Sigma Lithium (SGML) Investor Day 2024 summary

Strategic direction and growth plans

• Production capacity will double to 71,000 t/y LCE by 2025, triple to 100,000 t/y by 2026, and reach 125,000 t/y by 2027 through phased expansions, leveraging existing infrastructure and development bank financing, ensuring over 25 years of operating life.

• Expansion is sequenced: phase II construction completes in 2025, phase III in 2026, and intermediate chemical production (lithium sulfate) begins in 2027, timed to anticipated supply-demand imbalances.

• CapEx for expansion is fully funded at attractive rates (as low as 2.5-3% in dollars), with BNDES providing BRL 487 million for Phase 2 and ongoing access to development bank and export credit facilities.

• Commercial strategy emphasizes flexibility, direct relationships with end users, diversification between China and ex-China markets, and formal volume commitments to battery and car makers, targeting premium pricing through traceability and sustainability.

• Maintains a low-cost, high-scale, and sustainable production model, with plant gate costs reduced to $424/t and a focus on traceability and premium product quality, differentiating from untraceable, low-cost competitors.

Financial performance and guidance

• Achieved target cost guidance ahead of schedule, with cash costs per tonne reduced by 22-24% across CIF, FOB, and plant gate metrics in 2024.

• Maintains a strong liquidity position, with $57 million in cash and $43 million in available trade lines forecasted for 3Q24, and reduced reliance on short-term trade debt due to BNDES support.

• Cash EBITDA margins are expected to exceed 50% as capacity expands, with recurring cash flow potential before interest projected at $144 million in 2025, $349 million in 2026, and $662 million in 2027.

• Liability management includes plans to replace $100 million in shareholder debt due in 2026 with longer-duration borrowing, further optimizing the capital structure.

• Interest rates on debt have declined significantly, with BNDES loans at 2.5% USD equivalent and trade finance rates dropping to 8.6% as operational consistency is proven.

Operational excellence and innovation

• Mining operations focus on stability, low cost, and geometallurgical modeling, with redesigned pit shells, increased blasting efficiency, and use of efficient trucks and hybrid vehicles to optimize costs and ensure consistent high-grade feed for plant expansions.

• The industrial Greentech plant uses a simple, chemical-free DMS process, achieving high recoveries, water positivity, and zero tailings dams, with continuous improvements in automation, AI, and yield optimization.

• Productivity enhancements include upgrading screens, reprocessing ultra-fines, and upcycling dry-stacked material, aiming for low double-digit yield growth without major new CapEx.

• Greentech plant expansion underway, with Phase 2 earthworks and equipment orders in progress, targeting completion and commissioning in 2025 to double production capacity.

• Safety performance is industry-leading, with over a year without accidents, zero fatalities, and 85% of the workforce local, demonstrating successful skills development and community integration.