Sigma Lithium Announces 3Q24 Results: Production Beats Guidance, Maintained Low Costs Attarget, Generated Robust $ 34 Million Operating Cash Flow
SIGMA LITHIUM ANNOUNCES 3Q24 RESULTS: PRODUCTION
BEATS GUIDANCE, MAINTAINED LOW COSTS ATTARGET,
GENERATED ROBUST $ 34 MILLION OPERATING CASH FLOW
HIGHLIGHTS
• Sigma Lithium achieved strong operational performance at its Greentech industrial plant.
o Produced 60,23 7t of Quintuple Zero Lithium Concentrate in 3Q24 , higher than the 60,000t
guidance
o Further increased shipping cadence to quasi monthly volumes sold of 22, 000t
o Sales volumes totaled 57,483t in 3Q24, increasing 9% q-on-q
o Successfully executed Plant 1 efficiency capex revamp implementation
o Expects 4Q24 production and sales volumes of at least 60,000t
• Maintained one of the lowest cash unit operating costs in the industry, with CIF China averaging US$
513/t, down from US$ 515/t in 2Q24.
• Commercial strategy adapted to capitalize on seasonal restocking trends , weather seasonality more
effectively, and outperform market price benchmarks
o Average CIF sales price for the third quarter of US$ 820/t
• Robust operating cash flow generation of US$ 34 million in the third quarter enabled the Company to
maintain a healthy cash position of US$ 66 million at quarter-end while reducing debt by $40 million
• Signed final development loan agreement with the BNDES, fully financing its plant 2 expansion, further
de-risking construction
o Term: 16 years with 18 months amortization grace period
o Sub-Treasury Interest Rate: BRL 7.53%, or USD 2.5% at prevailing swap rates
• Continued to advance Plant 2 construction with earthworks and engineering
Conference Call Information
The Company will conduct a conference call to discuss its financial results for the third quarter at 8:00 a.m. EST
on Friday, November 15, 2024. Participating in the call will be Co-Chairperson and Chief Executive Officer, Ana
Cabral, Chief Financial Officer, Rogerio Marchini, and Executive Vice President for Corporate Affairs and
Strategic Development, Matthew De Yoe. To register for the call, please proceed through the following link
Register here. For access to the webcast, please Click here.
São Paulo, Brazil – (November 15, 2024) – Sigma Lithium Corporation NASDAQ: SGML, BVMF: S2GM34,
TSXV: SGML), a leading global lithium producer dedicated to powering the next generation of electric vehicles
with carbon neutral, socially and environmentally sustainable lithium concentrate, announces its results for the
third quarter ended September 30, 2024.
Ana Cabra l, Co-Chairperson and CEO said: “This quarter we achieved our production and low industry cost
targets, generating robust free cash flow and demonstrating our operational resilience to lithium cycles. We also
benefited from our shifted commercial strategy to navigate industry seasonality, enabling us to secure higher
average realized prices compared to benchmarks.
“Over the last year we are proud to have transformed Sigma from an emerging producer into an industry leader,
demonstrating the operational and financial resilience of a mature producer, with dependability and consistency.
Meanwhile we have delivered on all of our climate goals, reaching Net Zero one year in advance of our target and
27 years ahead of the industry, with our Quintuple Zero Green Lithium. We are confident that over the lithium
cycles, our capabilities to execute to strategy will deliver long -term value for Sigma and all of its stakeholders ”,
Ms. Cabral concluded.
Key Performance Metrics for Quarter Ended September 30, 2024 (US$)
Unit 3Q24 2Q24
Sales Revenue for Shipents in Quarter $ 000s 44,210 54,418
Provisional Price Adjustment $ 000s (23,316) (8,498)
Total Sales Revenue $ 000s 20,894 45,920
Concentrate Sold tonnes 57,483 52,572
Concentrate Grade Sold % 5.2% 5.5%
Average Reported Selling Price CIF (1) $/t 820 1,056
Average Revenue per Tonne CIF (2) $/t 415 894
Unit Operating Cost CIF (3) $/t 513 515
Cash and Cash Equivalents $ 000s 65,594 75,330
Revenues in the third quarter totaled US$44.2 million or US$20.9 million net of provisional price adjustments.
