Shares in Sigma Lithium (TSX–V: SGML; NASDAQ: SGML) rose almost 7% Tuesday on news the company’s operating cost guidance for spodumene production at its facility in Brazil is almost half the current price of the battery metal.
Its targeted ongoing run rate guidance is US$510 per tonne at 5.5% concentrate by cost, insurance and freight (CIF) to China, Sigma stated in a news release on Monday.
Those numbers contrast with the latest spodumene concentrate price (at 5.5% to 6.2%) of US$910 per tonne, according to the Shanghai Metals Market. Sigma also provided guidance costs of US$370 per tonne from the Grota do Cirilo plant gate, and US$420 per tonne shipped free on board (FOB) from Vitoria Port in Minas Gerais state.
The company did not immediately respond to a request for comment.
Sigma’s cost guidance news comes as prices of the critical metal, an essential component in electric vehicle batteries, continue trending downwards, with prices plunging more than 80% from a high in late 2022. The decline has spurred some miners to cut production and undertake cost-savings measures, such as layoffs.
Its guidance also follows the company reaching near full production capacity in the last six months of 240,000-270,000 tonnes per year at Grota do Cirilo, according to Sigma’s latest corporate presentation.
A second phase of expansion at the plant is expected to double capacity this year by about 250,000 tonnes per year of “green lithium,” or spodumene concentrate produced with net zero carbon emissions, 100% recycling of water and no wet tailings. Sigma also plans an eventual third stage of construction that would triple or quadruple output up to about 1 million tonnes per year.
About one month ago, the Vancouver-based company announced it had raised resource estimates at the project by 27% over the previous estimate from just over one year ago, giving it 109 million tonnes and making it the world’s fourth largest producing pre-chemical lithium complex. The estimate breaks down to 94.3 million measured and indicated tonnes grading 1.4% lithium oxide (Li2O) and 14.6 million inferred tonnes at 1.37 Li2O.
CEO Ana Cabral touted her company’s achievement in producing its ‘quintuple zero green lithium’ while keeping production costs low. Sigma shares traded at $18.08 apiece on Tuesday afternoon in Toronto, valuing the company at $1.9 billion. Its shares traded in a 52-week range of $14.03 and $57.57.
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