Sigma is clearly undervalued compared to its peer, Lithium Americas Corp. It is worth noting that Sigma has only delineated lithium resources at five of the nine known artisanal deposits so far, and future exploration success is expected to support additional phases of development and production growth. In terms of the P/NAV multiple, Sigma is valued at 0.27X. Key economic parameters of the Grota do Cirilo project, as in the December 2022 updated technical study (Sigma Lithium) Upside and risksĪs of June 16, 2023, Sigma Lithium had a market capitalization of US$4.15 billion and an enterprise value of US$4.08 billion. This is demonstrated by an after-tax NPV-8 of $15.3 billion, as illustrated in Figure 3, which is 200% higher than the after-tax NPV-8 for Phase 1 that was used in my previous article analysis of the risk-reward profile.įig. With an additional capital investment of $155 million for project expansion and benefiting from low all-in sustaining costs (or AISC) ranging from $458/t to $539/t, the combined three phases of Grota do Cirilo exhibit strong project economics. The aforementioned mineral reserves provide support for a 13-year mine life, producing 277 ktpa of battery-grade sustainable lithium concentrate in year 1, 768 ktpa in years 2-8, and 491 ktpa in years 9-13. Consolidated project mineral reserves and resources in the Grota do Cirilo project of Sigma Lithium, mineral resources being inclusive of mineral reserves (modified from Sigma Lithium) The consolidated mineral resources encompass 984 kt of LCE in the measured and indicated categories for Phase 3, while the consolidated mineral reserves include 759 kt of proven and probable LCE reserves for Phase 3.įig. These include 1,941 kt of proven and probable LCE reserves, as depicted in Figure 2. The Grota do Cirilo projectĪccording to the updated technical report from December 2022, the Grota do Cirilo project holds a total of 3,027 kt of measured, indicated, and inferred lithium carbonate equivalent (LCE) resources.
With operations reaching a critical juncture after the start of Phase 1 production, investors may find themselves contemplating their next move regarding the stock: should they sell and secure their profits or hold on for potential further capital appreciation, driven by the anticipated Phase 3 production? In the following analysis, we will delve into the details. Stock chart of Sigma Lithium, shown with major operational events, with the gold star being the publication of the article by Laurentian Research (Laurentian Research for The Natural Resources Hub based on Sigma Lithium, Barchart and Seeking Alpha) As a result, the stock has delivered a 55% gain from September 2022 - when my previous piece was published - to the present, as depicted in Figure 1.įig. Despite a peculiar short seller attack in late March 2023, just before the start of production, Sigma Lithium persevered.They began producing lithium concentrate in mid-April 2023, shipped the first batches of lithium concentrate and tailings at the end of April 2023, and received the first payment in May 2023, marking a significant milestone of revenue generation.
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In December 2022, Sigma completed a technical study, expanding the mineral resource and reserves at the Grota do Cirilo project, Brazil.So much has happened since my last article on Sigma Lithium Corp.
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