Sigma Lithium Resources Corporation, Vancouver, Canada, (TSXV: SGMA) (OTC- QB: SGMLF) has announced that it has closed its previously announced upsized non-brokered private placement and has issued 8,285,700 common shares at a price of C$2.15 per Common Share for gross proceeds of approximately US$13.3 million (equivalent to approximately C$17.8 million) (the “Offering”). No warrants were issued in connection with this Offering.
The Offering book was oversubscribed and it was comprised, in its majority by leading global institutional investors. Other participants included mainly large global family offices. The investors in the Offering have a strong focus on ESG and sustainability, therefore are closely aligned in purpose with Sigma’s commitment to an ESG-centric strategy for the development of the Grota do Cirilo lithium project in Brazil (the “Project).
The Company intends to use the net proceeds of the Offering for the engineering, procurement and construction (the “EPC”) of the Project and for general corporate purposes. The amount raised in the Offering will fully satisfy the equity funding requirement for the previously announced US$45 million project finance facility with Société Générale. These amounts will be complemented by the US$27 million that remains to be disbursed under a production prepayment agreement with Mitsui & Co. as well as by the proposed financing from the Spanish Export Credit Insurance Agency (CESCE) for the front-end engineering design EPC contract in order to fully fund the Project’s total capital expenditures to commercial production estimated at US$82 million, including US$8 million in working capital for the commissioning period.
Cormark Securities Inc. and National Bank Financial Inc. acted in the Offering as financial advisors to the Company and will receive an average finder’s fee of 7% in respect of certain orders. Other parties, including the A10 Group, shall also receive a finder’s fee of up to 7% in connection with certain orders procured by these parties. The A10 Group is a group of registered financial advisory firms located in Brazil of which certain of the directors/officers of the Company are partners.
“We are truly delighted with the outcome of this oversubscribed equity offering and the support for the Company by this group of global institutional shareholders and family offices focused on ESG and sustainable investments. The offering was completed amidst these unprecedented times and the lowest pricing environment for lithium in the past decade, therefore demonstrating the superior quality and low-cost of our Project”, said Co-Chairman and Chief Strategy Officer Ana Cabral-Gardner.
“The Offering is part of a comprehensive financing plan that will enable Sigma to become the next global low cost & premium lithium producer. Our strengthened balance sheet will propel the Company from developer to a producer with a low-cost sustainable capital structure, providing substantial financial flexibility to manage construction and production ramp-up”, she added.
About Sigma Lithium
Sigma is a Canadian company producing environmentally sustainable battery-grade lithium concentrate, which it has done on a pilot scale since 2018, shipping high-quality above 6% Li2O coarse lithium concentrate samples to potential customers in Asia. Based on the technical report titled “Grota do Cirilo Lithium Project, Araçuaí and Itinga Regions, Minas Gerais, Brazil, National Instrument 43-101 Technical Report on Feasibility Study Final Report”, dated October 18, 2019 and with an effective date of September 16th, 2019, a larger-scale lithium concentration commercial production plant will contemplate a capacity of 220,000 tonnes annually of battery-grade low-cost lithium concentrate and Sigma will be amongst the lowest-cost producers of lithium concentrate globally.
To secure a leading position supplying the clean mobility and green energy storage value chain, Sigma has adhered to the highest standards of environmental practices in line with its core values and mission since starting activities in 2012. Sigma’s production process is 100% powered by hydroelectricity and the Company utilizes state-of-the-art dry-stacking tailings management and water-recirculation techniques in its beneficiation process. Its corporate mission is to execute its strategy while embracing strict Environmental Social and Governance (“ESG”) principles, managed based on the United Nations’ sustainable development goals (“UN-SDGs”). Sigma has adhered to 14 out of the 17 UN-SDGs, including gender equality. Sigma’s shareholders include some of the largest ESG-focused institutional investors in the world.