Ann: Renard Project Update, page-7

From the announcement: "Winsome also announces a correction to the 17 February 2025 announcement. That announcementstated: "If Winsome has not exercised the Option by or on 31 July 2025, Winsome's exclusivity rights arereplaced with a right of first refusal over any alternative transaction". Thedate "31 July 2025" should read"31 May 2025". All other content in the announcement is correct." (my highlighting).

To be clear, it seems likely to me that the correction of the date pertains only to Winsome's exclusivity rights over Renard converting to a right of first refusal, and not to clauses regarding the issue of 5 million WR1 shares to 1127420 Canada Inc (or other specified debtors) and the initial payment increasing from C$1m to C$3m should Winsome exercise the call option after 31 July (but on or before 31 August). - see the post by @stevenjd

I suspect that the 31 May deadline is of secondary importance seeing that all the indications are that Winsome is the only serious bidder for Renard and even if there is another bidder Winsome has the right to match any competing bid. That said, I am not totally sure of the wording of the exclusivity clause as it is only broadly referred to in the Court document I am looking at:

The 8th report to the Quebec Superior Court, dated 21 February by Deloitte as "monitor" of the processing of Stornoway Diamonds (page 13). Note that the Court approved the changes to the call option agreement on 24 February but ordered that the restated call option agreement not be made public. Link, here

Another couple of interesting revelations about the restated call option agreement that are touched on but not fleshed out in Deloitte's 8th report are that:

• "If Winsome receives a certain funding threshold during the Fourth Call OptionPeriod, Winsome will have to exercise the Call Option", I'm guessing that suggests there really is a strategic party that is considering putting some money into the project. None of the court documents disclose the threshold figure, and

• Deloitte supported the amended call option agreement partly because "the extension fee and break fee will cover most of the estimated cost for the careand maintenance until August 31, 2025" (my emphasis). So really, whether Winsome exercised the option in February and paid for the c&m directly or extended the option until August and paid the extension fee works out to be about a similar cost to Winsome (though hopefully they pull the trigger before the end of July which will change that equation a bit).

I have to say the points I have picked up from this Deloitte document give me some comfort that Chris Evans and Winsome are being as open and informative as they can given the complex legal and commercial ground they are traversing. Nonetheless, I continue to have no feel for whether Winsome will be in a place to exercise the Renard option - a pretty existential dilemma for investors.

And yet for all of that I think the biggest threat / risk facing Winsome as the developer of the Adina Renard project remains the road from Renard up to Adina: whether the road gets approved and funded, the timing of its construction, whether the Cree agree to a road being pushed further into their territory. Without the road being put through in the next few years Adina remains a stranded asset and Renard becomes about as useful to Winsome as an ashtray on a motorbike.