UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2022
Commission File Number: 001-40786
Sigma
Lithium Corporation
(Translation of registrant's name into English)
2200 HSBC Building
885 West Georgia Street
Vancouver, British Columbia
V6C
3E8
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Sigma Lithium Corporation | ||
(Registrant) | ||
Date: August 4, 2022 | /s/ Ana Cristina Cabral Gardner | |
Ana Cristina Cabral Gardner | ||
Co-Chief Executive Officer |
Exhibit 99.1
NI 43-101 TECHNICAL REPORT
GROTA DO CIRILO LITHIUM PROJECT
GROTA DO CIRILO LITHIUM PROJECT
Araçuaí and Itinga Regions, Minas Gerais, Brazil
Phase 3 Mineral Resource Estimate
Prepared for: Sigma Lithium Corporation
Prepared by:
Homero Delboni Jr., MAusIMM, Promon Engenharia
Marc-Antoine Laporte, P.Geo, SGS Canada Inc
Jarrett Quinn, P.Eng., Primero Group Americas
Porfirio Cabaleiro Rodriguez, (MEng), FAIG, GE21 Consultoria Mineral
Brian Talbot, FAusIMM, Rtek Pty Ltd.
Effective Date: 30th May 2022
Issue Date: 4th August 2022
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IMPORTANT NOTICE
This report was prepared as National Instrument 43-101 Technical Report for Sigma Lithium Corporation (Sigma) by Primero Group Americas Inc. (a subsidiary of Primero Group Ltd), SGS Geological Services, GE21 Consultoria Mineral and Promon Engenharia Ltda. (collectively the Report Authors). The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved in the Report Authors' services, based on i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Sigma subject to terms and conditions of its individual contracts with the Report Authors. Except for the purpose legislated under Canadian provincial and territorial securities law, any other use of this report by any third party is at that party’s sole risk.
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Table of Contents
1 | SUMMARY | 24 | |
1.1 | Introduction | 24 | |
1.2 | Property Description and Location | 24 | |
1.3 | Accessibility, Climate, Local Resources,Infrastructure and Physiography | 25 | |
1.4 | History | 25 | |
1.5 | Geological Setting and Mineralization | 25 | |
1.6 | Exploration | 26 | |
1.7 | Drilling | 27 | |
1.8 | Sample Preparation, Analyses and Security | 27 | |
1.9 | Data Verification | 29 | |
1.10 | Mineral Processing and Metallurgical Testing | 30 | |
1.11 | Mineral Resource Estimates | 31 | |
1.12 | Mineral Reserve Estimates | 35 | |
1.13 | Mining Methods | 38 | |
1.14 | Recovery Methods | 39 | |
1.15 | Project Infrastructure | 39 | |
1.16 | Market Studies and Contracts | 41 | |
1.17 | Environmental Studies, Permitting and Social or Community Impact | 42 | |
1.18 | Capital and Operating Costs | 45 | |
1.19 | Economic Analysis | 47 | |
1.20 | Interpretation and Conclusions | 51 | |
1.21 | Recommendations | 52 | |
2 | INTRODUCTION | 53 | |
2.1 | Terms of Reference | 53 | |
2.2 | Effective Dates | 53 | |
2.3 | Qualified Persons | 54 | |
2.4 | Site Visits | 54 | |
2.5 | Information Source | 54 | |
3 | RELIANCE ON OTHER EXPERTS | 55 | |
3.1 | Marketing | 55 | |
3.2 | Units and Currency | 55 | |
3.3 | Environmental, Permitting and Social Licence | 55 | |
3.4 | Taxation | 56 | |
3.5 | Mineral Tenure | 56 | |
4 | PROPERTY DESCRIPTION AND LOCATION | 57 | |
4.1 | Property Description and Location | 57 | |
4.2 | Mineral Tenure | 58 | |
4.3 | Surface Rights | 62 | |
4.4 | Agreements | 62 | |
4.5 | Royalties and Encumbrances | 62 | |
4.6 | QP Comment | 62 | |
5 | ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,INFRASTRUCTURE AND PHYSIOGRAPHY | 63 | |
5.1 | Accessibility | 63 | |
5.2 | Climate | 63 | |
5.3 | Local Resources and Infrastructure | 63 | |
5.4 | Physiography | 66 |
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6 | HISTORY | 67 | |
6.1 | Project History | 67 | |
6.2 | Production | 67 | |
7 | GEOLOGICAL SETTING AND MINERALIZATION | 68 | |
7.1 | Regional Geology | 68 | |
7.2 | Local Geology | 68 | |
7.3 | Property Geology | 71 | |
8 | DEPOSIT TYPES | 81 | |
9 | EXPLORATION | 83 | |
9.1 | Introduction | 83 | |
9.2 | Grids and Surveys | 83 | |
9.3 | Geological Mapping | 83 | |
9.4 | Channel Mapping | 83 | |
9.5 | Trench Sampling | 85 | |
9.6 | Exploration Potential | 86 | |
10 | DRILLING | 90 | |
10.1 | Introduction | 90 | |
10.2 | Drill Type | 90 | |
10.3 | Sigma Drilling Campaigns | 90 | |
10.4 | Drill Hole Logging | 100 | |
10.5 | Recovery | 101 | |
10.6 | Drill Surveys | 101 | |
10.7 | QP Comment | 101 | |
11 | SAMPLE PREPARATION, ANALYSES AND SECURITY | 102 | |
11.1 | Introduction | 102 | |
11.2 | Sampling | 102 | |
11.3 | Density Determinations | 103 | |
11.4 | Analytical and Test Laboratories | 104 | |
11.5 | Sample Preparation and Analysis | 104 | |
11.6 | Quality Assurance and Quality Control | 105 | |
11.7 | Sample Security | 124 | |
11.8 | Sample Storage | 124 | |
11.9 | QP Comments | 124 | |
12 | DATA VERIFICATION | 126 | |
12.1 | Drilling Database | 126 | |
12.2 | Witness Sampling | 126 | |
12.3 | QP Comments | 130 | |
13 | MINERAL PROCESSING AND METALLURGICAL TESTING | 131 | |
13.1 | Xuxa Metallurgical Test work (2018-19) | 131 | |
13.2 | Xuxa Metallurgical Test Work (2020-2021) | 140 | |
13.3 | Barreiro Metallurgical Test Work (2020-21) | 158 | |
14 | MINERAL RESOURCE ESTIMATES | 174 | |
14.1 | Nezinho do Chicao Deposit | 174 | |
14.2 | Xuxa Deposit | 184 | |
14.3 | Barreiro Deposit | 194 | |
14.4 | Murial Deposit | 206 | |
14.5 | Lavra Do Meio Deposit | 214 |
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15 | MINERAL RESERVE ESTIMATES | 225 | |
15.1 | Xuxa Mineral Reserves | 225 | |
15.2 | Xuxa Pit Optimization Parameters | 226 | |
15.3 | Xuxa Modifying Factors | 229 | |
15.4 | Xuxa Pit Optimization Study | 234 | |
15.5 | Xuxa Mineral Reserves Statement | 240 | |
15.6 | Barreiro Mineral Reserves | 241 | |
15.7 | Barreiro Pit Optimization Parameters | 242 | |
15.8 | Barreiro Modifying Factors | 245 | |
15.9 | Barreiro Pit Optimization Study | 249 | |
15.10 | Barreiro Mineral Reserves Statement | 254 | |
16 | MINING METHODS | 255 | |
16.1 | Xuxa Open Pit Mining | 255 | |
16.2 | Xuxa Mine Sequencing | 266 | |
16.3 | Xuxa Mine Fleet | 273 | |
16.4 | Barreiro Open Pit Mining | 293 | |
16.5 | Barreiro Mine Sequencing | 310 | |
16.6 | Barreiro Mine Fleet | 316 | |
17 | RECOVERY METHODS | 335 | |
17.1 | Processing Overview | 335 | |
17.2 | Xuxa Front-End Engineering Design (FEED) Update | 335 | |
17.3 | Xuxa Process Plant | 336 | |
17.4 | Barreiro Process Plant | 345 | |
18 | Project Infrastructure | 351 | |
18.2 | Roads | 354 | |
18.3 | Earthworks and Buried Services | 355 | |
18.4 | Water Balance (Storm Water, Water Treatment) xuxa | 356 | |
18.5 | Sewage | 359 | |
18.6 | Built Infrastructure | 359 | |
18.7 | Stockpiles | 366 | |
18.8 | Waste Disposal | 367 | |
18.9 | Fuel | 376 | |
18.10 | Power Supply | 376 | |
18.11 | Water Supply | 378 | |
18.12 | Compressed Air | 378 | |
18.13 | Control Systems | 378 | |
18.14 | Communication Systems | 379 | |
18.15 | Camps and Accommodation | 379 | |
18.16 | Port Facilities | 379 | |
19 | MARKET STUDIES AND CONTRACTS | 381 | |
19.1 | Lithium Demand Forecast | 381 | |
19.2 | Lithium Supply Forecast | 382 | |
19.3 | Lithium Price Forecast | 385 | |
19.4 | Contracts and Off-Take Agreements | 386 | |
20 | ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT | 389 | |
20.1 | Environmental Considerations | 389 | |
20.2 | Permitting Considerations | 394 | |
20.3 | Social Considerations | 397 | |
20.4 | Evaluation of Environmental Impacts and Mitigation Actions | 399 | |
20.5 | Waste and Water Management | 401 | |
20.6 | Relations with Stakeholders | 402 | |
20.7 | Rehabilitation and Closure Planning | 403 | |
20.8 | Phase 2 Barreiro Pegmatite Environmental Work | 404 |
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21 | Capital and Operating Costs – Xuxa (Phase 1) and Barreiro (Phase 2) | 415 | |
21.1 | Basis of Estimate | 415 | |
21.2 | Work Breakdown Structure | 415 | |
21.3 | Estimate Plan | 415 | |
21.4 | Capital Cost | 417 | |
21.5 | Operating Costs | 431 | |
22 | ECONOMIC ANALYSIS | 439 | |
22.1 | Economic Assumptions | 439 | |
22.2 | Phase 1 DFS Economic Analysis | 441 | |
22.3 | Phase 2 PFS Economic Analysis | 451 | |
22.4 | Phase 1 + Phase 2 PFS Economic Analysis | 461 | |
23 | ADJACENT PROPERTIES | 472 | |
24 | OTHER RELEVANT DATA AND INFORMATION | 473 | |
24.1 | Schedule for Xuxa Phase 1 | 473 | |
24.2 | Schedule for Barreiro Phase 2 | 474 | |
24.3 | Schedule for NDC Phase 3 | 474 | |
24.4 | Project Execution Plan | 474 | |
25 | INTERPRETATION AND CONCLUSIONS | 478 | |
25.1 | Conclusions | 478 | |
25.2 | Risk Evaluation | 482 | |
25.3 | Opportunities | 483 | |
26 | RECOMMENDATIONS | 484 | |
26.1 | Geology and Resources | 484 | |
26.2 | Xuxa | 484 | |
26.3 | Barreiro Project Recommendations | 485 | |
26.4 | Nezinho do Chicao Project Recommendations | 485 | |
27 | REFERENCES | 486 |
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List of Tables
Table 1-1: NDC Deposit Mineral Resource Estimate | 33 |
Table 1-2 – Xuxa Deposit Mineral Resource Estimate | 33 |
Table 1-3 – Barreiro Deposit Mineral Resource Estimate | 34 |
Table 1-4 – Murial Deposit Mineral Resource Estimate | 34 |
Table 1-5 – Lavra do Meio Deposit Mineral Resource Estimate | 35 |
Table 1-6 – Parameters Used in Xuxa Pit Optimization | 36 |
Table 1-7 – Xuxa Mineral Reserves | 36 |
Table 1-8: Parameters Used in Barreiro Pit Optimization | 37 |
Table 1-9: Barreiro Mineral Reserves | 38 |
Table 1-10 – Xuxa Waste Pile Storage | 40 |
Table 1-11: Barreiro Waste Pile Storage | 40 |
Table 1-12 – Capital Cost Estimate Summary Xuxa | 45 |
Table 1-13: Capital Cost Estimate Summary Barreiro | 46 |
Table 1-14: Xuxa Operating Cost Estimate Summary | 46 |
Table 1-15: Barreiro Operating Cost Estimate Summary | 47 |
Table 1-16 – Base Case After-Tax NPVs | 47 |
Table 1-17: Phase 1 Base Case Scenario Results | 48 |
Table 1-18: Key Phase 1 Technical Assumptions | 48 |
Table 1-19: Phase 2 Base Case Scenario Results | 49 |
Table 1-20: Key Phase 2 Technical Assumptions | 50 |
Table 1-21: Phase 1+2 Base Case Scenario Results | 50 |
Table 1-22: Key Phase 1+2 Technical Assumptions | 51 |
Table 4-1 – Mineral Rights Description | 59 |
Table 4-2 – Property Tenure Summary | 61 |
Table 6-1 – Project History | 67 |
Table 9-1 – Channel Sampling Summary | 84 |
Table 9-2 – Grota do Cirilo Trench Sampling Summary | 85 |
Table 9-3 – Grota do Cirilo Property Prospects | 86 |
Table 9-4 – Genipapo Property Prospects | 88 |
Table 9-5 – Santa Clara Property Prospects | 89 |
Table 10-1 – Total Sigma Drill Holes to April 30, 2022 | 90 |
Table 10-2 – Total Xuxa Drilling | 90 |
Table 10-3 – Xuxa Example Drill Intercept Table | 91 |
Table 10-4 – Total Barreiro Drilling | 92 |
Table 10-5 – Barreiro Example Drill Intercept Table | 93 |
Table 10-6 – Total Lavra do Meio Drilling | 94 |
Table 10-7 – Lavra do Meio Example Drill Intercept Table | 95 |
Table 10-8 – Total Murial Drilling | 96 |
Table 10-9 – Murial Example Drill Intercept Table | 97 |
Table 10-10 – Nezinho do Chicao Drilling to December 1, 2021 | 98 |
Table 10-11 – Nezinho do Chicao Example Drill Intercept Table | 99 |
Table 10-12 – Total Maxixe Drilling | 100 |
Table 11-1 – Specific Gravity of Lithium-Bearing Pegmatites | 103 |
Table 11-2 – Standard Average Li Values with Analytical Error | 105 |
Table 11-3: Check Assay Original vs Control Samples | 111 |
Table 11-4: Check Assay Original and Control Descriptive Statistics | 111 |
Table 11-5: Standard Average Li Values with Analytical Error | 112 |
Table 11-6: Standard Average Li Values with Analytical Error | 119 |
Table 12-1 – Witness Sample Mineralized Interval Comparison between SGS Geosol and SGS Lakefield | 127 |
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Table 12-2 – Witness Sample Original vs Control Differences | 128 |
Table 12-3 – Witness Sample Original and Control Descriptive Statistics | 128 |
Table 13-1 – Chemical Analysis and WRA Results | 133 |
Table 13-2 – Bond Abrasion and Ball Mill Work Index Test Work Summary | 133 |
Table 13-3 – Average UCS and CWi | 134 |
Table 13-4 – Summary of Ore Sorter Test work Results | 134 |
Table 13-5 – Summary of HLS Test Results on Variability Samples | 135 |
Table 13-6 – Coarse Fraction DMS results | 136 |
Table 13-7: DMS Tailings Grades | 136 |
Table 13-8 – Fines Fraction DMS 2nd Pass SG Cut-Points | 138 |
Table 13-9 – Ultra-fine Fraction DMS Results | 138 |
Table 13-10: Variability sample assays | 143 |
Table 13-11: Semi-quantitative XRD analysis of the variability samples | 143 |
Table 13-12: HLS Interpolated stage and global lithium recoveries (6% Li2O concentrate) for each variability sample | 144 |
Table 13-13: Variability Sample 2 Global HLS Results | 145 |
Table 13-14: Variability Sample 3 Global HLS Results | 145 |
Table 13-15: Variability Sample 6 Global HLS Results | 146 |
Table 13-16: Variability Sample 6 Global HLS Results with magnetic separation | 146 |
Table 13-17: DMS and magnetic separation results by size fraction | 147 |
Table 13-18: Var 2 Combined DMS stage results | 148 |
Table 13-19: Var 3 Combined DMS stage results | 148 |
Table 13-20: Var 6 Combined DMS stage results | 149 |
Table 13-21: Var 2 Combined Global DMS results | 151 |
Table 13-22: Var 3 Combined Global DMS results | 151 |
Table 13-23: Var 6 Combined Global DMS results | 152 |
Table 13-24: Summary of 2019 and 2021 DMS and magnetic separation concentrate grade and global recovery (including hypofines fraction) | 153 |
Table 13-25: Estimates of DMS Circuit Recovery | 154 |
Table 13-26: Summary of Global Recovery and Yield at 5.5% Li2O for 9.5 mm Top Size | 158 |
Table 13-27 – Description of Barreiro Variability Samples | 160 |
Table 13-28 – Variability Sample and Composite Sample Assays | 160 |
Table 13-29 – Semi-quantitative XRD analysis of the four variability samples and the composite sample | 161 |
Table 13-30 – Estimates of Lithium Deportment to Spodumene | 161 |
Table 13-31 – HLS Interpolated stage and global lithium recoveries (6% Li2O concentrate) for each crush size | 163 |
Table 13-32 – Semi-Quantitative XRD Analysis for Selected Samples (-10 mm crush size) | 165 |
Table 13-33 – HLS Interpolated Stage and Global Combined Lithium Recoveries (6% Li2O concentrate) for each Variability Sample | 165 |
Table 13-34 – Variability Sample 1 Global HLS Results | 166 |
Table 13-35 – Variability Sample 2 Global HLS Results | 166 |
Table 13-36 – Variability Sample 3 Global HLS Results | 167 |
Table 13-37 – Variability Sample 4 Global HLS Results | 167 |
Table 13-38 – Coarse fraction DMS stage results | 169 |
Table 13-39 – Fines fraction DMS stage results | 169 |
Table 13-40 – Ultrafines fraction DMS stage results | 169 |
Table 13-41 – Global DMS results by size fraction | 171 |
Table 13-42 – Global combined DMS results | 171 |
Table 13-43 – Global combined DMS results with middlings re-crush | 171 |
Table 13-44 – Summary of DMS concentrate grade and recovery | 172 |
Table 13-45 – DMS concentrate semi-quantitative XRD analysis | 172 |
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Table 13-46: Barreiro Global Recovery and Yield between 6% and 5.5% Li2O Product Grade | 173 |
Table 14-1: NDC Assay Statistics Inside Mineralized Solids | 175 |
Table 14-2: NDC 1 m Composite Statistics | 176 |
Table 14-3: NDC Resource Block Model Parameters | 177 |
Table 14-4: NDC Pit Optimization Parameters | 183 |
Table 14-5: NDC Deposit Mineral Resource Estimate | 184 |
Table 14-6 – Xuxa Assay Statistics Inside Mineralized Solids | 185 |
Table 14-7 – Xuxa 1 m Composite Statistics | 186 |
Table 14-8 – Xuxa Resource Block Model Parameters | 188 |
Table 14-9 – Xuxa Parameters for Reasonable Prospects for Eventual Economic Extraction | 193 |
Table 14-10 – Xuxa Deposit Mineral Resource Estimate | 193 |
Table 14-11 – Barreiro Assay Statistics Inside Mineralized Solids | 196 |
Table 14-12 – Barreiro 1 m Composite Statistics | 196 |
Table 14-13 – Barreiro Resource Block Model Parameters | 198 |
Table 14-14 – Barreiro Pit Optimization Parameters | 204 |
Table 14-15 – Barreiro Deposit Mineral Resource Estimate | 205 |
Table 14-16 – Murial Assay Statistics Inside Mineralized Solids | 206 |
Table 14-17 – Murial 1 m Composite Statistics | 207 |
Table 14-18 – Murial Resource Block Model Parameters | 209 |
Table 14-19 – Murial Parameters for Reasonable Prospect for Eventual Economic Extraction | 213 |
Table 14-20 – Murial Deposit Mineral Resource Estimate | 213 |
Table 14-21 – Lavra do Meio Assay Statistics Inside Mineralized Solids | 216 |
Table 14-22 – Lavra do Meio 1 m Composite Statistics | 216 |
Table 14-23 – Lavra do Meio Resource Block Model Parameters | 218 |
Table 14-24 – Lavro do Meio Parameters for Reasonable Prospect for Eventual Economic Extraction | 223 |
Table 14-25 – Lavra do Meio Deposit Mineral Resource Estimate | 223 |
Table 15-1: Technical and Economic Parameters Used in the Final Xuxa Pit Optimization | 227 |
Table 15-2: Xuxa Geotechnical Pit Slope Design Criteria | 228 |
Table 15-3: Mining Recovery Versus Partial Percentage on Block Height | 231 |
Table 15-4: Xuxa Pit Optimization Results | 235 |
Table 15-5: Xuxa Open Pit Operational Design Parameters | 237 |
Table 15-6: Xuxa Pit Final Optimization Ore and Waste | 238 |
Table 15-7: Xuxa Mineral Reserves | 240 |
Table 15-8: Technical and Economic Parameters Used in the Final Barreiro Pit Optimization | 242 |
Table 15-9: Barreiro Geotechnical Pit Slope Design Criteria | 244 |
Table 15-10: Barreiro Dilution Analysis | 248 |
