Sigma Lithium Resources Corp’s PEA Shows Project Phase 2 Expansion In Brazil Could Double Its Value To US $ 844 Million
The study shows the advantage of commissioning the second deposit of the project called Barreiro after the extraction of the first deposit called Xuxa
Corp () () reported what it called the “exceptional” results of a Preliminary Economic Assessment (PEA), which envisioned a second phase of expansion of its Grota do Cirilo project in Brazil that could see value The net present value (NPV) of the assets more than doubled to reach $ 844 million.
The study shows the advantage of commissioning the second deposit of the project called Barreiro after the extraction of the first deposit called Xuxa. This will bring production from 220,000 tonnes per year (tpa) in phase 1, which is scheduled for 2022, to 440,000 tpa in phase 2 within about a year.
Barreiro is a high-purity, high-grade lithium deposit, with 20.485 million tonnes (Mt) of measured and indicated resources (M&I), which would see an average of 1.68 Mt mined per year over a lifetime of the 12.7 year old mine.
READ: Sigma Lithium may have the world’s greenest large-scale lithium project in Grota do Cirilo
COO Ana Cabral-Gardner noted that this “doubling” of Sigma’s planned short-term capacity, with little additional investment, has the potential to significantly transform the “scale and relevance” of Sigma. the company.
“This further reinforces our uniqueness as a global supplier of environmentally friendly green lithium concentrate, while consolidating our upstream strategic importance as a source of high purity green lithium products for our current and new customers,” as they advance their cathode and battery cell projects. production facilities in Europe and the United States, creating an important Atlantic lithium supply chain, ”she said.
Sigma is already working to bring Phase 2 to a construction-ready state by the end of 2021 or early 2022 and is preparing a Preliminary Feasibility Study (PFS) for the production of Phase 2, which is expected to be completed in June 2021.
Construction of Phase 2 is expected to begin once the commissioning and ramp-up of production of Phase 1 is complete, which is expected in the third quarter of 2022.
Regarding the financial data for phase 2, the NPV of the last PEA was set at US $ 449 million (the NPV of phase 1 according to a 2019 study was US $ 395 million), while the flow After-tax cash flow was estimated at US $ 766 million and net sales of US $ 2.1 billion. The internal rate of return (IRR) was evaluated at 208%.
The average total cash cost of phase 2 was estimated at USD 256 / t (free on board plant (FOB), mine life) and at USD 360 / t (cost, insurance and freight (CIF) China Port , mine life).
Also in the statement, Sigma announced its results for the first quarter ended March 31, in which it said it made “significant” progress towards construction at Grota do Cirilo, despite the circumstances created by the pandemic, including the completion of several critical sites involved in the pre-construction Phase 1 mine.
Regarding his ESG work, he said he has “significantly” advanced the carbon credit life cycle analysis and audit workflows and plans to release the results in the third quarter of 2021.
As of June 1, the company had C $ 41.3 million (US $ 33.6 million) in cash and cash equivalents, of which approximately C $ 33.8 million (US $ 28 million) is held in an account. separate savings for construction, he added.
Sigma is developing, with an ESG-centric strategy, the largest hard rock lithium deposits in the Americas, in its wholly-owned Grota do Cirilo project to be part of the rapidly expanding global supply chain of electric vehicles .
Since 2018, the company has been producing high purity low carbon lithium concentrate at an on-site demonstration pilot plant with the aim of shipping samples to potential customers for product certification and testing.
Grota do Cirilo sits in one of the world’s largest mining provinces in southeastern Brazil, with full mining infrastructure and highways connecting the project to a shipping port.
The site infrastructure is largely in place and is currently being upgraded for phase 1 production. The project is powered 100% by clean energy as the pylons and transmission lines are connected to a hydroelectric power station 50 km away.
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