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17 January 2024
Focusing on quality oversold lithium explorers
WR1 PMT

 It's always darkest before the dawn. In the recent months, shares of ASX-listed lithium
players have been aggressively sold off over declining lithium prices and cost blowout
concerns. This led to high-cost producers like Core Lithium to halt mining and we believe it
may discourage new players from entering the market too. We expect the resultant supply
impact will drive prices higher in the long run.
 EV sales remain resilient. Global EV sales in 2023 up 31% YoY with sales in the US
reached record high, implying robust demand for EV. Recent news on BYD talking to Sigma
Lithium over supply deal, Pilbara Minerals expanding offtake agreements with Ganfeng
Lithium, and India signing its first overseas lithium exploration with Argentina continue to
support the positive outlook for the sector.
 We highlight two lithium stocks for investors with an eye on the long-term to focus on, in
light of the drastic fall in their share prices and ability to ride out the current
gloom. Weakened share prices are only making them more vulnerable and attractive to
M&A.

Winsome Resources (WR1, Buy, Price Target $3.80)
 High-grade assays. WR1 today reported more positive assays from 5,000m drilling, 14 infill
holes at Adina's Footwall Zone and Main Zone. Highlights from the Main Zone included
51.9m @ 1.71% Li2O from 9m, 53.5m @ 1.55% Li2O from 47m, 34.9m @ 1.72% Li2O from
20m, and 13.2m @ 2.67% Li2O from 59m (including 4.4m @ 4.25% Li2O). Meanwhile, hits
at the Footwall Zone included 20.4m @ 1.64% Li2O from 262m, 49.1m @ 1.51% Li2O from
250m and 35.5m @ 1.49% Li2O from 240m.
 Resource upgrade on the horizon. This latest assay shows the potential to further
increase the MRE to over 100Mt making it one of the largest deposits globally. Adina has
five rigs now operating with more assay results expected in the coming weeks from another
17,000m of drilling. This is likely to provide strong momentum for WR1 as it progresses
towards a Resource upgrade in 1H24, which may result in higher grades and increased
confidence to indicated.
 Another 50,000m drill program in 2024 set to grow the resource further as the zones
remain open along strike to the east and west, and upwards to the north. This enables WR1
to test the continuity across the 3.1km strike as the MRE was based on only 1.3km strike
from 27,625m of drilling. WR1 is also working towards metallurgical testwork and initial
project studies to be completed in 2H24.
 We currently rate WR1 a Buy with a 12-month price target of $3.80. WR1 is one of the
cheapest among its peers, currently trading at only $42/t LCE - under that of peers of $198/t
LCE, implying ample upside. We believe the market will gain a clearer understanding of the
vast size of Adina’s deposits in the next resource upgrade. Meanwhile the company remains
amply funded with $60M cash.