Ideas Elsewhere: Winshear Gold (WINS-V)

Litigation

 

Jeremy Raper shared a quick pitch on Winshear Gold. It’s a Canadian junior gold miner that seems very likely to win a C$130m arbitration claim against the Tanzanian government for expropriation of its mining license. Meanwhile, the company’s market cap is just C$15m.

The crux of the thesis is that the litigation of Winshear Gold is likely to follow the path of another junior miner, Indiana Resources (IDA-AX), which has recently achieved a very similar arbitration victory against Tanzania. The court granted Indiana Resources 120% of the requested damages (US$114m vs US$95m). Both WINS and IDA have based their arguments on the same legal theory within the same geographical area. Both companies also share identical hearing arbitration (under World Bank’s division ICSID), location (Washington, DC), and legal teams. These factors strongly suggest that WINS setup is likely to yield a similarly favorable outcome.

While Winsher Gold’s shares have already surged by 43% since the announcement of IDA’s ruling, significant further potential upside remains. Assuming WINS is awarded 120% of the arbitration claim, and subsequently trades at a 60% discount to the awarded amount (akin to IDA), the shares would be priced at C$0.64/share (after netting out litigation funding expenses) vs the current price of C$0.20/share. The downside appears to be somewhat protected as even under quite pessimistic assumptions – considering 75% of the arbitration claim granted and a 70% discount to the claim value – the stock would still trade at C$0.24/share.

Note: The ‘Ideas Elsewhere’ section is intended to highlight interesting event-driven investment ideas by other authors. These ideas are not my own, and I am simply summarizing them to bring attention of SSI subscribers. I do not intend to actively follow the developments of these ideas, so you should expect limited updates or follow-ups in the comments section.

4 Comments

4 thoughts on “Ideas Elsewhere: Winshear Gold (WINS-V)”

  1. NEWS RELEASES
    Winshear and United Republic of Tanzania Conclude US$30 Million Settlement Agreement
    October 16, 2023

    “Winshear Gold Corp. (TSXV: WINS) (‘Winshear’, the ‘Company’, or the ‘Claimant’) reports that it has successfully concluded the settlement agreement with the United Republic of Tanzania (“Tanzania”) (collectively the “Parties”) in relation to its dispute regarding the Company’s SMP Gold Project.

    The Parties agreed on an amount of US$30,000,000 to settle the case and terminate the arbitration proceedings. Funds were received by the Company today, October 16th, 2023. After payment of funding and legal costs, the net amount to Winshear is approximately C$25,275,000 (US$18,500,000).

    Richard Williams, CEO of Winshear Gold, commented “This settlement is good for both Tanzania and Winshear and we are pleased to reach a mutually acceptable conclusion to this matter. It is time for both Parties to move on and we wish Tanzania success in attracting new investment. The Company sincerely thanks our legal team, Lalive, for their work in preparing and presenting our case.”

    The Company will look at various options available to it before deciding on what to do with the funds and will announce a decision in due course. “

    Reply
  2. Winshear Gold Corp. (TSXV: WINS) (‘Winshear’, the ‘Company’, or the ‘Claimant’) reports that, further to TSX Venture Exchange policies, the following dates are applicable to the Return of Capital payment to shareholders of CDN $0.25 per common share announced on October 26, 2023:
    RECORD DATE PAYMENT DATE DUE BILL PERIOD
    EX-DISTRIBUTION DATE
    DUE BILL REDEMPTION DATE
    DUE BILL TRADING:
    Thursday November 23, 2023
    Friday December 8, 2023
    Wednesday November 22, 2023 to Friday December 8, 2023, inclusive
    December 11, 2023
    December 12, 2023
    The CDN $0.25 per common share Return of Capital payment is payable on December 8, 2023 to shareholders of record as of the close of business on November 23, 2023. The common shares of the Company will commence trading on a “due bill” basis effective from the opening on November 22, 2023 until December 8, 2023 inclusively. Sellers of the shares from November 22, 2023 to and including December 8, 2023 will not be entitled to the distribution. The shares will commence trading on an ex-distribution basis effective at the opening on December 11, 2023.

    Reply
  3. If I’m reading my IB screen correctly, it looks like it’s trading at 27 cents USD, and the distribution will be 18 cents USD. Probably is I’m not sure the stub is worth anywhere near 9 cents USD.

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