The Company has undergone a significant evolution in its commercial relationship with trading companies,
strengthening commercial conditions. As a result of this change in strategy the Company concluded the final
settlement of provisional sales invoices from previous quarters conducted through our traders, generating a n
accounting adjustment of US$(23.3) million . Importantly, t hese are primarily non-cash accounting closing
settlements and do not have an effect on the future earnings potential of the Company.
In 3Q, Sigma Lithium m aintained one of the lowest cash unit operating costs in the industry, with CIF China
averaging US$ 513/t, down from US$ 515/t in 2Q24, in line with target levels.
• Cash unit operating costs(3) for lithium concentrate produced at the Company’s Grota do Cirilo operations
in the third quarter averaged US$ 395/t (including a temporary US$25/t for mobile crushers).
• On an FOB Vitoria(3) basis (which includes transportation and port charges) costs averaged US$449/t.
• On a CIF China basis(3) (includes ocean freight, insurance and royalties) costs averaged US$513/t.
Robust operating cash flow generation of US$ 34 million in the third quarter enabled the Company to maintain
a healthy cash position of US$ 66 million, ultimately reflecting the non -cash nature of the accounting
adjustments to the quarter.
• The Company delivered third quarter cash adjusted EBITDA(4) of US$(10.6) million. Reported EBITDA for
the third quarter totaled US$(12.8) million.
• The cash adjusted EBITDA number excludes US$0.8 million of non-recurring expenditures , primarily
related to capital markets and cost initiatives, and US$1.4 million in non-cash stock-based compensation
expenses.
Net income in the quarter totaled US$(25.1) million or US$(0.23) per diluted share outstanding. These reported
results were affected by the aforementioned US$(23.3) million in accounting adjustments.
Operational Update
Sigma Lithium achieved strong operational performance at its Greentech industrial plant in the third quarter .
Production of Sigma Lithium’s Quintuple Zero Lithium Concentrate totaled 60,237t, up 22% from 2Q24 and
ahead of the 60,000t guidance. This includes numerous daily production records and periods of sustained
operations above 860t per day. The Company expects 4Q24 production of lithium concentrate to reach at least
60,000 tonne.
Commercial Strategy Update
Sigma Lithium sold 57,483 tonnes of its Quintuple Zero Green Lithium concent rate in the third quarter, when its
operational performance enabled it to f urther increase shipping cadence to quasi monthly volumes sold of
22,000t. As a result, the Company made two full 22,000t shipments during the quarter and supplemented these
volumes with 13,483t sold at the Port customs warehouse.
Operational reliability and a consistent shipment pattern lowered the Company ’s export credit risk, increasing
the availability and lowering the interest rate of its trade finance lines. This generated direct benefits for Sigma’s
commercial strategy, enabling the Company to further geographically diversify its accounts receivables, shipping
to three distributors across the world: Glencore AG (Europe), Mitsubishi Corporation RtM International Pte. Ltd
(Japan/ Singapore), and International Resources Holdings (UAE/Abu Dhabi).
The interest rate cost of the Company’s trade finance export credit lines decreased substantially over the year
from nearly 15.5% in 4Q23 to 9.0% in 3Q24. In parallel, the amount of available export trade lines exceeded US$
100 million in the year.
The increased financial flexibility enabled the Company to strengthen its commercial strategy and change its
distribution relationship with trading companies from “traders as principals” to “traders as distributors” . This
strategy shift allows Sigma to capitalize on annual restocking trends of chemical refiners, weather seasonality
more effectively and outperform market price benchmarks , achieving a verage CIF sales price for the third
quarter of US$ 820/t.
While Sigma Lithium ships and sells monthly to its trading partners, its goal is to build maximum flexibility in the
final re-sale to clients to benefit from the established seasonality of refiners’ restocking periods. When combined
with its superior metallurgical properties and the associated value -in-use driven cost savings to customers,
Sigma believes it has positioned itself to drive superior price realizations over time.
