Sigma Lithium Corporation · NASDAQ:SGML
Sigma Lithium — Q2 2024 Earnings Presentation
40 slides from Sigma Lithium's earnings presentation, August 2024
Slide 1: Second Quarter 2024: Achieved Operational Excellence
Second Quarter 2024: Achieved Operational Excellence August 2024 : SGML : SGML : S2GM34
Slide 2: Disclaimer
Disclaimer No Offer or Solicitation Regarding Securities This presentation has been prepared by Sigma Lithium Corporation (“Sigma”) for general information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Sigma or its affiliates in any jur
Slide 3: Disclaimer
Disclaimer (…) Sigma is subject to liquidity risk and therefore may have to include a “going concern” note in its financial statements; Sigma may not be able to obtain sufficient financing in the future on acceptable terms, which could have a material adverse effect on Sigma’s business, results of o
Slide 4: Sigma Lithium Achieved "All Around" Operational Excellence in 2Q
Sigma Lithium Achieved “All Around” Operational Excellence in 2Q 1 Further Increased Cadence of Volumes Sold Shipping at 22,000tpm Reliability Driving Lower Cost Linked to Export Financing 2 Continued to Increase Sales Price Premium Relative to Competitors 3 Achieved One of the Highest Cash Margins
Slide 5: Combining Large Scale with Low Cost and High Traceability Standards
Sigma Lithium is Combining Large Scale with Low Cost and High Traceability Standards First company in lithium sector since 2018 to initiate operations with the “Trinity of Metal Producers” Large Scale Traceability/ State-of-the-Art Low Production Cost Sustainability Standards page 5
Slide 6: Operational Highlights
Operational Highlights
Slide 7: Implemented Culture of Excellence and High Standards: Safety Global Record
Implemented Culture of Excellence and High Standards: Safety Global Record ▪ 1 Year: Zero Fatalities, Zero Accidents ▪ 2nd Amongst World’s Largest Metals and Mining Companies (ICMM Ranking) Days Without Accident Combined Index Company (FFR and TRIFR) 365 Company 1 1.21 1.25 Company 2 1.44 75 Company
Slide 8: Achieved Regular Cadence of Volumes Shipped and Sold
One Year: Achieved Regular Cadence of Volumes Shipped and Sold, Further Increasing During 3Q Enhanced Creditworthiness Translated Into ”FOB Sales” Smoothing Quarterly Volumes Quarterly sales volume cadence (tonnes) 59,938t 60,000t 52,857t 52,572t 45,203t 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 Guidance 2023 v
Slide 9: Reliability of Seasoned Producer: Consistently Shipping 22,000t
Reliability of Seasoned Producer: Consistently Shipping 22,000t Driving Export Credit Lines and Commercial Independence Trader as PRINCIPAL End User Trader as AGENT 3Q23: 45,205 t 4Q23: 59,368 t 1Q24: 52,857 t 2Q24: 52,572 t 3Q24E: 60,000 t 22,860 22,050 22,157 22,000 22,000 22,002 22,000 22,000 22,
Slide 10: Sigma Continues to Capture Increased Price Premium Relative to Market
Sigma Continues to Capture Increased Price Premium Relative to Market Achieving sales volume cadence led to export financing and increasing commercial assertiveness (1) (2) 2024 Shipping Price 2Q24: Average Sales Price Sigma vs. Peers USD/Tonne CIF @ 6% Basis SGML CIF 6% Sales Price Fastmarkets 6% C
Slide 11: High Quality = Premium Pricing While Delivering Cost Savings to Clients
High Quality = Premium Pricing While Delivering Cost Savings to Clients Unique High Grade, High Purity And Coarse-Grained Lithium Chemistry of High Quality Physical Properties and Visibility of High Quality Iron Mica Sigma Dry Coarse Australian Wet Fines Canadian Wet Fines 2.1% 10.0% 1.6% 7.2% 6.5%
Slide 12: Significant Operational Improvements of the Greentech Plant
One Year Later: Significant Operational Improvements of the Greentech Plant Shipment Targets Every 30-35 days Driving Efficiency Module 3 - Dry Stacking: Fines Recovered Should Increase Yields Module 2 - Further Perfected Greentech DMS ▪ Starting in August 24, fines processed at 1.5% from April 23 t
Slide 13: Financial Highlights
Financial Highlights
Slide 14: Summary Second Quarter Financial Highlights
Summary Second Quarter Financial Highlights ($USD) 2Q24 Reported Revenue Cash Operating Margin - FOB Cash Balance - August 14, 2024 $45.9mm 54% $99.3mm Volume Sold Adjusted Cash EBITDA Margin(2) Cash Balance - June 30, 2024 52,572 t 29% $75.3mm (1) Cash operating costs on an FOB basis include mining
Slide 15: 2Q Cash Margins Superior to Industry Peers
2Q 24 Cash Margins Superior to Industry Peers: Result of Consistent Effort to Decrease Quarterly Volatility "Harmonized" Cash EBITDA Margin Gross FOB Margin 45% 78% 41% 40% 38% 54% 54% 35% Average = 34% 33% 41% 30% 25% 25% 20% Peer 1 Peer 2 Sigma Avg. Peer 4 Peer 3 Quarter 15% 10% 5% 0% -65% 3Q23 4Q
Slide 16: Achieved Target Cost Guidance Ahead of Schedule
Achieved Target Cost Guidance Ahead of Schedule Further potential reductions from increased operational efficiency (1) CIF Cash Cost FOB Cash Cost Plant Gate Cost USD/Tonne USD/Tonne USD/Tonne -22% $658 -22% $551 $549 -24% $515 $478 $462 $424 $397 $364 4Q23 1Q24 2Q24 4Q23 1Q24 2Q24 4Q23 1Q24 2Q24 1.