Table 15-11: Barreiro Nested Pit Optimization Results | 250 |
Table 15-12: Barreiro Open Pit Operational Design Parameters | 251 |
Table 15-13: Barreiro Pit Final Optimization Ore and Waste | 253 |
Table 15-14: Barreiro Mineral Reserves | 254 |
Table 16-1: Xuxa Geotechnical Slope Results Designed Pit | 257 |
Table 16-2: Xuxa Piezometer Locations and Results | 261 |
Table 16-3: Variation of Hydraulic Conductivity and Storage According to Depth | 263 |
Table 16-4: Comparison between Calculated and Adopted Values of K | 263 |
Table 16-5: Calibration Parameters for Calculated vs Observed Head Values | 264 |
Table 16-6: Xuxa Water Levels Reached in the Drawdown Numerical Model Simulation | 265 |
Table 16-7: Simulated Dewatering Streamflow (Annual Average) | 265 |
Table 16-8: Xuxa Designed Mine Sequencing | 267 |
Table 16-9: Xuxa Non-Designed Mine Sequencing | 268 |
Table 16-10: List of Main Equipment to be used in the Operation of the Xuxa Pits | 275 |
Table 16-11: Drilling Equipment for Xuxa Pits | 276 |
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Table 16-12: Xuxa Staffing Requirement Summary | 279 |
Table 16-13: Xuxa Preliminary Drill and Blast Plan - Ore | 284 |
Table 16-14: Xuxa Preliminary Drill and Blast Plan – Waste, Soil and Saprolite - Weathered | 285 |
Table 16-15: Xuxa Preliminary Drill and Blast Plan – Waste - Fresh | 286 |
Table 16-16: Xuxa Recommended Drill and Blast Rigs | 287 |
Table 16-17: Xuxa Preliminary Calculations for Drilling Requirements | 288 |
Table 16-18: Xuxa Estimated Annual Consumption of Explosives - Ore | 290 |
Table 16-19: Xuxa Estimated Annual Consumption of Explosives - Waste | 291 |
Table 16-20: Xuxa Estimated Annual Consumption of Explosives – Combined Ore and Waste | 292 |
Table 16-21: Uniaxial Compression Test (UCS) Results Barreiro Pit | 295 |
Table 16-22: Direct Shear Test Results Barreiro Pit | 296 |
Table 16-23: Barreiro Slope Stability Analysis | 300 |
Table 16-24: Barreiro Recommended Pit Slope Geometry | 304 |
Table 16-25: Survey results of groundwater levels in Barreiro exploration drillholes | 307 |
Table 16-26: Depth values of saprolite-fresh rock boundary Barreiro drill holes | 308 |
Table 16-27: Average climatic data for Araçuaí (1981-2010) | 310 |
Table 16-28: Barreiro Designed Mine Sequence | 311 |
Table 16-29: Barreiro Schedule of Primary Mining Equipment | 317 |
Table 16-30: Ore and Waste Production and percentage of material to be blasted Barreiro Pit | 318 |
Table 16-31: Drilling Equipment for Barreiro Pit | 319 |
Table 16-32: Barreiro Staffing Schedule | 322 |
Table 16-33: Barreiro Preliminary Drill and Blast Plan - Ore | 328 |
Table 16-34: Barreiro Preliminary Drill and Blast Plan – Waste | 329 |
Table 16-35: Barreiro Recommended Drill Rig | 330 |
Table 16-36: Barreiro Preliminary Calculations for Drilling Requirements | 331 |
Table 16-37: Barreiro Estimated Annual Consumption of Explosives - Ore | 333 |
Table 16-38: Barreiro Estimated Annual Consumption of Explosives - Waste | 333 |
Table 17-1 – Xuxa Operating Parameters | 342 |
Table 17-2: Xuxa Design Basis and Mass Balance Summary | 343 |
Table 17-3: Xuxa Operating Hours for Main Facilities | 344 |
Table 17-4: Barreiro Operating Parameters | 349 |
Table 17-5: Barreiro Design Basis and Mass Balance Summary | 349 |
Table 18-1 – Infrastructure Summary Table | 360 |
Table 18-2 – Infrastructure Summary Table | 362 |
Table 18-3: Xuxa Waste Pile Parameters for Stability Analysis | 371 |
Table 18-4: Safety Factor from Xuxa Waste Pile Stability Analysis | 371 |
Table 18-5: Xuxa Waste Pile Design Parameters | 372 |
Table 18-6: Xuxa Waste Pile Capacities and Surfaces Areas | 373 |
Table 18-7: Barreiro Waste Pile Design Parameters | 374 |
Table 18-8: Barreiro Waste Pile Capacity and Surface Area | 374 |
Table 18-9 – Total Process Plant Power Demand | 377 |
Table 19-1: Delivery Schedule Under the LGES Offtake | 386 |
Table 20-1 – Granted Licences and Leases | 390 |
Table 20-2 – Baseline Studies | 391 |
Table 20-3 – Applicable Environmental Compensation | 395 |
Table 20-4 – Environmental Impact Minimization Measures | 399 |
Table 20-5 – Environmental Impact Minimization Measures | 404 |
Table 21-1 – Quoted Currency Exchange Rates | 417 |
Table 21-2 – Xuxa Concentrator Capital Cost Estimate Summary | 418 |
Table 21-3 Barreiro Concentrator Capital Cost Estimate Summary | 421 |
Table 21-4: Process Plant Material Quantity Summary | 424 |
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Table 21-5: Capital Cost Estimate Basis – Process Plant | 425 |
Table 21-6 – Contingency Requirements | 427 |
Table 21-7 – Summary of Tax applied to the CAPEX | 429 |
Table 21-8 – Xuxa Estimated Capital Mining Cost | 430 |
Table 21-9: Barreiro Estimated Capital Mining Cost | 431 |
Table 21-10: Xuxa Concentrator OPEX Processing Cost Summary | 431 |
Table 21-11: Barreiro Concentrator OPEX Processing Cost Summary | 431 |
Table 21-12: Xuxa Processing Plant OPEX Cost Summary Breakdown | 432 |
Table 21-13: Barreiro Processing Plant OPEX Cost Summary Breakdown | 433 |
Table 21-14: Labour Summary | 434 |
Table 21-15: Xuxa Mining OPEX Costs | 438 |
Table 21-16: Barreiro Mining OPEX Costs | 438 |
Table 22-1 – Base Case After-Tax NPVs | 439 |
Table 22-2: Phase 1 Base Case Scenario Results | 441 |
Table 22-3: Key Phase 1 Technical Assumptions | 441 |
Table 22-4: Phase 1 Estimated Revenue and Operating Costs | 443 |
Table 22-5: Phase 2 Base Case Scenario Results | 451 |
Table 22-6: Key Phase 2 Technical Assumptions | 452 |
Table 22-7: Phase 2 Estimated Revenue and Operating Costs | 453 |
Table 22-8: Phase 1+2 Base Case Scenario Results | 461 |
Table 22-9: Key Phase 1+2 Technical Assumptions | 462 |
Table 22-10: Phase 1+2 Estimated Revenue and Operating Costs | 463 |
Table 24-1 – Major Contracts List | 475 |
Table 25-1 – CAPEX Summary Xuxa | 481 |
Table 25-2: CAPEX Summary Barreiro | 481 |
Table 25-3 – Xuxa Operating Cost Estimate Summary | 482 |
Table 25-4: Barreiro Operating Cost Estimate Summary | 482 |
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List of Figures
Figure 2-1 – Project Location | 53 |
Figure 4-1 – Project Properties - Genipapo, Grota do Cirilo, Santa Clara and São José | 57 |
Figure 4-2 – Project Mineral Rights, North and South Complexes | 60 |
Figure 5-1 – Aerial View, Current Project Infrastructure | 64 |
Figure 5-2 – Field Office (location 6 in Figure 5-2) | 64 |
Figure 5-3 – SMSA Pilot Plant | 65 |
Figure 5-4 – Lithium Metallurgical Test Phase Production Plant | 65 |
Figure 5-5 – Photo Showing Typical Vegetation Within Project Area | 66 |
Figure 7-1 – Regional Geologic Map (after Pedrosa-Soares et al., 2001) | 69 |
Figure 7-2 – Local Geology Map, Northern Complex | 70 |
Figure 7-3 – Historic Workings and Pegmatite Dike Swarms within Grota Do Cirilo Property | 71 |
Figure 7-4 – Xuxa Cross Section (looking northeast) | 72 |
Figure 7-5 – Barreiro Cross Section (looking northeast) | 73 |
Figure 7-6 – Lavra do Meio Cross Section (looking north) | 74 |
Figure 7-7 – Nezinho Do Chicao Cross Section (looking northeast) | 75 |
Figure 7-8 – Murial Cross Section (looking north) | 76 |
Figure 7-9 – Historical Workings within São José Property | 77 |
Figure 7-10 – Macro Crystals at Lavra Ramon | 78 |
Figure 7-11 – Samambaia Plan Map | 79 |
Figure 7-12 – Ananias Plan Map | 80 |
Figure 8-1 – Generalized Schematic Representation LCT Pegmatite | 82 |
Figure 9-1 – Grota do Cirilo Satellite Image | 84 |
Figure 9-2 – Channel Samples at Murial Mine | 85 |
Figure 10-1 – Plan View of the Drilling at Xuxa (2017 blue collars and 2018 black collars) | 91 |
Figure 10-2 – Longitudinal View of the Drilling at Xuxa | 92 |
Figure 10-3 – Plan View of the Drilling at Barreiro | 93 |
Figure 10-4 – Longitudinal View of the Drilling at Barreiro | 94 |
Figure 10-5 – Plan View of the Drilling at Lavra do Meio | 95 |
Figure 10-6 – Longitudinal View of the Drilling at Lavra do Meio | 96 |
Figure 10-7 – Plan View of the Drilling at Murial | 97 |
Figure 10-8 – Longitudinal View of the Drilling at Murial | 98 |
Figure 10-9 – Plan View of the Drilling at Nezinho do Chicao | 99 |
Figure 10-10: Longitudinal View of the Drilling at Nezinho do Chicao | 99 |
Figure 10-11 – Maxixe Drill Hole Location Plan | 100 |
Figure 11-1 – Standard Sample Analysis Results for the 2017–2018 Batch with Standard AMIS0338 | 106 |
Figure 11-2 – Standard Sample Analyses Results for the 2017–2018 Batch with Standard AMIS0339 | 106 |
Figure 11-3 – Standard Sample Analyses Results for the 2017–2018 Batch with Standard AMIS0341 | 107 |
Figure 11-4 – Standard Sample Analyses Results for the 2017–2018 Batch with Standard AMIS0342 | 107 |
Figure 11-5 – Standard Sample Analyses Results for the 2017–2018 Batch with Standard AMIS0343 | 108 |
Figure 11-6 – Standard Sample Analyses Results for the 2017–2018 Batch with Standard AMIS0408 | 108 |
Figure 11-7 – Blank Sample Analyses from the 2017–2018 Campaign | 109 |
Figure 11-8 – Scatterplot of Core Duplicates | 110 |
Figure 11-9 – Correlation Between Original Samples and Pulp Duplicates | 110 |
Figure 11-10: Check Assay Correlation Between Original Samples and Pulp Duplicates | 111 |
Figure 11-11: Check Assay Distribution of the Difference Between Original Results and Pulp Duplicates | 112 |
Figure 11-12: Standard Sample Analysis Results for the 2021 Batch with Standard AMIS0341 | 113 |
Figure 11-13: Standard Sample Analysis Results for the 2021 Batch with Standard AMIS0342 | 113 |
Figure 11-14: Standard Sample Analysis Results for the 2021 Batch with Standard AMIS0343 | 114 |
Figure 11-15: Standard Sample Analysis Results for the 2021 Batch with Standard AMIS0408 | 114 |
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Figure 11-16: Blank Sample Analyses from the 2021 Campaign | 115 |
Figure 11-17: Correlation Between 2021 Original Samples and Coarse Duplicates | 116 |
Figure 11-18: Correlation Between 2021 Original Samples and Pulp Duplicates | 117 |
Figure 11-19: 2021 Check Assay Correlation Between SGS Originals and ALS Duplicates | 118 |
Figure 11-20: Check Assay Distribution of the Difference Between SGS Originals and ALS Duplicates | 118 |
Figure 11-21: Standard Sample Analysis Results for the 2021-2022 NDC Batch with Standard AMIS0341 | 120 |
Figure 11-22: Standard Sample Analysis Results for the 2021-2022 NDC Batch with Standard AMIS0342 | 120 |
Figure 11-23: Standard Sample Analysis Results for the 2021-2022 NDC Batch with Standard AMIS0343 | 121 |
Figure 11-24: Standard Sample Analysis Results for the 2021-2022 NDC Batch with Standard AMIS0343 | 121 |
Figure 11-25: Blank Sample Analyses from the 2021-2022 NDC Campaign | 122 |
Figure 11-26: Correlation Between 2021-2022 NDC Original Samples and Coarse Duplicates | 123 |
Figure 11-27: Correlation Between 2021-2022 NDC Original Samples and Pulp Duplicates | 123 |
Figure 11-28: 2021-2022 NDC Check Assay Correlation Between SGS Originals and ALS Duplicates | 124 |
Figure 12-1 – Witness Sample Original vs Control Sample Differences | 128 |
Figure 12-2 – Witness Sample Original vs Control Sample Differences Frequency Distribution | 129 |
Figure 12-3 – Witness Sample Original vs Control Sample Differences Correlation Analysis | 129 |
Figure 13-1 – Overview of Typical Stage 1 Test work Flowsheet | 131 |
Figure 13-2 – Sample Preparation Diagram for Stage 1 Variability Samples | 132 |
Figure 13-3 – Effect of Combining Coarse DMS and -3.3 mm Middlings HLS Concentrates | 137 |
Figure 13-4: Xuxa Main Pegmatite and Second Pegmatite Sampled in 2018 | 141 |
Figure 13-5: Petalite Distribution (%) in Xuxa Block Model (Plan View Looking North) | 142 |
Figure 13-6: Spodumene Distribution (%) in Xuxa Block Model (Plan View Looking North) | 142 |
Figure 13-7: Comparative Results for 5.5% and 6.0% Li2O Global Recovery for 9.5 mm Top Size | 155 |
Figure 13-8: Relative Increase in Global Li2O Recovery for 9.5 mm Top Size | 156 |
Figure 13-9: Comparative Results for 5.5% and 6.0% Li2O Global Yield for 9.5 mm Top Size | 157 |
Figure 13-10: Relative Increase in Global Li2O Yield for 9.5 mm Top Size | 158 |
Figure 13-11 – Lithium (Li2O) Grade and Localization of the Drill Holes used to produce the Barreiro Variability Samples | 159 |
Figure 13-12 – BWi of the Composite Sample compared to the SGS Database | 162 |
Figure 13-13 – Ai of Var 3 compared to the SGS Database | 162 |
Figure 13-14 – Cumulative Lithium Grade - Stage Recovery Curves for HLS Tests | 164 |
Figure 13-15 – Cumulative Lithium Grade – Global Recovery Curves for HLS Tests | 164 |
Figure 14-1: NDC Drill Hole Collar Locations | 175 |
Figure 14-2: NDC Pegmatite Solid (looking west-northwest) | 177 |
Figure 14-3: NDC Combined Correlogram | 178 |
Figure 14-4: Isometric View of NDC Search Ellipsoids | 179 |
Figure 14-5: Isometric View of the NDC Interpolated Block Model | 179 |
Figure 14-6: Statistical Comparison of NDC Assay, Composite and Block Data | 180 |
Figure 14-7: Comparison NDC Block Values Versus Composites Inside Blocks | 181 |
Figure 14-8: NDC Block Model Classification | 182 |
Figure 14-9: NDC Deposit Mineral Resource Block Grades and Revenue Factor 1 Pit | 183 |
Figure 14-10 – Xuxa Drill Hole Collar Locations | 185 |
Figure 14-11 – Xuxa 1 m Composite Histogram | 186 |
Figure 14-12 – Xuxa Pegmatite Solid (looking southeast) | 187 |
Figure 14-13 – Xuxa Combined Correlogram | 188 |
Figure 14-14 – Isometric View of Xuxa Search Ellipsoids | 190 |
Figure 14-15 – Isometric View of the Xuxa Interpolated Block Model | 190 |
Figure 14-16 – Statistical Comparison of Xuxa Assay, Composite and Block Data | 191 |
Figure 14-17 – Comparison Xuxa Block Values Versus Composites Inside Blocks | 191 |
Figure 14-18 – Xuxa Block Model Classification | 192 |
Figure 14-19 – Barreiro Drillhole Collar Locations | 195 |
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Figure 14-20 – Barreiro 1 m Composite Histogram | 197 |
Figure 14-21 – Sectional Interpretations of the Barreiro Pegmatite Unit (looking north and west) | 198 |
Figure 14-22 – Barreiro Combined Correlogram | 199 |
Figure 14-23 – Isometric View of Barreiro Search Ellipses | 200 |
Figure 14-24 – Isometric View of the Barreiro Interpolated Block Model | 200 |
Figure 14-25 – Statistical Comparison of Barreiro Assay, Composite and Block Data | 201 |
Figure 14-26 – Barreiro Block Values Versus Composites Inside Those Blocks | 201 |
Figure 14-27 – Barreiro Block Model Classification | 203 |
Figure 14-28: Isometric View Looking Northeast: Barreiro Deposit Mineral Resource Block Grades and Revenue Factor 1 Pit | 204 |
Figure 14-29 – Murial Drill Hole Collar Locations | 206 |
Figure 14-30 – Murial 1 m Composite Histogram | 207 |
Figure 14-31 – Murial Pegmatite Solid (looking west) | 208 |
Figure 14-32 – Isometric View of Murial Search Ellipsoids | 210 |
Figure 14-33 – Isometric View of Murial Interpolated Block Model | 210 |
Figure 14-34 – Statistical Comparison of Murial Assay, Composite and Block Data | 211 |
Figure 14-35 – Murial Block Values Versus Composites Inside Those Blocks | 211 |
Figure 14-36 – Murial Block Model Classification | 212 |
Figure 14-37 – Lavra Do Meio Drill Hole Collar Locations | 215 |
Figure 14-38 – Lavra do Meio 1 m Composite Histogram | 217 |
Figure 14-39 – Lavra do Meio Pegmatite Solid (looking west) | 218 |
Figure 14-40 – Lavra do Meio Combined Correlogram | 219 |
Figure 14-41 – Isometric View of Lavra do Meio Search Ellipses | 220 |
Figure 14-42 – Isometric View of Lavra Do Meio Interpolated Block Model | 220 |
Figure 14-43 – Statistical Comparison of Lavro Do Meio Assay, Composite and Block Data | 221 |
Figure 14-44 – Lavra Do Meio Block Values Versus Composites Inside Those Blocks | 221 |
Figure 14-45 – Lavra Do Meio Block Model Classification | 222 |
Figure 15-1: Final Xuxa Mine Configuration | 226 |
Figure 15-2: Xuxa North and South Pit Geotechnical Sectors | 228 |
Figure 15-3: Grade x Tonnage Curve with Selectivity Results Based on Local Uniform Conditioning Estimate | 230 |
Figure 15-4: Cross-Section Showing the Original Pegmatite (white line) and the One Reduced At 1 M from the Edge (brown line). Blocks are Coloured Blue to Red in Relation to their Partial Percentage within the Reduced Solid (Blue = 0%, Red = 100%) | 232 |
Figure 15-5: Schematic Representation of the Dilution Analysis | 232 |
Figure 15-6: Xuxa Tonnage vs Partial Percentage – Dilution – 5 m | 233 |
Figure 15-7: Tonnage vs Partial Percentage – Dilution – 1 m | 233 |
Figure 15-8: Tonnage vs Partial Percentage – Solid Internal Dilution – 5 m | 234 |
Figure 15-9: Pit by Pit Graph of Optimization Results | 236 |
Figure 15-10: Xuxa Pit Wall Configuration | 237 |
Figure 15-11: Xuxa Pit Ramp Design | 238 |
Figure 15-12: Xuxa Final Optimized Pit Design | 239 |
Figure 15-13: Final Barreiro Mine Configuration | 242 |
Figure 15-14: Barreiro Pit Geotechnical Sectors | 244 |
Figure 15-15: Barreiro Grade x Tonnage Curve with Selectivity Results Based on Local Uniform Conditioning Estimate | 246 |
Figure 15-16: Cross-Section Showing the Original Pegmatite (brown line) and the One Reduced At 1 M from the Edge (white line). Blocks are Coloured Blue to Red in Relation to their Partial Percentage within the Reduced Solid (Blue = 0%, Red = 100%) | 247 |
Figure 15-17: Schematic Representation of the Dilution Analysis | 248 |
Figure 15-18: Barreiro Tonnage vs Partial Percentage Curves | 249 |
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Figure 15-19: Barreiro Nested Pit Tonnage and NPV | 250 |
Figure 15-20: Barreiro Pit Wall Configuration | 252 |