This commercial strategy of “trader as a distributor” was not yet in place during Company’s second through
seventh shipments, when trading partners served as the principals to the transaction. The accounting provisional
price adjustment booked in this quarter was mainly a result of the booking of final invoice settlement and closing
of these trades.
Phase 2 Expansion
Recall, on April 1, 2024, the Board of Directors announced a Final Investment Decision for the Company’s Phase
2 Greentech Plant expansion. The project is expected to add 250,000 tonnes of production capacity to the
current Phase 1 operation. Importantly, t he Company has already received all relevant licenses to build and
operate this second Greentech Plant.
In 3Q, Sigma Lithium initiated earthworks by completing clearing of the terrain for arid and semi-arid vegetation
suppression (including fauna capture and classification) for the entire industrial project, including future phase
3 construction of production plant. Total building and commissioning are expected to occur over a 12-month
period, with budgeted capex for Phase 2 of BRL492 million ( approximately US$90mm at current exchange
rates).
On August 29, the National Brazilian Bank for Economic and Social Development (BNDES) delivered a binding
commitment to Sigma for a BRL 487mm development loan to finance this expansion.
On October 10, Sigma and the BNDES signed the final binding loan agreement, concluding the closing of the
loan package. The first disbursement of the development loan is pending the Company posting bank guarantees
with BNDES. This disbursement shall reimburse the capex already disbursed by the Company since first
approval of the development bank loan.
The key terms and conditions of the development loan are:
• Amount: BRL 487 million
• Term: 192 months (16 years)
• Interest Rate: BRL 7.53% per year (US$ at approximately 2.5% at prevailing swap rates).
• Amortization Grace Period: 18 months – Calendarized Amortization: 174 months
• Assets in Collateral: Not required. Development Loan shall be secured by letter of credit (“fianca
bancaria”) issued by a BNDES registered financial institution.
Plant 2 Construction at Grota do Cirilo.
Balance Sheet & Liquidity
Robust operating cash flow generation of US$ 34 million during the third quarter enabled the Company to
maintain a healthy cash position . Sigma Lithium ended the third quarter with US$65.6 million in cash and cash
equivalents.
Free cash flow in the quarter totaled US$32 million primarily related to a reduction in working capital associated
with the collection of accounts receivable.
Cash generation in the third quarter enabled the Company to repay certain export credit debt, reducing
outstanding trade line balances. At the end of the quarter, the Company had US$181 million in short -term and
long-term debt. This included US$59 million in drawn and available, but unutilized, additional liquidity through
trade finance lines.
Capital expenditures during the third quarter totaled US$2.5 million (C $3.1 million) directed towards
maintenance, mining, Phase 2 expansion work, and incremental investments in the Greentech Plant.
ABOUT SIGMA LITHIUM
Sigma Lithium (NASDAQ: SGML, TSXV: SGML, BVMF: S2GM34) is a leading global lithium producer dedicated
to powering the next generation of electric vehicle batteries with carbon neutral, socially and environmentally
sustainable chemical-grade lithium concentrate.
Sigma Lithium is one of the world’s largest lithium producers. The Company operates at the forefront of
environmental and social sustainability in the EV battery materials supply chain at its Grota do Cirilo Operation
in Brazil. Here, Sigma produces Quintuple Zero Green Lithium at its state-of-the-art Greentech lithium
beneficiation plant that delivers net zero carbon lithium, produced with zero dirty power, zero potable water,
zero toxic chemicals and zero tailings’ dams.
Phase 1 of the Company’s operations entered commercial production in the second quarter of 2023. The
Company has issued a Final Investment Decision, formally approving construction to double capacity to 520,000
tonnes of concentrate through the addition of a Phase 2 expansion of its Greentech Plant.
Please refer to the Company’s National Instrument 43-101 technical report titled “Grota do Cirilo Lithium Project
Araçuaí and Itinga Regions, Minas Gerais, Brazil, Amended and Restated Technical Report” issued March 19,
2024, which was prepared for Sigma L ithium by Homero Delboni Jr., MAusIMM, Promon Engenharia; Marc -
Antoine Laporte, P.Geo, SGS Canada Inc; Jarrett Quinn, P.Eng., Primero Group Americas; Porfirio Cabaleiro
Rodriguez, (MEng), FAIG, GE21 Consultoria Mineral; and William van Breugel, P.Eng (the “Updated Technical
Report”). The Updated Technical Report is filed on SEDAR and is also available on the Company’s website .
