RE WINSOME RESOURCES LTD; EX PARTE WINSOME RESOURCES LTD [2026] WASC 140 (21 April 2026)

(a) 243,968,451 fully paid ordinary shares (Shares);

(b) 20,288,900 unlisted options (issued in six separate tranches with different expiry dates and exercise prices) (Options); and

(c) 8,705,000 performance rights (Performance Rights).

1. It is proposed that, prior to the Record Date, all Performance Rights will vest and convert into Shares in accordance with the terms of their issue. Some of the Performance Rights will automatically vest and convert into Shares on the change of control that will occur in the event the Share Scheme is approved. In relation to the other Performance Rights, the directors of Winsome intend to exercise their discretion to approve the accelerated vesting of these Performance Rights.[5]
2. Li-FT is based in Vancouver, British Columbia and is listed on the TSX Venture Exchange (TSXV).[6]
3. Under the proposed Share Scheme, Shareholders will receive 0.107 of a New Li-FT CHESS Depositary Instrument (CDI) (quoted on ASX) or, where an election is made, Li-FT share listed on the TSXV for every Share held at the Record Date (Share Scheme Consideration). Under the proposed Option Scheme, Optionholders will receive a specified fraction of a New Li-FT CDI or Li-FT share listed on the TSXV (where an election is made) for every Option held at the Record Date (Option Scheme Consideration).[7] The specified fractions are:

1. These have been calculated using the Black-Scholes option valuation model,[8] which is a well-accepted valuation methodology.
2. Any Shareholder who, based on their Shareholding on the Record Date, would be entitled to receive less than a marketable parcel of Li‑FT CDIs or shares (assessed by reference to the last traded price of Li‑FT shares on the TSXV and the Australian dollar: Canadian dollar exchange rate published by the Reserve Bank of Australia on the trading day prior to the Record Date) on the implementation of the Share Scheme is a Small Shareholder. Small Shareholders who do not opt-in to receive Li-FT CDIs or shares on or before the Record Date are treated as a Non-electing Small Shareholders. Ineligible Foreign Shareholders (as defined in the Schemes) and Non-electing Small Shareholders are ineligible to receive Li-FT CDIs or shares under the Share Scheme. The shares that would have otherwise been issued to them will be issued to a sale agent on their behalf and sold, with the pro-rata net proceeds remitted to Shareholders.[9]
3. The directors of Winsome have unanimously recommended that, in the absence of a superior proposal and on the basis that the independent expert continues to conclude that the relevant Scheme is in the best interests of the Shareholders and Optionholders (together Securityholders), Securityholders vote in favour of the Schemes.
4. Winsome engaged RSM Corporate Australia Pty Ltd (RSM) to prepare an Independent Expert Report (IER) to provide an opinion on the proposed Schemes. RSM has concluded that each of the Schemes is not fair but reasonable and is in the best interests of the Securityholders.[10]
5. The Schemes will not be implemented unless and until a number of conditions precedent, as set out in the SID[11] and summarised in the Scheme booklet,[12] are satisfied or waived. The SID sets out the agreed procedures for the implementation of the proposed Schemes. The obligations of Li-FT under the Schemes are supported by a Share Scheme Deed Poll and an Option Scheme Deed Poll which have been executed by Li-FT (Deed Polls).[13]

1. Pursuant to s 411 of the Corporations Act 2001 (Cth) (Act), a scheme of arrangement can be used to re-organise a company which is binding on members and creditors where:

(a) the arrangement is agreed by the requisite majorities prescribed by s 411(4)(a) of the Act, namely, 75% of shareholders by value and 50% by number; and

(b) the court approves the arrangement pursuant to s 411(4)(b) of the Act.

