Sigma Lithium Corp (TSX-V:SGML, NASDAQ:SGML) announced its plans to double the production of its unique Quintuple Zero Green Lithium from the current 270,000t/y to 520,000t/y.
The company's Board of Directors has approved the initiation of construction for the Phase 2 Industrial Greentech Plant, which will expand the capacity by 250,000t/y with a capital expenditure of $100 million.
The Phase 2 Industrial Greentech Plant is expected to commence construction activities this month, with earth civil works, foundation, and infrastructure installations underway. Approximately 200 workers will be mobilized for these construction activities.
The company aims to commission the Phase 2 Industrial Plant by the end of 2024, with the first production anticipated in the first quarter of 2025.
Sigma has a cash balance of $109.4 million as of March 30, 2024, and unused trade finance lines are expected to cover Capex requirements, according to a statement from the company. Additionally, a letter of intent from the Brazilian National Development Bank (BNDES) is expected to provide further financing flexibility.
Ana Cabral, CEO of Sigma Lithium, told investors that starting construction for Phase 2 is “a tremendous milestone” in its journey.
"By advancing the Phase 2 construction schedule as planned, Sigma Lithium is in a position to generate cashflow while delivering large quantities of low cost chemical grade lithium concentrate at a critical supply juncture for the lithium market and the battery industry, given focus on achieving price parity between EVs and ICE cars, lowering production costs,” Cabral-Gardner said.
The CEO also noted that it wrapped up its first year of production with positive cash adjusted EBITDA and cash operating profit, despite the sharp decline in lithium prices during 2023.
“This is a testament to our financial discipline in managing production costs. Irrespectively of the market, Sigma Lithium is a low-cost producer of a superior product with measurable ‘value in use’ that brings cost savings for its clients,” Cabral-Gardner added.
Sigma Lithium also provided unaudited financial information for the fourth quarter and full year ended December 31, 2023. The company reported a strong operational performance, with revenue of $135.1 million for the full year 2023, driven by the sale of over 102,500 tonnes of concentrate. Despite challenges in the market, Sigma Lithium achieved an adjusted EBITDA of $49.1 million for the year, reflecting a margin of 36.4%.
The company is currently negotiating agreements for the engineering, procurement, and construction management of the Phase 2 Industrial Greentech Plant, with completion expected within approximately 10 months.
Nasdaq-listed shares of Sigma were up around 6.7% on Monday morning.