Sigma Lithium Corporation · NASDAQ:SGML
Sigma Lithium — Q3 2024 Earnings Presentation
44 slides from Sigma Lithium's earnings presentation, November 2024
Slide 1: Third Quarter 2024 Earnings Release Presentation
Third Quarter 2024 Earnings Release Presentation November, 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 Continues to Deliver Operational Excellence
Sigma Lithium Continues to Deliver Operational Excellence Operational Highlights 1 Further Increased Cadence of Quasi Monthly Volumes Sold at 22,000tpm 2 Surpassed 3Q Production Target of 60,000 tonnes 3 Successful Shift in Commercial Strategy to Weather Seasonality: Higher Realized Prices Versus In
Slide 5: Delivered Robust Financial Performance
Delivered Robust Financial Performance Financial Highlights 1 ▪ Signed BNDES Development Loan Agreement ▪ Fully Funded Construction of Plant 2 2 Maintained low CIF Cash Costs at Target of US$ 513/t (Lowest Quartile in Industry) 3 ▪ US$ 34.5 Million in Generated Operational Cash Flow ▪ US$ 65 Million
Slide 6: Focus on Execution Delivered Operational Performance on Targets
Focus on Execution Delivered Operational Performance on Targets Production Volumes Provisional Price Adj. 60,237 dmt Sales Revenue US$(23.3) m US$44.2 m (1) Sales Volumes Final accounting settlement of sales open 57,483 dmt invoices Cash Costs Operational Cash Flow (1) US$449 /t US$34.5 m Cash Gross
Slide 7: Production: Superior Industrial Performance Delivering on Ambitious Targets
Production: Superior Industrial Performance Delivering on Ambitious Targets Strong performance of greentech industrial plant ▪ Production of 60,237 dmt ▪ DMS recoveries of 70% ▪ Global recoveries of 55% Concluded optimization project in record time: boost global recoveries and plant efficiency ▪ Shu
Slide 8: Increased Production Performance: Higher Sales Volumes
Increased Production Performance: Higher Sales Volumes Sales at port warehouse ensure appropriate quarterly “cut offs” Quarterly sales volume cadence (tonnes) 59,938 60,000 57,483 52,857 52,572 45,203 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24E 2023 volume for sale available per quarter Operational Maturity Afte
Slide 9: 443 Days Without Time Lost to Accident
Operational Excellence Driven by a Culture of Safety and Processes Returning to their families every day 0 Fatalities 443 Days Without time lost to accident & injury 1.24 #2 TRFIR over last ICMM Ranking nine months (1) (1) International Council on Mining and Metals (“ICMM”) metric of total recorded
Slide 10: Signed BNDES Loan Transaction
Signed BNDES Loan Transaction Fully funded construction of plant 2 Highly Attractive Development Loan for Project Financing Financial Commitment: Terms: BRL 487 mm Maturity: 16 years ▪ Created Long-Term Partnership 99% Capex Grace Period: 18 months for Development Funding (1) ▪ Opportunity For Addit
Slide 11: Continues to Advance Plant 2 Construction
Continues to Advance Plant 2 Construction
Slide 12: Maintained Cash Cost Discipline: One of the Lowest in the Industry
Maintained Cash Cost Discipline: One of the Lowest in the Industry Further potential reductions as mobile crusher costs to lapse in 1Q25 (1) CIF Cash Cost FOB Cash Cost Plant Gate Cost USD/Tonne USD/Tonne USD/Tonne -22% $658 -18% -17% $551 $549 $515 $513 $478 $462 $449 $424 $397 $395 $364 $370 -23%
Slide 13: Positive Cash Flow Generated in Third Quarter
Positive Cash Flow Generated in Third Quarter Operational Cash Flow Generated… 1 … Enabled Increased Investments… 2 $5.0 $34.5 ($40.6) ($20.3) ($15.3) ($6.1) June-30 3Q24 Sept-30 June-30 3Q24 Sept-30 … While Repaying Export Credit Debt… 3 … Maintaining Healthy Cash Balance During the YTD 4 $40.3 ($9
Slide 14: Concluded Final Accounting Settlement of Sales Invoices from Previous Quarters