Figure 15-21: Barreiro Pit Ramp Design | 252 |
Figure 15-22: Barreiro Final Operational Pit Design | 253 |
Figure 16-1: Kinematic Analysis of Sector A, Xuxa North Pit | 255 |
Figure 16-2: Xuxa North Pit, Sector A Stability Analysis, FS=1.47 | 256 |
Figure 16-3: Xuxa North Pit, Sector C Stability Analysis, FS=1.56 | 256 |
Figure 16-4: Xuxa North and South Pits with Geotechnical Sectors | 257 |
Figure 16-5: Regional Hydrogeological Conceptual Model | 258 |
Figure 16-6: Xuxa North and South Pits Separated by Piaui River | 259 |
Figure 16-7: Potentiometric Map of the Xuxa Pit Region | 260 |
Figure 16-8: Relationship between RQD and Depth Evaluated in the Block Model for the Proposed Pits | 262 |
Figure 16-9: Steady-State Calibration Graph of Calculated vs Observed Head Values | 264 |
Figure 16-10: Equipotential Surface of Groundwater Level in Year-9 Simulation Plan | 266 |
Figure 16-11: Xuxa North and South Pits Year 1 | 269 |
Figure 16-12: Xuxa North and South Pits Year 2 | 270 |
Figure 16-13: Xuxa North and South Pits Year 3 | 270 |
Figure 16-14: Xuxa North and South Pits Year 4 | 271 |
Figure 16-15: Xuxa North and South Pits Year 5 | 271 |
Figure 16-16: Xuxa North and South Pits Year 6 | 272 |
Figure 16-17: Xuxa North and South Pits Year 7 | 272 |
Figure 16-18: Xuxa North and South Pits Year 8 | 273 |
Figure 16-19: Explosives Magazines in Container | 277 |
Figure 16-20: Example of Ammonium Nitrate Emulsion Storage Structure | 278 |
Figure 16-21: Schematic of Wash Ramp Oil-Water Separator | 281 |
Figure 16-22: Schematic of Solid Waste Temporary Storage Facility | 282 |
Figure 16-23: Image Analysis and Calculation of Granulometric Distribution | 293 |
Figure 16-24: OPTV-derived stereogram showing two main joint structures at Barreiro | 295 |
Figure 16-25: Barreiro Pit Sectorization | 296 |
Figure 16-26: Barreiro kinematic analysis for sector 1 with 5% planar rupture occurring | 297 |
Figure 16-27: Barreiro kinematic analysis for sector 1 with 4% planar rupture occurring | 298 |
Figure 16-28: Barreiro kinematic analysis for sector 3 with 4% planar rupture occurring | 298 |
Figure 16-29: Barreiro kinematic analysis for sector 4 with 4% planar rupture occurring | 299 |
Figure 16-30: Barreiro kinematic analysis for sector 5 with 5% planar rupture occurring | 299 |
Figure 16-31: Barreiro Kinematic analysis for sector 5 with 30% planar rupture occurring | 300 |
Figure 16-32: Analysis of section 01 with FS = 1.92 | 301 |
Figure 16-33: Analysis of section 02 with FS = 1.43 | 301 |
Figure 16-34: Analysis of section 03 with FS = 1.80 | 302 |
Figure 16-35: Analysis of section 04 with FS = 1.99 | 302 |
Figure 16-36: Analysis of section 05 with FS = 2.18 | 303 |
Figure 16-37: Jequitinhonha River Basin in Minas Gerais state, Brazil | 305 |
Figure 16-38: Route map and drainage points inspected in the Barreiro area | 306 |
Figure 16-39: Drill hole locations and potentiometric map of the Barreiro area | 307 |
Figure 16-40: Barreiro geotechnical drill hole locations | 309 |
Figure 16-41: Barreiro Pit Year 1 | 312 |
Figure 16-42: Barreiro Pit Year 2 | 312 |
Figure 16-43: Barreiro Pit Year 3 | 313 |
Figure 16-44: Barreiro Pit Year 4 | 313 |
Figure 16-45: Barreiro Pit Year 5 | 314 |
Figure 16-46: Barreiro Pit Year 6 | 314 |
Figure 16-47: Barreiro Pit Year 10 | 315 |
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Figure 16-48: Barreiro Pit Year 12 | 315 |
Figure 16-49: Explosives Magazines in Container | 320 |
Figure 16-50: Example of Ammonium Nitrate Emulsion Storage Structure | 321 |
Figure 16-51: Schematic of Wash Ramp Oil-Water Separator | 325 |
Figure 16-52: Schematic of Solid Waste Temporary Storage Facility | 326 |
Figure 16-53: Image Analysis and Calculation of Granulometric Distribution | 334 |
Figure 17-1: Xuxa Process Plant | 337 |
Figure 17-2: Block Flow Diagram for Xuxa Crushing Circuit and DMS Plant | 338 |
Figure 17-3: Sigma Crushing and DMS Plant Overview | 339 |
Figure 17-4: Sigma Primary Crushing Facility and Crushed Ore Bin | 340 |
Figure 17-5: Sigma Xuxa DMS Plant and Product Stockpiles | 341 |
Figure 17-6: Xuxa and Barreiro Process Plant Layout (2021 Design) | 345 |
Figure 17-7: Block Flow Diagram for the Barreiro Crushing Circuit and DMS Plant | 347 |
Figure 18-1– Sigma Lithium Project General Layout Plan for Xuxa | 352 |
Figure 18-2– Overall Site Plan | 353 |
Figure 18-3: Schematic of the proposed municipal road upgrades | 354 |
Figure 18-4: Proposed municipal access road and community bypass road | 354 |
Figure 18-5 – Proposed Bridge Location Xuxa Mine | 355 |
Figure 18-6 – Xuxa Mine Water Balance | 357 |
Figure 18-7 – Intake Water / Water Treatment | 359 |
Figure 18-8: Conceptual Representation of Workshop Areas | 366 |
Figure 18-9: Xuxa Waste Piles Location Map | 368 |
Figure 18-10: Xuxa Waste Piles Geotechnical Sampling Locations | 369 |
Figure 18-11: Constructive Sequencing of the 340 M Level of the Waste Pile Berm | 370 |
Figure 18-12: Stability Analysis Section AA for Xuxa Waste Pile 03 | 372 |
Figure 18-13: Proposed Location of Barreiro Waste Dump | 373 |
Figure 18-14: Final Mine Configuration Showing Xuxa and Barreiro Pits and Sigma Processing Plant | 375 |
Figure 18-15 – Product Transport Routing from Xuxa to Ilhéus | 380 |
Figure 19-1: Lithium Supply-Demand Forecast | 381 |
Figure 19-2: Lithium Demand Breakdown by End-Use 2022 | 382 |
Figure 19-3: Electric Vehicle Sales as a Share of Total Cars | 382 |
Figure 19-4: Lithium Feedstock Supply Forecast | 383 |
Figure 19-5 Lithium Chemical Supply Breakdown | 383 |
Figure 19-6: Long-Term Supply C1 Lithium Carbonate Cost Curve | 384 |
Figure 19-7: Battery-Grade Lithium Chemical Price Forecast | 385 |
Figure 19-8: Spodumene Price Forecast | 385 |
Figure 20-1 – Location of Areas of Interest and Properties | 396 |
Figure 20-2: Sigma Wildlife Rehabilitation Centre and Seedling Nursery | 401 |
Figure 20-3: Avifauna: A) Nest of Red Ovenbird; individual of B) Red-Cowled Cardinal, C) Grassland Sparrow; D) Smooth-billed Ani; E) Rufous-collared Sparrow; F) Tropical Kingbird; G) Burrowing Owl and H) Yellow-chevroned Parakeet. | 407 |
Figure 20-4: Herpetofauna: A) Neotropical Ameiva, B) Tropidurus oreadicus, C) Leptodactilus fuscus; D) Tegu; E) Rhinella granulosa and F) Rhinellaschneideri. | 407 |
Figure 20-5: Terrestrial mammalian fauna: A) wild dog; B) skunk; C) big-eared opossums; and D) footprint of Procyon cancrivorus. | 408 |
Figure 20-6 – Project Status Plan with Mining Applications | 409 |
Figure 22-1: Spodumene Concentrate Price Forecast | 440 |
Figure 22-2: Phase 1 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 6.0% SC | 444 |
Figure 22-3: Phase 1 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.5% SC | 444 |
Figure 22-4: Phase 1 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.2% SC | 444 |
Figure 22-5 : Phase 1 Financial Model Summary @ 6.0% SC | 445 |
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Figure 22-6: Phase 1 Financial Model Summary @ 5.5% SC | 446 |
Figure 22-7: Phase 1 Financial Model Summary @ 5.2% SC | 447 |
Figure 22-8: Phase 1 6.0% SC After-Tax NPV Sensitivity Analysis (US$ B) | 448 |
Figure 22-9: Phase 1 5.5% SC After-Tax NPV Sensitivity Analysis (US$ B) | 449 |
Figure 22-10: Phase 1 5.2% SC After-Tax NPV Sensitivity Analysis (US$ B) | 449 |
Figure 22-11: Phase 1 6.0% SC After-Tax IRR Sensitivity Analysis (US$ B) | 450 |
Figure 22-12: Phase 1 5.5% SC After-Tax IRR Sensitivity Analysis (US$ B) | 450 |
Figure 22-13: Phase 1 5.2% SC After-Tax IRR Sensitivity Analysis (US$ B) | 451 |
Figure 22-14: Phase 2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 6.0% SC | 454 |
Figure 22-15: Phase 2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.5% SC | 454 |
Figure 22-16: Phase 2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.2% SC | 454 |
Figure 22-17: Phase 2 Financial Model Summary @ 6.0% SC | 455 |
Figure 22-18: Phase 2 Financial Model Summary @ 5.5% SC | 456 |
Figure 22-19: Phase 2 Financial Model Summary @ 5.2% SC | 457 |
Figure 22-20: Phase 2 6.0% SC After-Tax NPV Sensitivity Analysis (US$ B) | 458 |
Figure 22-21: Phase 2 5.5% SC After-Tax NPV Sensitivity Analysis (US$ B) | 459 |
Figure 22-22: Phase 2 5.2% SC After-Tax NPV Sensitivity Analysis (US$ B) | 459 |
Figure 22-23: Phase 2 6.0% SC After-Tax IRR Sensitivity Analysis (US$ B) | 460 |
Figure 22-24: Phase 2 5.5% SC After-Tax IRR Sensitivity Analysis (US$ B) | 460 |
Figure 22-25: Phase 2 5.2% SC After-Tax IRR Sensitivity Analysis (US$ B) | 461 |
Figure 22-26: Phase 1+2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 6.0% SC | 464 |
Figure 22-27: Phase 1+2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.5% SC | 464 |
Figure 22-28: Phase 1+2 After-Tax Cash Flow and Cumulative Cash Flow Profile @ 5.2% SC | 464 |
Figure 22-29: Phase 1+2 Financial Model Summary @ 6.0% SC | 465 |
Figure 22-30: Phase 1+2 Financial Model Summary @ 5.5% SC | 466 |
Figure 22-31: Phase 1+2 Financial Model Summary @ 5.2% SC | 467 |
Figure 22-32: Phase 1+2 6.0% SC After-Tax NPV Sensitivity Analysis (US$ B) | 468 |
Figure 22-33: Phase 1+2 5.5% SC After-Tax NPV Sensitivity Analysis (US$ B) | 469 |
Figure 22-34: Phase 1+2 5.2% SC After-Tax NPV Sensitivity Analysis (US$ B) | 469 |
Figure 22-35: Phase 1+2 6.0% SC After-Tax IRR Sensitivity Analysis (US$ B) | 470 |
Figure 22-36: Phase 1+2 5.5% SC After-Tax IRR Sensitivity Analysis (US$ B) | 470 |
Figure 22-37: Phase 1+2 5.2% SC After-Tax IRR Sensitivity Analysis (US$ B) | 471 |
Figure 24-1: Xuxa Schedule | 473 |
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CERTIFICATE OF AUTHOR
HOMERO DELBONI JR
I, Homero Delboni Jr, B.E., M.Eng.Sc., Ph.D., of São Paulo, Brazil, do hereby certify:
1. | I am a Senior Consultant of HDA Serviços S/S Ltda., Alameda Casa Branca, 755 cj. 161 Sao Paulo, SP 01408-001 Brazil |
2. | This certificate applies to the Technical Report entitled “Grota do Cirilo Lithium Project, Aracuai and Itinga Regions, Minas Gerais, Brazil – Phase 3 Mineral Resource Estimate” with an effective date of 30th May 2022. |
3. | I graduated with a Bachelor of Engineering Degree in Mining and Minerals Processing from The University of Sao Paulo (Brazil) in 1983, concluded a Masters in Engineering in Minerals Processing in The University of Sao Paulo (Brazil) in 1989 and obtained a Ph.D. in Minerals Processing Engineering at The University of Queensland – Julius Kruttschnitt Mineral Research Centre, Brisbane (Australia) in 1999. |
4. | I am a Member (#112813) and Chartered Professional in Metallurgy of the Australian Institute of Mining and Metallurgy – MAusIMM – CP (Metallurgy). I have worked as a Minerals Processing engineer for a total of 39 years since my graduation from university. |
5. | I have read the definition of Qualified Person set out in the National Instrument 43-101 (Instrument) and certify that by reason of my education, affiliation with a professional association and past relevant work experiences, I fulfil the requirement to be an independent qualified person for the purposes of NI 43-101. |
6. | I have read NI 43-101 and I have participated in the preparation of this Technical Report, and I am responsible for Section 18, excluding sub-sections 18.4.2, 18.4.4.2, 18.8 and 18.8.8.1.2, which have been prepared in compliance with NI 43-101. |
7. | I am independent of Sigma Lithium Resources Corporation as defined by Section 1.5 of the Instrument. I do not have prior involvement with the properties that are the subject of the technical report. |
8. | As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading. |
Signed and dated this 4th August 2022 at São Paulo, SP - Brazil.
“Signed and sealed” Homero Delboni Jr, Ph.D., MAusIMM
Homero Delboni Jr, B.E., M.Eng.Sc., Ph.D., MAusIMM – CP (Metallurgy) | |
Senior Consultant, Promon Engenharia, MAusIMM #112813 |
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CERTIFICATE OF AUTHOR
MARC-ANTOINE LAPORTE
I, Marc-Antoine Laporte, P.Geo., M.Sc., of Québec, Québec, do hereby certify:
1. | I am a senior geologist with SGS Canada Inc (Geological Services) with a business address at 125 rue Fortin, Suite 100, Quebec City, Quebec, G1M 3M2. |
2. | This certificate applies to the Technical Report entitled “Grota do Cirilo Lithium Project, Aracuai and Itinga Regions, Minas Gerais, Brazil – Phase 3 Mineral Resource Estimate” with an effective date of 30th May 2022. |
3. | I am a graduate of Université Laval (2004 and 2008) in Earth Sciences. I am a member in good standing of Ordre des Géologues du Québec (#1347). I have worked as a geologist continuously since my graduation. |
4. | I have read the definition of Qualified Person set out in the National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association and past relevant work experiences, I fulfil the requirement to be an independent qualified person for the purposes of NI 43-101. |
5. | My most recent personal inspection of the Project was on May 30 to June 1st, 2022. |
6. | I have read NI 43-101 and I have participated in the preparation of this Technical Report and am responsible for Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 23 and the applicable parts of sections 1, 2, 25, 26 and 27, each of which has been prepared in accordance with NI 43-101. |
7. | I am independent of Sigma Lithium Corporation as defined by Section 1.5 of the Instrument. I don’t have any prior involvement with the property that is the subject of the technical report. |
8. | As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading. |
Signed and dated this 4th August 2022 at Quebec City, Quebec.
“Signed and sealed” Marc-Antoine Laporte, P.Geo., M.Sc
Marc-Antoine Laporte, P.Geo., Senior Geologist | |
SGS Canada Inc |
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CERTIFICATE OF AUTHOR
JARRETT QUINN
I, Jarrett Quinn, P.Eng., Ph.D., of Montréal, Québec, do hereby certify:
1. | I am a Consulting Process Engineer for Primero Group Americas Inc. with a business address at 1450 - 1801 McGill College, Montréal, Québec, H3A 2N4. |
2. | This certificate applies to the Technical Report entitled “Grota do Cirilo Lithium Project, Aracuai and Itinga Regions, Minas Gerais, Brazil – Phase 3 Mineral Resource Estimate” with an effective date of 30th May 2022. |
3. | I am a graduate of McGill University (B.Eng. 2004, M.Eng. 2006, and Ph.D 2014) in Metallurgical Engineering. I am a member in good standing of the Ordre des Ingénieurs du Québec (#5018119). I have worked as a metallurgist since 2006. |
4. | I have read the definition of Qualified Person set out in the National Instrument 43-101 (Instrument) and certify that by reason of my education, affiliation with a professional association and past relevant work experiences, I fulfil the requirement to be an independent qualified person for the purposes of NI 43-101. |
5. | I have read NI 43-101 and have participated in the preparation of this Technical Report. I am responsible for Section 13 (Mineral Processing and Metallurgical Testing) excluding sections 13.2.7 and 13.3.7 and am responsible for Chapter 17 (Recovery Methods), which have been prepared in accordance with NI 43-101. |
6. | I am independent of Sigma Lithium Resources Corporation as defined by Section 1.5 of the Instrument. I do not have prior involvement with the properties that are the subject of the technical report. |
7. | As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading. |
Signed and dated this 4th August 2022 at Montréal, Quebec.
“Signed and sealed” Jarrett Quinn
Jarrett Quinn, P.Eng. (OIQ #5018119), Ph.D., Consulting Process Engineer, | |
Primero Group Americas Inc. |
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CERTIFICATE
OF AUTHOR
PORFÍRIO CABALEIRO RODRIGUEZ
I, Porfirio Cabaleiro Rodriguez, P.Eng., Ph.D., do hereby certify:
1. | I am a Mining Engineer and Director for GE21 Consultoria Mineral, located at Avenida Afonso Pena, 3130 − 12º andar, Belo Horizonte, MG, Brazil, CEP 30.130-910. |
2. | This certificate applies to the Technical Report entitled “Grota do Cirilo Lithium Project, Aracuai and Itinga Regions, Minas Gerais, Brazil – Phase 3 Mineral Resource Estimate” with an effective date of 30th May 2022 (Technical Report). |
3. | I am a graduate in Mining Engineering from the Federal University of Minas Gerais, in Belo Horizonte, Brazil. I have worked as a Mining Engineer for more than 42 years. |
4. | I am a Fellow of the Australian Institute of Geoscientists (FAIG #3708). |
5. | I have read the definition of Qualified Person set out in the National Instrument 43-101 (Instrument) and certify that by reason of my education, affiliation with a professional association and past relevant work experiences, I fulfil the requirement to be an independent qualified person for the purposes of NI 43-101. |
6. | I visited the site between April 17-18, 2019. |
7. | I have read NI 43-101 and have participated in the preparation of this Technical Report and am responsible for Sections 15, 16, 18.4.2, 18.4.4.2, 18.8, 18.8.1.2, 19, 20, 21.1, 21.2, 21.3 and 24, and the applicable parts of 1, 25 and 26, each of which has been prepared in accordance with NI 43-101. |
8. | I am independent of Sigma Lithium Corporation as defined by Section 1.5 of the Instrument. I do not have prior involvement with the properties that are the subject of the technical report. |
9. | As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading. |
Signed and dated this 4th August 2022, at Belo Horizonte, Minas Gerais State.
