Sigma Lithium Achieves Production Guidance Amid Growing Demand, Lower Costs

Sigma Lithium Corp. SGML, the global lithium producer helping power the next generation of electric vehicles, showcased its operational progress during the third quarter, achieving its lithium production target and maintaining what it says is one of the lowest cash unit operating costs in the industry.

For the third quarter, Sigma reported production of its Quintuple Zero Lithium Concentrate totaled 60,237 tons, up 22% from the second quarter and slightly higher than the 60,000 tons it had forecasted. During the quarter, the miner reports that it set several daily production records and experienced periods of sustained operations above 860 tons per day. For the fourth quarter, Sigma expects production of lithium concentrate to reach at least 60,000 tons.

"This quarter we achieved our production and low industry cost targets, generating robust free cash flow and demonstrating our operational resilience to lithium cycles," said Sigma Lithium CEO Ana Cabral. "We also benefited from our shifted commercial strategy to navigate industry seasonality, enabling us to secure higher average realized prices compared to benchmarks."

Shipping Up As Demand Grows 

Thanks to improvements in operations Sigma said it was able to further increase its shipping cadence to quasi-monthly volumes sold of 22,000 tons. During the quarter the miner made two full 20,000-ton shipments and was able to supplement that with 13,483 tons sold at the Port customs warehouse. All told, Sigma Lithium sold 57,483 tons of its Quintuple Zero Green lithium, up 9% quarter-over-quarter. 

The company reports that it did that while maintaining one of the lowest cash unit operating costs in the industry. The miner's cost, insurance and freight (CIF) in China averaged $513 per ton, down from $515 per ton in the second quarter.  

Sigma Lithium also benefited from a lower export credit risk, increasing the availability and lowering the interest rate of its trade finance lines from nearly 15.5% in 4Q23 to 9.0% in 3Q24. The amount of available export trade lines exceeded $100 million in the year. The better borrowing costs enabled Sigma Lithium to expand geographically to three distributors: Glencore AG (Europe), Mitsubishi Corporation RtM International Pte. Ltd (Japan/ Singapore) and International Resources Holdings (UAE/Abu Dhabi).

The company recently changed its commercial strategy shifting to a distributor model. This enabled Sigma to capitalize on annual restocking trends of chemical refiners, manage weather seasonality more effectively and outperform market price benchmarks, reported Sigma. 

Expansion Underway

As for the company's phase 2 Greentech Plant expansion, Sigma initiated earthworks by completing the clearing of the terrain for arid and semi-arid vegetation suppression for the entire industrial project, including future phase 3 construction of the production plant. Total building and commissioning are expected to occur over a 12-month period, with budgeted capex for phase 2 of $90 million at current exchange rates. Sigma ended the third quarter with $65.6 million in cash and $32 million in cash flow. Cash generation during the quarter enabled it to pay down export credit debt and reduce outstanding trade line balances.

"Over the last year we are proud to have transformed Sigma from an emerging producer into an industry leader, demonstrating the operational and financial resilience of a mature producer, with dependability and consistency," said Cabral. "We have delivered on all of our climate goals, reaching  Net Zero one year in advance of our target and 27 years ahead of the industry, with our Quintuple Zero Green Lithium. We are confident that over the lithium cycles, our capabilities to execute to strategy will deliver long-term value for Sigma and all of its stakeholders."

From boosting production to meeting demand, Sigma Lithium had a busy third quarter. It accomplished that while keeping costs down. With the company projecting that demand will only continue to grow, Sigma Lithium is one step closer to morphing into the industry leader it aims to become. 

Featured photo by MiningWatch Portugal on Unsplash.

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