Sigma Lithium Resources

NASDAQ: SGML

LAST: $39.54

+1.53

TSX.V: SGML

LAST: $54.25

+0.39

Grota do Cirilo

Phase 1-3 After-Tax NPV_8%

US$15.3 B

Phase 1 Production
(37 kt LCE)

270 Kt SC

Phase 1 AISC (CIF China)

US$459/t SC

Phase 1 Annual Free Cash Flow

US$455 M

Phase 1-3 After-Tax IRR

1,273%

Phase 1-3 Production
(104 kt LCE)

766 Kt SC

Phase 1-3 AISC (CIF China)

US$523/t SC

Phase 1-3 Annual Free Cash Flow

US$1.8 B

02.

Project Summary

Location	Minas Gerais, Brazil
Ownership	100%
Deposit Type	Hard rock spodumene
Reserves (P&P)	54.8 Mt @ 1.44% Li₂O
Resources (M&I)	85.6 Mt @ 1.43% Li₂O
Resources (Inferred)	8.6 Mt @ 1.43% Li₂O
Remaining Phase 1 Initial Capex	US$55.5 M
Annual Production	766 Kt/y \| 104,2 Kt LCE
AISC (CIF China)	US$523/t
Annual Free Cash Flow	US$1.8 B
After-Tax NPV_8%	US$15.3 B
After-Tax IRR	1,282%

03.

Timeline

2012Initial Investment

2015Private Equity

2017Follow-on Investment

2018Demonstration Plant start-up

2019DFS and Offtake

2020Equity Funded & Acceleration

2021Construction Commences

2022Phase 1 Commissioning

2023Phase 2 Commissioning

2024Phase 3 Commissioning

Initial Investment

Sigma Lithium’s founder and Co-CEO (Calvyn Gardner) acquires Sigma Lithium, alongside the Brazilian refractory products maker Magnesita
Mineral exploration starts at Grota do Cirilo

Private Equity

A controlling shareholder is established via a fund managed by A10 Investimentos
The first stage of mineral exploration is completed

Follow-on Investment

Convertible bond offering
Auditing of results of mineral exploration

Demonstration Plant start-up

Equity Offering I (Initial Public Offering and listing on the TSX-V)
NI 43-101 resource report filed
Pilot plant start-up

DFS and Offtake

Second NI 43-101 resource report filed tripling M&I Resources to 46mt
NI 43-101 Definitive Feasibility Study for Phase 1
Environmental licenses for construction and installation of commercial production plant
Sigma as a case study at COP-25
Sigma joins Mining & Tailings Safety Summit in London

Equity Funded & Acceleration

Equity Offering II
Project Finance Term Sheet for Phase 1
Decision to accelerate Phase 2

Construction Commences

Equity Offering III
Preliminary Economic Assessment for Phase 2
2024 net-zero target and ESG board committee implementation
Sigma Lithium listed on Nasdaq
LG Energy Solution binding offtake agreement
Equity Offering IV (including BlackRock)
Grota do Cirilo construction begins

Phase 1 Commissioning

Phase 1 and 2 Technical Report
Successfully commissioned the first module of the Phase 1 production plant(the "Greentech Plant"), on schedule and within budget
Project expansion: mineral reserves increased by 63%, triples NPV to US$15.3 billion
LG Energy Solution offtake
Phase 1 construction begins
Financing: Sigma secures US$100 million debt financing

Phase 1 Production

Concluded the crushing circuit ("dry module") commissioning
Concluded the commissioning of the system that pump water from Rio de Jequitinhonha 6km away
Commercial production to commence in April, generating cash flow in the second quater

Phase 2&3

Expected production capacity of 104,200 LCE tonnes combined with Phase 1&2 annually.

04.

Project Details

Location & Infrastructure

Grota do Cirilo is located in the mining friendly state of Minas Gerais, Brazil nearby the cities of Araçuaí and Itinga and approximately 450km northeast of the state capital, Belo Horizonte.

We are strategically located with existing infasturucture in place including roads, water, clean power and port access. The Project is 500km southwest of the Ilheús port on the Atlantic Ocean, enabling Sigma Lithium to efficiently supply the North American and European EV markets in an environmentally-friendly way. Additionally, Grota do Cirilo is connected to the Ilheús port by major roads.

The Project is also situated adjacent to the Jequitinhonha River, which supplies its water needs, and has access to 100% green power from the Irapé hydroelectric power plant. Grota do Cirilo is located approximately 50km away from the Irapé plant and has power lines situated on its property.

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Project Details

Grota do Cirilo is a “Tier-1” project that is among the largest and highest-grade hard rock lithium deposits in the world, with excellent metallurgy and low impurities. Sigma Lithium is expected to be a top 5 lithium producer globally upon achieving full-scale commercial production at its Grota do Cirilo Project.

Grota do Cirilo is expected to deliver a unique coarse and high-quality lithium concentrate, which will deliver higher margins and operational efficiencies for Sigma Lithium’s end users. The coarse size of the concentrate has the potential to deliver 20 to 30 percent greater efficiency in the lithium hydroxide and carbonate chemicals production process.

Sigma Lithium is currently focused on constructing the Grota do Cirilo Project in a phased approach, with Phase 1 production to commence from the Xuxa deposit in 2023 (commissioning expected by year-end 2022). Production is expected to be approximately doubled by 2024 via a Phase 2 expansion through the development of the nearby Barriero deposit.

