Sigma Lithium (TSXV:SGML,NASDAQ:SGML) has secured another large-scale sale of high-purity lithium fines and activated a production-backed revolving credit facility as it ramps up operations in Brazil.
The lithium producer announced it has agreed to sell 150,000 metric tons (MT) of high-purity lithium fines containing 1 percent lithium oxide at a net final price of US$140 per MT upon warehouse delivery at the port of Vitória.
The buyer has the option to purchase a further 350,000 MT at market prices.
Sigma, which refers to the high-purity fines as a low-grade product, said the optional volumes provide flexibility to respond to market conditions and customer requirements.
According to the company, the sale of its low-grade product could generate proceeds equivalent to the sale of 70,000 MT of its high-grade lithium oxide concentrate. Sigma attributes the marketability of the fines to the processing technology at its Greentech plant, which uses dense media separation and dry stacking.
According to the São Paulo-based company, clients have achieved up to 60 percent recovery when reprocessing the material, producing lithium concentrate with over 4 percent lithium oxide content.
That higher-grade concentrate is currently priced at about US$1,370 per MT on average by Shanghai Metals Market.
“Our sequential sales of the Low Grade Product show how this material can generate recurring value, demonstrating its marketability,” said Marina Bernardini, Sigma vice president of business development. “Continuous demand for the Low Grade Product has supported the creation of an additional revenue stream for the Company.”
The February 13 agreement follows Sigma’s January sale of 100,000 MT of high-purity lithium fines.
At the time, the company reiterated that mining remobilization was proceeding as planned and pushed back against what it described as inaccurate media reports regarding an administrative process related to waste piles.
Alongside the new sale, Sigma confirmed that the resumption of production of its high-grade lithium oxide concentrate has triggered the start of pre-payments under a US$96 million revolving facility.
The unsecured binding agreement, signed with what the company describes as a leading company in the battery materials supply chain, calls for the delivery of 70,500 MT of high-grade concentrate in 2026.
Under the terms, fixed pre-payments of US$8 million are made 30 days prior to production and delivery to the port of Vitória. The first pre-payment was disbursed on January 13.
Each pre-payment carries interest at SOFR plus 1 percent for 30 days until final sale upon delivery. Pricing for each shipment is tied to prevailing spot market prices for high-grade lithium concentrate, as reflected in major industry indexes.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.