SIGMA LITHIUM REPORTS 4Q24 AND FY24 RESULTS: STRONG MARGIN GENERATION, RECORD PRODUCTION AND SIGNIFICANT COST REDUCTIONS
HIGHLIGHTS
FINANCIAL REPORT
Strong operating margins: reflecting strong profitability and operational efficiency.
Cash operating margin of 42% in 4Q24, underlying 41% in FY24.
Adjusted EBITDA margin in 4Q24 of 26%, underlying 25% in FY24.
Record quarterly production and sales volumes: improvements at Greentech Industrial Lithium Plant:
Increased production and sales of Quintuple Zero Lithium Concentrate by approximately 28% in 4Q24: over 77,000 tonnes of production and 73,900 tonnes of sales.
Issued FY 2025 production guidance of 270,000 tonnes, reinforced by performance achieved in 4Q24.
A video highlighting our operational improvements is available for viewing here
Achieved significant cost reductions: monetized economies of scale and increased efficiency.
CIF China cash operating costs decreased 17% to US$427/t in 4Q24.
All-in sustaining costs (AISC) totaled US$592/t in 4Q24.
Provided FY 2025 cost guidance of CIF China cash costs of US$500/t and AISC of US$660/t.
Strengthened Commercial Strategy in 4Q24 to align with annual restocking trends of chemical refiners, effectively managing seasonality: achieved average sales prices of approximately US$900/t (6% CIF China).
PLANT 2 CONSTRUCTION
Significantly Progressed Plant 2 Construction:
Concluded procurement of long-lead items, continued detailed engineering, completion of earthworks and foundation construction.
A video of construction progress is available for viewing here.
Plant commissioning is expected to begin in 4Q25.
TECHNICAL REPORT
Published an updated NI 43-101 Technical Report for the Grota do Cirilo operations:
Updated After-Tax NPV8% for the operations at US$5.7 billion, at current prices averaging US$1,000/t for the next three years of operations.
Validated 22 years of operational life with a mineral resource estimate of 107Mt (M&I&I) at 1.40% Li2O, and a mineral reserve estimate at 76 Mt.
Conference Call Information
The Company will hold a conference call to discuss its financial results for the fourth quarter at 8:00 a.m. ET on Monday, March 31, 2025. Participating in the call will be Ana Cabral, Co-Chairperson and Chief Executive Officer, and Rogerio Marchini, Chief Financial Officer. To register for the call, please proceed through the following link Register here. For access to the webcast, please Click here.
SÃO PAULO, March 31, 2025 /PRNewswire/ -- Sigma Lithium Corporation (NASDAQ:SGML, BVMF: S2GM34)), a leading global lithium producer dedicated to powering the next generation of electric vehicles with carbon neutral, socially and environmentally sustainable lithium concentrate, reports its results for the full year ended December 31, 2024.
Ana Cabral, Co-Chairperson and CEO, said: "In 2024, Our continued focus on innovation and the introduction of advanced Greentech technologies, such as the new ultrafines reprocessing circuit, increased the overall efficiency of our industrial process. As a result, we significantly increased industrial lithium oxide concentrate production volumes, without a concomitant increase in mining footprint, thereby simultaneously creating value for both the environment and our shareholders."
"We are undergoing a transformational period as we accelerate our growth to become one of the world's leading integrated industrial-mineral lithium oxide producers. As we increase production volume, we see opportunities to further monetize economies of scale. We demonstrated operational resilience during the current lithium cycle, surpassing production targets, while maintaining one of the lowest cash cost positions in the industry. Our execution track record further reinforces our ability to deliver on our targets", she added.
The CEO concluded, "We are simultaneously constructing our second Greentech Industrial Plant to double our production capacity in 2025, while entering the planning stages for a third Greentech production line. This expansion, coupled with our disciplined approach to capital deployment and industry-leading low capex intensity, positions Sigma Lithium for sustainable long-term growth. As we look ahead, our unwavering focus on innovation, cost leadership, strategic partnerships, and environmental stewardship will continue to drive value creation for our stakeholders."
Table 1. Summary of FY 2024 and 4Q24 Key Operational and Financial Metrics
Production and Sales
Unit
FY2024
4Q24
Production Volumes
tonnes
240,828
77,034
Sales Volumes
tonnes
236,811
73,900
Average grade of shipped product
% of Li2O
5.3
5.2
Average Selling Price, @6% CIF China(1)
US$/t
875
900
COGS
US$/t
506
434
Operating Cash Cost at Plant Gate(2)
US$/t
364
318
Operating Cash Cost CIF China (2)
US$/t
494
427
All-in Sustaining Cash Cost (2)
US$/t
714
592
Financial Performance
Unit
FY2024
4Q24
Underlying Revenue(3)
US$ 000
180,589
47,336
Reported Revenue
US$ 000
151,352
47,336
Underlying Adjusted EBITDA(4)
US$ 000
46,023
12,259
Adjusted EBITDA(4)
US$ 000
16,786
12,259
Cash and Cash Equivalents, at the end of the respective period
US$ 000
45,918
45,918
Revenues and Production
Sigma Lithium reported revenues of US$151.4 million for the FY24. Revenues for the FY24 include non-cash provisional price adjustments for the shipments realized in 2023 in the amount of US$29.2 million, reflecting downward price settlements for these shipments. Therefore, underlying revenues, excluding these non-cash provisional 2023 price adjustments, totaled US$180.6 million for the full year 2024.
