Sigma Lithium Corp (TSX-V:SGML, NASDAQ:SGML) said it had received a Letter of Intention (LOI) from the Brazilian Development Bank (BNDES) to support the construction of its second Greentech industrial lithium plant.
BNDES will provide a project finance credit line to Sigma to help develop its Quintuple Zero green Lithium Grota do Cirilo project in Vale do Jequitinhonha in Brazil under the LOI.
The non-binding LOI stipulates that before Sigma can receive the funding it must undergo a review of its financing structure and into aspects such as collateral.
“The closing conditions do not include lithium market-related conditions and pricing elements that fall outside of the control of the Company,” Sigma added in a statement.
Once the funding is acquired, Sigma will aim to boost the annual output of the project from 270,000 tonnes to approximately 510,000 tonnes, with the total cost estimated at around US$100 million.
Additionally, Sigma Lithium was granted a full environmental license by the Brazilian State of Minas Gerais.
Sigma anticipates initiating the construction phase at the end of the wet season in the first quarter of 2024, pending a final investment decision from its Board of Directors.
Ana Cabral-Gardner, CEO and co-chairman of Sigma Lithium said: “We are honoured and delighted with the Letter of Intention received today from BNDES.
“Development Bank Debt awarded by Brazil has the potential to significantly improve our capital structure due to typical longer duration, significantly lower interest rates and grace periods.
“Having BNDES as a creditor represents the support of the government of Brazil to Sigma Lithium's industrial expansion plans at Vale do Jequitinhonha."