1. There are three stages to an application under s 411 of the Act. First, the court approves the convening of a scheme meeting. Second, the members vote on the proposed scheme at the scheme meeting. Third, assuming the first two stages have occurred, the court approves the proposed scheme.[14]
2. There are well established principles that apply to each stage. In relation to the first court hearing, the court will order the scheme meeting to be convened if it is satisfied that:

(a) there is a pt 5.1 body;

(b) there is a compromise or arrangement within the meaning of s 411 of the Act;

(c) the proposed scheme booklet contains the prescribed information and provides proper disclosure;

(d) the scheme is bona fide and properly proposed;

(e) the Australian Securities and Investments Commission (ASIC) has had at least 14 days' notice of the proposed hearing date and a reasonable opportunity to examine the terms of the scheme and the scheme booklet and make submissions;

(f) the procedural requirements of the Act and the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules) have been met; and

(g) the scheme is of such a nature that, if it receives the necessary statutory majority at the scheme meeting, the court will be likely to approve it.

1. Any issue about classes of members is usually determined at the first hearing. This is so that costs and court time are not wasted which would otherwise occur if this issue was left to the second hearing.[15]
2. The standard of review that is undertaken by the court at the first hearing is whether the proposed scheme is not inappropriate and is one that sensible businesspeople might consider is of benefit to its members. If the proposed arrangement is one that appears fit for consideration by a meeting of members and is a commercial proposition likely to gain the court's approval if passed by the necessary majority, leave should be given to convene the meeting.[16]

Should orders be made for the convening of the Meetings and the dispatch of the Scheme booklet?

1. At the first court hearing, Winsome relied on six affidavits being:

(a) three affidavits of Matthew Nowotny-Walsh, a legal practitioner employed by DLA Piper, the solicitors for Winsome; one filed on 4 March 2026 and two filed on 24 March 2026;

(b) an affidavit of Simone Iacopetta, executive director of Development and Finance at Winsome, filed on 17 March 2026;

(c) an affidavit of Christopher Allan Evans, the managing director of Winsome, filed on 20 March 2026; and

(d) an affidavit of Leonard Francis MacDonald, the chief executive officer and a director of Li-FT, filed 24 March 2026.

1. These affidavits prove the formal matters that Winsome is required to establish. Each of the proposed Schemes is an arrangement or compromise contemplated by s 411(1) of the Act in that:

(a) the Share Scheme is a standard members' scheme for the merger of the companies in question; and

(b) for the purposes of s 411 of the Act, Optionholders are treated as contingent creditors and, as a result, the Option Scheme is a creditors' scheme.[17]

1. On the materials before me, there was nothing to suggest the Schemes were not properly proposed or that any class issues arise.
2. In relation to the Option Scheme, while Optionholders will receive different fractions as Option Scheme Consideration, the same methodology has been used to calculate the consideration payable for all options. As courts have previously acknowledged, where this is the case, 'community of interest is not lost' and no class issue arises.[18]
3. There are a number of conditions precedent to the Schemes. Neither Winsome nor Li-FT has any basis to believe that any of these conditions precedent will not be satisfied prior to the implementation of the Schemes.[19]
4. At the hearing, senior counsel for Winsome drew my attention to two of the conditions precedent. First, a condition precedent to the Scheme is that Li-FT obtain conditional approval for the listing on the TSXV of the new shares to be issued pursuant to the Schemes.[20] Conditional approval of the TSXV to Li-FT's acquisition of Winsome was given on 9 January 2026.[21] The evidence before me is that, in accordance with the standard practice of the TSXV, the TSXV will not give its final approval prior to the second court hearing. Based on the experience of Li-FT's Canadian lawyers, both Winsome and Li-FT believe that once approval for the Schemes has been given by the court at the second court hearing (if this occurs) and evidence of this is given to the TSXV, final approvals will be provided for the Transaction and the listing of the new shares shortly afterwards.[22]
5. Senior counsel for Winsome quite properly drew to my attention that it was possible that the condition precedent could be satisfied and the court could approve the Schemes, but the listing of the Li-FT shares not occur. If this were to occur, on their terms, the Schemes would still be effective. Senior counsel submitted this should not prevent the court ordering the convening of the Scheme Meetings for three primary reasons. First, Li-FT is required under the SID to make all necessary applications and use their best endeavours for the listing to occur. These obligations are enforceable by Securityholders under the Deed Polls. Second, the evidence before the court is that the relevant applications have been made, conditional approval has been obtained and there is no reason to believe that final approvals will not be obtained. Third, the risk of delay or possible non-occurrence is disclosed in the Scheme booklet.
6. I accept this submission. While I accept there is a risk that the regulatory approvals may not be obtained in a timely manner (or possibly at all), the evidence before the court is that the TSXV will only grant the necessary approvals once approval has been given by this court and that there is no reason to believe this will not occur. In all of the circumstances, and in particular the three matters senior counsel referred to, it is my view that this risk does not warrant withholding approval for the convening of the Scheme meetings or the issue of the Scheme booklet, which identifies this risk.[23] This is consistent with the approach that has previously been adopted by the courts.[24]
7. Second, senior counsel for Winsome drew to my attention the question as to whether the condition precedent requiring the completion of an equity raising by Li-FT had been satisfied.[25] Winsome considered it had been, however Li-FT had not confirmed this was the case. Winsome proposed that additional disclosure be provided to Securityholders of the positions of each of the parties. Subject to the amendments to the proposed disclosure discussed at the first court hearing, I accepted it was appropriate that Securityholders be informed of this matter.