The Company also reported total revenues of US$47.3 million for the 4Q24, an increase of 127% over the revenues reported in 3Q24.
As a result of the improved efficiencies at the Greentech Plant, following the completion of the new ultrafines circuit, the Company achieved a 28% increase in production volumes in the 4Q24, reaching 77,034 tonnes. Annual production totaled 240,828 tonnes in 2024.
The Company expects to produce at least 270,000 tonnes of its Quintuple Zero Lithium Concentrate in 2025, averaging approximately 67,500 tonnes per quarter.
Following the success in increasing production volumes, during the 4Q24, Sigma Lithium sold 73,900 tonnes of its Quintuple Zero Green Lithium concentrate. As a result, the Company reported a total of 236,811 tonnes in sales volumes for the FY24.
The Company strengthened its commercial relationship with trading companies, allowing to execute commercial strategy in line with annual restocking trends of chemical refiners, weathering seasonality more effectively and outperforming market price benchmarks, achieving average CIF sales price for the 4Q24 of approximately US$900/t.
In 2025, the Company will focus on optimizing further its commercial strategy by following seasonality patterns. This will involve consolidating shipments into larger vessels and timing deliveries to align with peak demand seasons at final destinations.
Cash Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin
Sigma Lithium reported an underlying cash gross margin (gross margin excluding non-cash 2023 provision price adjustments and D&A expenses) of 41% for FY24 and cash gross margin of 42% for 4Q24 (gross margin excluding D&A expenses).
For the FY24 Adjusted EBITDA totaled US$16.8 million. Similarly to revenues, underlying Adjusted EBITDA (excluding non-cash 2023 provisional price adjustments) for the FY24 totaled US$46.0 million, representing underlying Adjusted EBITDA margin of 25%.
For the 4Q24, Adjusted EBITDA totalled US$12.3 million, representing an Adjusted EBITDA margin of 26%, reflecting strong profitability and operational efficiency.
Costs and FY25 Guidance
The Company reported cost of sales of US$119.7 million or US$506/t of sold products for the FY24. The cost of sales totalled US$32.1 million for the 4Q24, an increase of 10% compared to the cost of sales reported for the previous quarter as a result of significantly higher sales volumes in the quarter.
By monetizing economies of scale, the Company reported a 15% decrease in cost of sales per tonne averaging US$434/t of sold product for the 4Q24 compared to 3Q24.
During 2024, the Company maintained its low-cost position, with CIF China cash operating costs averaging US$494/t. In the 4Q24, the Company achieved a significant reduction in CIF China operating cash costs, totaling US$427/t, a decrease of 17% compared to the 3Q24. This reduction was driven by economies of scale from a substantial increase in production volumes during the quarter.
Demonstrating resilience to price cycles, AISC also saw a significant improvement at US$592/t in 4Q24, compared to the average of US$714/t for the FY24. The decreases were primarily driven by a reduction in financial expenses, resulting from more efficient use of working capital, and a dilution of SG&A expenses as we scaled production.
For the 2025 business year, the Company expects to maintain CIF China operating cash cost of US$500/t with AISC averaging US$660/t. This conservative guidance is based on the average CIF China operating cash cost and AISC per tonne achieved in 2024.
Balance Sheet & Liquidity
As of December 31, 2024, the Company's cash and cash equivalents totaled US$45.9 million. The Company's cash generation for the year was US$23.7 million, excluding the "non-realized" foreign exchange impact on cash held in other currencies of US$14.4 million and the interest payments related to the previous year, as outlined below.
The main uses of cash during the year were:
(i)
interest payments of US$31.5 million, which included payments for two years of interest on a long-term loan facility (US$12.0 million accrued in 2023);
(ii)
Increase in working capital of US$8.8 million due to significantly higher production and sales volumes;
(iii)
Capital expenditures of US$23.8 million;
In 2024, due to the achieved operational consistency, the Company was granted substantial trade finance credit lines by commercial banks. As of December 31, 2023, the Company had US$9.4 million in short-term debt and US$119 million in total debt. By December 31, 2024, short-term debt increased to US$60.3 million, with total debt reaching US$173.6 million.