Concluded Final Accounting (Non-Cash) Settlement of Sales Invoices from Previous Quarters Generated accounting adjustment of (US$23mm) to close the opened invoices 3Q24 Reported Sales Revenue YTD 2024 Reported Sales Revenue $29.3 $23.3 $19.5 4Q23 $7.7 4Q23 $9.8 This year $15.6 This year $133.3 $44.2
Slide 15: Adopted and Strengthened Commercial Strategy: Selling to Trader with Distribution Agreement
Adopted and Strengthened Commercial Strategy: Selling to Trader with Distribution Agreement Sold to Trader as a Principal Sold to Trader as a Distributor Realized Price Bulletin Price 122% 119% 95% 100% 100% 100% 106% 100% 75% Winter Seasonality Summer Seasonality 4Q23 1Q24 2Q24 3Q24 Sigma Realized
Slide 16: Commercial Assertiveness Resulted in Higher Final Prices Achieved in 3Q
Commercial Assertivness Resulted in Higher Final Prices Achieved in 3Q (2) 3Q24: Average Realized Sales Price Sigma vs. Peers CIF @ 6% Basis in USD/t @ Original Grade Adjustment $946 $126 $872 $842 $802 $79 $787 $772 $90 $105 $90 $872 $820 $763 $712 $682 $682 Sigma Avg. Quarter Peer 1 Peer 2 Peer 3
Slide 17: Robust Cash Flow Deployed to Retire Export Credit Trade Balances
Robust Cash Flow Deployed to Retire Export Credit Trade Balances Cash Flow Bridge USD Millions 1 2 $5 $2 $2 5 $32 $45 $6 $32 3 4 $75 $40 $66 FCF = $32 million Starting Cash 2Q Invoiced Total Cash Costs Cash Interest Net Working FX & Other Capex Other Net Debt Ending Cash - Revenues Expense Capital I
Slide 18: Comfortable Liquidity Position
Comfortable Liquidity Position Robust access to liquidity at improved rates resulting from consistent operational performance Liquidity: Cash x Indebtedness Cash Debt ST LT $90.0 $65.6 $59.2 $10.8 $11.2 Cash St: Trade Lines ST: Current Portion LT Debt LT: Shareholder Debt Net Cash LT: BDMG Collatera
Slide 19: Where we are headed: Delivering our strategy to increase production capacity
Where we are headed: Delivering our strategy to increase production capacity Expects to reach 100,000 t/y LCE capacity by 2026 Nameplate Capacity (kt LCE) 2024: Efficiency 2025: Completion of 2026: Completion of 2027: Completion of Initiatives to Plant 1 Phase 2 Plant Phase 3 Plant Intermediate Chem
Slide 20: Over the Year Sigma Lithium was Transformed into a Leading Producer
Over the Year Sigma Lithium was Transformed into a Leading Producer: Resilient to Cycles Operational discipline, low cost and large scale FID Phase 2 and Mobilitzation Achieved Financial Independence: Large Trade Finance Lines at Low Rates Increase Mineral Reserves by 40% Signed Transformative Began
Slide 21: Appendix
Appendix
Slide 22: Sigma's Impeccable Execution: Large Asymmetry to Peers
Sigma’s Impeccable Execution: Large Asymmetry to Peers Contagion Effect Amongst North American Listed: 2023 Producer Vintage Has Not Delivered Producers by Volume (kt LCE) 450 2024E Production $10.5 $12.0 11 400 2026E Production $9.4 Phase 1 Run-Rate Production 9 350 Phase 1, 2 & 3 Run-Rate Producti
Slide 23: Sigma Completed Optimization of Greentech Plant
Sigma Completed Optimization of Greentech Plant Potential to Increase Production by 10-15% Module 2 - Further Perfected Greentech DMS Planned Real 100% ▪ Ultrafines processed at 1.5% from April 23 to July 23 are being reconcentrated to 5.2% 90% ▪ Reprocessing circuit developed for Operational Effici
Slide 24: Screens Upgraded at Ultrafine Circuit
Screens Upgraded at Ultrafine Circuit to Improve feed mix, limit production loss, and allow for stockpile reprocessing 3 Days page 24
Slide 25: Magnetic Separators Decrease Contaminants Increasing Feed Quality
Magnetic Separators Decrease Contaminants Increasing Feed Quality of Material: Optimizing Capacity 3 Days page 25
Slide 26: Phase 2 Update
Phase 2 Update
Slide 27: Sigma Lithium Continues its Expansion to Cement Global Leadership
Sigma Lithium Continues its Expansion to Cement Global Leadership in Lithium Industry Expects to reach 100,000 t/y LCE capacity by 2026 Nameplate Capacity (kt LCE) 2024: Efficiency 2025: Completion of 2026: Completion of 2027: Completion of Initiatives to Plant 1 Phase 2 Plant Phase 3 Plant Intermed