“Signed and sealed” Porfirio Cabaleiro Rodriguez, BSc. (MEng), FAIG
Porfirio Cabaleiro Rodriguez, BSc. (MEng) Senior Director GE21, FAIG #3708 |
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CERTIFICATE
OF AUTHOR
BRIAN TALBOT
I, Brian Talbot, FAusIMM, do hereby certify:
1. | I am a Consulting Process Engineer for Rtek Pty LTD. with a business address at 33 Richardson St West Perth. |
2. | This certificate applies to the Technical Report entitled “Grota do Cirilo Lithium Project, Aracuai and Itinga Regions, Minas Gerais, Brazil – Phase 3 Mineral Resource Estimate” with an effective date of 30th May 2022 (Technical Report). |
3. | I am a graduate of the University of the Witwatersrand (BSc Engineer Chemical) and I am a member in good standing of AusIMM (#3001296). I have worked as a chemical engineer since 1994. |
4. | I have read the definition of Qualified Person set out in the National Instrument 43-101 (Instrument) and certify that by reason of my education, affiliation with a professional association and past relevant work experiences, I fulfil the requirement to be an independent qualified person for the purposes of NI 43-101. |
5. | I have read NI 43-101 and have participated in the preparation of this Technical Report and am responsible for Sections 13.2.7, 13.3.7, 21 and 22, each of which has been prepared in accordance with NI 43-101. |
6. | I am independent of Sigma Lithium Corporation as defined by Section 1.5 of the Instrument. I do not have prior involvement with the properties that are the subject of the technical report. |
7. | As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading. |
Signed and dated this 4th August 2022, at Perth, Western Australia.
“Signed and sealed” Brian Talbot, FAusIMM
Brian Talbot, FAusIMM |
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Abbreviations
AMIS | African Mineral Standards |
CAPEX | Capital Expenditures |
CIM | Canadian Institute of Mining, Metallurgy and Petroleum |
DMS | Dense Medium Separation |
EPCM | Engineering Procurement Construction Management |
FOB | Free on Board |
FS | Feasibility Study |
GE21 | GE21 Mineral Consultants |
HDPE | High Density Polyethylene |
HLS | Heavy Liquid Separation |
HMI | Human Machine Interface |
LOM | Life of Mine |
MEL | Mechanical Equipment List |
MTO | Material Take-off |
NPI | Non-Process Infrastructure |
NPV | Net Present Value |
OPEX | Operating Expenditures |
PEP | Project Execution Plan |
Primero | Primero Group Americas Inc |
Project | Grota do Cirilo Lithium Project |
Promon | Promon Engenharia Ltda |
Property | Sigma Property |
RFQ | Request for Quotation |
ROM | Run of Mine |
SC | Spodumene Concentrate |
Sigma | Sigma Lithium Corporation |
SGS | SGS Geological Services (SGS Canada) |
UCS | Unconfined Compressive Strength |
UPS | Uninterruptible Power Supply |
WBS | Work Breakdown Structure |
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1 | SUMMARY |
1.1 | Introduction |
Sigma Lithium Corporation (Sigma) requested SGS Geological Services (SGS) to prepare a NI 43-101 Technical Report (the Report) on Sigma’s Grota do Cirilo project located in Minas Gerais State, Brazil.
This report contains the Phase 3 Mineral Resource Estimate (MRE) for the Nezinho do Chicao pegmatite.
Sigma Mineração S.A. (SMSA) is the Brazilian subsidiary of Sigma and is the owner of the mining rights and the holder of mining concessions ordinance which includes the Xuxa, Barrerio, Murial, Lavra do Meio and Nezinho do Chicao deposits.
The Report supports the disclosure by Sigma in the news release dated 22nd June 2022.
Mineral Resources and Mineral Reserves (MRMR) are reported using the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards) and adhere to the 2019 CIM Estimation of Mineral Resources & Mineral Reserves Best Practice Guidelines (2019 CIM MRMR Guidelines).
1.2 | Property Description and Location |
The Project is located in Northeastern Minas Gerais State, in the municipalities of Araçuaí and Itinga, approximately 25 km east of the town of Araçuaí and 450 km northeast of Belo Horizonte.
The Project is comprised of four properties owned by SMSA and is divided into the Northern Complex (the Grota do Cirilo, Genipapo and Santa Clara properties) and the Southern Complex (the São José property).
The Project consists of 27 mineral rights, which include mining concessions, applications for mining concessions and exploration permits, spread over 191 km2, and includes nine past producing lithium mines and 11 first-priority exploration targets. Granted mining concessions are in good standing with the Brazilian authorities.
The surface rights in the Grota do Cirilo area, the current primary focus of activity, are held by two companies, Arqueana Minérios e Metais (Arqueana) and Miazga Participações S.A. (Miazga). SMSA has entered into two right-of-way agreements with these companies to support Sigma’s exploration and development activities within the Grota do Cirilo property, as well as third-party surface owners.
Sigma has been issued both the Environment Provisional License and the Environment Installation License (LP&LI) and construction on Phase 1 of the project has commenced. Sigma has also been granted a Water License to pump of 150 m3/h of water from the Jequitinhonha River for all months of the year for a period of 10 years after which the license can be renewed.
The Brazilian Government levies a Compensação Financeira pela Exploração de Recursos Minerais (CFEM) royalty on mineral production. Lithium production is subject to a 2.0% CFEM royalty, payable on the gross income from sales. The Project is subject to two third-party net smelter return (NSR) royalties of 1% each however, Sigma intends to exercise its option to repurchase one of the 1.0% NSRs for US$3.8 million in its first year of commercial production at the Project.
To the extent known to the QPs, there are no other significant factors and risks that may affect access, title, or the right or ability to perform work on the Project that have not been discussed in this Report.
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1.3 | Accessibility, Climate, Local Resources, Infrastructure and Physiography |
The Project is easily accessible from regional paved road BR-367, which runs through the northern part of the Project. Within the Project area, accessibility is provided by a network of maintained arterial and back country service roads. A municipal airport services the town of Araçuaí. The closest major domestic airport is located at Montes Claros, 327 km west of Araçuaí.
The Eastern Brazil region is characterized by a dry, semi-arid and hot climate. It is expected that future mining operations could be conducted year-round. Exploration activities are year-round but can be interrupted by short-term rainfall events.
Mining operations have been previously conducted in the Project area. Existing infrastructure includes power supply and substation, an extensive office block equipped with internet and telephones, accommodation for 40 persons on site, dining hall and kitchen, workshop, on-site laboratory and sample storage building, warehouse and a large store, a fuel storage facility with pumping equipment, and a water pumping facility from the Jequitinhonha River with its reservoir. The main 138 kV transmission line from the Irape hydro power station runs through the northern part of the Project area. The town of Araçuaí can supply basic services. Other services must be sourced from Belo Horizonte or São Paulo.
The topography consists of gently rolling hills with less than 100 m difference in elevation. The Project area typically hosts thorn scrub and savannah. Much of the area has been cleared for agriculture. The primary source of water for this project is the Jequitinhonha River.
1.4 | History |
Exploration and mining activities prior to Sigma’s project interest were conducted by Companhia Estanìfera do Brazil (CEBRAS), Arqueana Minérios e Metais (Arqueana), Tanex Resources plc (Tanex; a subsidiary of Sons of Gwalia Ltd (Sons of Gwalia)), and RI-X Mineração S.A. (RI-X). CEBRAS produced a tin/tantalite concentrate from open pit mines from 1957 to the 1980s. Arqueana operated small open pit mines from the 1980s to the 2000s, exploiting pegmatite and alluvial gravel material for tin and tantalite. Tanex Resources obtained a project interest from Arqueana, and undertook channel sampling, air-track, and reverse circulation (RC) drilling. The Project was subsequently returned to Arqueana. In 2012, RI-X obtained a controlling interest in Arqueana, and formed a new subsidiary company to Arqueana called Araçuaí Mineração whose name was later changed to SMSA. SMSA completed mapping, data compilation, a ground magnetic survey, channel sampling, and HQ core drilling. A heavy mineral separation (HMS) pilot plant was built during 2014–2015. Lithium-specific mining activities were conducted over at least five deposits in the Northern Complex, and four deposits in the Southern Complex.
In 2017 Sigma purchased a dense media separation (DMS) unit to produce a 6% Li2O spodumene concentrate. Sigma has completed ground reconnaissance, satellite image interpretation, geological mapping, channel and chip sampling, trenching, core drilling, Mineral Resource and Mineral Reserve estimation, and a feasibility study. Sigma initially focused on a geological assessment of available field data to prioritize the 200 known pegmatites that occur on the various properties for future evaluation. A ranking table that highlighted pegmatite volume, mineralogy and Li2O and Ta2O5 grade was established. Within the more prospective areas, Sigma concentrated its activities on detailed geological and mineralogical mapping of historically mined pegmatites, in particular, on the larger pegmatites.
1.5 | Geological Setting and Mineralization |
The pegmatites in the Project area are classified as lithium–cesium–tantalum or LCT types. The Project area lies in the Eastern Brazilian Pegmatite Province (EBP) that encompasses a very large region of about 150,000 km2, stretching from the state of Bahia to Rio de Janeiro state.
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The pegmatite swarm is associated with the Neoproterozoic Araçuaí orogeny and has been divided into two main types: anatectic (directly formed from the partial melting of the country rock) or residual pegmatite (fluid rich silicate melts resulting from the fractional crystallization of a parent magma). The pegmatites in the Project area are interpreted to be residual pegmatites and are further classified as LCT types.
Pegmatite bodies are typically hosted in a grey biotite–quartz schist and form bodies that are generally concordant with the schist foliation but can also cross-cut foliation. The dikes are sub-horizontal to shallow-dipping sheeted tabular bodies, typically ranging in thickness from a few metres up to 40 m or more, and display a discontinuous, thin, fine-grained chilled margin. Typical pegmatite mineralogy consists of microcline, quartz, spodumene, albite and muscovite. Spodumene typically comprises about 28–30% of the dike, microcline and albite around 30–35%, and white micas about 5–7%. Locally, feldspar and spodumenes crystals can reach as much as 10–20 cm in length. Tantalite, columbite and cassiterite can occur in association with albite and quartz. The primary lithium-bearing minerals are spodumene and petalite. Spodumene can theoretically contain as much as 3.73% Li, equivalent to 8.03% Li2O, whereas petalite, can contain as much as 2.09% lithium, equivalent to 4.50% Li2O.
Features of the pegmatites where mineral resources have been estimated include:
Xuxa:
● | foliation concordant, strikes northwest–southeast, dips to the southeast at 40º to 45º, and is not zoned. The strike length is 1,700 m, averages 12–13 m in thickness and has been drill tested to 259 m in depth. Xuxa remains open to the west, east, and at depth. |
Barreiro:
● | foliation discordant, strikes northeast–southwest, dips to the southeast at 30º to 35º, and is slightly zoned with a distinct spodumene zone as well as an albite zone. The pegmatite is about 600 m long (strike), 30–35 m wide, and 800 m along the dip direction. Barreiro remains open to the northeast and at depth. |
Murial:
● | foliation discordant, strikes north–south, and has a variable westerly dip, ranging from 25º to 75º. The strike length is about 750 m, with a thickness of 15–20 m, and the down-dip dimension is 200 m. The pegmatite is zoned with a spodumene-rich intermediate zone and a central zone that contains both spodumene and petalite. The southern section of the pegmatite has lower lithium tenors than the norther portion of the dike. Murial remains open to the north, south, and at depth. |
Lavra do Meio:
● | foliation concordant, strikes north–south, dips 75º–80º to the east. The strike length is 300 m with an average thickness of 12–15 m and a down-dip distance of 250 m. The pegmatite is zoned and contains both spodumene and petalite and remains open at depth. |
Nezinho do Chicao:
● | The pegmatite body strikes nearly north-south (020º) and dips at 40-75º to the southeast. The dike is about 1,600 m long, 200 m down-dip and 20-30 m thick. It remains open to the north, south and at depth. The NDC pegmatite is a high-grade mix of spodumene and petalite with a variable ratio depending on the thickness of the zone. |
1.6 | Exploration |
Sigma began working on the Project in June 2012, focusing on a geological assessment of available field data to prioritize the 200 known pegmatites that occur on the various properties for future evaluation. A ranking table that highlighted pegmatite volume, mineralogy and Li2O and Ta2O5 grade was established.
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Within the more prospective areas, Sigma concentrated its activities on detailed geological and mineralogical mapping of historically mined pegmatites, in particular, on the larger pegmatites, Xuxa and Barreiro. These dikes were channel sampled and subsequently assessed for their lithium, tantalum and cassiterite potential. This work was followed by bulk sampling, drilling and metallurgical test work. In the southern complex area, Sigma geologists have visited sites of historical workings, and undertaken reconnaissance mapping and sampling activities. The Lavra Grande, Samambaia, Ananias, Lavra do Ramom and Lavra Antiga pegmatites were mined for spodumene and heavy minerals, and in some cases gem-quality crystals were targeted. These pegmatites are considered to warrant additional work.
1.7 | Drilling |
Drilling completed by Sigma across the Project area consists of 409 core holes totalling 71,538 m. To date, this drilling has concentrated on the Grota do Cirilo pegmatites. Drilling was completed using HQ core size (63.5 mm core diameter) in order to recover enough material for metallurgical testing. Drill spacing is variable by pegmatite, but typically was at 50 m with wider spacing at the edges of the drill pattern. Drill orientations were tailored as practicable to the strike and dip of the individual pegmatites. The drill hole intercepts range in thickness from approximately 85–95% of true width to near true width of the mineralization.
All core was photographed. Drill hole collars were picked up in the field using a Real Time Kinematic (RTK) global positioning system (GPS) instrument with an average accuracy of 0.01 cm. All drill holes were down-hole surveyed by Sigma personnel using the Reflex EZ-Track and Reflex Gyro instruments. Calibrations of tools were completed every year since 2017.
Sampling intervals were determined by the geologist, marked and tagged based on lithology and mineralization observations. The typical sampling length was 1 m but varied according to lithological contacts between the mineralized pegmatite and the host rock. In general, 1-2 m host rock samples were collected from each side that contacts the pegmatite.
Sigma conducted HQ drilling programs in 2014, 2017, 2018, 2020, 2021 and 2022 on selected pegmatite targets. The drill programs have used industry-standard protocols that include core logging, core photography, core recovery measurements, and collar and downhole survey measurements. There are no drilling, sampling or recovery factors that could materially impact the accuracy and reliability of the results in any of the drill campaigns. Drill results from Grota do Cirilo property support the Mineral Resource and Mineral Reserve (MRMR) estimates the Xuxa DFS and the Barreiro PFS.
1.8 | Sample Preparation, Analyses and Security |
Sampling intervals were determined by the geologist, marked and tagged based on lithology and mineralization observations. The typical sampling length was 1 m but varied according to lithological contacts between the mineralized pegmatite and the host rock. In general, 1 m host rock samples were collected from each side that contacts the pegmatite.
All samples collected by SMSA during the course of the 2012–2022 exploration programs were sent to the SGS Geosol laboratory (SGS Geosol) located in the city of Belo Horizonte, Brazil. A portion of the 2017–2018 and 2020-2022 sample pulps were prepared by ALS Brazil Ltda. in Vespasiano, Brazil (ALS Vespasiano) and shipped to ALS Canada Inc. Chemex Laboratory (ALS Chemex) in North Vancouver, BC, Canada for cross check validation. A portion of the 2014 samples were resampled by the QP and sent for validation to the SGS Lakefield Laboratory (SGS Lakefield) in Lakefield Canada. All laboratories, including ALS Chemex, ALS Vespasiano, SGS Lakefield and SGS Geosol are ISO/IEC 17025 accredited. The SGS Geosol laboratory is ISO 14001 and 17025 accredited by the Standards Council. All laboratories used for the technical report are independent from SMSA and Sigma and provide services to SMSA pursuant to arm’s length service contracts.
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Sample preparation conducted at SGS Geosol consisted of drying, crushing to 75% passing 3 mm using jaw crushers, and pulverizing to 95% passing 150 mesh (106 µm) using a ring and puck mill or a single component ring mill. In 2017, SGS Geosol performed 55-element analysis using sodium peroxide fusion followed by both inductively coupled plasma optical emission spectrometry (ICP-OES) and inductively coupled plasma mass spectrometry (ICP-MS) finish (SGS code ICM90A). This method uses 10 g of the pulp material and returns different detection limits for each element and includes a 10 ppm lower limit detection for Li and a 10,000 ppm upper limit detection for Li. In 2018, SGS Geosol used a 31-element analytical package using sodium peroxide fusion followed by both Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) and ICP-MS finish (SGS code ICP90A). The 2020-2022 samples were assayed by SGS Geosol with a 31-element analytical package using sodium peroxide fusion followed by both Inductively Coupled Plasma Optical Emission Spectrometry (ICP-OES) and ICP-MS finish (SGS code ICP90A) For Li, the lower limit of detection is 10 ppm, and the upper limit of detection is 15,000 ppm (1.5% Li).
Sample preparation at ALS Vespasiano comprised drying, crushing to 70% passing 2 mm using jaw crushers, and pulverizing to 85% passing 200 mesh (75 µm) using a ring and puck mill or a single component ring mill. Lithium and boron were determined by sodium peroxide fusion followed by ICP-AES analysis (ALS Chemex method ME-ICP82b).
The 2017 witness samples collected on the 2014 drill core were analyzed at SGS Lakefield using sodium peroxide fusion followed by both ICP-OES and ICP-MS finish (SGS code ICM90A).
In addition to the laboratory quality assurance quality control (QA/QC) routinely implemented by SGS Geosol and ALS Chemex using pulp duplicate analysis, SMSA developed an internal QA/QC protocol for the Xuxa drilling, which consisted of the insertion of analytical standard reference materials (standards), blanks and core duplicates on a systematic basis with the samples shipped to the analytical laboratories. In 2017 and 2021, Sigma also sent pulps from selected mineralized intersections to ALS Chemex for reanalysis. No pulp reanalysis was performed by Sigma in 2013 and 2014. A total of 729 pulp samples from the 2017, 2018, 2020 and 2021 Xuxa, Barreiro, Murial and Lavra do Meio drilling programs were sent to ALS Vespasiano for third-party verification.
SMSA inserted standards in sample batches during the 2014,2017–2018 and 2020-2022 sampling programs. The 2017–2018 campaign used seven certified standards from African Mineral Standards (AMIS), an international supplier of certified reference materials while the 2020-2022 campaign used four certified AMIS standards. A total of 88 standards were inserted during the 2017 campaign and 315 were inserted during the 2018 campaign, with a further 73 standards submitted in the 2021 campaign and 191 samples submitted in 2021-2022. Results were considered acceptable, and no material accuracy issues were noted.
During the 2017–2018 and 2020-2022 campaigns SMSA included insertion of analytical blanks in the sample series as part of their internal QA/QC protocol. The blank samples, which are made of fine silica powder provided by AMIS, are inserted an average of one for every 20 samples by the SMSA geologist and subsequently sent to SGS Geosol. The same procedure was used by SMSA for the 2014 drilling campaign. A total of 919 analytical blanks were analysed during the 2014, 2017–2018 and 2020-2022 exploration programs. Results were considered acceptable, and no material contamination issues were noted.
SMSA inserted coarse duplicates every 20th sample in the sample series as part of their internal QA/QC protocol. The sample duplicates correspond to a quarter HQ core from the sample left behind for reference, or a representative channel sample from the secondary channel cut parallel to the main channel. Assay results were considered acceptable between the two sample sets.
Bulk densities of the lithologies were measured by SGS Geosol by pycnometer measurement. Measurements were by lithology with special attention to the lithium bearing pegmatite. Separate measurements were made for the Xuxa, Barreiro, Murial, Lavra do Meio and NDC deposits.
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A total of 219 measurements were made on Xuxa core from 2017–2021. Of the 219 measurements, 26 were made on albite-altered pegmatite, 69 on schist, and 121 on lithium-bearing pegmatite. For Barreiro, a total of 471 measurements were made on core from the 2018 and 2021 drill programs. Of the 471 measurements, 94 were made on albite-altered pegmatite, 206 on schist, and 164 on lithium-bearing pegmatite. For Murial, a total of 134 measurements were made by the same method on core from the 2018 drill program. Of the 134 measurements, 32 were made on the albite-altered pegmatite, 58 on the schist and 44 on the lithium bearing pegmatite. For Lavra do Meio, a total of 51 measurement were made by the same method on core from the 2018 drill program. Of the 51 measurements, nine were made on the albite altered pegmatite, 22 on the schist and 20 on the lithium bearing pegmatite. For NDC, a total of 292 lithium-bearing samples had density measurements calculated, comprising 196 spodumene samples and 96 petalite samples.
In 2017, SGS validated the exploration processes and core sampling procedures used by SMSA as part of an independent verification program. The QP concluded that the drill core handling, logging and sampling protocols are at conventional industry standard and conform to generally accept best practices. The chain of custody was followed by SMSA employees, and the sample security procedure showed no flaws. The QP considers that the sample quality is good and that the samples are generally representative.