Throughout 2024, enhanced operational reliability and a steady shipment schedule reduced the Company's export credit risk, which in turn improved the availability and lowered the interest rates on its trade finance lines.
As a result of these performance improvements, the Company increased working capital efficiency and decreased its total financial and interest expenses per ton as follows:
Significantly decreased interest rates on the Company's trade finance export credit lines, from 15.5% per year in 4Q23 to 8.7% per year in 4Q24.
Improved working capital efficiency, maintaining a short-term trade finance balance of US$59.6 million as of December 2024, consistent with the previous quarter, despite the significant increase in production.
Decreased net interest paid on short-term debt to US$19/t in 4Q24.
Net interest paid in FY24 totaled US$19.6 million (excluding interest accrued in 2023), or approximately US$81/t based on annual production of 240,828 tonnes.
As guidance, the Company expects interest payments to remain at similar levels of approximately US$78/t in 2025. While we plan to ramp up production, the impact on financial costs per tonne may not be as significant, as we expect to disburse the BNDES loan without the benefit of the additional production volumes from Plant 2. However, by 2026, once Plant 2 is operating at full capacity, we anticipate a sharp reduction in financing costs per tonne to US$39.
Phase 2 Expansion and CAPEX Update
In April 2024, the Board of Directors announced a Final Investment Decision for the Company's Phase 2 Greentech Plant expansion. The project is expected to add 250,000 tonnes of production capacity to the current Phase 1 operation. Importantly, the Company has already received all licenses to build and operate this second Greentech Plant and commence mining operation at its Barreiro site, when needed. The operating license for the Barreiro mine, the second mine within the Grota do Girlo property, was granted in December 2024.
The Company has successfully completed 100% of the foundation earthworks for the second Greentech industrial plant, staying on schedule and within budget. The first cement has been poured, and construction has advanced to civil works, including the completion of water drainage infrastructure for the second industrial site.
In addition, detailed engineering with technical specifications has been completed for certain key equipment items with long manufacturing lead times (long-lead items). Procurement and contractual negotiations have been completed, and the initial deliveries of the plant's equipment are expected to commence in July 2025, followed by the assembly of mechanical structures.
Currently, there are more than 100 people working on the expansion project, with plans to increase the workforce to 1,000 at peak construction. The Company has also accelerated its homecoming program with the creation of a training center for heavy machinery operators in one of the neighboring communities.
Sigma Lithium has secured a US$100 million development bank credit line from BNDES to fully fund the construction. The Company decided to continue advancing its construction, despite the current lithium cycle, due to its low capital expenditure intensity (capex per tonne of capacity built). This efficiency is driven in part by the existing infrastructure, which supports the additional Greentech Industrial Plant and enables the Company to fast-track construction timelines while controlling costs.
During 2024, the capital expenditure totalled US$23.8 million, including approximately US$8.0 million of maintenance expenses. The Company expects the 2025 capital expenditure to reach approximately US$100 million for the Phase 2 construction to be reimbursed through the BNDES development loan.
Updated Technical Report
The Company filed an updated technical report (the "Technical Report") for its 100% owned Grota do Cirilio lithium project supporting 22 years of operational life for the Company. The Technical Report contains an updated Mineral Resource and Reserve Estimate, and provides revised operational cost, and economic parameters for the Grota do Cirilo operation at Vale do Jequitinhonha in Minas Gerais, Brazil, as of January 15, 2025.
The Company's mining resource increased by a total of 23% from the previous technical report, to 93.2 million tonnes of measured and indicated (M&I) mineral resource at 1.40% Li2O, together with inferred mineral resource of 13.7 million tonnes at 1.36% Li2O. Proven and Probable reserves have increased 40% to 76.4 million tonnes at 1.29% Li2O, with a revised long-term cash operating cost at Plant Gate estimate of approximately US$318/t of lithium oxide concentrate.
This increase in mineral resource estimates reflects only a portion of the full geological exploration potential at Grota do Cirilo, as announced by the Company. Grota do Cirilo is one of four properties within Sigma Lithium's broader mining portfolio, highlighting significant further exploration and resource growth potential.
Additionally, Sigma Lithium continues to execute the mineral and metallurgical development work to further convert its mineral resources into reserves over time. As a result, the Company expects the increase in mineral reserve estimates to continue alongside the construction of additional Greentech industrial production lines, ensuring that the operational life remains above 15 years.
The Technical Report also outlines an updated after-tax NPV (at 8%) for Phases 1, 2, and 3, estimated at US$5.7 billion, using Benchmark Minerals Inc.'s updated price forecast, representing a decrease from US$15.3 billion in the previous technical report filed in January 2023. This reduction in project NPV is not solely due to the significant decline in lithium prices in recent years, ...
