Sigma Lithium Corp. (SGML), a leading global lithium producer fueling the electric vehicle revolution, reported exceptional progress in its third-quarter results. The company not only met but exceeded its lithium production target, solidifying its position as a cost leader in the industry. Their commitment to operational excellence and innovative strategies is driving significant growth and shaping the future of sustainable energy.
During the third quarter, Sigma Lithium produced a remarkable 60,237 tons of its high-quality Quintuple Zero Lithium Concentrate. This represents a substantial 22% increase compared to the second quarter and surpasses the company’s forecast of 60,000 tons. This achievement is even more impressive considering Sigma set multiple daily production records throughout the quarter, sustaining operational rates exceeding 860 tons per day for extended periods. The fourth quarter is expected to maintain this momentum, with projected lithium concentrate production of at least 60,000 tons.
CEO Ana Cabral highlighted the company’s remarkable success: “This quarter we achieved our production and low industry cost targets, generating robust free cash flow and demonstrating our operational resilience to lithium market fluctuations. Our strategic shift in commercial strategy allowed us to secure higher average realized prices compared to industry benchmarks.” This strategic approach, focused on navigating seasonal market demands, has proven highly effective.
Sigma Lithium’s operational improvements extended beyond production. The company significantly increased its shipping cadence, facilitating quasi-monthly sales volumes of 22,000 tons. This included two full 20,000-ton shipments, complemented by an additional 13,483 tons sold from the Port customs warehouse, resulting in total sales of 57,483 tons of Quintuple Zero Green lithium—a 9% quarter-over-quarter surge. This growth was achieved while maintaining some of the lowest cash unit operating costs in the industry. Their cost, insurance, and freight (CIF) to China averaged a competitive $513 per ton, a slight decrease from the previous quarter’s $515.
Further enhancing its financial strength, Sigma Lithium reduced its export credit risk, lowering the interest rate on its trade finance lines from nearly 15.5% in the fourth quarter of 2023 to a significantly improved 9.0% in the third quarter of 2024. This access to over $100 million in export trade lines has enabled the company to expand its geographical reach, adding three new distributors: Glencore AG (Europe), Mitsubishi Corporation RtM International Pte. Ltd (Japan/Singapore), and International Resources Holdings (UAE/Abu Dhabi).
The transition to a distributor model has been instrumental in Sigma’s success. This strategy allows the company to effectively capitalize on annual restocking trends within the chemical refining sector, mitigate the impact of seasonal weather patterns, and consistently outperform market price benchmarks. This proactive approach underscores Sigma Lithium’s commitment to operational excellence and strategic adaptability.
Looking toward the future, Sigma Lithium is actively progressing with phase 2 of its Greentech Plant expansion. Earthworks are underway, including land clearing for the entire industrial project, encompassing future phase 3 construction. The entire building and commissioning process is anticipated to span 12 months, with a budgeted capital expenditure of $90 million (at current exchange rates). The company concluded the third quarter with a strong financial position, holding $65.6 million in cash and generating $32 million in cash flow. This enabled the company to strategically reduce its export credit debt and outstanding trade line balances.
Ms. Cabral concluded by emphasizing the company’s impressive journey and future prospects: “Over the last year, we’ve transformed Sigma from an emerging producer into an industry leader, showcasing the operational and financial resilience of a mature producer. We’ve met all our climate goals, achieving Net Zero a year ahead of schedule and 27 years ahead of industry standards, with our Quintuple Zero Green Lithium. We’re confident that our strategic execution capabilities will deliver long-term value for Sigma and all our stakeholders.” With robust production, a strategic global reach, and a strong commitment to sustainability, Sigma Lithium is well-positioned for continued success in the rapidly growing electric vehicle market.
