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Sigma Lithium Receives LOI For Development Bank Financing Of Facility Expansion

Sigma Lithium Receives LOI For Development Bank Financing Of Facility Expansion

Jay Lutz

Monday, February 12 2024, 08:14:20:AM

Sigma Lithium (TSXV: SGML) is reporting this morning that it has received a letter of intent for the funding of an expansion at its Grota do Cirilo project in Brazil. The LOI for funding comes from the Development Bank of the Brazil, or BNDES, with the funding to take the form of a project finance credit line.

The funding is said to be a potential extension of debt financing already in place, which would fund the second Greentech industrial lithium concentrate production plant that would be located at site. The proposed plant would expand the production capacity of the complex from 270,000 tonnes per year to that of 510,000 tonnes, despite the currently weak market for spodumene concentrate.

The proposed facility is expected to have a cost of US$100 million.

At the same time, Sigma this morning revealed it received a full environmental license for the proposed second plant on January 31. The license now permits the processing of up to 3.7 million tonnes per year.

The letter of intent for financing is non-binding, with final approval subject to a number of conditions, including a review of the financing structure proposed, the posting of sufficient collateral, and a review of operating policies within the project finance application, as well as negotiation of definitive documentation. Closing conditions reportedly do not include market related conditions for lithium.


"Despite the recent deterioration in the outlook for lithium demand for the short term, the Company believes that with the appropriate capital structure enabled by this development bank financing, it has a unique opportunity to solidify its global industrial competitive leadership in producing low cost and sustainable pre chemical lithium concentrate," commented CEO Ana Cabral-Gardner.

Sigma Lithium last traded at $19.83 on the TSX Venture.

Information for this briefing was found via Nikkei Asia, Sedar, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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