As additional QAQC, SMSA sent 664 samples from the 2017-2018 Grota do Cirillo drilling campaign to ALS Chemex for analysis using the protocol ME-ICP82b with sodium peroxide fusion. Preparation was done by ALS Vespasiano and the samples were subsequently shipped to Vancouver. The average Li concentration for the original was 6,411.4 ppm Li while the duplicate average was 6,475.9 ppm Li. This indicates a slight bias of the ALS Chemex duplicates which is well within the accepted margin of error.
Sigma sent 65 samples from the 2021 Barreiro drilling campaign to ALS Chemex for check sample analysis using the ALS Chemex protocol ME-ICP82b with sodium peroxide fusion.
The average lithium concentration for the original samples was 6,518.0 ppm Li and the duplicates averaged 6,559.7 ppm Li, with an average difference of 41.7 ppm or 0.6%. The correlation coefficient R2 of 0.9854 suggests a strong correlation and a high similarity between the two sets of samples.
A total of 198 coarse duplicates and 198 pulp duplicates from NDC were submitted for analysis from the 2021 and 2022 drill programs. For the coarse duplicates, the average of the original samples was 1.48% Li2O, while the duplicates averaged 1.46% Li2O a difference of 1.35%, while the original pulp samples averaged 1.48% Li2O, with the pulp duplicates averaging 1.46% Li2O, a difference of 0.68%.
Overall, the QP is confident that the system is appropriate for the collection of data suitable for a Mineral Resource estimate and can support Mineral Reserve estimates and mine planning.
1.9 | Data Verification |
Visits to the Project site were conducted by Marc-Antoine Laporte, P.Geo., M.Sc. from September 11 to September 15, 2017, from July 11 to July 17, 2018, from September 18 to 23, 2018, from October 18 to 21, 2021 and from May 30 to June 1 2022. These visits enabled the QP to become familiar with the exploration methods used by SMSA, the field conditions, the position of the drill hole collars, the core storage and logging facilities and the different exploration targets.
The database for the Project was transmitted to SGS by Sigma as comma separated values (csv) files and regularly updated by Sigma geologists. The database contains data for: collar locations; downhole surveys; lithologies and lithium assays. Upon importation of the data into the SGS proprietary modelling and mineral resources estimation software (Genesis©), SGS conducted a second phase of data validation where any discrepancies were identified and removed from the database, after consultation and verification with Sigma geologists. Finally, SGS conducted random checks on approximately 5% of the assay certificates, to validate the assay values entered in the database.
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Witness sampling was undertaken in 2017 on previously sampled mineralized intervals, with the remaining half core cut to quarter core, and the samples submitted to the SGS Lakefield lab for analysis. A total of nine mineralized intervals were sampled to compare the average grade for the two different laboratories. The average for the original samples is 1.61 % Li2O while the average for the control samples is 1.59 % Li2O. The average grade difference is 0.02% which makes a relative difference of 1.28% between the original and the control samples.
Following the data verification process and QA/QC review, the QP is of the opinion that the sample preparation, analysis and QA/QC protocol used by SMSA for the Project follow generally accepted industry standards and that the Project data is of a sufficient quality.
1.10 | Mineral Processing and Metallurgical Testing |
Drill core samples from the Xuxa pegmatite deposit were processed at the SGS Lakefield facility in 2018 and 2022, while samples from Barreiro were tested between November 2020 and May 2021. Work conducted on the Xuxa samples included comminution, heavy liquid separation (HLS), REFLUX™ classifier, dense media separation (DMS) and magnetic separation. The Barreiro test work program included sample characterization, grindability testing, HLS and DMS metallurgical test work.
1.10.1 | Xuxa |
Drill core samples were selected and combined into six variability (Var) samples for a test work program comprising of mineralogical analyses, grindability, HLS, REFLUX™ classifier, DMS, and magnetic separation testing. Flowsheets for lithium beneficiation were developed in conjunction with the test work. The goal was to produce spodumene concentrate grading a minimum 6% Li2O and maximum 1% Fe2O3 while maximizing lithium recovery.
Four HLS tests, at four crush sizes (15.9 mm, 12.5 mm, 9.5 mm, and 6.3 mm) were carried out on each of the six variability samples to evaluate the recovery. The 9.5 mm crush size was selected as the optimum crush size for DMS test work, as it resulted in the highest lithium recovery with minimal fines generation.
The DMS variability samples were each crushed to -9.5 mm and screened into four size fractions: coarse (-9.5 mm/+6.3 mm), fines (-6.3 mm/+1.7 mm), ultrafines (-1.7 mm/+0.5 mm) and hypofines (-0.5 mm). The coarse, fines and ultrafines fractions of each variability sample were processed separately for lithium beneficiation. The REFLUX™ classifier (RC) test work was carried out with a RC-100 unit for mica rejection from the fines and ultrafines fractions only. This test work was conducted at FLSmidth’s Minerals Testing and Research Center in Utah, USA.
The coarse, fines and ultrafines RC underflow streams of each variability sample were processed separately through DMS. The DMS concentrate from each fraction underwent dry magnetic separation at 10,000 gauss.
The DMS test work flowsheet for the coarse and fines fractions included two passes through the DMS; the first at a lower specific gravity (SG) cut-point (~2.65) to reject silicate gangue and the second pass at a higher SG cut-point (ca. ~2.90) to generate spodumene concentrate. The coarse DMS middlings were re-crushed to -3.3 mm and a two stage HLS test was conducted. The ultrafines DMS test work flowsheet included both a single pass and a double pass DMS circuit at a high SG cut-point (~2.90) to generate spodumene concentrate.
The DMS test results demonstrated the ability to produce spodumene concentrate with >6% Li2O in most of the tests. Based on the test work results, a lithium recovery of 60.4% was selected for plant design.
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1.10.2 | Barreiro |
Four variability and one composite sample were tested for Barreiro, with the goals of the program to provide preliminary process information on the metallurgical performance of mineralized material from the Barreiro deposit. The test work program was developed based on the flowsheet developed for the Xuxa deposit. The aim of the test work program was to produce chemical grade spodumene concentrate (>6% Li2O) with low iron content (<1% Fe2O3), while maximizing lithium recovery.
Two sets of HLS tests were undertaken. The first set was conducted using the Composite to test optimal crush size (i.e., top size of 15.9 mm, 12.5 mm, 10.0 mm, and 6.3 mm). HLS tests were then performed on each variability sample at the optimum crush size. The fine fraction (i.e., -0.5 mm) was screened out from each sub-sample and the oversize fraction was submitted for HLS testing. A crush size of -10 mm was determined to be optimal and variability HLS testing was undertaken at this crush size. Interpolated stage recoveries (6% Li2O concentrate) for the four variability samples ranged from 56.0% to 77.3%.
In all four variability samples, HLS tests produced >6% Li2O spodumene concentrate with low iron content (<1.0% Fe2O3).
Pilot-scale DMS test work was operated on the composite sample. Dry magnetic separation was undertaken on the DMS feed. DMS test work results showed combined spodumene concentrate grade of 6.11% Li2O and stage recovery of 59.5% for a global recovery of 50.9%.
1.11 | Mineral Resource Estimates |
Mineral Resources for the Grota do Cirilo pegmatite were estimated using a computerised resource block model. Three-dimensional wireframe solids of the mineralisation were defined using drill hole Li2O analytical data.
Data were composited to 1 m composite lengths, based on the north–south width of the block size defined for the resource block model. Compositing starts at the schist-pegmatite contact. No capping was applied on the analytical composite data. The Xuxa, Murial, Lavra do Meio and NDC models used a 5 m x 3 m x 5 m block size and the Barreiro model used a 5 m x 5 m x 5 m block. Average densities were applied to blocks, which varied by pegmatite, from 2.65 t/m3 at Lavra do Meio to 2.71 t/m3 at Barreiro.
Variography was undertaken for Xuxa, Barreiro, Lavra do Meio and NDC, and the projection and Z-axis rescaling were done according to the mineralization orientation.
The grade interpolation for the Xuxa, Barreiro, Lavra do Meio and NDC resource block models were completed using ordinary kriging (OK). The Murial model was estimated using an inverse distance weighting to the second power (ID2) methodology. The interpolation process was conducted using three successive passes with more inclusive search conditions from the first pass to the next until most blocks were interpolated, as follows:
Pass 1:
● | Xuxa: search ellipsoid distance of 75 m (long axis) by 75 m (intermediate axis) and 25 m (short axis) with an orientation of 130° azimuth and -50° dip to the southeast; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Barreiro: search ellipsoid distance of 55 m (long axis) by 55 m (intermediate axis) and 25 m (short axis) with an orientation of 155° azimuth and -35° dip to the southeast; a minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Murial: 75 m (long axis) by 75 m (intermediate axis) and 35 m (short axis) with an orientation of 95° azimuth and -80° dip to the west; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Lavra do Meio: 50 m (long axis) by 50 m (intermediate axis) and 25 m (short axis) with an orientation of 280° azimuth and -75° dip to the east; minimum of five composites, a maximum of 15 composites and a minimum of three drill holes. |
● | NDC: search ellipsoid distance of 75 m (long axis) by 75 m (intermediate axis) and 25 m (short axis) with an orientation of 18° azimuth and -50° dip to the east; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
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Pass 2:
● | Xuxa: twice the search distance of the first pass; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Barreiro: twice the search distance of the first pass; a minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Murial: twice the search distance of the first pass; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
● | Lavra do Meio: twice the search distance of the first pass; minimum of five composites, a maximum of 15 composites and a minimum of three drill holes. |
● | NDC: twice the search distance of the first pass; minimum of seven composites, a maximum of 15 composites and a minimum of three drill holes. |
Pass 3:
● | Xuxa: 300 m (long axis) by 300 m (intermediate axis) by 100 m (short axis) with a minimum of seven composites, a maximum of 25 composites and a minimum of three drill holes. |
● | Barreiro: 250 m (long axis) by 250 m (intermediate axis) by 100 m (short axis) with a minimum of seven composites, a maximum of 25 composites and no minimum number of drill holes. |
● | Murial: 200 m (long axis) by 200 m (intermediate axis) by 100 m (short axis) with a minimum of seven composites, a maximum of 20 composites and no minimum number of drill holes. |
● | Lavra do Meio: 125 m (long axis) by 125 m (intermediate axis) by 75 m (short axis) with a minimum of five composites, a maximum of 15 composites and no minimum composites required per drill hole. |
● | NDC: 300 m (long axis) by 300 m (intermediate axis) by 100 m (short axis) with a minimum of seven composites, a maximum of 25 composites and a minimum of three drill holes. |
The estimates and models were validated by statistically comparing block model grades to the assay and composite grades, and by comparing block values to the composite values located inside the interpolated blocks. The estimates were considered reasonable.
Mineral Resources are classified into Measured, Indicated and Inferred categories. The Mineral Resource classification is based on the density of analytical information, the grade variability and spatial continuity of mineralization. The Mineral Resources were classified in two successive stages: automated classification, followed by manual editing of final classification results. Classifications were based on the following:
Measured Mineral Resources
● | Xuxa: the search ellipsoid used was 50 m (strike) by 50 m (dip) by 25 m with a minimum of seven composites in at least three different drill holes. |
● | Barreiro, Murial, and Lavra do Meio: the search ellipsoid was 55 m (strike) by 55 m (dip) by 35 m with a minimum of five composites in at least three different drill holes |
● | NDC: the search ellipsoid used was 75 m (strike) by 75 m (dip) by 25 m with a minimum of seven composites in at least three different drill holes. |
Indicated Mineral Resources.
● | In all deposits, the search ellipsoid was twice the size of the Measured category ellipsoid using the same composites selection criteria. |
Inferred Mineral Resources
● | In all deposits, all remaining blocks. |
Conceptual economic parameters were used to assess the reasonable prospects of eventual economic extraction. A series of economic parameters were estimated to represent the production cost and economic prospectivity of an open pit mining operation in Brazil and came either from SGS Canada or SMSA. These parameters are believed to be sufficient to include all block models in future open pit mine planning, due mostly to the relatively low mining costs in Brazil.
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The Mineral Resource estimates for Grota do Cirilo are reported in Table 1-1 to Table 1-5 using a 0.5% Li2O cut-off. The Mineral Resource estimates are constrained by the topography and are based on the conceptual economic parameters. The Xuxa, Murial and Lavra do Meio estimates have an effective date of January 10, 2019, the Barreiro estimate has an effective date of February 10, 2022 and the NDC estimate has an effective date of May 30, 2022. The QP for the estimates is Mr. Marc-Antoine Laporte, P.Geo., an SGS employee.
Table 1-1: NDC Deposit Mineral Resource Estimate
Cut-off
Grade Li2O (%) |
Category | Tonnes (Mt) |
Average
Grade Li2O (%) |
LCE (Kt) |
0.5 | Measured | 2,400,000 | 1.55 | 92 |
0.5 | Indicated | 20,900,000 | 1.48 | 765 |
0.5 | Measured + Indicated | 23,300,000 | 1.49 | 857 |
0.5 | Inferred | 3,500,000 | 1.48 | 129 |
Notes to accompany Table 1-1 NDC Mineral Resource Estimate:
1. | Mineral Resources have an effective date of May 30, 2022 and have been classified using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr Marc-Antoine Laporte, P.Geo., an SGS employee. |
2. | All Resources are presented undiluted and in situ, constrained by continuous 3D wireframe models, and are considered to have reasonable prospects for eventual economic extraction. |
3. | Mineral Resources are reported assuming open pit mining methods, and the following assumptions: lithium concentrate (6% Li2O) price of US$1,500/t, mining costs of US$2.2/t for mineralization and waste, crushing and processing costs of US$10/t, general and administrative (G&A) costs of US$4/t, concentrate recovery of 60%, 2% royalty payment, pit slope angles of 52-55º, and an overall cut-off grade of 0.5% Li2O. |
4. | Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding. |
5. | Mineral resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to a Measured and Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. |
6. | The results from the pit optimization are used solely for the purpose of testing the “reasonable prospects for economic extraction” by an open pit and do not represent an attempt to estimate mineral reserves. There are no mineral reserves on the Property. The results are used as a guide to assist in the preparation of a Mineral Resource statement and to select an appropriate resource reporting cut-off grade. |
7. | The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. |
Table 1-2 – Xuxa Deposit Mineral Resource Estimate
Cut-off
Grade Li2O (%) |
Category | Tonnage (t) |
Average
Grade Li2O (%) |
LCE (Kt) |
0.5 | Measured | 10,193,000 | 1.59 | 400.8 |
0.5 | Indicated | 7,221,000 | 1.49 | 266.1 |
0.5 | Measured + Indicated | 17,414,000 | 1.55 | 666.9 |
0.5 | Inferred | 3,802,000 | 1.58 | 148.6 |
Notes to accompany Table 1.2 Xuxa Deposit Mineral Resource Estimate:
1. | Mineral Resources have an effective date of January 10, 2019 and have been classified using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr. Marc-Antoine Laporte, P.Geo., an SGS employee. |
2. | Mineral Resources are reported assuming open pit mining methods, and the following assumptions: lithium concentrate (6% Li2O) price of US$1,000/t, mining costs of US$2/t for mineralization and waste, US$1.2/t for overburden, crushing and processing costs of US$12/t, general and administrative (G&A) costs of US$4/t, concentrate recovery of 85%, 2% royalty payment, pit slope angles of 55º, and an overall cut-off grade of 0.5% Li2O. |
3. | Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding. |
4. | Mineral Resources are reported inclusive of those Mineral Resources converted to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. |
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Table 1-3 – Barreiro Deposit Mineral Resource Estimate
Cut-off
Grade Li2O (%) |
Category | Tonnage (t) |
Average
Grade Li2O (%) |
LCE (Kt) |
0.5 | Measured | 18,741,000 | 1.41 | 653.5 |
0.5 | Indicated | 6,341,000 | 1.30 | 203.9 |
0.5 | Measured + Indicated | 25,081,000 | 1.38 | 857.4 |
0.5 | Inferred | 3,825,000 | 1.39 | 131.5 |
Notes to accompany Table 1-3 Barreiro Deposit Mineral Resource table:
1. | Mineral Resources have an effective date of February 11, 2022 and have been classified using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr. Marc-Antoine Laporte, P.Geo., an SGS employee. |
2. | All Resources are presented undiluted and in situ, constrained by continuous 3D wireframe models, and are considered to have reasonable prospects for eventual economic extraction. |
3. | Mineral Resources are reported assuming open pit mining methods, and the following assumptions: lithium concentrate (6% Li2O) price of US$1,500/t, mining costs of US$2.2/t for mineralization and waste, crushing and processing costs of US$10/t, general and administrative (G&A) costs of US$4/t, concentrate recovery of 60.7%, 2% royalty payment, pit slope angles of 52-55º, and an overall cut-off grade of 0.5% Li2O. |
4. | Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding. |
5. | Mineral resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to a Measured and Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. |
6. | The results from the pit optimization are used solely for the purpose of testing the “reasonable prospects for economic extraction” by an open pit and do not represent an attempt to estimate mineral reserves. There are no mineral reserves on the Property. The results are used as a guide to assist in the preparation of a Mineral Resource statement and to select an appropriate resource reporting cut-off grade. |
7. | The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. |
Table 1-4 – Murial Deposit Mineral Resource Estimate
Cut-off
Grade Li2O (%) |
Category | Tonnage (t) |
Average
Grade Li2O (%) |
LCE (Kt) |
0.5 | Measured | 4,175,000 | 1.17 | 120.8 |
0.5 | Indicated | 1,389,000 | 1.04 | 35.7 |
0.5 | Measured + Indicated | 5,564,000 | 1.14 | 156.5 |
0.5 | Inferred | 669,000 | 1.06 | 17.5 |
Notes to accompany Table 1.4 Murial Deposit Mineral Resource Estimate
1. | Mineral Resources have an effective date of January 10, 2019 and have been classified using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr. Marc-Antoine Laporte, P.Geo., an SGS employee. |
2. | Mineral Resources are reported assuming open pit mining methods, and the following assumptions: lithium concentrate (6% Li2O) price of US$1,000/t, mining costs of US$2/t for mineralization and waste, US$1.2/t for overburden, crushing and processing costs of US$12/t, general and administrative (G&A) costs of US$4/t, concentrate recovery of 85%, 2% royalty payment, pit slope angles of 55º, and an overall cut-off grade of 0.5% Li2O. |
3. | Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding. |
4. | Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability |
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Table 1-5 – Lavra do Meio Deposit Mineral Resource Estimate
Cut-off Grade Li2O (%) |
Category | Tonnage (t) |
Average
Grade Li2O (%) |
LCE (Kt) |
0.5 | Measured | 1,626,000 | 1.16 | 44.6 |
0.5 | Indicated | 649,000 | 0.93 | 14.9 |
0.5 | Measured + Indicated | 2,275,000 | 1.09 | 59.5 |
0.5 | Inferred | 261,000 | 0.87 | 5.6 |
Notes to accompany Table 1.5 Lavra do Meio Deposit Mineral Resource Estimate
1. | Mineral Resources have an effective date of January 10, 2019 and have been classified using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr. Marc-Antoine Laporte, P.Geo., an SGS employee. |
2. | Mineral Resources are reported assuming open pit mining methods, and the following assumptions: lithium concentrate (6% Li2O) price of US$1,000/t, mining costs of US$2/t for mineralization and waste, US$1.2/t for overburden, crushing and processing costs of US$12/t, general and administrative (G&A) costs of US$4/t, concentrate recovery of 85%, 2% royalty payment, pit slope angles of 55º, and an overall cut-off grade of 0.5% Li2O. |
3. | Tonnages and grades have been rounded in accordance with reporting guidelines. Totals may not sum due to rounding. |
4. | Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. |
Factors that can affect Grota do Cirilo Mineral Resource estimates include but are not limited to:
● | Changes to the modelling method or approach. |
● | Changes to geotechnical assumptions, in particular, the pit slope angles. |
● | Metallurgical recovery assumption that are based on preliminary test results. |
● | Changes to any of the social, political, economic, permitting, and environmental assumptions considered when evaluating reasonable prospects for eventual economic extraction. |
● | Mineral Resource estimates can also be affected by the market value of lithium and lithium compounds. |
1.12 | Mineral Reserve Estimates |
Xuxa Mineral Reserve estimates have an effective date of 26 June 2021 and have been converted from Measured and Indicated Mineral Resources. The key parameters upon which the 26 June 2021 Mineral Reserve estimates were defined are summarized in Table 1-6.
