Sigma Lithium Corp (TSX-V:SGML, OTCQB:SGMLF, NASDAQ:SGML) told investors that the net present value (NPV) of Phase 1 of its flagship Grota do Cirilo lithium project in Brazil has increased to US$1.6 billion following an updated feasibility study (FS).
The lithium company said the updated FS economics also demonstrate that Phase 1 of the project is financially robust even as a standalone project.
The key factors influencing the study outcome include a high average mill feed grade of 1.55% lithium oxide (Li2O) (mineral reserve grade) and phase 1 plant dense medium separation (DMS) process recoveries of 60.4%, Vancouver-based Sigma said in a statement.
READ: Sigma Lithium ends 2021 with C$155M in cash to move Grota do Cirilo project into production
Sigma said the economic model assumes:
- An average production plant feed of 1.5 million tonnes per year (Mtpa), resulting in the production of approximately 230,000 tonnes per year of 6% lithium concentrate (battery-grade sustainable lithium);
- Pricing based on a fixed percentage of the market forecast for battery-grade lithium hydroxide provided by Benchmark Mineral Intelligence.
The company noted that Phase 1 of the Grota do Cirilo project will utilize spodumene ore from the Xuxa deposit as feedstock to be processed by its green tech production plant, which will produce battery-grade sustainable lithium, creating a fully integrated high-purity lithium concentrate operation.
“The updated Phase 1 FS reflects increased precision of the technical assumptions, resulting from over 11 months of detailed engineering, bringing the confidence level of the project to FEL3 (the third stage of front-end engineering and design work for the development of underground mines),” Sigma said. “As a result, the company is pleased to report an updated remaining construction capex (capital expenditure) for Phase 1 of $123.1 million, compared with $113.6 million total capex referenced in the 2019 FS.”
The Phase 1 all-in sustaining cost was updated in the updated Phase 1 FS, which Sigma said demonstrated its low-cost and strong-cash-flow profile:
- Average cash costs of $357/tonne FOB (free on board) production plant (at project's truck loading bay);
- Average all-in sustaining costs of $463/tonne CIF (cost, insurance and freight) China.
The company confirmed the exceptional lithium recovery of 60.4% using DMS, which was announced in the 2019 FS, through additional metallurgical testing at SGS's laboratory.
Sigma also announced its maiden mineral reserve estimate for the Phase 2 deposit of 21.8 Mt, which it said further increased its confidence in the potential Phase 2 expansion.
This includes:
- 16.9 Mt of proven mineral reserves at 1.4 per cent Li2O.
- 4.8 Mt of probable mineral reserves at 1.3 per cent Li2O.
Additionally, it said it increased the mineral resource for the Phase 2 deposit by 30% to 29 Mt while preserving its competitive advantage of high-grade and high-purity deposits, as demonstrated by DMS metallurgical results:
- 25.1 Mt of measured and indicated mineral resources at 1.4 per cent Li2O.
- 3.8 Mt of inferred mineral resources at 1.4 per cent Li2O.
Sigma said the 2021 drilling campaign focused on the central area of the Phase 2 deposit mineralization and on upgrading the confidence and tonnage of the existing mineral resource.
“The "Phase 2 combined concentrate from DMS results" table demonstrates the potential for the Phase 2 deposit to produce a battery-grade sustainable lithium (very low alkalines and iron) with coarse particles (large crystals),” the company concluded.
Sigma Lithium is a resource company dedicated to powering the next generation of electric vehicle batteries with environmentally sustainable and high-purity lithium.
* The headline on an earlier version of the story did not specify that the increase in the NPV to $1.6 billion related to Phase 1 of the Grota do Cirilo lithium project
Contact the author at stephen.gunnion@proactiveinvestors.com