Stornoway: a $12 million option on Renard, and a stay to October 2027

The sale process approved for Stornoway in October 2023 ended in March 2024 with a call option agreement with Winsome Resources Ltd., selected from the only binding letter of interest received before the phase 2 bid deadline. Winsome terminated that option on July 28, 2025, and paid the break fee on October 30 and 31, 2025, after a judgment of the Superior Court of Québec ordered it to, per the monitor's Application for an Order Approving an Option Agreement and a Distribution, June 23, 2026, paras. 6, 8, 16–17. On December 15, 2025, Winsome announced an agreement under which Li-FT Power Ltd. would buy all of its securities. In the months before that deal closed, the monitor held preliminary discussions with Li-FT, which submitted non-binding term sheets for a going-concern acquisition of the debtors' assets, to be done through a call option agreement. Li-FT completed the Winsome combination on May 21, 2026, re-submitted a modified proposal on June 3, and on June 23 signed a call option agreement with the monitor, acting for the debtors, per the same Application, June 23, 2026, paras. 27–30 and the Fifteenth Report of the Monitor, June 26, 2026, paras. 57, 59.

When this case was reported here on May 21, the monitor was weighing dismantlers' proposals for tearing the mine down and waiting on Québec before any of them could start. The option put that work on hold. Given the transaction it contemplates, the monitor decided, after consulting the secured creditors, "to halt ongoing discussions with potential dismantlers or buyers" under the call for tenders and the parallel process for selling the mine's core assets, per the Application, June 23, 2026, para. 34. Justice Karen M. Rogers approved the agreement on July 3, per the Approval Order, July 3, 2026, para. 24. Over the summer, the monitor reported in August, Stornoway accommodated Li-FT "by allowing employees and consultants to carry out activities or studies at the Renard site," per the Sixteenth Report of the Monitor, Aug. 21, 2026, para. 51. On October 15, without a hearing, Justice Rogers extended the stay of proceedings to October 15, 2027, per the Stay Extension Order, Oct. 15, 2026, paras. 7, 13.

What the $12 million buys

The agreement itself is sealed: the approval order keeps the unredacted copy, Exhibit R-2A, under seal in the court record, and no one may consult it without the court's authorization, per the Approval Order, July 3, 2026, paras. 36–37. Its key terms are set out in the monitor's own filings. For a cash Signing Payment of $12 million, Li-FT acquires an exclusive option to take either the Renard Mine "and all of its associated assets and infrastructure," cash excluded, together with "all environmental, rehabilitation, closure and reclamation liabilities and obligations associated with the Assets," under an approval and vesting order, or all the shares of Stornoway Diamonds (Canada) Inc. or 11272420 Canada Inc. under a reverse vesting order. The option runs two years from signing, and if Li-FT asks, the parties are to negotiate in good faith a possible twelve-month extension. Throughout, Li-FT makes annual deposits to cover the estimated costs of care and maintenance, "including 50% of all restructuring costs incurred during the LIFT Call Option Period, being approximately $18 million per year," per the Fifteenth Report of the Monitor, June 26, 2026, paras. 61–62, 64.

Should Li-FT exercise the option and buy the assets as a going concern, the June application says, it pays "the Option Exercise Price (approximately $1)" and assumes the environmental obligations associated with them, per the Application, June 23, 2026, para. 41. The transaction then goes back to the court, which would consider its structure, documentation and orders, per the Fifteenth Report, June 26, 2026, paras. 65, 68. During the option period the monitor carries on care and maintenance "in coordination with LiFT," and keeps the right to take the measures it deems necessary or useful to prepare for the retirement of the assets and to satisfy the related closure and reclamation obligations "should the Call Option be terminated." The agreement can end early in five ways: by mutual consent; if the Signing Payment was not paid within two business days of signing, or by another agreed date; if the approval order was not issued by July 10, 2026, or by another agreed date; if the release conditions are not met within three months of that order; or "by LiFT at any time following the satisfaction of the Release Conditions upon written notice to the Monitor," per the Application, June 23, 2026, para. 39.

The monitor's reasons start with the length of the search. "For the past three years, Stornoway and the Monitor have been actively seeking a transaction that would allow the Assets to be repurposed on site and avoid a dismantling of the Renard Mine," the Fifteenth Report says, and the option "represents the best available alternative for the potential monetization of the Assets in the current circumstances." An exercise, the report says, could lead "to the retention of certain employees" and contribute to regional development, per the Fifteenth Report, June 26, 2026, para. 67. Without approval of the option, the application says, the monitor would have to proceed with closing the mine down "subject to the availability of funds required to do so, including the receipt of the proceeds of the XL Guarantee," with execution risks in finishing the restoration plan and in the dismantling and core-asset deals, per the Application, June 23, 2026, para. 43. Li-FT, in its May 21, 2026 release announcing that the Winsome combination had closed, describes itself as focused on developing a portfolio of hard-rock lithium assets in Canada.

A ministry's deadline, and a later one

On February 25, 2026, the Ministère des ressources naturelles et des forêts sent the debtors a notice about the cessation of their mining operations as of January 28, 2025, requiring them to commence the rehabilitation and restoration of the Renard Mine "by no later than 2027," under s. 232.7.1 of the Mining Act, per the Application, June 23, 2026, paras. 20–21. The option depends on moving that deadline. Its release conditions require the MRNF's authorization, within three months of the approval order, to postpone the start of that work until at least June 23, 2028, on terms acceptable to both the monitor and Li-FT. If the conditions are not met by October 3, 2026, the monitor's August application says, "the Signing Payment shall be refunded to LiFT and the Call Option Agreement shall be terminated in accordance with its terms," per the Application for the Issuance of Stay Extension Orders, Aug. 21, 2026, paras. 19, 29. Otherwise, the June application says, the payment is non-refundable, and its distribution to the secured creditors is itself a condition of the agreement, per the Application, June 23, 2026, para. 39.

Justice Rogers heard the application on July 2, with testimony from Jean-François Nadon for the monitor, and signed the approval order the next day. Its recitals record the monitor's confirmation that the arrangement "would be more beneficial to the creditors than a sale or disposition in a bankruptcy, especially in the context of the care and maintenance costs required to maintain Debtors' assets (including the Renard Mine), including notably its environmental insurance," and that the secured creditors had been consulted and agreed with the monitor's opinions, per the Approval Order, July 3, 2026, paras. 3, 9, 13–14. The order declares the s. 36 criteria of the CCAA met for the transaction the option contemplates; approval of the structure to pass title, and of the related orders, waits for an exercise. Among other things, the agreement is not to be rendered invalid or unenforceable by a bankruptcy application or order, an assignment for the general benefit of creditors, or a change in the debtors' economic context or in the value of their assets over the option period. The debtors and the monitor may not consent to any amendment, modification, assignment, waiver, termination or extension of the agreement, its deadlines and option periods included, without the prior written consent of the Streamers and Diaquem or confirmation that they do not oppose, per the Approval Order, July 3, 2026, paras. 24, 28–29.