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Table 1-6 – Parameters Used in Xuxa Pit Optimization
Item | Unit | Value | ||
Revenue | Sales Price | US$/t conc.* | $1500.00 | |
Ore | Density | g/cm³ | fixed in model | |
Grade | % Li2O | fixed in model | ||
Mining | Mine Recovering | % | fixed in model | |
Dilution | fixed in model | |||
Block Model Dimensions | Block Dimensions | Unit | value | |
X x Y x Z | m | 5 x 3 x 5 | ||
General Angle | Soil | º | 34 | |
Saprolite | 37.5 | |||
Fresh Rock | Sector 1 – 72º Sector 2 – 50º | |||
Processing | Metallurgical Recovery** | % | 60.7 | |
Mass Recovery*** | % | Calculated in block | ||
Concentrated Grade | % Li2O | 6.0 | ||
Cut-off | % Li2O | 0.5 | ||
Costs | Mining | US$/t mined | $2.20 | |
Processing | US$/t ore | $10.70 | ||
G&A (Adjusted for OPEX) | $4.00 | |||
Sale (2% cost of sale) | US$/t product | $14.66 | ||
Royalties (CFEM 2%) | $14.66 |
Note: * conc. = concentrate, ** based on DMS Tests, *** Including 15% fines losses - FOB Mine
The total Proven and Probable Mineral Reserves are as presented in Table 1-7.
Table 1-7 – Xuxa Mineral Reserves
Sigma FS Xuxa 5 x 3 x 5 (m) Block Dimensions 97% Mine Recovery, 3.75% Dilution (Effective date: 6/26/2021) | |||
Classification | Tonnage (Mt) | Li2O(%) | LCE(Kt) |
Proven | 8.34 | 1.55 | 319.7 |
Probable | 3.46 | 1.54 | 131.8 |
Total | 11.80 | 1.55 | 451.5 |
Notes to accompany Mineral Reserves table:
1. | Mineral Reserves were estimated using Geovia Whittle 4.3 software and following the economic parameters listed below: |
2. | Sale price for Lithium concentrate at 6% Li2O = US$1,500/t concentrate FOB Mine |
3. | Exchange rate US$1.00 = R$5.00. |
4. | Mining costs: US$2.20/t mined. |
5. | Processing costs: US$10.7/t ore milled. |
6. | G&A: US$4.00/t ROM (run of mine). |
7. | Mineral Reserves are the economic portion of the Measured and Indicated Mineral Resources. |
8. | 97% Mining Recovery and 3.75% Mining Dilution |
9. | Final slope angle: 34° to 72° based on Geotechnical Document presented in Section 16. |
10. | Inferred Mineral Resources with the Final Operational Pit is 0.68 Mt grading at 1.52% Li2O. The Inferred Mineral Resources are not included in the Mineral Reserves. |
11. | Strip Ratio = 16.6 t/t (waste+Inferred mineral resources)/mineral reserves. |
12. | The Qualified Person for the estimate is Porfírio Cabaleiro Rodriguez, BSc. (MEng), FAIG, an employee of GE21. |
Barreiro Mineral Reserve estimates have an effective date of February 24, 2022 and have been converted from Measured and Indicated Mineral Resources. The key parameters upon which the February 24, 2022 Mineral Reserve estimates were defined are summarized in Table 1-8.
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Table 1-8: Parameters Used in Barreiro Pit Optimization
Item | Unit | Value | ||
Revenue | Sales Price | US$/t conc.* | $1,500 | |
Ore | Density | g/cm³ | Block model | |
Grade | % Li2O | Block model | ||
Mining | Mine Recovering | % | Block model | |
Dilution | Block model | |||
Block Model Dimensions | Block Dimensions | Unit | value | |
X x Y x Z | m | 5 x 5 x 5 | ||
General Angle | Overburden | º | Sector 1 – 35º Sector 2 – 37º | |
Fresh Rock | Sector 1 – 55º Sector 2 – 52º | |||
Processing | Metallurgical Recovery** | % | 60.0 | |
Mass Recovery*** | % | Calculated in block | ||
Concentrated Grade | % Li2O | 6.0 | ||
Cut-off | % Li2O | 0.5 | ||
Costs | Mining | US$/t mined | $2.19 (Ore)/$1.88 (Waste) | |
Processing | US$/t ore | $10.70 | ||
G&A (Adjusted for OPEX) | $4.00 | |||
Sale (2% cost of sale) | US$/t product | $14.66 | ||
Royalties (CFEM 2%) | $14.66 |
Note: * conc. = concentrate, ** based on DMS Tests, *** Including 15% fines losses - FOB Mine
The total Proven and Probable Mineral Reserves are as presented in Table 1-9.
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Table 1-9: Barreiro Mineral Reserves
Sigma PFS Barreiro 5 x 5 x 5 (m) Block Dimensions 97% Mine Recovery, 3.00% Dilution (Effective date: 2/24/2022) | |||
Classification | Tonnage (Mt) | Li2O(%) | LCE(Kt) |
Proven | 16.93 | 1.38 | 576.8 |
Probable | 4.83 | 1.29 | 153.1 |
Total | 21.76 | 1.36 | 729.9 |
Notes to accompany Mineral Reserves table:
1. | Mineral Reserves were estimated using Geovia Whittle 4.3 software and following the economic parameters listed below: |
2. | Sale price for Lithium concentrate at 6% Li2O = US$1,500/t concentrate FOB Mine. |
3. | Exchange rate US$1.00 = R$5.00. |
4. | Mining costs: US$2.19/t mined. |
5. | Processing costs: US$10.7/t ore milled. |
6. | G&A: US$4.00/t ROM (run of mine). |
7. | Mineral Reserves are the economic portion of the Measured and Indicated Mineral Resources. |
8. | 97% Mine Recovery and 3% Mine Dilution |
9. | Final slope angle: 35° to 55° based on Geotechnical Document presented in Section 16. |
10. | Inferred Mineral Resources with the Final Operational Pit is 0.59 Mt grading at 1.32% Li2O. The Inferred Mineral Resources are not included in the Mineral Reserves. |
11. | Strip Ratio = 12.5 t/t (waste+Inferred mineral resource)/mineral reserve. |
12. | The Qualified Person for the estimate is Porfírio Cabaleiro Rodriguez, BSc. (MEng), FAIG, an employee of GE21. |
1.13 | Mining Methods |
Sigma has undertaken a program of resource drilling for the Xuxa and Barreiro deposits. Most of these drill holes have been geotechnically logged for structural data. The geotechnical data logged from these holes has been analyzed to provide estimates of slope stability, using industry standard empirical techniques.
1.13.1 | Xuxa |
The mine layout and operation are based on the following criteria:
● | Two independent open pits areas: Pit 1 in the north and Pit 2 in the south |
● | Single access from both pits to the mine infrastructure pad and the processing plant |
● | Pre-splitting of the ore zone to reduce mine dilution |
● | Elevated inter-ramp angles for the waste to reduce strip ratio. |
The basis for the scheduling includes:
● | Six months of pre-stripping to liberate the ore |
● | Pit 1 and Pit 2 mined in conjunction from Year 1 to Year 8 to reduce the drop-down rate and to facilitate the 1.5 Mtpa production rate |
● | The planned open pit mine life is eight years |
● | The mining fleet is based on road trucks and this fleet will be operated by a mining contractor. |
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1.13.2 | Barreiro |
The mine layout and operation are based on the following criteria:
● | A single open pit on the Barreiro pegmatite |
● | Low height mineralized material benches to reduce mine dilution and maximize mine recovery |
● | Pre-splitting of the mineralized material to reduce mine dilution |
● | Elevated inter-ramp angles for the waste to reduce strip ratio |
The basis for the scheduling includes:
● | Pre-stripping the pit to liberate mineralized material |
● | Pit cut-backs in years 4 to 6 to expand and deepen pit |
● | Mining at a rate of 1.80 Mtpa |
● | The planned open pit mine life is 12 years |
● | The mining fleet is based on road trucks and this fleet will be operated by a mining contractor. |
1.14 | Recovery Methods |
The Xuxa concentrator plant is designed to produce a target 6.0% Li2O spodumene concentrate from an ore grade of 1.46% Li2O (diluted) using dense media separation (DMS).
A second DMS concentrator plant would be constructed to process Barreiro ore. This plant would produce a minimum 6.0% Li2O spodumene concentrate from an ore grade of 1.39% Li2O (diluted).
1.14.1 | Processing Plant Description |
The Xuxa plant throughput capacity is based on 1.5 Mtpa (dry) of ore fed to the crushing circuit, while the Barreiro plant is based on a nominal 1.85 Mt throughput capacity.
Both concentrator plants are designed based on a proven DMS circuit and include conventional three-stage crushing and screen circuit, up-flow classification for mica removal, two-stage coarse DMS circuit, two-stage fines DMS circuit, two-stage ultrafines circuit, as well as magnetic separation on the fines and ultrafines DMS concentrate final product streams.
Font-End Engineering Design (FEED) is currently underway for the Xuxa concentrator. Xuxa design data is based on feasibility-level metallurgical test work conducted at SGS Canada Inc. in Lakefield, Ontario. The mass balance, process design criteria and process flow diagrams were developed based on these test work data.
Design of the Barreiro concentrator is based on pre-feasibility-level test work conducted at SGS Canada Inc. in Lakefield, Ontario.
1.14.2 | Design Criteria and Utilities Requirements |
The utilities consumption requirements for each plant are approximately 6.7 MW for the process plant and 1.5 MW for non-process infrastructure at the process plant.
The raw water consumption for process water is nominal a 35 m3/hr (make-up raw water requirement).
The process water will be recycled within the plant using a thickener, where all fines slurry streams will be directed and recovered. This water will be pumped to the process water tank and recycled to the circuits.
Consumables will include reagents and operational consumables for the crushing circuit and the DMS plant.
1.15 | Project Infrastructure |
The Xuxa project infrastructure will be constructed on earthworks pads for the mineral processing plant, the mine operation support units, the open pits of the mines and the areas of waste rock and tailings disposal.
If developed, the Barreiro project will utilise the infrastructure developed for the Xuxa project.
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1.15.1 | Buildings, Roads, Fuel Storage, Power Supply and Water Supply |
Access to the processing plant will be by municipal roads linking BR367 within the communities of Poço D’antas and Taquaril Seco. The current road will be suitable for truck traffic; however, construction of a new section of the road will be necessary to bypass the plant.
The plant and mine services areas will have administrative buildings such as offices, changeroom, cafeteria, concierge, clinic, fire emergency services and operation support facilities such as workshops and warehouses.
Fuel will be stored and dispensed from a fuel facility located at the mine services area.
Power will be supplied from the existing power grid line. Two main sub-stations (CEMIG and plant) will be installed to supply power to the plant, the mine services area and associated infrastructure.
Raw water will be supplied from the Jequitinhonha River, treated as necessary and reticulated within the plant for process, potable and firewater needs.
1.15.2 | Waste Rock and Tailings Disposal and Stockpiles |
At Xuxa, waste rock will be stored in three waste piles in the vicinity of the Xuxa pits. Geotechnical studies determined an optimal bench height of 20 m, with a face angle of 38°. The access ramps will be 12 m wide, with a maximum gradient of 10%.
Table 1-10 shows the capacities of the Xuxa waste piles.
Table 1-10 – Xuxa Waste Pile Storage
Designed Pile | Volume (Mm³) |
Area (ha) |
Pile 1 | 14.9 | 34.0 |
Pile 2 | 43.3 | 74.3 |
Pile 3 | 35.9 | 55.8 |
TOTAL | 94.1 | 164.1 |
The Barreiro waste will be stored in a single waste pile close to the Barreiro pit. The waste pile parameters are the same as the Xuxa parameters – 20 m bench height, 38° face angle, 12 m access ramp and a maximum gradient of 10%.
Table 1-11 show the capacity of the Barreiro waste pile.
Table 1-11: Barreiro Waste Pile Storage
Waste Pile | Value |
Volume (Mm3) | 110.9 |
Area (ha) | 122.7 |
Maximum height (m) | 220 |
The tailings stockpile will be fed by a radial stacker from the process plant. The tailings will then be loaded into mine trucks by front end loaders and transported to a waste pile for disposal.
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1.15.3 | Control Systems and Communication |
A process control system (PCS) including a main plant supervisory control and data acquisition (SCADA) system will be installed for monitoring and control purposes.
The telecommunications network will consist of the telecommunications network, access control system and radio frequency identification (RFID).
1.16 | Market Studies and Contracts |
The key information contained in the market study regarding lithium demand, supply and price forecasts are summarized from Benchmark Mineral Intelligence.
1.16.1 | Demand and Consumption |
Lithium’s demand growth profile increased dramatically in 2021, driven by structural changes in the automotive industry with manufactures increasingly transitioning towards electric vehicles (EVs). Benchmark Mineral Intelligence estimates global EV penetration reached 7.9% in 2021, up from 4.0% in 2020, as global EV sales continue to accelerate, particularly from Europe and China.
Benchmark Mineral Intelligence estimates that 2021 lithium supply-demand ended in a deficit position and expects that it will tighten further going forward, with 2022 forecasted to have a base case demand from battery end-use of 541 kt LCE, a 32% increase from 2021. This deficit position is expected to continue to increase, reaching a net deficit position of 156 kt LCE by 2030 and 2.1 Mt LCE by 2040.
Benchmark Mineral Intelligence's robust demand outlook is partially driven by continued EV adoption, with global EV penetration expected to climb to 21% of total sales by 2025 and reach 73% by 2040.
1.16.2 | Supply |
Benchmark Mineral Intelligence expects lithium supply to increase over the 604 kt LCE of total supply estimated in 2022, given the robust commodity price outlook for lithium.
In the longer term, Benchmark Mineral Intelligence forecasts that the total lithium supply will reach 2.2 Mt LCE by 2030 and 3.7 Mt LCE by 2040. Benchmark Mineral Intelligence’s supply forecast includes expansions from existing mines as well as new entrants developing pre-production projects.
1.16.3 | Contracts |
On April 5, 2019, Sigma entered into a binding head of agreement (the Agreement) for a strategic offtake and funding partnership with Mitsui & Co., Ltd. of Japan (Mitsui) for a portion of the funding required for the capital expenditures and project construction.
Pursuant to the Agreement, Mitsui and Sigma had agreed terms on:
● | Production pre-payment to Sigma of US$30,000,000 for battery-grade lithium concentrate supply of up to 55,000 t annually over six years, extendable for five years plus an off-take agreement supplementary 25,000 t of product annually |
● | Advancement of deposit for long-lead items for the project |
● | Strategic collaboration to leverage Mitsui’s considerable global logistics and battery materials marketing expertise as well as an agreement to continue discussions regarding additional funding for further exploration and development of Sigma’s mineral properties |
● | Mitsui’s right to participate in Sigma’s future capital for production expansion with other deposits conditional to concluding a feasibility study and Mineral Reserves estimates |
● | Sales prices are set quarterly based on the published price of nominal arms-length chemical-spodumene concentrate above 6% Li2O (SC6). |
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An initial deposit payment of US$3.0 million was received by Sigma on April 4, 2019, but any further rights of the parties to the Agreement were subject to certain conditions not met, including the negotiation and execution of related definitive offtake agreements with Mitsui. It remains to be determined whether a mutually acceptable role for Mitsui can be agreed upon.
On October 6, 2021, Sigma announced the signing of a binding term sheet for an offtake agreement on a “take or pay” basis (LGES Offtake) for the sale of up to 100,000 tonnes per year of battery grade lithium concentrate to LG Energy Solution, Ltd (LGES), one of the world’s largest manufacturers of advanced lithium-ion batteries for EVs.
The six-year LGES Offtake starts with 60,000 tonnes per year in 2023 and is expected to increase to 100,000 tonnes per year from 2024 to 2027 (Guaranteed Take-or-Pay Quantity), subject to Sigma and LGES executing mutually acceptable definitive documentation to implement the LGES Offtake. Sigma and LGES are also to negotiate each year, starting in 2022, an additional optional supply of battery grade lithium concentrate (Optional Offtake Quantity), not otherwise committed by Sigma in other offtake arrangements.
Pursuant to the LGES Offtake, Sigma will receive a price for the delivered battery grade lithium concentrate linked to the market prices for high purity lithium hydroxide.
Sigma has no contracts in place in support of operations. but is in negotiations with respect to a number of contracts pertaining to mining contracting, road transport, port handling and power. Any future contracts are likely to be negotiated and renewed on an annual or biannual basis. Contract terms are expected to be typical of similar contracts in Minas Gerais State.
1.16.4 | Price Forecast |
Tight market supply combined with rapidly improving demand for lithium chemicals is expected to put continued strong upward pressure on prices. Benchmark Mineral Intelligence’s base case forecast expects prices to continue to rise through 2023 as demand outstrips supply with real lithium hydroxide and spodumene 6% prices hitting US$33,900/t and US$2,900/t in 2023, respectively. Benchmark Mineral Intelligence then expects prices to stabilize at higher levels in 2024 and begin to decline to more stable levels in a balanced supply-demand market starting in 2025. Benchmark Mineral Intelligence estimates longer term real lithium hydroxide and spodumene 6% prices of US$16,300/t and US$850/t in 2030, respectively.
1.17 | Environmental Studies, Permitting and Social or Community Impact |
Conselho Estadual de Politica Ambiental (COPAM) granted an Operation License in support of certain SMSA mining concessions on the Grota do Cirilo property on August 25, 1994. The licence was renewed on August 14, 2008 but has subsequently been allowed to lapse as it was not suitable for the new level of mining contemplated by Sigma. Sigma applied and was issued the first phase of the Preliminary License (Licença Previa or LP) and an Installation License (Licença de Instalação or LI) to commence construction at the Xuxa deposit. Mining licenses are for life of mine and environmental licences are timely renewed when due.
Sigma holds approved economic mining plans (Plano de Aproveitamento Econômico or PAE) over the Xuxa, Barreiro, Lavra do Meio, Murial, Maxixe and Nezinho do Chicâo deposits within the Grota do Cirilo property. The PAE for Xuxa was updated and approved in August 2018.
Reclamation plans (referred to as degraded area plans or PRADs) have been developed and implemented for certain past-producing areas within the Grota do Cirilo property. The successful recovery of these areas is managed by SMSA personnel and external consultants in conjunction with the governing regulatory agencies.
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Sigma has held regular meetings and consultation sessions with local stakeholders regularly over the last five years. The further development of SMSA mining activities in the Jequitinhonha Valley is viewed by both communities as an important regional economic driver.
1.17.1 | Applicable Legal Requirements for Project Environmental Permitting |
CONAMA Resolution N° 237 (1997) defines environmental licensing as an administrative procedure by which the competent environmental agency permits the locating, installation, expansion and operation of enterprises and activities that use environmental resources in a manner considered to be effectively or potentially polluting.
The licensing process in Minas Gerais has been developed in accordance with COPAM Regulatory Deliberation N° 217, dated December 6, 2017, and establishes classification criteria based on scale and polluting potential, as well as the locational criteria used to define the modalities of environmental licensing of ventures and activities that use environmental resources in the state of Minas Gerais.
In compliance with CONAMA Resolution 09/90, the environmental licensing of mining projects is always subject to an Environmental Impact Assessment (EIS), followed by an Environmental Impact Report (EIR), which supports the technical and environmental feasibility stage of the project and the granting of a LP and/or a concurrent LP + LI.
1.17.2 | Current Project Environmental Permitting Status |
A Concurrent Environmental Licensing Type CEL 2 (LP + LI) will be required in support of operations.
The water license for the uptake of 150 m³/h of water from the Jequitinhonha River was approved by the Agencia Nacional das Águas (ANA) in February 2019.
The CEL 2 (LP + LI) for the initial project phase, consisting of the north pit (Pit #1), waste piles 1 and 2 and the plant area was submitted on December 20, 2018 and was followed by the complete presentation of the EIS, the EIR and the Environmental Control Plan (ECP) as well the other documents listed in Basic Guidance Form (BGF). The EIS (Estudo e Relatorio de Impacto Ambiental – EIA-RIMA dated 30 October 2018) and Plano de Controle Ambiental – PCA dated December 2018 were prepared and issued for submittal to the authorities by NEO Soluções Ambientais and ATTO GEO Geologia e Engenharia. Approval was obtained on June 3, 2019.
A second EIS covering Pit #2 and waste piles #3 and #4 was formally submitted for approval in March 2020 in line with the prescribed permitting timing requirements for the process plant coming online with Pit #1.
1.17.3 | Authorization |
SMSA is the owner of the mining rights registered under DNPM Nº 824.692/1971, and the holder of Mining Concession Ordinance Nº 1.366, published on October 19, 1984. In 2018 a new Economic Development Plan (EDP) was registered with the National Mining Agency (ANM), which was approved on November 16, 2018.
The approval of the EDP and environmental study involves the technical and legal analysis and formal approval of the proposed project. With the granted LP + LI, the company must now install the project within 5 years, comply with the environmental conditions established in the LP + LI certificate and finally, apply for the Operation License after installation in order to begin operational activities.
The formalization of the environmental licensing process also included requesting and granting of the EIA. This allows Sigma environmental intervention in an approximately 64 ha area.
