SIGMA LITHIUM REPORTS 1Q 2024 RESULTS: MAY SHIPMENT PRICED AT $1,290, INCREASED 25% FROM 1Q; PRODUCTION COSTS AT $397/t, 2ND LOWEST IN INDUSTRY
FIRST QUARTER 2024 HIGHLIGHTS ($ USD)
-
Strengthened commercial position in May, achieving a premium price of USD
$1,290 /t, at a fixed formula of 9% of lithium hydroxide quoted at LME, delivering:- 11% price increase from April
-
25% price increase from 1Q24 realized sales price (USD
$930 /t or$1,035 /t on a 6% basis)
-
Revenues from volumes of Quintuple Zero High Purity Lithium Concentrate sold in 1Q totaled
$49.1 million .- Sales volumes totaled 52,857/t
-
Production volumes totaled 54,168/t
-
Reduced reported cash cost by 16% from 4Q23, approaching 3Q cost guidance:
-
FOB cash costs of
$462 /t (guidance$420 /t) -
Cash costs at industrial plant gate averaging
$397 /t (guidance of$370 /t)
-
FOB cash costs of
-
Robust 1Q24 EBITDA margins:
-
35.3% margins on pro forma EBITDA(3) of
$17.4 million , generated by business conducted in 1Q24. -
15.8% margins on reported 1Q adjusted EBITDA of
$5.9 million .
-
35.3% margins on pro forma EBITDA(3) of
-
Board of Directors made a Final Investment Decision to build a second Greentech Industrial Plant that will increase production capacity to 520,000/t of Quintuple Zero Green Lithium from the current 270,000 t/year.
- Extended operational life to 25 years at the Company's 100% owned Grota do Cirilo industrial-mineral complex at an industrial throughput of 520,000 t/year: Increase of 40% in proven and probable mineral reserves to 77 million tonnes (from 54.8 million tonnes).
Conference Call Information
The Company will conduct a conference call to discuss its financial results for the first quarter at
She added: "Operationally, our team has been progressing consistently towards achieving robust cash flow generation for 2024. We continue to premiunize the price of our Quintuple Zero Green Lithium, increasing May prices by 11% from April, and a nearly 30% from the 1Q24 average realized prices. We reduced reported cash cost by 16% vs 4Q23, approaching guidance.
Key Performance Metrics for Quarter Ended
|
Unit |
1Q24 |
4Q23 |
Concentrate Produced |
tonnes |
54,168 |
59,938 |
Concentrate Grade Produced |
% |
5.4 % |
5.3 % |
Concentrate Sold |
tonnes |
52,857 |
64,670 |
Reported Revenue |
$ 000s |
37,202 |
37,688 |
Average Reported Selling Price |
$/t |
704 |
583 |
Revenue for Business Conducted in 1Q |
$ 000s |
49,141 |
67,500 |
Average Realized Selling Price in 1Q |
$/t |
930 |
1,067 |
Unit Operating Cost (1) |
$/t |
397 |
478 |
Adjusted EBITDA (2) |
$ 000s |
5,878 |
1,295 |
Net Income |
$ 000s |
(6,962) |
(9,500) |
Cash and Cash Equivalents |
$ 000s |
108,191 |
48,584 |
- Sales were supplemented by an additional sale to Glencore AG of volumes at port totalling 8,700/t at the end of the quarter.
- Revenues associated with volumes sold in the first quarter totaled
$49 million , implying a realized FOB sales price of$930 /t. - Reported revenues for the first quarter totaled
$37.2 million (C$50.4 million ).- Provisional price adjustments reduced 1Q24 revenues by USD
$12 million , an improvement from the$30 million price adjustment in 4Q23, as lithium concentrate prices turned upward after theLunar New Year .
- Provisional price adjustments reduced 1Q24 revenues by USD
Cash unit operating costs(1) for lithium concentrate produced at the Company's Grota do Cirilo operations in the first quarter averaged USD
- This is a nearly 16% improvement from the reported FOB costs in 4Q23 and is an important step to meeting Company cost targets of
$370 /t plant gate and$420 /t FOB. -
Sigma Lithium has already seen an improvement in its cost structure given productivity actions taken, and notes that production at the processing plant was the primary hinderance to achieving guided costs during the first quarter. The Company reiterates its expectation to achieve guidance within 2Q24 for 3Q average realization.