Slide 17: Sigma is a Low Cost and Sustainable/Traceable Producer
Sigma is a Low Cost and Sustainable/Traceable Producer Keys to Secure a Competitive Position in Premier Global EV Supply Chains Yichun Others Huaqiao Dagang 1,400 Total Low Cost & Traceable 2025E (Brines & Mines) = 1Mt LCE Baishuidong & Shuinanduan NAL and Authier C3 Cash Cost Spodumene Curve Baishi
Slide 18: Achieved 2024 Annual Cost per Ton Targets Ahead of Schedule
Achieved 2024 Annual Cost per Ton Targets Guideline Ahead of Schedule (1) Cash Cost Bridge: Greentech Plant – FOB Brazil Port – CIF Shangai Port – COGS 2QFS SG&A Streamlined (USD Millions) USD/Tonne USD Millions $510 $566 $3 -24% $515 $55 $12.4 $420 $25 $11.2 $424 $66 $370 $364 $60 $566 $515 $490 $5
Slide 19: Robust Cash Generation Capabilities
Robust Cash Generation Capabilities Results from Increased Commercial Competitiveness and Premuinization Cash Flow Bridge USD Millions $8 1 $54 $33 2 5 $108 $4 $4 $17 $99 $48 $45 3 4 $75 $2 $9 $13 Starting Cash Revs for 2Q Price Total Cash Net Interest Pending FX & Other Capex Net New Ending Cash -
Slide 20: Comfortable Liquidity Position
Comfortable Liquidity Position Robust access to liquidity at improved rates resulting from consistent operational performance Liquidity: Cash x Indebtedness Interest Profile Cash Debt 16% 14% $99.3 ST LT 11.8% 12% 9.5% 9.3% 10% $92.7 7.7% 8% 6.7% $90.0 6% 4% 2% Gross Cash as of Aug 14 St: Trade Line
Slide 21: Phase 2 Update
Phase 2 Update
Slide 22: Among the Lowest Capex-Intensive Projects in the World
Among the Lowest Capex-Intensive Projects in the World Lowest quartile in capex per production capacity Project Capex Intensity Comparison Sigma’s P2 Leads in Capex Efficiency Bubble size = capex efficiency ratio (USD millions) / production capacity Capex efficiency ratio = capex (USD millions) / pr
Slide 23: Balance Sheet Strength Supports Construction of Phase 2
Balance Sheet Strength Supports Construction of Phase 2: a Combination of Cash Generation and Undrawn Trade Finance Revolving Credit Lines Robust Cash Position Trade Finance (Drawn and Unused) Construction Capex US$99 mn US$92.7 mn US$100.5 mn As of August 14th, 2024 As of August 14th, 2024 page 23
Slide 24: Greentech Line Infrastructure Expansion
Expansion Greentech Line ✓ Plans to double production to 520ktpa of Green Lithium within a year ✓ Phase 2 capex estimated at ~$100mm for Infrastructure ~250ktpa of spodumene capacity page 24
Slide 25: Phase 2 Earthworks Underway
Phase 2 Earthworks Underway Environmental Clearing and Fauna Capturing and Cataloguing: Mandatory Step Ahead of Initiation page 25
Slide 26: Ability to Scale Up Production Organically
Ability to Scale Up Production Organically: 100,000 t LCE / year with +20 Years Operating Life of Large Mineral Reserve Production expansion is de-risked by operational and execution capabilities replicating previous implementation 770 750 P3: ~250 kt Phase 3: Production in 2026E Capacity in Phase 1
Slide 27: Market Update
Market Update
Slide 28: EV Growth in China Drives Global Lithium Demand
EV Growth in China Drives Global Lithium Demand: 60% of EV Market Global Lithium Demand kmt LCE Electric Car Sales (Millions of EVs) China 61 Between 2024 Bearish Demand Europe and 2030 the INCREMENT world will need 50 2,882 USA 9 forecasted for new Sigmas 50 Others 2024 is larger than the industry'
