0001104659-24-055720
SEC filingSigma Lithium generated $181.2M revenue in its first production year but recorded a net loss of $38.2M due to ramp-up costs and $47M in stock-based compensation.
Sigma Lithium Corporation commenced commercial production in April 2023, reporting full-year revenue of $181.2 million for the period ended December 31, 2023. This compares to zero revenue in the prior year when the company was in pre-operating stage. Cost of goods sold totaled $92.3 million, resulting in a gross profit of $88.9 million and a gross margin of 49.1%. Operating expenses were dominated by general and administrative costs of $54.4 million (including $9.6 million in legal fees and $3.0 million in other one-off items), stock-based compensation of $47.0 million, and other operating expenses of $6.7 million. The operating loss was $21.6 million, a significant improvement from the $134.1 million loss in 2022. Net loss for the year was $38.2 million, compared to a net loss of $127.2 million in the prior year. Basic and diluted loss per share improved from $1.26 to $0.35.
Total assets grew 58% to $487.2 million, driven by increases in property, plant and equipment ($239.7 million vs $158.6 million) and deferred exploration costs ($74.3 million vs $35.6 million). Cash and cash equivalents decreased to $64.4 million from $96.4 million, reflecting $30.8 million used in operations and $82.2 million used in investing activities, partially offset by $77.8 million in financing inflows. Total debt (loans and export prepayment agreements) rose sharply to $170.9 million from $77.4 million, as the company drew down remaining tranches of the Synergy export prepayment facility ($100 million facility, fully drawn) and obtained $13.3 million from BDMG. The company also entered into short-term trade finance facilities. Working capital turned negative as current liabilities ($122.4 million) exceeded current assets ($142.7 million) by only $20.3 million, largely due to $59.8 million in supplier payables.
Operating cash flow was negative $30.8 million, primarily due to net loss of $38.2 million adjusted for non-cash items (stock-based compensation $47.0 million, depreciation $7.5 million, interest on loans $17.7 million) and working capital build (trade receivables $30.4 million, inventories $18.6 million, recoverable taxes $17.3 million). Investing activities used $82.2 million, including $45.8 million for property, plant and equipment and $23.5 million for deferred exploration. Financing activities provided $77.8 million from loan proceeds. Free cash flow (operating minus capex) was negative $100.1 million, highlighting the cash-intensive nature of the ramp-up. Management expects to fund Phase 2 expansion with cash on hand and future operating cash flows.
Management highlighted the successful commissioning of the Phase 1 Greentech Plant, which reached nameplate capacity of 270,000 tonnes per annum by December 2023. The company announced a final investment decision for Phase 2 on April 1, 2024, with $136 million in capital expenditures budgeted, expected to lift total capacity to 520,000 tonnes. Commercial agreements were established with Glencore for sales and marketing. The company continues to face material weaknesses in internal control over financial reporting, with remediation plans extending into 2025. Risks include lithium price volatility, exchange rate fluctuations, and operational risks in Brazil. The outlook remains focused on sustaining Phase 1 production and advancing Phase 2 construction.
Sigma Lithium’s revenue is concentrated in a single product: spodumene concentrate. Revenue includes $66.2 million in favorable provisional pricing adjustments due to market price movements during the quotational period. Stock-based compensation of $47.0 million relates primarily to restricted stock units granted to employees and directors, with $24.3 million attributed to key management. The company had $19.4 million in inventory at year-end, including $10.5 million in finished goods. Trade accounts receivable stood at $29.7 million, net of price adjustments. Related party transactions include $13.2 million in loans to Tatooine for land acquisition. The company was subject to a $100 million export prepayment agreement with Synergy Capital at BSBY plus 6.95%, maturing in 2026. Subsequent to year-end, an arbitration claim was filed by LG Energy Solution, which management believes is without merit.