0001104659-24-055720
SEC filingSigma Lithium generated $181.2M revenue in its first year of commercial production, with a net loss of $38.2M as it ramped Phase 1 operations and advanced Phase 2 expansion.
Sigma Lithium reported its first full year of commercial operations for the fiscal year ended December 31, 2023. Revenue from the sale of 102.5 kilotonnes of Green Lithium concentrate and 32.5 kilotonnes of by-product lithium concentrate totaled $181.2 million. Gross profit was $88.9 million (49.0% gross margin), after cost of goods sold of $92.3 million. Operating expenses (including $47.0 million stock-based compensation, $54.4 million general and administrative, and $6.7 million other operating expenses) resulted in an operating loss of $21.6 million. Net loss for the year was $38.2 million, or $0.35 per share, compared to a net loss of $127.2 million in the pre-operating prior year (driven largely by stock-based compensation of $111.6 million). The improvement reflects the commencement of revenue generation offset by ongoing cost of ramping operations.
Total assets at December 31, 2023 were $487.2 million, up from $308.9 million at year-end 2022, mainly due to increases in property, plant and equipment ($158.6M to $239.7M) and deferred exploration and evaluation expenditure ($35.6M to $74.3M). Cash and cash equivalents declined to $64.4 million from $96.4 million, primarily used for investing activities ($82.2 million). Total debt increased to $170.9 million from $77.4 million, consisting of a $144.8 million long-term export prepayment facility (fully drawn), $13.3 million drawn from BDMG, and $12.8 million short-term export prepayment trade finance. Current liabilities rose to $122.4 million (from $37.4 million) due to increased suppliers ($59.8 million) and current portion of loans ($28.9 million). Shareholders' equity increased slightly to $214.3 million ($183.1 million in 2022) as share capital grew from RSU exercises.
Cash used in operating activities was $30.8 million, compared to $5.4 million in the prior year. The negative cash flow reflects working capital build (trade receivables $30.4 million, inventories $18.6 million, recoverable taxes $17.3 million) partially offset by non-cash items (stock-based compensation $47.0 million, depreciation $7.5 million). Investing activities consumed $82.2 million, mainly for property, plant and equipment ($45.8 million) and deferred exploration ($23.5 million). Financing activities provided $77.8 million, from proceeds of loans ($92.6 million) less repayments ($13.3 million) and lease payments ($1.4 million). Free cash flow (operating cash flow less capex) was negative $100.0 million (capex of $69.3 million plus investing outflows for loans to related parties and collateral). The company ended the year with $64.4 million cash, sufficient for near-term obligations but reliant on future cash flow from operations and access to additional financing for Phase 2 construction.
Management highlighted successful ramp of Phase 1 operations, with December production at annualized nameplate capacity of 270,000 tonnes. The Phase 2 Final Investment Decision was approved on April 1, 2024, with a budget of $136 million, intended to add 250,000 tonnes per annum capacity. Expansion is to be funded from cash on hand and expected free cash flow. The company also emphasized its ESG positioning, including net-zero carbon achieved for 2023 shipments, zero tailings dams, and zero hazardous chemicals. Key risks include lithium price volatility (spot prices declined significantly in H2 2023), Brazilian economic and regulatory environment, and material weaknesses in internal control over financial reporting. Management is actively remediating these weaknesses with external consultants and additional staffing.
Cost of goods sold of $92.3 million comprised mining costs ($32.8 million), processing costs ($38.8 million), royalties ($5.2 million), and distribution costs ($15.6 million). General and administrative expenses of $54.4 million included $21.3 million of one-off costs (legal fees for strategic review and data room incident, demurrage, and travel associated with plant inauguration). Stock-based compensation of $47.0 million was mainly related to RSUs granted to executives and employees (including $64.3 million recognized in equity, partially offset by reversals). The company had no segment disclosures as it operates a single lithium concentrate business. Deferred tax assets of $2.1 million were recognized, primarily from pre-operational expenses and unrealized foreign exchange. Subsequent events include entering into $120 million short-term export prepayment agreements in Q1 2024 and an arbitration filing by LG Energy Solution (deemed without merit).