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1.17.4 | Land Access |
Sigma has a lease agreement with Miazga Participações S.A., owner of the Poço Danta-Paiuí, Poço Danta and Poço Dantas Farms, to carry out mining activities on its properties. These farms include Legal Reserves (LR) which are preserved and registered in the National Rural Environmental Registration System (NRERS), in accordance with Law Nº 12.651, dated May 25, 2012.
Sigma is also leasing the following individual farms: Lucinéia Fátima de Souza, Demostenes Vieira Filho, Jose Antonio Teixeira dos Santos, Ildete Faria, Vanusia Santos, Nixon Borges, Sandro Araújo, Claudenice Silva, Ustane Ribeiro, Nizoeiro Souza, Lourivaldo Araujo and Joaquim Ferreira Santos.
1.17.5 | Social License Considerations |
Sigma understands and accepts the importance of proactive community relations as an overriding principle in its day-to-day operations as well as future development planning. The company therefore structures its community relations activities to consider the concerns of the local people and endeavors to communicate and demonstrate its commitment in terms that can be best appreciated and understood to maintain the social license to operate.
The Jequitinhonha valley is the poorest region in Minas Gerais which is plighted by poverty and is in the lowest quartile the Human Development Index (HDI). Sigma is the largest investment and operation in the area by a factor of ten and the project will be transformational to the local communities. The largest direct economic benefit is that Sigma is subject to a 2% royalty on revenue which is divided between the Federal Government, State Government and Local Government. Secondly a portion of the taxes on local procurement of goods and services is shared with the Local Government. These incomes from the royalty and tax are a most important source of funding for local Government and Sigma is the largest direct contributor in the region. Sigma will be by far the largest employer in the region with an estimated 500 direct jobs being created with 3 to 4 times this number being indirect.
Farming in the area is small-scale subsistence type as the area is semi-arid. There is minimal impact on the neighbouring farms of Grota do Cirilo properties. Sigma and contractor workforce will live in the cities of Araçuaí and Itinga and strict environmental management plans are in place to minimize the environmental footprint of the project. An example is 90% of the process water is re-circulated and there is zero run-off water from the site except during the wet season, when excess water from the pond will be discharged in an overflow channel. The process uses dry stacking technology, and no slimes dam will be built. Regular environmental monitoring will be conducted, and results will be shared with the local communities.
Sigma has targeted and continues with consultations/engagements with numerous stakeholders in support of project development of the Project and has hosted visits from representatives of government departments and local academic institutions.
1.17.6 | Rehabilitation, Closure Planning and Post-Closure Monitoring |
The closure plan for the Grota do Cirilo property encompasses the following: dismantling of building and infrastructure, removal of heavy mobile and surface equipment, restoration by reconstituting vegetal cover of the soil and the establishment of the native vegetation, grading and capping with vegetation suppression layer and revegetation of the waste rock and overburden stockpiles, removal of suppressed vegetation along with slope cover and surface drainage for water management, fencing of site, environmental liability assessment studies where there may have been spillages and soil and water contamination and safe disposal, revegetation of the open pit berm areas and fencing around the open pits.
In the post-closure phase, a socioenvironmental and geotechnical monitoring program will be carried out, to support ecosystem restoration or preparation for the proposed future use.
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The monitoring program will collect soil and diversity of species on an annual basis, continuing for a five-year period after mine closure.
1.17.7 | Barreiro Environmental Work to Date |
The Environmental Impact Study - EIA and its respective Environmental Impact Report - RIMA will be submitted to the regulatory agency, Bureau of Priority Projects - SUPPRI, as a supporting document to obtain a Preliminary License - LP and an Installation License - LI for Grota do Cirilo Project - Barreiro Pegmatite.
Considering the parameters defined by the current laws and regulations, CONAMA Resolution 09/90, the environmental licensing of mining projects is conditioned to EIA/RIMA submission, and these studies are the main technical resources to assess project feasibility.
The environmental licensing process started in October 2020 and will be formalized with the submission of the technical studies requested through the Environmental Licensing System - SLA, request No.: 2020.10.01.003.0003780 for the production of: 1,500,000 t/year for open pit mining and 251.89 ha for waste heaps.
1.18 | Capital and Operating Costs |
1.18.1 | Capital Cost Estimate |
As a basis for the CAPEX build-up, engineering and design were advanced to a FEED level for the Xuxa plant and a pre-feasibility level for the Barreiro plant with approval of key deliverables obtained from Sigma. These included the design basis, process design criteria, block flow diagram, process flow diagram, a high-level mass balance basis of design along with a similar project execution plan, schedule and site conditions as Xuxa Phase 1 FEED.
The total CAPEX for Xuxa including the Estimated Vat Tax Incentive is US$131.6 M. The total CAPEX already disbursed during construction is US$20,700,000 with US$110,900,545 of CAPEX remining.
The total CAPEX for Barreiro including the Estimated Vat Tax Incentive is US$75.7 M.
The CAPEX estimate has an accuracy of ±25% and is summarized in Table 1-12 (Xuxa) and Table 1-13 (Barreiro).
Table 1-12 – Capital Cost Estimate Summary Xuxa
AREA | TOTALS | ||
|
DIRECTS + INDIRECTS (USD) |
CONTINGENCY (USD) |
TOTAL (USD) |
001 Mine | 7,856,938 | 604,984 | 8,461,922 |
002 Plant | 64,841,255 | 4,992,777 | 69,834,032 |
003 Environmental | 15,387,006 | 1,184,799 | 16,571,805 |
004 EPCM & Engineering Services | 17,867,543 | 1,375,801 | 19,243,344 |
005 Substation and Utility Power Supply | 6,888,863 | 530,442 | 7,419,305 |
Total Construction Capital Cost | 112,841,604 | 8,688,804 | 121,530,408 |
006 Owner’s Project Costs | 8,901,677 | 890,168 | 9,791,844 |
007 Working Capital and Spares | 6,137,293 | – | 6,137,293 |
Total Construction Capital Cost (ex VAT Tax Incentive) | 127,880,574 | 9,578,971 | 137,459,545 |
009 Estimated VAT Tax Incentive | (5,859,000) | – | (5,859,000) |
Total Construction Capital Cost | 122,021,574 | 9,578,971 | 131,600,545 |
008 Sustaining and Deferred Capital | 3,200,000 | 246,400 | 3,446,400 |
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Table 1-13: Capital Cost Estimate Summary Barreiro
AREA | TOTALS (USD) | ||
DIRECTS + INDIRECTS (USD) |
CONTINGENCY (USD) |
TOTAL (USD) | |
001 Mine | 2,096,208 | 161,408 | 2,257,616 |
002 Plant | 50,056,062 | 3,854,317 | 53,910,379 |
003 Environmental | 6,747,201 | 519,534 | 7,266,735 |
004 EPCM & Engineering Services | 10,726,444 | 825,936 | 11,552,380 |
005 Substation and Utility Power Supply | – | – | – |
006 Owner’s Project Costs | 3,000,000 | 231,000 | 3,231,000 |
007 Working Capital and Spares | 937,293 | 72,172 | 1,009,465 |
Total Construction Capital Cost (VAT Tax Incentive) | 73,563,208 | 5,664,367 | 79,227,575 |
008 Estimated VAT Tax Incentive | (3,500,000) | – | (3,500,000) |
Total Construction Capital Cost (VAT Tax Incentive) | 70,063,208 | 5,664,367 | 75,727,575 |
008 Sustaining and Deferred Capital | 7,070,000 | 544,390 | 7,614,390 |
Note: The Barreiro substation costs are included in the Xuxa CAPEX estimate
1.18.2 | Operating Cost Estimate |
The processing plant operating cost estimate includes the operation of a three-stage crushing and screening circuit and DMS circuits (two stages for coarse, fine and ultra fines material classes).
The processing OPEX includes operating and maintenance labour, power, fuel and indirect charges associated with the processing plant. Based on these cost assumptions, inclusions and exclusions, it is estimated that the OPEX for the Xuxa concentrator will be US$10.2/t of ore feed (or US$55.73/t of spodumene concentrate produced). The estimated OPEX for the Barreiro concentrator is US$8.4/t of ore feed (or US$66.3/t of spodumene concentrate produced).
Is it worth noting that General and Administration (G&A) costs to manage the site (including the two concentrators) has been accounted for into the Xuxa concentrator OPEX exercise, which explains the majority of the cost difference between to two processing plants.
Operating cost estimates are summarized in Table 1-14 (Xuxa) and Table 1-15 (Barreiro)
Table 1-14: Xuxa Operating Cost Estimate Summary
DESCRIPTION | OPEX (US$) |
Mining (US$/t material mined) | $2.06 |
Process (US$/t ore feed) | $10.2 |
G&A (US$/t ore feed) | $3.3 |
Shipping (US$/t SC) | $119 |
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Table 1-15: Barreiro Operating Cost Estimate Summary
DESCRIPTION | OPEX (US$) |
Mining (US$/t material mined) | $2.68 |
Process (US$/t ore feed) | $8.4 |
G&A (US$/t ore feed) | $4.3 |
Shipping (US$/t SC) | $110 |
1.19 | Economic Analysis |
1.19.1 | Economic Assumptions |
Three levels of economic analyses were undertaken for the Project, contemplating the mining of the Mineral Reserves of:
● | the Xuxa deposit (Phase 1); |
● | the Barreiro deposit (Phase 2); and |
● | both Phase 1 and Phase 2 (Phase 1+2). |
Additionally, the economic analyses contemplate the production of spodumene concentrate (SC) at grades of 6.0%, 5.5% and 5.2% Li2O, in order to consider the current lithium market conditions.
The base case scenario after-tax net present value (NPV) results are detailed in Table 1-16 below. The discount rate assumed for the after-tax NPVs is 8%.
A sensitivity analysis reveals that the Project’s viability will not be significantly vulnerable to variations in capital expenditures, within the margins of error associated with the DFS and PFS estimates for Phase 1 and Phase 2, respectively. In contrast, the Project’s economic returns remain most sensitive to changes in spodumene prices, feedstock grades and recovery rates.
Table 1-16 – Base Case After-Tax NPVs
Modelled Case | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
Phase 1 | US$ M | $2,187 | $2,643 | $2,820 |
Phase 2 | US$ M | $1,853 | $2,438 | $2,611 |
Phase 1+2 | US$ M | $4,043 | $5,083 | $5,435 |
Phase 1, Phase 2 and Phase 1+2 were evaluated on a pre- and after-tax basis. It must be noted that there are many potential complex factors that affect the taxation of a mining project. The taxes, depletion, and depreciation calculations in the economic analyses are simplified and only intended to give a general indication of the potential tax implications at the project level.
Sudene is a government agency tasked with stimulating economic development in specific geographies of Brazil. The project is to be installed in a Sudene-covered geographic area, where a tax incentive granted to the project indicates a 75% reduction of income tax for 10 years, after achieving at least 20% of its production capacity. The considered Brazilian income tax rate is assumed to be 15.25%, which represents the Sudene tax benefit applied to the Brazilian maximum corporate tax of 34% on taxable income (25% income tax plus 9% social contribution). For Phase 2 and Phase 1+2, the Sudene tax incentive is expected to be renewed after the 10th anniversary of achieving at least 20% of their production capacities.
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The Project is expected to be exempt from all importation taxes for products which there is no similar item produced in Brazil (Ex-Tarifário). Assembled equipment where some but not all individual components are produced in Brazil can be considered exempt from import taxes under these terms.
The Project royalties will include:
● | A 2.0% CFEM royalty on gross spodumene revenue, paid to the Brazilian Government. The CFEM royalty amount is split between the Federal Government of Brazil (12%), State Government of Minas Gerais (23%), and Municipal Government of Araçuaí (65%). |
● | A 1.0% NSR royalty with permissible deductions from gross spodumene revenue including the CFEM royalty, any commercial discounts, transportation costs and taxes paid. |
● | A 1.0% NSR royalty with permissible deductions including all of the costs associated with production; however, this royalty has a buyback provision for US$3.8 million which is assumed to be exercised upon achieving commercial production in the Phase 1, Phase 2 and Phase 1+2 analyses. |
1.19.2 | Phase 1 DFS Economic Analysis |
The Phase 1 economic analysis is based on an eight-year operation sourcing feedstock ore from the Xuxa deposit’s Mineral Reserve of 11.8 Mt grading at 1.55% Li2O. Phase 1 is expected to generate run-rate production of up to 286 ktpa of lithium concentrate, delivering US$485 million of annual free cash flow, at a 5.2% SC grade.
The base case scenario results are detailed in Table 1-17 below.
Table 1-17: Phase 1 Base Case Scenario Results
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
After-Tax NPV @ 8% | US$ M | $2,187 | $2,643 | $2,820 |
After-Tax IRR | % | 482% | 571% | 606% |
After-Tax Payback Period | years | 0.3 | 0.2 | 0.2 |
The key technical assumptions used in the base case are highlighted below in Table 1-18.
Table 1-18: Key Phase 1 Technical Assumptions
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
Total Ore Processed (ROM) | Mt | 11.8 | 11.8 | 11.8 |
Annual ROM Ore Processed | Mt | 1.5 | 1.5 | 1.5 |
Run-Rate SC Production | ktpa | 230 | 270 | 286 |
Run-Rate LCE Production (Note 1) | ktpa | 34 | 37 | 37 |
Strip Ratio | ratio | 16.4: 1 | 16.4: 1 | 16.4: 1 |
Average Li2O Grade | % | 1.55% | 1.55% | 1.55% |
Spodumene Recovery Rate | % | 60.4% | 65.0% | 65.0% |
Spodumene Concentrate Grade | % Li2O | 6.0% | 5.5% | 5.2% |
Operating Life | years | 8 | 8 | 8 |
Total Cash Cost (FOB) | US$/t SC | $386 | $339 | $324 |
Transportation Costs (CIF China) | US$/t SC | $119 | $119 | $119 |
Total Cash Cost (CIF China) | US$/t SC | $505 | $458 | $443 |
AISC (CIF China) | US$/t SC | $506 | $459 | $444 |
Mining Costs | US$/t Material Mined | $2.06 | $2.06 | $2.06 |
Processing Costs | US$/t ROM | $10.20 | $10.20 | $10.20 |
G&A Costs | US$/t ROM | $3.26 | $3.26 | $3.26 |
Note 1: tonnage based on direct conversion to LCE excluding conversion rate
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The total gross revenue derived from the sale of spodumene concentrate for Phase 1 is estimated up to US$5.7 billion, an average revenue of US$2,499/t 5.2% SC with total operating costs (including royalty payments and commercial discounts) of US$1.0 billion at an average cost of US$443/t 5.2% SC. The resulting after-tax earnings margin (gross revenue less realization, operating costs and taxes) was estimated at US$3.9 billion.
A sensitivity analysis for Phase 1 was carried out with the base case as the midpoint. An interval of ±20% versus base case values was considered with increments of 10%.
Phase 1 after-tax NPV is not significantly vulnerable to changes in BRL to US$ exchange rate, CAPEX, OPEX, or discount rate considered. In contrast, Phase 1 after-tax NPV is more sensitive to variation in spodumene price, lithium grade, and spodumene recovery rates.
Phase 1 after-tax IRR is not significantly vulnerable to changes in Opex. In contrast, Phase 1 after-tax IRR is more sensitive to variation in spodumene price, lithium grade, spodumene recovery rates, BRL to US$ exchange rate and Capex. Note that the Phase 1 after-tax IRR is independent of the discount rate considered.
1.19.3 | Phase 2 PFS Economic Analysis |
The Phase 2 economic analysis is based on a twelve-year operation sourcing feedstock ore from the Barreiro deposit’s Mineral Reserve of 21.8 Mt grading at 1.37% Li2O. Phase 2 is expected to generate run-rate production of up to 276 ktpa of lithium concentrate, delivering US$366 million of annual free cash flow, at a 5.2% SC grade.
The base case scenario results are detailed in Table 1-19 below.
Table 1-19: Phase 2 Base Case Scenario Results
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
After-Tax NPV @ 8% | US$ M | $1,853 | $2,438 | $2,611 |
After-Tax IRR | % | 601% | 764% | 813% |
After-Tax Payback Period | years | 0.2 | 0.2 | 0.1 |
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The key technical assumptions used in the base case are highlighted below in Table 1-20.
Table 1-20: Key Phase 2 Technical Assumptions
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
Total Ore Processed (ROM) | Mt | 21.8 | 21.8 | 21.8 |
Annual ROM Ore Processed | Mt | 1.8 | 1.8 | 1.8 |
Run-Rate SC Production | ktpa | 210 | 261 | 276 |
Run-Rate LCE Production (Note 1) | ktpa | 31 | 36 | 36 |
Strip Ratio | ratio | 12.5: 1 | 12.5: 1 | 12.5: 1 |
Average Li2O Grade | % | 1.37% | 1.37% | 1.37% |
Spodumene Recovery Rate | % | 50.9% | 57.9% | 57.9% |
Spodumene Concentrate Grade | % Li2O | 6.0% | 5.5% | 5.2% |
Operating Life | years | 12 | 12 | 12 |
Total Cash Cost (FOB) | US$/t SC | $408 | $340 | $325 |
Transportation Costs (CIF China) | US$/t SC | $110 | $110 | $110 |
Total Cash Cost (CIF China) | US$/t SC | $519 | $451 | $435 |
AISC (CIF China) | US$/t SC | $521 | $453 | $437 |
Mining Costs | US$/t Material Mined | $2.68 | $2.68 | $2.68 |
Processing Costs | US$/t ROM | $8.40 | $8.40 | $8.40 |
G&A Costs | US$/t ROM | $4.30 | $4.30 | $4.30 |
Note 1: tonnage based on direct conversion to LCE excluding conversion rate
The total gross revenue derived from the sale of spodumene concentrate for Phase 2 is estimated up to US$6.9 billion, an average revenue of US$2,074/t 5.2% SC with total operating costs (including royalty payments and commercial discounts) of US$1.4 billion at an average cost of US$435/t 5.2% SC. The resulting after-tax earnings margin (gross revenue less realization, operating costs and taxes) was estimated at US$4.4 billion.
A sensitivity analysis for Phase 2 was carried out with the base case as described above as the midpoint. An interval of ±20% versus base case values was considered with increments of 10%.
Phase 2 after-tax NPV is not significantly vulnerable to changes in BRL to US$ exchange rate, Capex, Opex, or discount rate considered. In contrast, Phase 2 after-tax NPV is more sensitive to variation in spodumene price, lithium grade, and spodumene recovery rates.
Phase 1 after-tax IRR is not significantly vulnerable to changes in Opex. In contrast, Phase 1 after-tax IRR is more sensitive to variation in spodumene price, lithium grade, spodumene recovery rates, BRL to US$ exchange rate and Capex. Note that the Phase 1 after-tax IRR is independent of the discount rate considered.
1.19.4 Phase 1 + Phase 2 PFS Economic Analysis
The Phase 1+2 economic analysis is based on a thirteen-year operation sourcing feedstock ore from the Xuxa and Barreiro’s combined Mineral Reserves of 33.6 Mt. Phase 1+2 is expected to generate run-rate production of up to 562 ktpa of lithium concentrate, delivering US$637 million of annual free cash flow, at a 5.2% SC grade.
The base case scenario results are detailed in Table 1-21 below.
Table 1-21: Phase 1+2 Base Case Scenario Results
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
After-Tax NPV @ 8% | US$ M | $4,043 | $5,083 | $5,435 |
After-Tax IRR | % | 495% | 589% | 624% |
After-Tax Payback Period | years | 0.3 | 0.3 | 0.2 |
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The key technical assumptions used in the base case are highlighted below in Table 1-22.
Table 1-22: Key Phase 1+2 Technical Assumptions
Item | Unit | @ 6.0% SC | @ 5.5% SC | @ 5.2% SC |
Total Ore Processed (ROM) | Mt | 33.6 | 33.6 | 33.6 |
Annual ROM Ore Processed | Mt | 2.6 | 2.6 | 2.6 |
Run-Rate SC Production | ktpa | 440 | 531 | 562 |
Run-Rate LCE Production (Note 1) | ktpa | 65 | 72 | 72 |
Strip Ratio | ratio | 13.8: 1 | 13.8: 1 | 13.8: 1 |
Average Li2O Grade | % | 1.43% | 1.43% | 1.43% |
Spodumene Recovery Rate | % | 54.4% | 60.5% | 60.5% |
Spodumene Concentrate Grade | % Li2O | 6.0% | 5.5% | 5.2% |
Operating Life | years | 13 | 13 | 13 |
Total Cash Cost (FOB) | US$/t SC | $399 | $340 | $325 |
Transportation Costs (CIF China) | US$/t SC | $114 | $114 | $114 |
Total Cash Cost (CIF China) | US$/t SC | $513 | $454 | $438 |
AISC (CIF China) | US$/t SC | $515 | $455 | $440 |
Mining Costs | US$/t Material Mined | $2.39 | $2.39 | $2.39 |
Processing Costs | US$/t ROM | $9.04 | $9.04 | $9.04 |
G&A Costs | US$/t ROM | $3.93 | $3.93 | $3.93 |
Note 1: tonnage based on direct conversion to LCE excluding conversion rate
The total gross revenue derived from the sale of spodumene concentrate from Phase 1+2 is estimated up to US$12.6 billion, an average revenue of US$2,247/t 5.2% SC with total operating costs (including royalty payments and commercial discounts) of US$2.5 billion at an average cost of US$438/t 5.2% SC. The resulting after-tax earnings margin (gross revenue less realization, operating costs and taxes) was estimated at US$8.3 billion.