The Company delivered first quarter adjusted EBITDA of
- This number includes
$0.5 million (C$0.7 million ) of non-recurring expenditures, including those associated with the strategic review, and$2.3 million (C$3.1 million ) in non-cash stock-based compensation expenses.
1Q24 results had a
Net income in the quarter was a loss of
Operational Update and Phase 2 Expansion
Lithium concentrate production in the first quarter totaled 54,168 tonnes, compared to the 59,938 tonnes produced in 4Q23. No single factor weighed materially on production, but it was impacted, in part, by holiday seasonality and fewer work days. Sigma maintained a delivery schedule of approximately 35 days. The Company has successfully continued to improve Greentech plant efficiency in 2024, and notes that production improved sequentially through the course of the first quarter.
On
Ninth Shipment Scheduled for the week of
The Company is also announcing today that it has finalized pricing discussions for its ninth shipment of Quintuple Zero Green Lithium concentrate scheduled for the week of
The current value of the May shipment reflects an 11% price increase over the Company's eighth shipment in April, where the
A similar price discovery process was followed through closed private bidding for the fixed portion of the price formula, though the final economics will depend on LME/
Sigma Lithium Commercial Director
Balance Sheet & Liquidity
Capital expenditures during the first quarter totaled
Free cash flow was a modest drag as a result of lower market prices in the quarter, higher receivables, as well as the conclusion of the March shipment taking place in the first week of April (resulting in one less shipment made during the 1Q24 compared with 4Q23).
ABOUT
Please refer to the Company's National Instrument 43-101 technical report titled "Grota do Cirilo Lithium Project Araçuaí and Itinga Regions,
For more information about
LinkedIn:
Instagram: @sigmalithium
Twitter: @SigmaLithium
FORWARD-LOOKING STATEMENTS
This news release includes certain "forward-looking information" under applicable Canadian and
Neither the
Figure 1: Income Statement Summary
|
Three Months Ended |
|
Three Months Ended |
( |
CAD |
|
USD |
|
|
|
|
Revenue |
50,408 |
|
37,202 |
Operating costs |
(38,722) |
|
(28,642) |
Gross profit |
11,686 |
|
8,560 |
G&A expense |
(5,882) |
|
(4,363) |
Sales expense |
(1,166) |
|
(861) |
Stock-based compensation |
(3,066) |
|
(2,266) |
ESG and other operating expenses |
(1,887) |
|
(1,400) |
EBIT |
(315) |
|
(329) |
Financial income and FX (expenses), net |
(9,614) |
|
(7,104) |
Income (loss) before taxes |
(9,929) |
|
(7,433) |
Income taxes and social contribution |
585 |
|
471 |
Net Income (loss) for the period |
(9,344) |
|
(6,962) |
|
|
|
|
Weighted avg diluted shares outstanding |
110,460,681 |
|
110,460,681 |
|
|
|
|
Earnings per share |
$ (0.08) |
|
$ (0.06) |
Figure 2: Balance Sheet Summary
|
Three Months |
Twelve |
|
Three Months |
Twelve |
( |
CAD |
CAD |
|
USD |
USD |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
146,393 |
64,403 |
|
108,191 |
48,584 |
Trade accounts receivable |
39,276 |
29,693 |
|
29,027 |
22,400 |
Other current assets |
51,114 |
48,580 |
|
37,776 |
36,647 |
Total current assets |
236,783 |
142,676 |
|
174,993 |
107,631 |
Property, plant and equipment |
236,824 |
239,742 |
|
175,023 |
180,856 |
Other non-current assets |
107,613 |
104,820 |
|
79,530 |
79,074 |
Total Assets |
581,220 |
487,238 |
|
429,546 |
367,561 |
|
|
