Sigma Lithium Presents Project Progress Update and MD&A for Year End 2018
TSX VENTURE: SGMA
Highlights the achievement of significant milestones by the Company
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VANCOUVER, British Columbia, May 02, 2019 (GLOBE NEWSWIRE) -- SIGMA Lithium Resources Corporation (“Sigma”) (TSX-V: SGMA) (OTC-QB: SGMLF) is pleased to present the project progress update and inform the filing of December 2018 financial statements and management’s discussion and analysis for the year ended December 31, 2018.
Most recent highlights subsequent to the year-end and in 2018, were (in reverse chronological order):
- Significantly advanced the process to obtain the required LI and LP environmental licenses required for the construction and installation (“Environmental Licenses”) of Sigma’s lithium concentration commercial production plant (“Commercial Production Plant”). The Company received internal approval from SUPRAM, Superintendência Regional do Meio Ambiente, the environmental regulatory approval body (Superintendence of the Environment in Diamantina) and received formal approval from CPB, Câmara para Proteção de Biodiversidade (Chamber for the Protection of Biodiversity).
- Commenced metallurgical studies and test work for Barreiro deposit to confirm that its lithium spodumene can be economically processed through the same dense medium separation (“DMS”) processing circuit of the Commercial Production Plant designed to process the spodumene of the Xuxa deposit in the ongoing feasibility study (“DFS”).
- Sigma’s lithium spodumene concentrate samples were validated by several large customers in the chemical and cathode industries, who confirmed their exceptional quality with high grades above 6% and very low impurities, specifically low levels of alkaline elements and iron, both well below 1%. Sigma has experienced robust demand for long-term offtake agreements to supply Sigma spodumene concentrate starting in 2H20.
- Received certain tax incentives and exemptions under an economic development program administered by SUDENE, a Brazilian federal government agency. The main tax benefits under the SUDENE program include a 75% corporate income tax reduction for 10 years after the Company reaches more than 20% of its annual production capacity and incentivized accelerated depreciation of assets.
- Received the definitive Water License for the construction of Sigma’s Commercial Production Plant granted by Agência Nacional de Águas, the Federal government water agency of Brazil. The water usage license is valid for 10 years. Sigma will use advanced environmental equipment and techniques in the Commercial Production Plant, recirculating up to 90% of the water in the processing. As a result, the water license received is sufficient for the Company to process 1.5 million metric tonnes of spodumene per year, producing an expected 220,000 tonnes of 6% lithium concentrate as well as at a later stage, if confirmed by a feasibility study, double capacity to process 3 million metric tonnes of spodumene per year, producing an expected 440,000 tonnes of spodumene concentrate.
- Received formal unwavering public support from the community of Itinga in the Vale do Jequitinhonha, with the conclusion of the public consultation period of the environmental licenses without additional public hearings being requested by the community. Such support has been the result of intensive communication and interactions Sigma has maintained with the community during the licensing process by proactively holding frequent public hearings.
- Signed a binding heads of agreement (“HoA”), establishing the general terms and conditions of a strategic alliance with Mitsui including a production pre-payment, offtake rights and a strategic collaboration, as discussed in our press release dated April 5, 2019. On the terms and subject to the conditions set forth in the HoA, Mitsui would provide a US$ 30,000,000 pre-payment facility for a portion of the funding required to advance the construction of the Company’s Commercial Production Plant, in exchange for offtake rights to purchase up to 80,000 tonnes of the Company’s spodumene concentrate annual production. The initial tranche payment of US$3,000,000 has been received by the Company. The consummation of the transactions contemplated by the HOA remains subject to the negotiation of definitive documentation and other customary closing conditions.
- Concluded with SGS its Grota do Cirilo property resource estimate update, multiplying by three times the size of the measured and indicated mineral resource to 45.7 million tonnes, as discussed in our press release dated January 10, 2019. The two deposits that will support Sigma’s future production profile, Xuxa and Barreiro were increased to a combined measured and indicated resource of 37.9 million tonnes with an average grade of 1.48%, amongst the highest in the world. The technical report including the updated estimates was filed on February 25, 2019 at www.sedar.com.
- Commissioned Sigma’s pilot production plant (“Pilot Plant”) at its site in Itinga. The Pilot Plant has the capacity to produce up to 12,000 tonnes of lithium spodumene concentrate per year at the rate of 10 tonnes per hour. The Pilot Plant Produced high quality coarse lithium concentrate samples (“Samples”) with an average grade of 6.27% Li2O and a size of 9.3mm and Sigma shipped these Samples to potential long-term offtake partners in Asia for validation.
NEXT STEPS FOR SIGMA DURING THE SECOND AND THIRD QUARTERS OF 2019
- Finalize its ongoing DFS (level 3, which includes the complete design of the Commercial Production Plant, including the itemization of the long-lead items and detailed mining plan).
- Select an engineering contractor to build its Commercial Production Plant, once the ongoing DFS is finalized. Sigma has engaged global engineering firms to prepare a detailed engineering proposal based on the Commercial Production Plant design prepared by Primero in the ongoing DFS.
- Complete the financing package for the construction of the Commercial Production Plant and continue discussions with financing institutions and strategic partners, including companies from the lithium, mining, chemicals, battery, automotive sectors.
- Complete the Environmental License approval process.
- Continue ongoing discussions with offtake customers, in order to celebrate binding offtake agreements.
INDEPENDENT QUALIFIED PERSON
The technical and scientific information in this press release has been reviewed and approved by Marc Antoine Laporte, P.Geo., M. Sc., of SGS Canada Inc. Mr. Laporte is a Qualified Person as defined by National Instrument 43-101 and is independent of Sigma.
ABOUT SIGMA LITHIUM
Sigma is developing a leading lithium hard-rock deposit with exceptional mineralogy at its Grota do Cirilo project in Brazil.
Sigma started to produce battery-grade lithium concentrate on a pilot scale in 2018, shipping high quality coarse lithium concentrate samples to potential customers produced by the Pilot Plant. Based on the initial design being considered under the FS, a larger scale lithium concentration commercial production plant will contemplate a capacity of 220,000 tonnes of battery-grade spodumene concentrate annually. If recommended in the FS and required funding is obtained, Sigma would seek to begin construction by the end of the second quarter of 2019 and to become a fully-operational sustainable lithium producer in 2020.
Sigma’s lithium minerals output is destined for the fast-growing lithium-ion battery market, which is driven by the increasing demand for electric vehicles and energy storage worldwide. Our corporate mission is to execute our strategy while embracing best in class environmental, social, and governance (“ESG”) principles. Sigma’s shareholders include some of the largest ESG-focused institutional investors in the world.
FOR ADDITIONAL INFORMATION PLEASE CONTACT
Sigma Lithium Resources Corporation
Chief Strategy Officer and Director of Investor Relations
55 11 2985-0089
This news release contains forward-looking statements relating to Sigma’s objectives, the potential for increased resources, concentration plant construction and expected production levels, achieving sustainable production and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the state of the economy in general and capital markets in particular, the availability of project financing on reasonable terms, investor interest in the business and future prospects of Sigma and the settlement of definitive offtake and other commercial agreements.
The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, Sigma disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Sigma undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.
The key risks and uncertainties that could cause actual results or the material factors and assumptions applied in preparing forward-looking information to differ materially from predictions, forecasts, projections, expectations or conclusions are discussed in the “Risk Factors” section of Sigma’s Filing Statement dated April 26, 2018. We caution that the foregoing list is not exhaustive of all possible factors.
For more information on the risks, uncertainties and assumptions that could cause our actual results to differ from current expectations, please refer to our public filings available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.