Slide 29: While Lithium Production in China has Grown, it Remains Very Seasonal
While Lithium Production in China has Grown, it Remains Very Seasonal Lithium concentrate behaves counter seasonally to chemicals China LC Production China Brine Production Change vs. Prior 6 Months (LC) Change vs. Prior 6 Months (Brine) 70,000 140% 120% 60,000 100% 50,000 80% 40,000 60% 40% 30,000
Slide 30: Closing Comments
Closing Comments
Slide 31: Sigma Did Not Benefit in Valuation From Becoming A Large Producer
Sigma Did Not Benefit in Valuation From Becoming A Large Producer Re-Rate of Valuation did not take place: Ramped up production against lithium prices sharp decline in 2H24 Proportional Comparison: Valuation to Production SGML x ALB SGML x PLS 199Kt $9.3 bn 4/5 77kt $5.5 bn 4/5 1/2 1/2 37kt 37kt $2.
Slide 32: Transforming from a construction site to an Industry Leader
Transforming from a construction site to an Industry Leader Completed FID Phase 2 and operational DMS plant Mobilitzation commissioning Initial production April ‘23. Nameplate Increase Mineral capacity by 4Q Reserves by 40% Dry stacking and/or selling tailings to market Begin Phase 2 Construction Ze
Slide 33: Appendix
Appendix
Slide 34: Income Statement Summary and EBITDA Bridge
Income Statement Summary and EBITDA Bridge (‘000) Unaudited Three Months Ended Three Months Ended Three Months Ended Three Months Ended Income Statement June 30, 2024 June 30, 2024 EBITDA Bridge June 30, 2024 June 30, 2024 ($000) CAD USD ($ 000) CAD USD Revenue 62,857 45,920 Revenues 62,857 45,920 O
Slide 35: Balance Sheet and Cash Flow Statement Summary
Balance Sheet and Cash Flow Statement Summary (‘000) Unaudited Three Months Ended Three Months Ended Six Months Ended June Six Months Ended Balance Sheet June 30, 2024 June 30, 2024 Cash Flow Statement 30, 2024 June 30, 2024 ($000) CAD USD ($000) CAD USD Assets Operating Activities Net income (loss)
Slide 36: Realized Price Reconciliations
Realized Price Reconciliations ($ USD) Average Realized Price, CIF Equivalent Average Repoerted Selling Price in Quarter, CIF Equivalent $000 1Q24 2Q24 $000 1Q24 2Q24 Reported Revenues 37,202 45,920 Revenues from Shipments Made 49,141 54,418 Tonnage Sold 52,857 52,572 Tonnage Sold 52,857 52,572 Real
Slide 37: Provisional Pricing Drives Volatility in Headlines Not to Business
Provisional Pricing Drives Volatility in Headlines Not to Business ($ USD) Reported Sales $mm "Harmonized" Sales $mn 3Q23 96,902 3Q23 63,090 4Q23 38,319 Adjustments 4Q23 49,593 1Q24 37,202 Revenue and EBITDA 1Q24 50,724 2Q24 45,920 • Provisional Price: Shipments may be 2Q24 54,936 Sum 218,343 recogn
Slide 38: Phase 2 Expansion; Derisked Construction Replicating Plant 1
Phase 2 Expansion; Derisked Construction Replicating Plant 1 Phase 2 builds on Phase 1 success Construction Items Phase 1 Phase 2 Total Total Earthworks Industrial Site Construction 16.6 16.4 Infrastructure Crushing System DMS System Industrial Plant Assembly Direct & Construction Management 68.6 61
Slide 39: Sigma Generates Cash at Trough, a Lot at Mid Cycle
Sigma Generates Cash at Trough, a Lot at Mid Cycle ▪ Unique Operational Efficiency ▪ Low Costs Are Mainly Due to Low Processing Cost and Brazil Jurisdiction: ▪ Utilization of DMS/ Low-Cost Renewable Power Cost Scenarios Current Price Mid-Cycle Estimated Run-Rate Cash Operating Margin / tonne Headlin
Slide 40: SIGMA
W\ 4 SIGMA LITHIUM