A sensitivity analysis for Phase 1+2 was carried out with the base case as described above as the midpoint. An interval of ±20% versus base case values was considered with increments of 10%.
Phase 1+2 after-tax NPV is not significantly vulnerable to changes in BRL to US$ exchange rate, Capex, Opex, or discount rate considered. In contrast, Phase 1+2 after-tax NPV is more sensitive to variation in spodumene price, lithium grade, and spodumene recovery rates.
Phase 1+2 after-tax IRR is not significantly vulnerable to changes in Opex. In contrast, Phase 1+2 after-tax IRR is more sensitive to variation in spodumene price, lithium grade, spodumene recovery rates, BRL to US$ exchange rate and Capex. Note that the Phase 1+2 after-tax IRR is independent of the discount rate considered.
1.20 | Interpretation and Conclusions |
Mineral Resources are reported for five pegmatite bodies, Xuxa, Barreiro, Murial, Lavra do Meio and Nezinho do Chicao. Mineral Reserves are reported for the Xuxa and Barreiro deposits.
This report contains the Phase 3 Mineral Resource Estimate (MRE) for the Nezinho do Chicao (NDC) pegmatite.
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1.20.1 | Risk Assessment |
Risk assessment sessions were conducted individually and collectively by all parties.
Most aspects of the project are well defined. The risks are grouped by licensing, cost (CAPEX and OPEX), schedule, operations, markets and social/environmental categories. One of the most significant risks identified for the Project is related to lithium markets.
The following risks are highlighted for the project:
● | Lithium market sale price and demand (commercial trends) |
● | Delay in receiving the Environmental Operation License |
● | Delay in obtaining the power permit and CEMIG substation energization: impact on plant start-up date |
● | Delay in obtaining the license for Barreiro Pit |
● | Fluctuations in the exchange rate and inflation |
● | Labour strikes at the Port and at site (construction and operation) |
● | Tax exemptions and import not confirmed |
● | Increased demands from the local community once in operation |
● | More fines generated from mining and crushing: potential negative impact on recovery |
● | The production rate and size of the pit may impose challenges for operations |
● | Waste generation: the continuous geotechnical monitoring system to be implemented during mining operation can indicate local changes to geotechnical parameters, and potential increase of waste |
1.20.2 | Opportunities |
The following opportunities are identified for the Grota do Cirilo Project:
● | Recovery of Li2O from hypofines with a flotation circuit |
● | Recovery of Li2O from petalite |
● | Sale of plant rejects to the ceramics industry |
● | Potential upgrading of some or all of the Inferred Mineral Resources to higher-confidence categories and eventually conversion to Mineral Reserves |
● | Potential for future underground mining at both Phase 1 and Phase 2 projects. |
● | Exchange rate may work in the Project’s favour. |
1.21 | Recommendations |
The following summarizes the recommendations from the NDC MRE.
1.21.1 | Geology and Resources |
The QPs recommend that additional exploration drilling be conducted across the NDC deposit to update existing resources and potentially increase resources. The overall cost for the drill program is estimated to be $800 000.
1.21.2 | NDC Recommendations |
The recommendations for NDC are to complete a Preliminary Economic Assessment (PEA) of the deposit, which will include:
a. | Metallurgical test work |
b. | Geotechnical analysis |
c. | Hydrogeology study |
d. | Mine plan |
e. | Plant design |
f. | Capex and Opex |
g. | Financial model |
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2 | INTRODUCTION |
Sigma Lithium Corporation (Sigma) requested Primero Group Americas Inc. (Primero), a division of Primero Group Ltd, together with SGS Geological Services (SGS), GE21 Consultoria Mineral (GE21) and Promon Engenharia Ltda (Promon) to prepare a NI 43-101 Technical Report (the Report) for the Sigma’s Grota do Cirilo Project located in Minas Gerais State, Brazil. (Figure 2 1). This includes a Definitive Feasibility Study (DFS) for the phase 1 Xuxa deposit and a Pre-feasibility Study (PFS) for the phase 2 Barreiro deposit.
Figure 2-1 – Project Location
2.1 | Terms of Reference |
Mineral Resources are reported for four pegmatite bodies, Xuxa, Barreiro, Murial and Lavra do Meio. Mineral Reserves are reported for the Xuxa and Barreiro deposits. A feasibility study has been conducted on the Xuxa deposit and a pre-feasibility level study has been conducted on the Barreiro deposit (project phase 2).
Mineral Resources and Mineral Reserves are reported using the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards).
This Report is based, in part, on internal reports and information as listed in Section 27 of this Report. Where sections from reports authored by other consultants have been directly quoted in this Report, they are indicated as such in the Report sections.
2.2 | Effective Dates |
The effective date of the Xuxa Mineral Resource estimate is January 10, 2019.
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The effective date of the Xuxa Mineral Reserve estimate is June 21, 2021
The effective date of the Barreiro Mineral Resource estimate is February 24, 2022.
The effective date of the Barreiro Mineral Reserve estimate is February 24, 2022.
The effective date of the financial analysis supporting the Mineral Reserves is February 24, 2022.
The overall effective date of the Report is the date of the financial analysis supporting the Mineral Reserves and is February 24, 2022.
2.3 | Qualified Persons |
This Technical Report was prepared for Sigma by or under the supervision of the following Qualified Persons (QPs):
● | Mr. Homero Delboni Jr, MAusIMM, Senior Consultant, Promon Engenharia |
● | Mr. Marc-Antoine Laporte, P.Geo., Senior Geologist, SGS |
● | Mr. Jarrett Quinn, P.Eng., Lead Process Engineer, Primero Group Americas |
● | Mr. Porfirio Cabaleiro Rodriguez, FAIG, Senior Director GE21 |
● | Mr. Brian Talbot, FAusIMM, |
2.4 | Site Visits |
The following Qualified Persons visited the Project site.
Mr. Marc-Antoine Laporte visited the Project site on September 11–15, 2017, from July 11–17, 2018, from September 18-23, 2018, and October 18-21, 2021. During the 2017 site visit, Mr. Laporte conducted a general review of the logging and QA/QC procedures in place for the 2017 drill program. Drill hole collars were visited, and selected collar positions checked with a hand-held global positioning system (GPS) instrument. An inspection of the drilling equipment and deviation survey methodology and tools was completed. Mr. Laporte took 26 witness (control) samples from the remaining 2014 Xuxa campaign drill core to submit for independent confirmation of the presence of lithium-bearing mineralization. During the July 2018 site visit a general review of the logging and QA/QC procedure was conducted with Sigma geologists to confirm compliance with industry best practices. Drill hole collars at Xuxa, Barreiro and Lavra Do Meio were inspected, and selected collar positions checked with a hand-held GPS instrument. An extensive review of the mineralized core from the four main pegmatite was conducted during the first two days of the visit including discussion of the sampling method with technical staff. Inspection of the drilling equipment and deviation survey methodology and tools between the two drilling companies was also completed to check consistency between the drill teams. One day was spent on the Sao Jose property to inspect the different historical mine workings and make recommendations for future drilling. Mr. Laporte visited the site again in September 2018, where he discussed the geological model and information needed to complete the resource estimates on the Xuxa, Barreiro, Murial and Lavra do Meio pegmatites. On his site visit in 2021, Mr. Laporte reviewed logging, QAQC and the drilling program underway at the Barreiro deposit. He also discussed the geological model and the information needed to update the MRE for Barreiro.
Mr. Porfirio Cabaleiro Rodriguez visited the site from April 17-18, 2019. During this visit, he familiarized himself with general aspects of the proposed mine area, and locations for future waste pile areas and the planned plant site area. Mr. Rodriguez observed the possible influence of the Piauí River on the planned pits, and the general aspects of rock behavior based on the observation of excavations.
2.5 | Information Source |
Sigma provided the financial model for the economic study. Primero has reviewed the model and input files for alignment with the Project input data.
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3 | RELIANCE ON OTHER EXPERTS |
3.1 | Marketing |
The QP has fully relied upon, and disclaims responsibility for, marketing information derived from a third-party expert retained by Sigma through the following document:
● | Benchmark Mineral Intelligence, Q1-2022: Lithium Forecast, Q1-2022. |
This information is used in Section 19, the Mineral Reserve estimate in Section 15, and the financial analysis in Section 22.
The QP considers it reasonable to rely on Benchmark Mineral Intelligence because the company is independent, privately owned, and is an industry leader in battery metals reporting. Benchmark Mineral Intelligence, founded in 2014, is a London-based IOSCO-regulated Price Reporting Agency and specialist information provider for the lithium-ion battery to EV supply chain. Benchmark Mineral Intelligence specialises in providing in depth market reports that give a comprehensive analysis of an individual metal or mineral market. These reports cover world supply and demand, the operations of the major producers, end-use market applications, price trends, international trade patterns and forecasts. Benchmark Mineral Intelligence also publishes regularly updated cost curves and databases for a number of metals and minerals.
The QP has fully relied upon, and disclaims responsibility for contract and off-take information derived from Sigma through the following documents:
● | Sigma’s announcement on April 10, 2019, of the Sigma and Mitsui Binding Heads of Agreement. (Heads of Agreement - Lithium concentrate offtake dated March 25, 2019) |
● | Sigma’s announcement on October 5, 2021, of the Sigma and LG Energy Solution, Ltd. Binding Offtake Agreement Term Sheet (Term Sheet - Lithium concentrate offtake dated October 5, 2021) |
This information is used in Section 19, and in support of the Mineral Resource estimate in Section 14, the Mineral Reserve estimate in Section 15, and the financial analysis in Section 22.
3.2 | Units and Currency |
Système International d'unités (SI) metric units are used, including metric tonnes (tonnes, t) for weight.
All currency amounts are stated in US dollars (US$) unless otherwise stated.
3.3 | Environmental, Permitting and Social Licence |
The QP has fully relied upon, and disclaims responsibility for, environmental, permitting, and social licence information derived from third-party experts retained by Sigma through the following document:
● | Environmental Regularization Summary – Xuxa Project - DNPM 824 692 71: report prepared by Harpia Consultoria Ambiental for Sigma, 2019. |
● | Vetor Ambiental updated the report for the Phase 1 Project in 2020 and for Phase 2 in 2021. |
This information is used in Section 20, and in support of the Mineral Resource estimate in Section 14, the Mineral Reserve estimate in Section 15, and the financial analysis in Section 22.
This Environmental Regularization Summary for Phase 1 Xuxa by Harpia Consultoria Ambiental is a translation from and is based on an Environmental Impact Assessment (EIA) prepared by NEO Soluções Ambientais, ATTO GEO Geologia e Engenheria and Vetor Ambiental and submitted by Sigma to applicable regulatory authorities.
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Similarly, the Environmental Regularization Summary for Phase 2 Barreiro is based on an Environmental Impact Assessment (EIA) prepared by Vetor Ambiental and submitted by Sigma to applicable regulatory authorities.
The EIS was comprised of:
● | Estudo e Relatorio de Impacto Ambiental Phase 1 North Pit – EIA-RIMA dated 30 October 2018 |
● | Plano de Controle Ambiental Phase 1 North Pit– PCA dated December 2018 |
● | Estudo e Relatorio de Impacto Ambiental Phase 1 south pit – EIA-RIMA dated 28 August 2020, and |
● | Plano de Controle Ambiental Phase 1 south pit – PCA dated 28 August 2020 |
● | Estudo e Relatorio de Impacto Ambiental Phase 2 Barreiro t – EIA-RIMA dated 20 February 2022, and |
● | Plano de Controle Ambiental Phase 2 Barreiro – PCA dated 15 March, 2022 |
The Phase 2 Barreiro Environmental Regularization Summary is based on an EIA-RIMA and PCA which was prepared by Vetor Ambiental.
This information is used in Section 20, and in support of the Mineral Resource estimate in Section 14, the Mineral Reserve estimate in Section 15, and the financial analysis in Section 22.
The EIA and the Environmental Regularization Summary for Phase 1 cover the licensing process for Xuxa North & South pits and waste piles 1 ,2 ,3 and 4. The EIS and the Environmental Regularization Summary for Phase 2 cover the licensing process for Barreiro pit and waste pile 1.
3.4 | Taxation |
The QP has fully relied upon, and disclaims responsibility for taxation (including amortization, interest rates, depreciation, discounts), levy, royalty, and buy-back options information derived from third-party experts retained by Sigma including the following document:
● | Sigma Legal Opinion – SUDENE and RECAP tax incentives: legal opinion prepared by Lefosse Advogados 25 March 2019. |
● | Import and Local taxes opinion was prepared by TSX Engineering December 2021 |
This information is used in Section 22, and in support of the Mineral Reserve estimate in Section 15.
3.5 | Mineral Tenure |
The QPs have not reviewed the mineral tenure, nor independently verified the legal status, ownership of the Project area, underlying property agreements or permits. The QPs have fully relied upon, and disclaims responsibility for, information derived from third-party experts retained by Sigma through the following document:
● | Friere, W., Costa, B., Soarres, D.R., and Azevedo, M., 2018: Legal Opinion 29/2018: report prepared by William Freire and Partners for Sigma, 10 April 2018, 68 p. |
This information is used in Section 4 of the report, and in support of the Mineral Resource estimate in Section 14, the Mineral Reserve estimate in Section 15, and the financial analysis in Section 22.
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4 | PROPERTY DESCRIPTION AND LOCATION |
4.1 | Property Description and Location |
The Project area is located within Zone SE24 of the Americas topographic map reference, and is divided into four properties:
● | Grota do Cirilo property: UTM 190,615 m east and UTM 8146,788 m north; WGS 84, Zone 24S |
● | Genipapo property: UTM 191,226 m east and UTM 8,155,496 m north, WGS 84, Zone 24 K |
● | Santa Clara: UTM 197,682 m east and UTM 8,134,756 m north, WGS 84, Zone 24 K |
● | São José property: UTM 190,612 m east and UTM 8,119,190 m north, 84, Zone 24 K. |
The property locations are shown in Figure 4-1.
Figure 4-1 – Project Properties - Genipapo, Grota do Cirilo, Santa Clara and São José
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4.2 | Mineral Tenure |
The legal framework for the development and use of mineral resources in Brazil was established by the Brazilian Federal Constitution, which was enacted on October 5, 1988 (the Brazilian Constitution) and the Brazilian mining code, which was enacted on January 29, 1940 (Decree-law 1985/40, later modified by Decree-law 227, of February 29, 1967, the Brazilian Mining Code).
According to the Brazilian Constitution, all mineral resources in Brazil are the property of the Federal Government. The Brazilian Constitution also guarantees mining companies the full property of the mineral products that are mined under their respective concessions. Mineral rights come under the jurisdiction of the Federal Government and mining legislation is enacted at the Federal level only. To apply for and acquire mineral rights, a company must be incorporated under Brazilian law, have its management domiciled within Brazil, and its head office and administration in Brazil.
In general, there are no restrictions on foreign investment in the Brazilian mining industry, except for mining companies that operate, or hold mineral rights within a 150 km-wide strip of land parallel to the Brazilian terrestrial borders. In this instance the equity interests of such companies have to be majority Brazilian-owned. Exploration and mining activities in the border zone are regulated by the Brazilian Mining Code and supporting legislation.
The Project consists of 25 mineral rights, mining concessions, applications for mining concessions and exploration permits covering an area of 18.424,21 ha in four property areas (refer to Figure 4-1). The tenure holdings are summarized in Table 4-1 and tenure outlines are shown in Figure 4-2. The identification numbers used in Figure 4-2 correspond to the identification numbers in the first column of Table 4-1. A summary of the types of concession within each property area is provided in Table 4-2.
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Table 4-1 – Mineral Rights Description
ID | Number | Year | Type | Expiry Date | Area | Associated
Property |
(ha) | ||||||
1 | 802.401 | 1972 | Mining concession (*) | Life of mine | 1,796.5 | Genipapo |
2 | 802.400 | 1972 | Mining concession (*) | Life of mine | 969.13 | Genipapo |
3 | 4.134 | 1953 | Mining concession (*) | Life of mine | 494.69 | Grota do Cirilo |
4 | 831.891 | 2017 | Exploration Permit | 17/07/2023 (**) | 10.57 | Genipapo |
5 | 830.039 | 1981 | Mining Application | Life of mine | 715.24 | Grota do Cirilo |
6 | 824.692 | 1971 | Mining concession | Life of mine | 756.21 | Grota do Cirilo |
7 | 810.345 | 1968 | Mining concession (*) | Life of mine | 125.54 | Grota do Cirilo |
8 | 9.135 | 1967 | Mining concession (*) | Life of mine | 312 | Grota do Cirilo |
9 | 5.804 | 1953 | Mining concession (*) | Life of mine | 9.33 | Grota do Cirilo |
10 | 804.541 | 1971 | Mining Application | Life of mine | 44.89 | Grota do Cirilo |
11 | 824.695 | 1971 | Mining concession (*) | Life of mine | 1,069.2 | Grota do Cirilo |
12 | 805.799 | 1970 | Mining concession (*) | Life of mine | 8.29 | Grota do Cirilo |
13 | 801.312 | 1972 | Mining concession (*) | Life of mine | 2,505.22 | Grota do Cirilo |
14 | 831.975 | 2017 | Exploration Permit | 19/03/2023 (**) | 4.03 | Grota do Cirilo |
15 | 2.998 | 1953 | Mining concession (*) | Life of mine | 327.84 | Santa Clara |
16 | 801.870 | 1978 | Mining concession | Life of mine | 544.9 | Santa Clara |
17 | 801.316 | 1972 | Mining concession (*) | Life of mine | 3,727.9 | Santa Clara |
18 | 801.315 | 1972 | Mining concession (*) | Life of mine | 991.71 | Santa Clara |
19 | 813.413 | 1973 | Mining concession (*) | Life of mine | 379.31 | Santa Clara |
20 | 832.889 | 2013 | Extension Exploration Permit | 02/12/2022 (**) | 810.23 | São José |
21 | 806.856 | 1972 | Mining concession (*) | Life of mine | 1,920.4 | São José |
22 | 808.869 | 1971 | Mining concession (*) | Life of mine | 29 | São José |
23 | 804.088 | 1975 | Mining concession | Life of mine | 29.22 | São José |
24 | 801.875 | 1978 | Mining concession | Life of mine | 281.51 | São José |
25 | 830.580 | 1979 | Exploration Permit | N/A*** | 686.89 | São José |
* Mining rights covered by the Mining Group 931.021/83. | |
**Deadline for submission to the ANM of the final research report | |
*** The Final Research Report was submitted in due time and is pending analysis. There is no provision for an administrative decision. |
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Figure 4-2 – Project Mineral Rights, North and South Complexes
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Table 4-2 – Property Tenure Summary
Property | Area |
Concessions | Historical
Workings |
Grota do Cirilo | 5,919 | 8 mining concessions, 2 Application for mining concession, 1 exploration permit | Xuxa, Barreiro, Lavra do Meio, Murial and Maxixe |
São José | 3,757 | 4 mining concessions and 2 exploration permits | Samambaia, Lavra Grande, Ananias, Ramom and Lavra Antiga |
Genipapo | 2,776 | 2 mining concessions and 1 exploration permit | Morundu and Lavra Velha |
Santa Clara | 5,971 | 5 mining concessions | Lavra do Honorato |
All concessions have been surveyed on the ground and have been monumented (physical boundary markers are in place). Sigma retains third-party consultants to monitor its concession obligations. The consultants report on both a monthly and a quarterly basis.
The following payments and fees are required to keep concessions current:
● | ANM Proceeding 802.401/1972, 802.400/1972, 4.134/1953, 824.692/1971, 810.345/1968, 9.135/1967, 5.804/1953, 824.695/1971, 805.799/1970, 801.312/1972, 2.998/1953, 801.870/1978, 801.316/1972, 801.315/1972, 813.413/1973, 806.856/1972, 808.869/1971, 804.088/1975, 801.875/1978 (mining concessions): Financial Compensation for the Exploration of Mineral Resources (CFEM) will only be due when there is mineral production in the areas. For the sale of lithium, the value of CFEM is equivalent to 2% of gross sales revenue, less taxes levied on its sale |
● | ANM Proce |