1. I was provided with a copy of the draft Scheme booklet[26] (as well as an updated Scheme booklet following its review by ASIC)[27] and am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for Securityholders.
2. There is evidence before me as to the due diligence and verification process undertaken by both Winsome and Li-FT.[28] I accept that Winsome and Li-FT have undertaken processes to verify the accuracy of statements attributable to each of them in the Scheme booklet and to ensure that the Scheme booklet does not omit any material information.
3. Based on the checklist provided by counsel for Winsome,[29] I was and am satisfied the Scheme booklet contained prescribed information in accordance with s 411(3) and s 412 of the Act and reg 5.1.01 and sch 8 of the Corporations Regulations 2001 (Cth).
4. In written and oral submissions, counsel for Winsome drew my attention to some specific matters which are addressed below.

1. The independent expert, RSM, has concluded each of the proposed Schemes is not fair but is reasonable. In the absence of a superior proposal, RSM concluded each of the proposed Schemes is in the best interests of Securityholders.
2. In Re Beadell Resources Ltd, Vaughan J (as his Honour then was) summarised the approach that the court should take where the independent expert reaches this conclusion on the proposed scheme.[30] In essence, provided that shareholders are adequately informed of the independent expert's conclusion and the basis for it, it is ultimately a decision for shareholders, and not the court, whether the scheme is in their best interests.
3. The basis for RSM's assessment of the proposed Share Scheme is that:[31]

(a) the fair value of a Winsome Share prior to the Share Scheme (on a controlling basis) was between $0.410 and $0.660, with a preferred value of $0.610; however

(b) the fair value of the Share Scheme Consideration (on a diluted, non-controlling basis) was between $0.272 and $0.434, with a preferred value of $0.401.

1. In relation to the Option Scheme, RSM determined that the preferred fair value of the Option Scheme Consideration was less than the preferred fair value of an Option prior to the Option Scheme for all tranches except one (WR1AG).[32]
2. RSM concluded that each of the proposed Schemes is reasonable because the advantages of the Scheme outweigh the disadvantages.
3. I have carefully considered the explanations contained in the IER for RSM's assessment that each of the Schemes is not fair but reasonable. I was and am satisfied that the matters referred to in the IER justify the conclusion reached. In my view, there is appropriate disclosure of the basis for the opinion of the independent expert and sufficient information is provided to Securityholders enable them to understand and assess for themselves the basis of the independent expert's opinion and make an informed decision whether or not to approve the Schemes.
4. I do not consider the conclusion of the IER that each of the Schemes is not fair but reasonable was a basis to refuse to order the convening of the Scheme Meetings. The independent expert's opinion (that the Schemes are reasonable) was open and the Schemes are one that sensible businesspeople may consider will be of benefit to Securityholders. Accordingly, it was and is my view that the Schemes were fit for consideration by Securityholders.

