Investor Call to be held on Friday November
30th, 2018 at 10:30 a.m. (EST).
SIGMA Lithium Resources Corporation (“
Sigma” or
the
“Corporation”)
(TSX-V:
SGMA) announces the signing of a term sheet for an offtake
agreement (“Term Sheet”) with Mitsui & Co., Ltd. of Japan
(“
Mitsui”). On the terms and subject to the
conditions set forth in the Term Sheet, Mitsui would provide a
pre-payment facility (“
Pre-Payment Financing”) for
a portion of the funding required to advance the construction of
Sigma’s commercial production plant, in exchange for offtake rights
to purchase a fixed volume of Sigma’s spodumene concentrate annual
production. The consummation of the transactions contemplated by
the Term Sheet remains subject to the negotiation of definitive
documentation and other customary closing conditions.
“We are delighted with this first step in
establishing a strategic offtake partnership with Mitsui, as we
both share the same vision regarding the development of the value
chain of battery metals globally. We have long believed that the
right partnerships bring important and critical intangible benefits
to Sigma, to the local communities of the Jequitinhonha Valley in
Minas Gerais and to our shareholders”, declared Calvyn Gardner,
Chairman and Chief Executive Officer of Sigma.
Highlights of Term Sheet
- Pre-Payment Financing: Mitsui and Sigma have
agreed on certain preliminary terms and conditions by which Mitsui
would provide Sigma with a US$30 million pre-payment facility in
exchange for various rights with respect to future sales of Sigma’s
spodumene concentrate to Mitsui.
- Offtake Rights: Mitsui and Sigma have agreed
on certain preliminary terms and conditions for a potential offtake
agreement that would grant Mitsui the right to purchase from Sigma
up to one third of its initial commercial production of battery
grade spodumene concentrate on an annual basis at then-prevailing
market prices for an initial term of six years, subject to two
consecutive five-year extension periods.
Financing
The Pre-Payment Financing will be used to fund
various capital expenditures for Sigma’s Grota do Cirilo Project
(the “Project”), including to (i) construct and
install the commercial production plant as well as build its
infrastructure, and (ii) acquire equipment in order to implement
environmentally advanced techniques at the commercial production
plant, including water treatment recycling circuit and dry
stacking.
Ana Cabral, Vice-Chairman of Sigma commented:
“Sigma has made significant progress to secure financing for the
construction of its commercial plant and break ground early next
year. We are honored to welcome Mitsui as an offtake partner. We
have long admired Mitsui, with whom we share similar values and a
long history in Brazil, where Mitsui has a significant on the
ground corporate presence and business experience, including as a
shareholder of Vale, the Brazil-based global mining company”.
Mitsui’s Right to Participate on Sigma’s
Future Capital Expenditure Financings for Production
Expansion
Sigma is proceeding with a definitive
feasibility study for the Project, which currently contemplates an
annual production of 240,000 tonnes of battery-grade spodumene
concentrate. Sigma believes that there will be significant
potential to economically expand production capacity. If that
definitive feasibility study suggests doing so, it would be Sigma’s
intention to carry out further studies as a first step towards then
increasing the Project’s production capacity to 440,000 tonnes per
year in the future (the “Production
Expansion”).
Under the term sheet, Sigma would also grant
Mitsui the right to purchase a portion of the Production Expansion,
provided that Mitsui participates in the future financings required
to fund the capital expenditures for the Production Expansion.
“We are also continuing discussions regarding
additional financing facilities and offtake agreements with other
high-quality counterparts which have increasingly growing spodumene
concentrate requirements for the next five years. Our goal is to
secure long-term sales offtakes for a reasonable portion of Sigma’s
production in the early years of our project, further de-risking
it”, added Ana Cabral.
Offtake Rights
The Offtake Rights would entitle Mitsui to acquire, at
then-prevailing market prices, up to one third of Sigma’s initial
commercial production on an annual basis and would have an initial
term of six years, renewable for two consecutive five-year
extension periods, subject to Mitsui’s and Sigma’s agreement.
INVESTOR CONFERENCE CALL
REPLAY
Sigma will host a video conference call for
analysts and investors on Friday, November 30th, 2018 at 10:30 a.m.
(EST), followed by a question-and-answer session. A telephone
replay of the call will be available.
ABOUT SIGMA
Sigma Lithium Resources Corporation (TSX-V:
SGMA) commissioned its Phase I production plant and has commenced
the production of battery grade spodumene lithium concentrate from
its high-quality hard-rock deposits at its four properties in
Brazil at an annual capacity of 12,000 tonnes. Sigma plans to
commence construction of a commercial-scale lithium concentration
plant in 2019, becoming a fully-operational sustainable lithium
producer in 2020.
We expect to produce approximately 240,000
tonnes per year of battery-grade spodumene concentrate on our
initial phase of commercial production. Definitive feasibility
studies on the mine and concentrator are well advanced. Our output
of lithium minerals is destined for the fast-growing lithium-ion
battery market, which is driven by the increasing demand for
electric vehicles and energy storage worldwide. Sigma’s corporate
mission is to execute our strategy while embracing environmental,
social, and governance principles. Sigma’s shareholders include
some of the largest ESG (environmental, sustainability, governance)
focused institutional investors in the world.
QUALIFIED PERSON Marc-Antoine
Laporte, P.Geo, M.Sc. of SGS, a qualified person (as defined by
National Instrument 43-101) and independent of Sigma, has reviewed
and approved the scientific and technical information in this news
release.
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Sigma Lithium Resources
Corporation / www.sigmalithiumresources.com Company
Contact:Ana Cabral Vice – Chairman Director of Business Development
and Investor Relations 55 11 2985-0089
ana.cabral@sigmaca.com |
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements relating
to the objectives of the Corporation, plant construction, entering
into definitive agreements for financing and offtake, completion of
studies, achieving sustainable production and other statements that
are not historical facts. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which
they are based will occur. By their nature, forward-looking
statements involve numerous assumptions, known and unknown risks
and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, projections and
other forward-looking statements will not occur, which may cause
actual performance and results in future periods to differ
materially from any estimates or projections of future performance
or results expressed or implied by such forward-looking statements.
These assumptions, risks and uncertainties include, among other
things: the state of the economy in general and capital markets in
particular, and investor interest in the business and future
prospects of Sigma.
The forward-looking statements contained in this
news release are made as of the date of this news release. Except
as required by law, Sigma disclaims any intention and assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities law. Additionally,
Sigma undertakes no obligation to comment on the expectations of,
or statements made, by third parties in respect of the matters
discussed above.
The key risks and uncertainties that could cause
actual results or the material factors and assumptions applied in
preparing forward-looking information to differ materially from
predictions, forecasts, projections, expectations or conclusions
are discussed in the “Risk Factors” section of Sigma’s Filing
Statement dated April 25, 2018. We caution that the foregoing
list is not exhaustive of all possible factors.
For more information on the risks, uncertainties
and assumptions that could cause our actual results to differ from
current expectations, please refer to our public filings available
at www.sedar.com.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
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