Sigma Lithium (SGML) Investor Day 2024 summary

Strategic direction and growth plans

• Plans to double and then triple production capacity by 2027, targeting up to 125,000 tons LCE, with phased expansions leveraging organic mineral reserves and existing infrastructure.

• Expansion strategy is fully funded, with BNDES providing BRL 487 million for Phase 2 and additional facilities under negotiation, ensuring low CapEx and financial flexibility.

• Commercial strategy emphasizes flexibility, direct relationships with battery and car makers, diversification between China and ex-China markets, and seasonality management to maximize pricing and reliability.

• Plans to enter intermediate lithium chemicals production in 2027, capitalizing on anticipated supply-demand imbalance and leveraging Brazil’s low-cost environment.

• Maintains industry-leading low production costs, premium product quality, and sustainability standards, including zero carbon, zero tailings, and zero toxic chemicals.

Operational excellence and innovation

• Achieved status as the world's 5th largest mineral-industrial lithium complex within two years, with consistent monthly shipments of 22,000 tons.

• Mining operations optimized through geometallurgical modeling, redesigned pit shells, increased blasting efficiency, and use of efficient local and planned hybrid trucks to reduce costs and emissions.

• Industrial plant utilizes a simple, chemical-free DMS process, achieving high recoveries, water positivity, and dry stacking of tailings, eliminating environmental liabilities.

• Continuous improvement initiatives include AI-driven process optimization, upgraded screening, upcycling of fines, and ongoing Greentech plant expansion with Phase 2 earthworks and equipment orders in progress.

• Safety performance is industry-leading, with over a year without accidents, zero fatalities, and 85% of the workforce sourced locally.

Financial discipline and capital structure

• Phase II expansion is 99% funded, with BNDES providing long-term, low-cost debt and additional facilities under negotiation for future phases.

• Cash costs, SG&A, and interest expenses have been reduced by 20-24% ahead of targets, with further leverage expected as scale increases.

• 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.

• 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.

• 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.