Sigma's $45 Million Project Finance Beneficial for Lithium Industry

SIGMA Lithium Resources Corporation (Sigma) is pleased to announce the signing of a term sheet for a US$45 million senior secured project finance facility to be led by Societe Generale. The Bank Project Finance Facility will be used for the construction and development of the Company's world-class and green Li Grota do Cirilo project in Minas Gerais, Brazil.

Sigma is developing a world-class, hard rock lithium deposit at its Grota do Cirilo property in Brazil, with ultra-high grade and exceptional mineralogy. It is on track to become a premier supplier to the Li-ion battery industry worldwide. The company has 28 mineral rights in four properties spread over 188 km2 and 18,887 hectares - with over 200 Li bearing pegmatites and 11 former historical Li mines. The Grota do Cirilo property, the company's main focus includes 10 mining concessions.

The news was announced at the end of June, marking the second time that the lithium industry has succeeded in green financing in a few weeks following Livent's $225 million green debt facility.

"With an interest rate of US LIBOR plus 5%, dropping to LIBOR plus 4.5% after completion of the project, this deal highlights the relatively low-cost access to capital lithium producers can gain, even in a tough market, by leveraging the green credentials of their product (which can be used in the production of rechargeable batteries)," the report reads.

"In the case of Sigma, these green credentials have been bolstered by its access to hydro-power (reducing its scope 2 GHG emissions) and its wider Environmental, Social, and Governance (ESG) focused development of the project, which has helped it meet the EPs."

According to Roskill, Sigma's financing plan includes an environmental and social contract that follows the Equator Principles, a set of voluntary guidelines adopted by private financial institutions to ensure that large-scale development or construction projects appropriately consider the associated potential impacts on the natural environment and any affected communities.

In addition, the package will be supplemented by a production prepayment facility signed with Mitsui & Co in April 2019 and an approximate $10-million equity contribution, which is required to satisfy the funding package.

The lithium Grota do Cirilo project in Minas Gerais, Brazil is initially expected to produce 220,000 tons/year of 6% Li2O spodumene concentrate from the Xuxa deposit. The construction capital cost of the project is currently estimated at US$82 million.

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