Sigma Lithium Announces Filing Technical Report with Outstanding Economic Results of the Integrated Phase 1 & 2 Projected Production: After-Tax NPV of US$5.1 Billion & Average Annual Free Cash Flow of US$595 Million; Continues Evaluating Phase 3
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SIGMA LITHIUM ANNOUNCES FILING TECHNICAL REPORT WITH
OUTSTANDING ECONOMIC RESULTS OF THE INTEGRATED
PHASE 1 & 2 PROJECTED PRODUCTION: AFTER-TAX NPV OF
US$5.1 BILLION & AVERAGE ANNUAL FREE CASH FLOW OF
US$595 MILLION; CONTINUES EVALUATING PHASE 3
HIGHLIGHTS
• The phased expansion scenario will potentially position Sigma Lithium as the world’s fourth
largest lithium producer.
o Run-rate combined production of 531,000 tpa (72,200 tpa LCE) of Battery Grade
Sustainable Lithium.
o Expected to be among the lowest cost lithium producers globally with average cash
costs of US$454/t (CIF China).
o Combined average annual free cash flow of US$595 million over the 13-years of
operation.
• Sigma Lithium is in construction of a greentech lithium processing plant integrated with its
own lithium ore feedstock:
o The Company is fully funded to production for remaining Phase 1 capex of US$111
million.
o Phase 1 remains on schedule and on budget to begin commissioning by year-end
2022.
o Phase 2 Greentech Plant and mine capex is estimated at US$76 million.
o Detailed engineering and feasibility level geotechnical workstream are being initiated
at Phase 2.
o Therefore, construction of Phase 2 is expected to begin once Phase 1 initiates
commissioning.
• The technical report projects results for an integrated, multi-stage approach to
development of Phase 1 and Phase 2 production of Battery Grade Sustainable Lithium as
follows:
o Combined after-tax NPV8% of US$5.1 billion.
o Combined after-tax IRR of 589%.
o 13-year project life (fully integrated with both Phase 1 & 2 mines).
• Sigma Lithium’s integrated technical report encompasses just two initial production phases
of the Grota do Cirilo Project (Phase 1 and Phase 2). Sigma Lithium continues to work on the
remaining six former artisanal mines within its properties in order to prepare them for
potential development.
o Phase 1 Feasibility Study contemplates the Greentech Plant fully integrated with the
Phase 1 mine, both currently in construction:
▪ Expected to produce 270,000 tpa of Battery Grade Sustainable Lithium
(36,700 tpa LCE).
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▪ Estimates annual steady-state free cash flow of US$455 million over the 8
years of operation.
▪ After-tax NPV8% of US$2.6 billion, IRR of 571% over an 8-year operating life,
and payback period of just 3 months.
▪ Average All-In Sustaining Costs projected to be US$459/t (cash production
costs plus royalties and transportation costs CIF China)
o Phase 2 Pre-Feasibility Study evaluates a second “twin” Greentech Plant fully
integrated with the Phase 2 mine:
▪ Expected to produce an additional 261,100 tpa of Battery Grade Sustainable
Lithium (35,500 tpa LCE).
▪ Estimates annual steady-state free cash flow of US$342 million over the 12
years of operation.
▪ After-tax NPV8% of US$2.4 billion, IRR of 764% over a 12-year operating life,
and payback period of just 2 months.
▪ Average All-In Sustaining Costs projected to be US$453/t (cash production
costs plus royalties and transportation costs CIF China)
o Phase 3 preliminary economic assessment: targeted for summer 2022, with the goal
of planning a potential Phase 3 production expansion from its existing estimated 59
million tonnes of mineral resources (50.3 million tonnes of measured and indicated
mineral resources and 8.6 million tonnes of inferred mineral resources).
• Combined Phase 1 + Phase 2 has the potential to be one of the lowest-cost operations
globally of Battery Grade Sustainable Lithium.
o Significant cost advantage from vertical integration with Sigma Lithium’s 33.6
million tonnes of estimated high-grade mineral reserves.
o Phase 1 spodumene ore feed grade of 1.55% Li2O, Phase 2 spodumene ore feed
grade of 1.37% Li2O.
o Average FOB Cash Costs of US$340/t (FOB Greentech Plant, at operation’s truck
bay).
o Average CIF Cash Costs of US$454/t (CIF China).