1. On the evidence before the court, I was and am satisfied that Securityholders are adequately protected against any performance risk.
2. Under the terms of the Schemes:[33]

(a) transfer of the Shares and Options to Li-FT is subject to the provision of the Share Scheme Consideration and/or Option Scheme Consideration.[34] As a consequence, beneficial title does not pass until the Share Scheme Consideration and Option Scheme Consideration has issued; and

(b) Li-FT is required to issue and allot new Li-FT shares to each Securityholder, and procure the entry of the name and address of each Securityholder in its register.[35]

1. These arrangements are supported by the Deed Polls, which can be enforced by Winsome and its directors on behalf of any Securityholder.[36]

1. The SID contains standard lock-up devices which include, where usual, fiduciary carve-outs.[37] If certain circumstances, Winsome will be obliged to pay a reimbursement fee of $1,307,615 (Break Fee) to Li‑FT.[38] Under the terms of the SID, a reverse break fee of $1,307,615 (Reverse Break Fee) may also be payable by Li-FT to Winsome, including if Li-FT fails to pay or procure the payment of the Consideration (together, the Break Fees).[39]
2. In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to:[40]

(a) the period of the exclusivity, which should be no more than a reasonable period and capable of precise ascertainment;

(b) whether the provisions are subject to an overriding obligation that the directors do not breach their fiduciary duties or are otherwise unlawful; and

(c) whether there is adequate prominence given to these provisions in the Scheme booklet.

1. In this case, the exclusivity period is, at most, six and a half months from the date of the SID. The exclusivity provisions are subject to appropriate fiduciary carve-outs.[41]
2. The amount of the Break Fees is approximately 1% of equity value of Winsome, based on the value of the equity value of Winsome as at 10 December 2025.[42] This is within the generally accepted commercial parameters and in accordance with guidance note 7 issued by the Takeovers Panel. The Break Fee is intended to compensate the relevant party for its wasted costs if the Schemes do not proceed. Importantly, the Break Fees are not payable if Securityholders do not vote in favour of the Schemes. In addition, the exclusivity arrangements and Break Fees are disclosed in the Scheme booklet.[43] In my view, the amounts of the Break Fees are unlikely to influence Securityholders on their decisions to vote on the Schemes.

1. The directors of Winsome have recommended that in the absence of a superior proposal, and subject to RSM continuing to conclude that each of the Schemes are in the best interests of Securityholders, Securityholders should vote in favour of the Schemes.
2. Counsel for Winsome drew my attention to four matters. First, each of the directors have interests in Shares and Options. Second, Winsome directors have been issued Performance Rights which will vest and convert into Shares as at the Last Practicable Date. Third, the directors have approved payment of monthly exertion payments to each of the directors, as well as to Mr Iacopetta, for their additional work in negotiating and implementing the Schemes. Fourth, if the Schemes are implemented, it is anticipated that the employment of both Mr Evans and Mr Iacopetta will be terminated or that their roles will become redundant. If this occurs, additional payments may become payable to each of them. [44]
3. For the following reasons, notwithstanding these matters, I accept that it is appropriate for the directors to make a recommendation in respect of the Scheme.
4. First the consideration that each director will receive for their Shares or Options is the same consideration that every other Securityholder will receive.
5. Second, the Performance Rights were issued to the directors prior to entry into the SID. The issue of these Performance Rights (alternatively the incentive scheme under which they were issued) was previously approved by Shareholders, including the terms upon which they would be issued.
6. Third, the exertion payments are intended to compensate these directors for the additional work undertaken in negotiating the SID and implementing the Schemes. These amounts are relatively limited and will be paid regardless of whether the Schemes are implemented and are not being paid as an incentive to promote the Schemes or to ensure the directors' support of the Schemes.
7. Fourth, in the event that payments are made to Mr Evans and Mr Iacopetta for the termination of their employment, I accept these payments will be paid for this reason and not as an incentive to promote the Schemes or to ensure their support of the Schemes.
8. Finally, and importantly, the Scheme Booklet sets out in detail each of the directors' interests and benefits that they will receive under the Scheme. These interests are fully disclosed to Securityholders, who can assess the recommendations made by the directors in the context of that disclosure.[45]

