses.
Given these cost estimates, Adina is well-positioned to generate substantial cash flow, particularly if lithium prices remain elevated. The use of simple dense media separation (DMS) technology, which Winsome plans to employ, is expected to further reduce operating costs while maintaining the production of high-quality spodumene concentrate.
Economic Impact on Québec
In addition to its financial metrics, the Adina Project is expected to contribute significantly to regional development. Winsome anticipates the creation of approximately 600 jobs during the project’s operational phase. The economic boost to the Eeyou Istchee James Bay region, as well as the Province of Québec, will be a major win for local communities, including First Nations groups, with whom Winsome has pledged to work closely.
For Québec, a province that has been positioning itself as a hub for clean energy and battery material production, Adina offers both economic and strategic advantages.
Key Life-of-Mine Statistics from Winsome Scoping Study:
| Figure | Units | |
|---|---|---|
| Renard plant – Targeted throughput | 1.7 | Mtpa |
| Renard plant – Nameplate throughput capacity | 2.2 | Mtpa |
| Production target – Indicated mineral resource | 31.2 | Mt |
| Indicated mineral resource | 61.4 | Mt |
| Production target – Inferred mineral resource | 4.6 | Mt |
| Inferred mineral resource | 16.5 | Mt |
| Mine life | 21 | Years |
| Production target – Average annual concentrate production | 256 | ktpa |
| Projected LRC GOR royalty undiscounted cashflow | $296 | USD millions |
A Significant Win for Lithium Royalty Corp.
For Lithium Royalty Corp., the Adina Project is a crucial asset within its portfolio, particularly given LRC’s 4.0% gross overriding revenue royalty (GOR) on the project. The scoping study estimates that LRC could receive up to US$300 million in undiscounted royalty payments over the 21-year life of the mine.
“Adina represents everything we look for in an asset,” Ortiz remarked. “It’s high-grade, low-cost, and relatively simple to develop. As the project progresses toward production, we expect it will uncover tremendous value for LRC.”
The scoping study integrates LRC’s GOR royalty into its pit design, reinforcing the significant long-term benefits the company stands to gain from the project’s eventual production.
Conclusion: A Bright Future in Lithium
The Adina Lithium Project’s low capital cost, scalable production, and competitive operating expenses make it a standout in North America’s emerging lithium market. For Lithium Royalty Corp., the potential US$300 million in royalties from the project highlights the effectiveness of its investment strategy. As demand for lithium continues to climb amid the global shift towards electrification, projects like Adina will be pivotal in meeting supply needs while delivering financial returns to investors.