• Sigma Lithium is expected to produce the world's most environmentally responsible
lithium:
o 100% of the tailings to be dry stacked.
o 100% clean, renewable hydro power.
o 100% of the water recirculated/reused in the plant – and sourced from a river with
“high chemical levels of raw sewage contamination”.
• Grota do Cirilo is located in Brazil, a tier-1 metals and mining operating jurisdiction with
existing complete infrastructure: transmission power lines, roads and ports.
o Close proximity to the emerging Atlantic supply chain for electric vehicles in North
America and Europe.
VANCOUVER, CANADA -- (May 26, 2022) - SIGMA Lithium Corporation ("Sigma Lithium " or the " Company")
(NASDAQ: SGML, TSXV: SGML), dedicated to powering the next generation of electric vehicles with environmentally
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sustainable and high-purity lithium, is pleased to announce the filing of its Phase 1 DFS and Phase 2 PFS Update of
the NI 43 -101 Technical Report (the “Consolidated Technical Report ”) for its 100% owned Grota do Cirilo Project
(the “Project” or “ Grota do Cirilo ”). The Consolidated Technical Report incorporate s the Phase 1 Feasibility Study
and a Phase 2 Pre-Feasibility Study, and demonstrates robust combined economics, highlighted by a combined after-
tax NPV8% of US$5.1 billion and combined after-tax IRR of 589%.
“With Phase 1 funded and in construction, we are delighted to share our progress on Phase 2 and the combined
economics of this fully -integrated lithium project” says Ana Cabral -Gardner, Co-CEO and Co -Chairperson of Sigma
Lithium. “We remain focused on delivering Battery Grade Sustainable Lithium for the electric vehicle supply chain, while
continuing to focus on lifting the most vulnerable members of our local communities in Vale do Jequitinhonha, Brazil”
The Consolidated Technical Report considers a fully integrated and environmentally sustainable production of battery
grade high purity lithium concentrate (“Battery Grade Sustainable Lithium”), with feedstock spodumene ore sourced
from its Phase 1 and Phase 2 lithium deposits. The combined operation increases average run-rate production to
531,000 tpa of Battery Grade Sustainable Lithium. Additionally, Grota do Cirilo’s operating life has been extended by
more than 50% to 13 years with the addition of Phase 2 production from the initial 8 years in the Phase 1 Feasibility
Study.
The Consolidated Technical Report estimates US$76 million of additional capital expenditures to build a “second
production line” to produce Battery Grade Sustainable Lithium in a Phase 2.
The key factors influencing the robust Consolidated Technical Report economics include:
• high average feed grades of 1.55% Li2O for Phase 1 and 1.37% Li2O for Phase 2; and
• The superior recovery rates achieved by the greentech plant in the dense media separation (“DMS”) circuit of
65.0% for Phase 1 and 57.9% for Phase 2.
The Company expects to announce a n updated mineral resource estimate in the second quarter of 2022, with the
goal of determining the potential for a further production expansion (“Phase 3”). A Preliminary Economic Assessment
on Phase 3 is expected to be completed at the end of the second quarter or early in the third quarter of 2022.
The Company has filed the Consolidated Technical Report and it is available on SEDAR (www.sedar.com), EDGAR
(www.sec.gov) and the Company’s corporate website. The Consolidated Technical Report is NI 43-101 compliant and
was issued on May 25, 2022. The Consolidated Technical Report was prepared for Sigma Lithium 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 Brian Talbot, FAusIMM,
Rtek Pty Ltd.
Integrated Economic Analysis
The Grota do Cirilo Phase 1 and Phase 2 after-tax NPV8% and after-tax IRR of US$5.1 billion and 589% were calculated
based on an average annual production run-rate of 531,000 tonnes of Battery Grade Sustainable Lithium and a 13-
year operating life. A financial summary for the Project is included in Table 1 below, which demonstrates the robust
economics for the production of Battery Grade Sustainable Lithium for the following concentrations of lithium oxide:
6.0%, 5.5% and 5.2%.