Slide 28: Among the Lowest Capex-Intensive Projects in the World
Among the Lowest Capex-Intensive Projects in the World Executing a low capex, low risk expansion strategy Project Capex Intensity Comparison Sigma’s P2 Leads in Capex Intensity Bubble size = capex intensity ratio (USD millions) / production capacity Capex intensity ratio = capex (USD millions) / pro
Slide 29: Greentech & Infrastructure
Expansion Area: July 24 Greentech & Infrastructure page 29
Slide 30: Greentech Line Infrastructure
Expansion Area: Oct 24 Greentech Line ✓ Double production to 520ktpa of Green Lithium within a year Infrastructure ✓ Phase 2 Capex Fully Funded ~$100mm page 30
Slide 31: Expansion Phase 2 & 3
Expansion Phase 2 & 3
Slide 32: Expansion Phase 2 & 3
Expansion Phase 2 & 3
Slide 33: Expansion Phase 2 & 3
Expansion Phase 2 & 3
Slide 34: 3Q24 Financial Highlights
3Q24 Financial Highlights
Slide 35: Achieved Cadence of Quasi-Monthly Volumes Sold of 22,000t
Achieved Cadence of Quasi-Monthly Volumes Sold of 22,000t Commercial Policy Lines Supported Commercial Assertiveness and Diversification Sold to Trader as a Principal Sold to Trader as a Distributor 22,860 22,050 22,157 22,000 22,000 22,000 22,000 22,000 22,000 22,000 22,000 21,624 21,000 15,000 Fir
Slide 36: Cash Cost on Target Leveraging Productivity and Initiatives
Cash Cost on Target Leveraging Productivity and Initiatives Cash Cost Bridge: Greentech Plant – FOB Brazil Port – CIF Shanghai Port – COGS 3QFS Cash Cost Items USD/Tonne $49 $55 $54 $513 Cash costs include $25/tonne $509 from deployment of a temporary $11 3 1 mobile crushing circuit (until Dec- $53
Slide 37: Market Update
Market Update
Slide 38: EV Growth in China Drives Global Lithium Demand
EV Growth in China Drives Global Lithium Demand: 60% of EV Market Short-Term EVs to grow ~25% in 2024 Long-Term Demand is Resilient (kmt LCE) 2021 2022 2023 2024 Global EV sales +12% m-m in Sept 2,000 China EV sales +14% m-m in Oct Thousands of EVs 1,500 Between 2024 and 2,882 1,000 2030 the world w
Slide 39: Industry is Responding to Lower Prices by Cutting Volumes
Industry is Responding to Lower Prices by Cutting Volumes Importantly, even China is proving to be price sensitive to volatility Market is testing and holding floors at much higher levels than last cycle Large battery company Zimbabwe operation reportedly halts lepidolite announces partial $1,200 op
Slide 40: 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 - Unaudited September 30, 2024 September 30, 2024 EBITDA Bridge - Unaudited September 30, 2024 September 30, 2024 ($000) CAD USD ($ 000) CAD USD Sa
Slide 41: Balance Sheet and Cash Flow Statement Summary
Balance Sheet and Cash Flow Statement Summary (‘000) Unaudited Three Months Ended Three Months Ended Balance Sheet Nine Months Ended Nine Months Ended September 30, 2024 September 30, 2024 Cash Flow Statement September 30, 2024 September 30, 2024 ($000) CAD USD ($000) CAD USD Assets Operating Activi
Slide 42: Revenue, Realized Price, and Gross Profit Reconciliation Bridges
Revenue, Realized Price, and Gross Profit Reconciliation Bridges ($ USD) Unaudited Three Months Ended Three Months Ended Revenue Bridge - Unaudited September 30, 2024 Gross Margin and Cash Gross Margin – Unaudited September 30, 2024 $000 USD $000 USD 3Q24 Invoiced Revenues - CIF $44,550 Reported Rev
Slide 43: Provisional Pricing Drives Volatility in Headlines Not to Business
Provisional Pricing Drives Volatility in Headlines Not to Business ($ USD) Reported Sales $000 $000 CIFe "Pro Forma" Sales $000 $000 CIFe 3Q23 96,902 99,507 3Q23 56,648 59,253 4Q23 37,688 43,307 4Q23 48,706 54,325 1Q24 37,202 41,532 Notes 1Q24 42,557 46,887 2Q24 45,920 46,986 2Q24 46,485 47,551 Reve
Slide 44: Sigma Lithium
W\4 SIGMA LITHIUM