Canadian explorer Sigma Lithium (TSX-V; NASDAQ: SGML ) is poised to complete the first phase of its Grota do Cirilo lithium hard rock project in Brazil by the end of this year.
In a call with investors on Monday, CEO Ana Cabral-Gardner said the company will begin commissioning the crushing plant by the end of the year, with commercial production expected to begin in April 2023. Lithium, which has a project value of $5.1 billion, expects to generate significant free cash flow in the second half of the 2023 quarter thanks to strong metal prices.
Grota do Cirilo is said to be not only the largest hard rock lithium deposit in the Americas but also one of the cheapest producers of battery-grade lithium concentrate.
The phase mine is expected to produce 270,000 tons of lithium per year in the first phase, adding 531,000 tons of lithium per year when the two mines become operational.
Sigma said design work for phases two and three is underway, and it hopes to release resource updates before the end of the year.
The project, located in the mine-friendly state of Minas Gerais, has been pilot-producing lithium concentrate since 2018.
Grota do Cirilo is powered by a hydroelectric project 50 km (31 mi) from the city and serves what Sigma calls an “evolving transatlantic supply chain” for batteries and electric vehicles manufactured in North America and Europe.
Sigma expects the market to split as growth outside China accelerates and environmental factors such as water, energy, and waste become increasingly important in manufacturers’ considerations.
Cabral-Gardner believes that Brazil has the potential to become a “green lithium power.”
Brazil is already a global case study of low-carbon mobility, with cars running on ethanol, biofuels, and natural gas.
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