|
|
|
|
Liabilities & Shareholder Equity |
|
|
|
|
|
Financing and export prepayment |
127,149 |
28,907 |
|
93,968 |
21,807 |
Accounts payable |
62,918 |
59,826 |
|
46,499 |
45,131 |
Other current liabilities |
32,047 |
33,640 |
|
23,691 |
25,377 |
Total current liabilities |
222,114 |
122,373 |
|
164,159 |
92,315 |
Financing and export prepayment |
145,488 |
141,999 |
|
107,522 |
107,121 |
Other non-current liabilities |
8,344 |
8,582 |
|
6,167 |
6,474 |
Total non-current liabilities |
153,832 |
150,581 |
|
113,689 |
113,595 |
|
|
|
|
|
|
Total shareholders' equity |
205,274 |
214,284 |
|
151,699 |
161,651 |
|
|
|
|
|
|
Total Liabilities & Shareholders' Equity |
581,220 |
487,238 |
|
429,546 |
367,561 |
Figure 3: Cash Flow Statement Summary
|
Three Months Ended |
|
Three Months Ended |
( |
CAD |
|
USD |
|
|
|
|
Operating Activities |
|
|
|
Net income (loss) for the period |
(9,344) |
|
(6,962) |
Adjustments |
20,487 |
|
15,261 |
Interest payment on loans and leases |
(15,194) |
|
(11,266) |
Adjustments to income (loss) for the period |
(4,051) |
|
(2,967) |
Change in working capital |
(11,341) |
|
(8,449) |
|
(15,392) |
|
(11,416) |
|
|
|
|
Investing Activities |
|
|
|
Purchase of PPE |
(5,303) |
|
(3,952) |
Addition to exploration and evaluation assets |
(2,248) |
|
(1,667) |
Other |
(55) |
|
(41) |
|
(7,606) |
|
(5,660) |
|
|
|
|
Financing Activities |
|
|
|
Proceeds of loans, net |
106,862 |
|
79,237 |
Other |
(846) |
|
(627) |
|
106,016 |
|
78,610 |
|
|
|
|
Effect of FX |
(1,028) |
|
(1,927) |
Net (decrease) increase in cash |
81,990 |
|
59,607 |
Cash & Equivalents, Beg of Period |
64,403 |
|
48,584 |
Cash & Equivalents, End of Period |
146,393 |
|
108,191 |
Endnotes:
(1) |
Cash Operating Costs per tonne include mining, crushing, processing, and site administration expenses. When shown as Freight on Board (FOB), these expenses include transport and port charges. For clarity, non-site G&A, and royalty costs are excluded unless otherwise noted. |
(2) |
Adjusted EBITDA represents a cash operating profit metric that nets revenues against cost of goods sold, selling, general, administrative and other cash operating expenses. Adjusted EBITDA also excludes stock-based compensation and certain non-recurring expenses, such as those related to the Company's strategic review. |
(3) |
Pro forma Adjusted EBITDA utilizes the same formula as Adjusted EBITDA, though it backs out the implications of the provisional price adjustment to associated revenues and costs. The Company believes this is a more accurate reflection of business conducted within the quarter. |
Reconciliation
To provide investors and others with additional information regarding the financial results of
Figure 4:
|
Three Months Ended |
|
Three Months Ended |
( |
CAD |
|
USD |
|
|
|
|
Revenues |
50,408 |
|
37,202 |
Cost of goods sold |
(38,722) |
|
(28,642) |
Gross Profit |
11,686 |
|
8,560 |
G&A expense |
(5,882) |
|
(4,363) |
Sales expenses |
(1,166) |
|
(861) |
Stock-based compensation |
(3,066) |
|
(2,266) |
ESG & other operating expenses, net |
(1,887) |
|
(1,400) |
EBIT |
(315) |
|
(329) |
Depreciation & Amortization |
4,622 |
|
3,443 |
EBITDA |
4,307 |
|
3,114 |
EBITDA (%) |
8.5 % |
|
8.4 % |
Non-recurring expenses |
678 |
|
499 |
Accounting Services |
443 |
|
324 |
Other G&A |
235 |
|
174 |
Stock-based compensation |
3,066 |
|
2,266 |
Adjusted EBITDA |
8,051 |
|
5,878 |
Adjusted EBITDA (%) |
16.0 % |
|
15.8 % |
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