Table 1: Phase 1 & 2 Financial Summary
Base Case Phase 1 & 2 6.0% Li2O 5.5% Li2O 5.2% Li2O
Economic Analysis
After-Tax Net Present Value (@ 8% Discount Rate) US$4.0 Billion US$5.1 Billion US$5.4 Billion
After-Tax Internal Rate of Return 495% 589% 624%
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Revenues, Cash Flow and Capex
Operating Life 13 years 13 years 13 years
Battery Grade Lithium Run-Rate Production 440,400 tpa 531,000 tpa 561,700 tpa
Lithium Carbonate Equivalent Run-Rate Production 65,300 tpa LCE 72,200 tpa LCE 72,200 tpa LCE
Average Annual Revenue US$756 M US$915 M US$968 M
Average Annual After-Tax Free Cash Flow US$472 M US$595 M US$637 M
Costs per tonne of Lithium
Total Cash Cost at Production US$399/t US$340/t US$325/t
All-in Sustaining Cost (CIF China) US$515/t US$455/t US$440/t
Phase 1 Lithium Recovery Rate (DMS) 60.4% 65.0% 65.0%
Phase 2 Lithium Recovery Rate (DMS) 50.9% 57.9% 57.9%
Integrated Costs (per tonne of lithium)
Mining costs US$236/t US$194/t US$184/t
Greentech Plant Processing costs US$69/t US$57/t US$54/t
G&A costs US$30/t US$25/t US$24/t
Transportation costs (Mine to CIF China) US$114 US$114 US$114
Spodumene Mined Feedstock for Greentech Plant
Total quantity mined 33.6 Mt 33.6 Mt 33.6 Mt
Annual run of mine (ROM) 2.6 Mtpa 2.6 Mtpa 2.6 Mtpa
Table 2 below highlights the robust Phase 1 only standalone economics for the production of Battery Grade
Sustainable Lithium for the following concentrations of lithium oxide: at 6.0%, 5.5% and 5.2% .
Table 2: Phase 1 Only Financial Summary
Base Case Phase 1 Only 6.0% Li2O 5.5% Li2O 5.2% Li2O
Economic Analysis
After-Tax Net Present Value (@ 8% Discount Rate) US$2.2 Billion US$2.6 Billion US$2.8 Billion
After-Tax Internal Rate of Return 482% 571% 606%
After-Tax Payback Period 3 months 3 months 2 months
Revenues, Cash Flow and Capex
Operating Life 8 years 8 years 8 years
Battery Grade Lithium Run-Rate Production 230,000 tpa 270,000 tpa 285,600 tpa
Lithium Carbonate Equivalent Run-Rate Production 34,100 tpa LCE 36,700 tpa LCE 36,700 tpa LCE
Average Annual Revenue US$575 M US$675 M US$714 M
Average Annual After-Tax Free Cash Flow US$376 M US$455 M US$485 M
Costs per tonne of Lithium
Total Cash Cost at Production US$386/t US$339/t US$324/t
All-in Sustaining Cost (CIF China) US$506/t US$459/t US$444/t
Lithium Recovery Rate (DMS) 60.4% 65.0% 65.0%
Integrated Costs (per tonne of lithium)
Mining costs US$229/t US$195/t US$185/t
Greentech Plant Processing costs US$65/t US$56/t US$53/t
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G&A costs US$21/t US$18/t US$17/t
Transportation costs (Mine to CIF China) US$119/t US$119/t US$119/t
Spodumene Mined Feedstock for Greentech Plant
Total quantity mined 11.8 Mt 11.8 Mt 11.8 Mt
Annual run of mine (ROM) 1.5 Mtpa 1.5 Mtpa 1.5 Mtpa
Spodumene ore feed grade LOM average 1.55% 1.55% 1.55%
Table 3 below highlights the robust Phase 2 only standalone economics for the production of Battery Grade
Sustainable Lithium for the following concentrations of lithium oxide: at 6.0%, 5.5% and 5.2%.
