Sigma Lithium says Brazil project is worth $5.1 billion

Sigma Lithium’s Grota do Cirilo lithium project in Brazil. Credit: Sigma Lithium

Canadian minerals explorer Sigma Lithium Corp. has valued its undeveloped project in Brazil at $5.1 billion, with the mining operations having the potential to deliver battery-grade lithium for 13 years once it’s built.

The project, known as Grota do Cirilo, is expected to produce 531,000 metric tonnes of lithium per year from two deposits, the company said in a Thursday statement. Sigma Lithium, which has a market value of C$1.97 billion ($1.5 billion), is building the project in phases, with the initial mine already under construction. An April feasibility study anticipated an eight-year operating life for the first phase, which it valued at $1.6 billion.

Shares of Sigma Lithium surged nearly 15% in Toronto and were trading 13% higher at C$22.15 as of 11:37 a.m. local time. The stock has risen about 70% this year.

“We are doubling the production capacity of this project,” said Ana Cabral-Gardner, co-chief executive officer of the Vancouver-based firm, adding that the gain is done by adding a second production line. The combination will give the firm the potential “to be one of the lowest cost operations globally” for battery-grade lithium.

Sigma Lithium said the phased expansion of its integrated project in Brazil’s Minas Gerais state — its sole operation — could potentially make the company the world’s fourth-largest lithium producer. Prices of lithium, a key metal used in batteries, have soared as countries push to electrify their economies and automakers increasingly turn to electric vehicles.

The world needs lithium supplies to grow fivefold by the end of the decade to meet projected demand as the EV revolution gets into full swing, according to BloombergNEF. BlackRock Inc.’s managed funds are among investors of Sigma Lithium.

Sigma is in talks with Societe Generale SA to increase the size of its project financing initially signed in 2020, said Cabral-Gardner, a former investment banker at Goldman Sachs Group Inc. and Barclays Plc.

“It’s been a significant improvement of our risk profile,” she said in an interview from Brasilia. “Therefore we can properly increase the size of the project financing.”

(By Esteban Duarte)

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