1. Waratah Capital Advisors Ltd (Waratah), who as at 12 December 2025 holds 9.3% of the Shares, has given a statement to Winsome that it intends to vote all the Shares in which it has a relevant interest as at the date of the Scheme Meeting in favour of the proposed transaction, in the absence of a superior proposal and subject to RSM continuing to conclude that (each of) the Schemes are in the best interests of the Securityholders.[46]
2. Counsel for Winsome drew my attention to a royalty agreement entered into in 2021 between a subsidiary of Winsome and Lithium Royalty Corp (LRC) (whose parent company Waratah controls approximately 14% of the shares). Pursuant to the royalty agreement, LRC was granted a royalty on all tenements within Winsome's Adina project.[47] There is an argument that the royalty could apply to a project that has recently been acquired by Li-FT. However, it is not clear whether this is the case and, if so, what value might be derived by Waratah. At present, there is no current activity which would subject to the royalty.[48]
3. Counsel for Winsome submitted, which I accept, that in these circumstances, the royalty agreement does not raise any issue of a collateral benefit nor any concern in relation to the circumstances in which the voting intention statement has been given.

1. On 9 December 2025, prior to entry into the SID and its announcement on 15 December 2025, Winsome received a query from the ASX in relation to a spike in its share price. Its shares were suspended from trading on 11 December 2025 until its announcement on 15 December 2025. Mr Iacopetta's evidence is that none of the directors are aware of what caused this increase in the price of Shares prior to the trading halt and that this did not adversely affect the amount of the Scheme Consideration.[49]
2. In the Scheme booklet, in comparing the Share Scheme Consideration and the Share price, reference has been made to the 'undisturbed share price', which is the price at the end of trading on 8 December 2025. This, in my view, appropriately discloses the basis for the opinions and recommendations set out in the Scheme booklet.
3. Winsome submitted, which I accept, that no public policy or unfairness concerns arose from this, and that, in any event, this was a matter to be addressed at the second court hearing.

1. Winsome drew my attention to the deemed warranty and no encumbrance provisions in the proposed Schemes.[50] These clauses are not unusual and are acceptable provided there is adequate disclosure.
2. These provisions are drawn to the attention of Securityholders in the Scheme booklet.[51] I was and am satisfied that adequate disclosure has been given of these clauses.

1. Winsome drew my attention to the steps it proposes to take in terms of Securityholder communications. Winsome have engaged Automic Pty Ltd to operate an inbound information line, and First Advisors Pty Ltd to operate an outbound call campaign. Both have been instructed that information provided to Securityholders must be consistent with and reflect the material in the Scheme Booklet.[52]

1. Winsome sought orders pursuant to s 411 and s 1319 of the Act for the dispatch of the draft Scheme booklet and related materials by email and post.
2. I was and am satisfied that the orders proposed for the dispatch of the Scheme booklet are appropriate.

1. Counsel for Winsome informed the court that, if the proposed Schemes are approved, Winsome and Li-FT intend to rely on s 3(a)(10) of the Securities Act 1933 (USA), which provides an exemption from certain registration requirements under that Act. A condition of the exemption is the court consider the fairness of the scheme of arrangement, which occurs at the second court hearing.
2. For the purposes of the first court hearing, it is sufficient to record that I have been informed that Winsome and Li-FT intend to rely on the exemption provided by s 3(a)(10). Further consideration of this matter will otherwise be dealt with at the second hearing (assuming Securityholders approve the proposed Schemes by the requisite statutory majorities).

1. At the first hearing before me, I was satisfied that the substantive and procedural requirements under s 411(1) and s 1319 of the Act had been satisfied and that the proposed Schemes were fit for consideration by Winsome's shareholders.
2. On this basis, at the conclusion of the hearing on 25 March 2026, I made orders in terms of the plaintiff's minute of proposed orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Matthew James Nowotny-Walsh filed 4 March 2026 [11], 'MJNW-02', 'MJNW-04'.

[3] Affidavit of Simone Iacopetta filed 17 March 2026 [10].

[4] Affidavit of Simone Iacopetta filed 17 March 2026 [12].