Table 3: Phase 2 Only Financial Summary
Base Case Phase 2 Only 6.0% SC 5.5% SC 5.2% SC
Economic Analysis
After-Tax Net Present Value (@ 8% Discount Rate) US$1.9 B US$2.4 B US$2.6 B
After-Tax Internal Rate of Return 601% 764% 813%
After-Tax Payback Period 2 months 2 months 2 months
Revenues, Cash Flow and Capex
Operating Life 12 years 12 years 12 years
Battery Grade Lithium Run-Rate Production 210,400 tpa 261,100 tpa 276,100 tpa
Lithium Carbonate Equivalent Run-Rate Production 31,200 tpa LCE 35,500 tpa LCE 35,500 tpa LCE
Average Annual Revenue US$436 M US$541 M US$573 M
Average Annual After-Tax Free Cash Flow US$260 M US$342 M US$366 M
Costs per tonne of Lithium
Total Cash Cost at Production US$408/t US$340/t US$325/t
All-in Sustaining Cost (CIF China) US$521/t US$453/t US$437/t
Lithium Recovery Rate (DMS) 50.9% 57.9% 57.9%
Integrated Costs (per tonne of lithium)
Mining costs US$240/t US$194/t US$183/t
Greentech Plant Processing costs US$72/t US$58/t US$55/t
G&A costs US$37/t US$30/t US$28/t
Transportation costs (Mine to CIF China) US$110/t US$110/t US$110/t
Spodumene Mined Feedstock for Greentech Plant
Total quantity mined 21.8 Mt 21.8 Mt 21.8 Mt
Annual run of mine (ROM) 1.8 Mtpa 1.8 Mtpa 1.8 Mtpa
Spodumene ore feed grade LOM average 1.37% 1.37% 1.37%
Grota do Cirilo’s average revenue and operating costs per tonne of Battery Grade Sustainable Lithium are outlined in
Table 4 below. The lithium prices forecasted are based on the Benchmark Mineral Intelligence curve of battery grade
lithium hydroxide (LiOH) shown in Figure 1, with the price of the Battery Grade Sustainable lithium calculated based
on a fixed percentage of 9% of the LiOH price. This is based on an average Battery Grade Sustainable Lithium price
of US$3,159/t for 2022 to 202 6, with a long -term Battery Grade Sustainable L ithium price of US$1,710/t from 2027
to 2035.
Figure 1: Battery Grade LiOH & SC Price Forecast (US$/t)
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Table 4: Grota do Cirilo Integrated Estimated Revenue and Operating Costs
Estimated Revenue, Operating Cost and After-Tax Earnings Annual Average Economics (1)
(13 Year Operating Life)
(US$ MM) (US$/t)
Gross Revenue $915 $2,247
Less: Realization costs ($26) ($63)
(-) CFEM Royalty ($18) ($45)
(-) Other Royalties ($7) ($18)
(-) Commercial Discount - -
Net Revenues $889 $2,184
Less: Site Operating Costs ($159) ($390)
(-) Mining ($79) ($194)
(-) Processing ($23) ($57)
(-) Transport ($46) ($114)
(-) Selling, General & Administration ($10) ($25)
(-) Depreciation ($27) ($67)
EBIT $703 $1,727
% EBIT Margin 79% 79%
(-) Taxes ($107) ($263)
After-Tax Earnings $596 $1,463
% After-Tax Earnings Margin 67% 67%
(1) Based on the production of Battery Grade Sustainable Lithium at 5.5%
Given the relatively low capital intensity of the Project, the after-tax NPV8% shows low sensitivity to changes in capex,
BRL/USD exchange rate and operating expenses. Grota do Cirilo’s after-tax NPV8% is more sensitive to variations in
Battery Grade Sustainable Lithium prices, as reflected in Figure 2 below.
$2,840
$3,364
$3,606
$3,492
$2,493
$1,889
$1,737
$1,650
$1,605
$1,632
$1,674
$1,701
$1,742
$1,756
$31,550
$37,380
$40,065
$38,800
$27,700
$20,990
$19,299 $18,335 $17,830 $18,136 $18,595 $18,901 $19,360 $19,513
$10,000
$20,000
$30,000
$40,000
$50,000
-
$1,000
$2,000
$3,000
$4,000
2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E
LiOH Forecast (US$/t)
Battery Grade Sustainable Lithium Concentrate
Price Based on LiOH Forecast (US$/t)
Sigma Expected Contract Price Lithium Hydroxide Battery Grade Global Prevailing Price
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Figure 2: Grota do Cirilo After-Tax NPV8% Sensitivity Analysis to Price Changes (US$ billion)
Capital Expenditures
In addition to the remaining US$111 million pre-production Phase 1 capex (which is already fully funded) , the
Consolidated Technical Report estimates US$76 million of additional capex to build a “second production line” to
produce Battery Grade Sustainable Lithium process in a Phase 2 . This Phase 2 expansion is expected to be
constructed during the first year of production for Phase 1 at the Project, with Phase 2 production expected to
commence in the second year of production.
The Phase 1 capex was estimated at a FEL3 level of engineering detail , whereby the engineering firms provided
pricing quotations from qualified suppliers for all areas of construction (summarized in Table 5 below).