For more information about Sigma Lithium, visit our website
FOR ADDITIONAL INFORMATION PLEASE CONTACT
Matthew DeYoe, EVP, Corporate Affairs and Strategic Development
Irina Axenova, VP, Investor Relations
Sigma Lithium
Sigma Lithium
@sigmalithium
@SigmaLithium
FORWARD-LOOKING STATEMENTS
This news release includes certain “forward -looking information” under applicable Canadian and U.S. securities legislation,
including but not limited to statements relating to timing and costs related to the general business and operational outlook of
the Company, the environmental footprint of tailings and positive ecosystem impact relating thereto, donation and upcycling
of tailings, timing and quantities relating to tailings and Green Lithium, achievements and projections relating to the Zero
Tailings strategy, achievement of ramp -up volumes, production estimates and the operational status of the Grota do Cirilo
Project, and other forward -looking information. All statements that address future plans, activities, events, estimates,
expectations or developm ents that the Company believes, expects or anticipates will or may occur is forward -looking
information, including statements regarding the potential development of mineral resources and mineral reserves which may
or may not occur. Forward -looking information contained herein is based on certain assumptions regarding, among other
things: general economic and political conditions; the stable and supportive legislative, regulatory and community environment
in Brazil; demand for lithium, including that such demand is supported by growth in the electric vehicle market; the Company’s
market position and future financial and operating performance; the Company’s estimates of mineral resources and mineral
reserves, includi ng whether mineral resources will ever be de veloped into mineral reserves; and the Company’s ability to
operate its mineral projects including that the Company will not experience any materials or equipment shortages, any labour
or service provider outages or delays or any technical issues. Although management believes that the assumptions and
expectations reflected in the forward-looking information are reasonable, there can be no assurance that these assumptions
and expectations will prove to be correct. Forward -looking information inherently invol ves and is subject to risks and
uncertainties, including but not limited to that the market prices for lithium may not remain at current levels; and the market for
electric vehicles and other large format batteries currently has limited market share and no assurances can be given for the
rate at which this market will develop, if at all, which could affect the success of the Company and its ability to develop lithium
operations. There can be no assurance that such statements will prove to be accurate, as ac tual results and future events
could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on
forward-looking information. The Company disclaims any intention or obligation to update or revise any forward-looking
information, whether because of new information, future events or otherwise, except as required by law. For more information
on the risks, uncertainties and assumptions that could cause our actual results to differ from current expectation s, please
refer to the current annual information form of the Company and other public filings available under the Company’s profile
at www.sedarplus.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Financial Tables
The Company’s independent auditor has not performed a review of the unaudited interim consolidated financial statements
for the three -month period ended March 31, 2024 , the six-month period ended June 30, 2024 , or the interim consolidated
financial statements for the nine months ended September 30, 2024 in accordance with standa rds established by the
Canadian Institute of Chartered Accountants for a review of interim financial statements by the entity’s auditor.
