On 1 April, Brazilian lithium producer Sigma Lithium released the FY2023 earnings results, highlighting its market performance and production expansion plan.
2023 was the first operational year for Sigma Lithium’s flagship project Grota do Cirilo. The company reported unaudited full-year 2023 revenue of US$135.1 million, with an adjusted EBITDA of US$49.1 million, an annual average price for its lithium concentrate of US$1,321 per tonne for 2023 (US$1,067 in Q4 2023), and CIF China cost at US$565 per tonne.
Sigma Lithium also announced the Phase 2 final investment decision (FID) to double its production capacity from 270,000 tonnes to 520,000 tonnes of spodumene concentrate per year. This expansion will be supported by a US$100 million capital expenditure for the construction of the Phase 2 plant, fully funded through the existing cash balance (US$109.4 million as of 30 March 2024), unused trade finance lines, and anticipated free cash flow generation.
The company also further considers an integrated lithium sulfate plant in Phase 3 in 2025, given that lithium sulfate is an intermediate chemical naturally produced after spodumene ores go through roasting and acid wash. Selling lithium sulfate could capture an additional US$3,000 cash flow per tonne. During the Q&A session, the management team further explained the rationale behind the lithium sulfate plant as the company believes its edges would build on the low-cost energy supply and the ability of Brazil’s cement-based construction industry to recycle residual acid-tailings such as aluminum sulfate.
In CEO Ana Cabral Gardner’s words, Sigma Lithium, currently undervalued by the market sentiments, has become “the world's 6th largest integrated producer of lithium concentrate” with “the second lowest cost in the industry” and its efforts in sustainability. In the next few years, the company and the project will have the opportunity to prove and secure its position as one of the top lithium producers.
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