• This FEL3 quoting exercise was led by the procurement teams at Promon Engenharia Ltda., for infrastructure,
services, buildings and bulk earthworks; Primero Group Ltd (“Primero”) for crushing plant and DMS plant; and
GE21 Consultoria Mineral (“GE21”) for mining.
The pre-production Phase 2 capex to construct the “second production line” (including all direct and indirect costs
and contingencies in each line item) is summarized in Table 5 below and was estimated with an accuracy of ±25%.
• Primero provided the estimates related to infrastructure, ser vices, buildings, bulk earthworks, crushing and
DMS. GE21 provided the estimates related to mining capex.
Table 5: Capex to Commercial Production
Item Phase 1 (Year 1) (1) Phase 2 (Year 2) (2)
(US$ M) (US$ M)
Mine $8.5 $2.3
Process Plant $69.8 $53.9
Environmental Equipment (Water & Dry Stacking) $16.6 $7.3
Engineering Services $19.2 $11.6
Substation & Utility Power Supply $7.4 -
Operational and ESG Expenses During Construction $9.8 $3.2
Working Capital During Plant Commissioning $6.1 $1.0
Tax Incentives (Savings) ($5.9) ($3.5)
Capex already Disbursed During Construction ($20.7) -
$3.8
$4.4
$5.1
$5.7
$6.4
$2.0 $2.3 $2.6 $3.0 $3.3
$1.8 $2.1 $2.4 $2.8 $3.1
$0
$1
$2
$3
$4
$5
$6
$7
(20%) (10%) 0% 10% 20%
After-Tax NPV (US$ billion)
Battery Grade Lithium Price Sensitivity (%)
Phase 1 & 2 @ 5.5% SC Phase 1 @ 5.5% SC Phase 2 @ 5.5% SC
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Total Capex to Commercial Production $110.9 $75.7
(1) The operating life capital is estimated at US$3.2 M (including contingency) for replacement of key plant components over the
Phase 1 operating life, considering the modelled operating life and useful life of major equipment items. The sustaining capex is
mainly for the crushing area and allows for crusher rebuilds (replacements).
(2) The operating life capital is estimated at US$166.9 M and includes capitalized stripping of US$56.7 M in year 6, US$52.9 M in
year 7 and US$50.8 M in year 8.
All-In Sustaining Cost
The operating cost estimate is based on an owner-operated model with contract mining . Table 6 below shows the
anticipated average operating costs over the operating life.
Mining costs were estimated based on a quoted proposal from a large Brazilian mining contractor, selected after an
extensive tender process by the Company and its mining consultant, GE21.
Grota do Cirilo Battery Grade Sustainable Lithium is forecasted to have very low All-in Sustaining Costs (CIF China)
of US$455/t, mainly as a result of the following:
• high-grade and low impurities, as well as large crystal mineralization of the spodumene feed;
• high recoveries achieved in the green tech plant DMS;
• low overall processing costs of the DMS, resulting from its streamlined processing circuit (with less
processing steps), therefore utilizing less electricity, water and chemical ingredients than a typical lithium
flotation plant; and
• low local G&A costs in Brazil.
Grota do Cirilo’s mining costs hav e decreased from the standalone Phase 1 operation partially as a result of a lower
Phase 2 strip ratio (waste mined per ore mined) of 12.5 versus the Phase 1 strip ratio of 16.6.
Table 6: Grota do Cirilo Operating Cost Estimate
Operating Cost Category US$/t SC
Mining $194
Processing $57
G&A $25
Royalties $63
Total Cash Cost (FOB) $340
Transport & Ocean Freight Costs $114
Total Cash Cost (CIF China) $454
Sustaining $2
All-In Sustaining Cost (CIF China) $455
QUALIFIED PERSONS
The mining and mineral reserve estimates in this news release has been reviewed and approved by Porfirio Cabaleiro
Rodriguez P.Eng, Mining Engineer of GE21 Consultoria Mineral Brazil. Mr. Rodriguez is a Qualified Person as defined
by National Instrument 43-101 and is independent of Sigma Lithium.
The technical and scientific information related to geology and mineral resource estimate in this news release has
been reviewed and approved by Marc-Antoine Laporte P.Geo., M.Sc., of SGS Geological Services. Mr. Laporte is a
Qualified Person as defined by National Instrument 43-101 and is independent of Sigma Lithium.