Figure 1: Unaudited Income Statement Summary
Income Statement - Unaudited
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2024
($000) CAD USD
Sales Revenues 59,887 44,210
Provisional price adjustments (31,612) (23,316)
Revenue 28,275 20,894
Cost of goods sold & distribution (39,733) (29,232)
Gross profit (11,458) (8,338)
Sales expense (535) (392)
G&A expense (7,163) (5,252)
Stock-based compensation (1,871) (1,369)
ESG and other operating expenses (416) (304)
EBIT (21,444) (15,655)
Financial income and (expenses), net (11,277) (8,267)
Non-cash FX & other income (expenses), net (278) (163)
Income (loss) before taxes (32,998) (24,085)
Income taxes and social contribution (1,247) (1,013)
Net Income (loss) for the period (34,246) (25,098)
Weighted avg diluted shares outstanding 110,822 110,822
Earnings per share ($0.31) ($0.23)
Figure 2: Unaudited Balance Sheet Summary
Balance Sheet - Unaudited
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2024
($000) CAD USD
Assets
Cash and cash equivalents 88,645 65,594
Trade accounts receivable 20,122 14,889
Inventories 22,394 16,571
Other current assets 24,883 18,413
Total current assets 156,044 115,467
Property, plant and equipment 224,945 166,451
Other non-current assets 117,459 86,915
Total Assets 498,447 368,833
Liabilities & Shareholder Equity
Financing and export prepayment 94,573 69,980
Suppliers & accounts payable 57,596 42,619
Other current liabilities 33,082 24,480
Total current liabilities 185,251 137,080
Financing and export prepayment 150,274 111,197
Other non-current liabilities 15,029 11,121
Total non-current liabilities 165,303 122,318
Total shareholders' equity 147,893 109,435
Total Liabilities & Shareholders' Equity 498,447 368,833
Figure 3: Unaudited Cash Flow Statement Summary
Cash Flow Statement - Unaudited
Nine Months Ended
September 30, 2024
Nine Months Ended
September 30, 2024
($000) CAD USD
Operating Activities
Net income (loss) for the period (58,302) (42,855)
Adjustments, including FX movements 51,351 37,346
Interest payment on loans and leases (587) (426)
Adjustments to income (loss) for the period 50,764 36,920
Change in working capital (197) (143)
Net Cash from Operating Activities (7,735) (6,078)
Investing Activities
Purchase of PPE (19,377) (14,339)
Addition to exploration and evaluation assets (4,228) (3,129)
Other (3,900) (2,886)
Net Cash from Investing Activities (27,505) (20,353)
Financing Activities
Proceeds of loans, net 70,353 52,721
Other (1,521) (1,125)
Net Cash from Financing Activities 68,832 51,596
Effect of FX (9,350) (8,155)
Net (decrease) increase in cash 24,242 17,010
Cash & Equivalents, Beg of Period 64,403 48,584
Cash & Equivalents, End of Period 88,645 65,594
Land Transactions:
In connection with the acquisition of additional properties located in areas of interest for Sigma Mineração S.A. (“SMSA”), an
indirectly owned subsidiary of the Company, SMSA has amended the previous Credit Facility Agreement entered with Tatooine
Investimentos S.A. (“Tatooine”) in 2023, increasing the amount by US$3 million, of which US$ 0.8 million is to be disbursed.
Tatooine will continue to acquire such properties and shall grant the possession of the area to SMSA, which shall use it to
continue with the Grota do Cirilo Project. This agreement and its amendments are qualified as a related party transaction under
the policies of the TSXV, given that Marina Bernardini, a current officer of SMSA, has an economic interest in Tatooine.
Footnotes & Reconciliations:
To provide investors and others with additional information regarding the financial results of Sigma Lithium, we have disclosed
in this release certain non -IFRS operating performance measures such as realized price per tonne, unit operating costs,
EBITDA, EBITDA margin, Adjusted cash EBITDA, and Adjusted cash EBITDA margin. These non-IFRS financial measures are
a supplement to and not a substitute for or superior to, the Company's results presented in accordance with IFRS. The non-
IFRS financial measures presented by the Company may be different from non -GAAP/IFRS financial measures presented by
other companies. Specifically, the Company believes the non -IFRS information provides useful measures to inv estors
regarding the Company's financial performance by excluding certain costs and expenses that the Company believes are not
indicative of its core operating results. The presentation of these non-U.S. GAAP/IFRS financial measures is not meant to be
considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S.
GAAP/IFRS. A reconciliation of these financial measures to IFRS results is included herein.
1: Average selling price, CIF represents revenues associated with shipments invoiced during the reporting period netted out against
total volume shipped. The final price may be higher or lower than the invoiced price based on future price movements.
2: Reported revenue per tonne, CIF equivalent reflects net revenues for the quarter and tonnes shipped. Given a change in accounting
policy in 3Q, the Company is not realizing the ocean freight and insurance costs associated with its 3Q shipments until product has
been received by the final customer. Thus, this exercise is grossing up the reported revenues for these costs to create a more peer
and market comparable figure. The final price may be higher or lower than the estimated realized price based on future price
movements.