Sigma Lithium has conducted significant metallurgical testing at its Grota do Cirilo Project, conducting pilot plant production at site since 2018. Grota do Cirilo’s excellent metallurgy has been further validated by Sigma Lithium securing world-class offtake partners including LG Energy.

Sigma has tremendous exploration potential including over 200 identified pegmatites on its ~20,000 hectare land package (200 km2), representing 27 mineral rights.

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Phase 1

Phase 1 is expected to produce 270,000 tonnes of high-purity 5.5% Li₂O lithium concentrate (36,700 LCE) per year over an 8 year mine life. The Phase 1 mine is expected to be one of the lowest cost hard rock lithium producers in the industry with a life of mine CIF All-in Sustaining Cost of US$459/t (CIF China). Importantly, Phase 1 capex includes key items to ensure a seamless transition to Phase 2, which is expected to double annual production by 2024.

Concluded the commissioning of 50% of the Greentech Plant and first shipment planned of April 2023.

Phase 2

Phase 2 is expected to approximately double Sigma Lithium’s production rate to 531,000 tonnes of high-purity 5.5% Li₂O lithium concentrate (72,200 LCE) per year. Phase 2 will contribute an additional 261,100 tonnes of high-purity 5.5% Li₂O lithium concentrate (35,500 LCE) per year over a 12 year mine life. The Phase 2 mine will leverage infrastructure built for the Phase 1 mine and dense media separation testing results validate that Phase 2 material can be processed in a similar way as Phase 1.

Construction for Phase 2 could start as early as 2023.

Phase 3 & Additional Upside

Grota do Cirilo is an underexplored brownfield project with significant additional growth potential. The property hosts 9 former lithium mines, representing the potential for 7 additional deposits beyond the Phase 1 and Phase 2 mines currently being developed.

Sigma Lithium has recently accelerated its exploration efforts with the goal of increasing its production output further through a potential Phase 3 expansion.

In June 2022, Sigma Lithium announced a maiden mineral resource estimate (M&I resources of 23.3 Mt @ 1.49% Li₂O and Inferred resources of 3.5 Mt @ 1.48% Li₂O) at its NDC Deposit located near its Phase 2 Barreiro Deposit. PEA of Phase 3 was published in December 2022.

05.

A Sustainable Future for Mining

The Grota do Cirilo project sets a new standard for environmentally sustainable mining operations, combining four key elements in its commercial plant process.

Innovative mining technology

Using proprietary software from Primero, the Sigma Lithium plant boasts greater levels of density stability in its production process.

With an automated digital method of controlling dense media, the plant can produce high-quality lithium more efficiently and sustainably.

100% of water used to be recirculated

Grota do Cirilo boasts a high level of water efficiency, with 100% of the water used in the production process recirculated into the plant.

Roughly 10% of this is either lost or evaporates, meaning that 90% of the water previously consumed is reused by the production plant.

100% dry stacked tailings

Tailings from the production process are dry-stacked, removing the need for a mud tailings dam and the associated environmental impact.

Also, because the production process involves no hazardous chemicals, the tailings materials could be recycled for use in other industries.

100% green power

All water and power needs are provided by the Jequitinhonha River that runs adjacent to the site.

The hydropower plant 50km away from the mine delivers 100% green energy, significantly reducing the emissions generated by the production process.

View Highlights

06.

Reserves and Resources

Phase 1

Lithium Mineral Resources

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Measured	10.2	1.59%	401
Indicated	7.2	1.49%	266
Measured & Indicated	17.4	1.55%	667
Inferred	3.8	1.58%	149
Total	21.2	1.56%	815

Lithium Mineral Reserves

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Proven	8.3	1.55%	320
Probable	3.5	1.54%	132
Total	11.8	1.55%	452

Phase 2

Lithium Mineral Resources

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Measured	18.7	1.41%	653
Indicated	6.3	1.30%	204
Measured & Indicated	25.1	1.38%	857
Inferred	3.8	1.39%	131
Total	28.9	1.38%	989

Lithium Mineral Reserves

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Proven	16.9	1.38%	577
Probable	4.8	1.29%	153
Total	21.8	1.37%	730

Phase 3

Lithium Mineral Resources

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Measured	2.4	1.56%	93
Indicated	24.3	1.48%	889
Measured & Indicated	26.7	1.49%	984
Inferred	–	–	–
Total	26.8	1.49%	984

Lithium Mineral Reserves

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Proven	2.2	1.53%	82
Probable	19.0	1.44%	677
Total	21.2	1.45%	759

Consolidated Reserves and Resources

Lithium Mineral Resources

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Measured	37.1	1.43%	1,314
Indicated	39.9	1.43%	1,410
Measured & Indicated	77.0	1.43%	2,600
Inferred	8.6	1.43%	304
Total	85.6	1.43%	2,904

Lithium Mineral Reserves

Resources Category	Ore (Mt)	Grade (Li₂O %)	LCE (Kt)
Proven	27.4	1.44%	979
Probable	27.3	1.43%	962
Total	54.8	1.44%	1,941

Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding.
Mineral Reserves are reported with an effective date of February 24, 2022 and Mineral Resources are reported with an effective date of January 2019, February 11, 2022 and May 30, 2022.
Consolidated Mineral Resources include the Murial and Lavra Deposits (in addition to Phase 1, Phase 2 and Phase 3).
Measured & Indicated Mineral Resources are reported inclusive of Proven & Probable Mineral Reserves.

07.