[5] Affidavit of Simone Iacopetta filed 17 March 2026 [16].

[7] Affidavit of Simone Iacopetta filed 17 March 2026 [31], [32]; Scheme booklet [3.7(a)].

[8] Affidavit of Simone Iacopetta filed 17 March 2026 [32(a)].

[9] Share Scheme cl 5.6 - cl 5.16; Scheme booklet [2.7].

[10] Affidavit of Simone Iacopetta filed 17 March 2026, 'SI-01' (pages 276 - 579).

[13] Affidavit of Matthew James Novotny-Walsh filed 24 March 2026 'MJNW-22', 'MJNW-23'.

[14] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7].

[15] Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 [20].

[16] Re SRG Ltd [2018] FCA 1092 [12]; Re Wesfarmers Ltd [2018] WASC 308 [72] - [76].

[17] Re Doray Minerals Ltd; ex parte Doray Minerals Ltd [2019] WASC 57.

[18] Re Xplore Wealth Ltd [2020] FCA 1868 [41]; Re Security Matters Ltd [2023] FCA 19 [72].

[19] Affidavit of Leonard Francis MacDonald filed 24 March 2026 [39] - [40]; Affidavit of Simone Iacopetta filed 17 March 2026 [50].

[21] Affidavit of Simone Iacopetta filed 17 March 2026 [47], 'SI-16'; Affidavit of Leonard Francis MacDonald filed 24 March 2026 'FM-6'.

[22] Affidavit of Leonard Francis MacDonald filed 24 March 2026 [41] - [44], 'FM-9'.

[23] Scheme booklet [6.2(b)], [6.2(g)], [8.2], [8.3].

[24] See for example Re Electric Metals (USA) Ltd [2021] FCA 352.

[26] Affidavit of Simone Iacopetta filed 17 March 2026, 'SI-01'.

[27] Second affidavit of Matthew James Novotny-Walsh filed 24 March 2026, 'MJNW-07', 'MJNW-08'.

[28] Affidavit of Simone Iacopetta filed 17 March 2026 [57] - [71]; Affidavit of Leonard Francis MacDonald filed 24 March 2026 [20] - [30].

[29] Plaintiff's submissions filed 20 March 2026, p 27 - 29.

[30] Re Beadell Resources Ltd [2018] WASC 410; (2018) 133 ACSR 600 [60] - [64].

[31] Affidavit of Simone Iocapetta filed 17 March 2026, 'SI-01', p 281.

[32] Affidavit of Simone Iacopetta filed 17 March, 2026 'SI-01', p 282.

[33] Share Scheme cl 4.2(a), cl 5.2(a); Option scheme 4.2(a), cl 5.2(a).

[34] Share Scheme cl 4.2(a); Option Scheme cl 4.2(a).

[35] Share Scheme cl 5.2(a); Option Scheme cl 5.2(a).

[36] Share Scheme Deed Poll, cl 1.3; Option Scheme Deed Poll, cl 1.3.

[40] Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 [29] - [35]; Re Kangaroo Resources Ltd [2018] WASC 327 [57] - [61]; Re Pacific Energy Limited [2019] WASC 443 [58].

[42] Affidavit of Simone Iacopetta filed 17 March 2026 [43(a)].

[44] Affidavit of Simone Iacopetta filed 17 March 2026 [77] - [88].

[45] Scheme booklet FAQs, [2.10], [3.9].

[46] Affidavit of Simone Iacopetta filed 17 March 2026 [18].

[47] Affidavit of Simone Iacopetta filed 17 March 2026 [21] - [22].

[48] Affidavit of Simone Iacopetta filed 17 March 2026 [23].

[49] Affidavit of Simone Iacopetta filed 17 March 2026 [28] - [29], 'SI-9'; Third affidavit of Matthew James Novotny-Walsh filed 24 March 2026 [10].

[50] Share Scheme cl 9.3, cl 9.5; Option Scheme cl 8.3, cl 8.5.

[51] Scheme booklet [8.16], [8.17].

[52] Affidavit of Christopher Allan Evans filed 20 March 2026 [8] - [9].