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• Q3 2024 Highlights
  • Significant backlog of $4.6 billion at quarter-end, up 49% YoY
  • Strong top line growth with revenues of $282.4 million, up 38% YoY
  • Solid profitability with adjusted EBITDA¹ of $55.5 million, up 30% YoY, and adjusted EBITDA margin¹ of 19.7%
  • Solid adjusted net income¹ of $34.7 million, up 60% YoY, and adjusted diluted earnings per share¹ of $0.28, up 56% YoY
  • Strong operating cash flow of $258.8 million
  • Net debt to adjusted EBITDA¹ ratio of 0.8x at quarter-end
• Updated 2024 full-year financial outlook
  • Raised revenue guidance, narrowed adjusted EBITDA guidance and reaffirmed capital expenditures guidance
  • Reaffirmed positive free cash flow in 2024

BRAMPTON, ON, Nov. 15, 2024 /PRNewswire/ – MDA Space Ltd. MDA, a trusted space mission partner to the rapidly expanding global space industry, today announced its financial results for the third quarter ended September 30, 2024.     

“In Q3, the MDA Space team delivered another strong quarter with double digit growth in our top and bottom lines as we continued to execute and convert our backlog,” said Mike Greenley, Chief Executive Officer of MDA Space.

“The team continued to execute on our major programs, successfully conducting the preliminary design review for the Canadarm3 program, a critical milestone for the program. We also made significant progress on MDA CHORUS™, our next generation Earth Observation constellation, completing the spacecraft assembly and commencing spacecraft integration and testing. And in our Satellite Systems business, the team made solid progress advancing the engineering work for the Telesat Lightspeed program. In Q3, we also broke ground on our Satellite Systems facility expansion in Quebec which will add 185,000 square feet of advanced manufacturing capacity,” continued Mr. Greenley.

“I am also pleased to welcome Guillaume Lavoie to the MDA Space Team as Chief Financial Officer. Guillaume brings a wealth of financial leadership experience and will be instrumental in supporting our long-term growth plans and helping us deliver successfully for our customers and shareholders.”   

Q3 2024 HIGHLIGHTS  

• Backlog of $4.6 billion at quarter-end provides good revenue visibility for 2025 and beyond and was up 49% compared to Q3 2023. The year-over-year increase in backlog is driven by new order bookings including the $1 billion award for Phases C/D of the Canadarm3 program announced in Q2 2024.
• Revenues of $282.4 million in Q3 2024 were up 38.0% year-over-year driven by higher work volumes across the business with strong contributions from the Satellite Systems and Robotics & Space Operations businesses.
• Adjusted EBITDA of $55.5 million in Q3 2024 compared to $42.8 million in Q3 2023, representing an increase of $12.7 million (or 29.7%) year-over-year. Adjusted EBITDA margin of 19.7% in Q3 2024 is consistent with the Company’s full year margin guidance of 19-20% and compares to adjusted EBITDA margin of 20.9% reported in the third quarter of 2023.
• Adjusted net income for Q3 2024 was $34.7 million compared to $21.7 million in Q3 2023, representing an increase of $13.0 million (or 59.9%) year-over-year driven by higher operating income. Adjusted diluted earnings per share of $0.28 in Q3 2024 compared to $0.18 in Q3 2023, representing an increase of 55.6% year-over-year.
• Operating cash flow was $258.8 million in Q3 2024 compared to $(30.0) million in Q3 2023. The year-over-year increase in operating cash flow was driven by positive working capital contributions primarily related to the Telesat Lightspeed program.
• At quarter-end, net debt to adjusted EBITDA ratio was 0.8x compared to 2.4x as of December 2023 (2.0x as of June 30, 2024) as the Company utilized its strong operating cash flow in Q3 2024 to make repayments to its revolving credit facility and deleverage the balance sheet while continuing to invest in its growth initiatives.

2024 FINANCIAL OUTLOOK

As a trusted mission partner and leading global space technology provider, we are leveraging our capabilities and expertise to execute on targeted growth strategies across our end markets and business areas. Our strategic initiatives, which span across our three businesses, include investing in next generation space technology and services, expanding our presence in high growth markets and geographies, scaling and expanding skills, talent and operations to meet current and future market demand and leveraging strategic M&A to complement organic growth. We continue to make good progress against our long-term strategic plan.

MDA Space is well positioned to capitalize on strong customer demand and robust market activity given our diverse and proven technology offerings. Our growth pipeline is significant and underpinned by existing and new programs and our book of business is healthy. We see activities ramping up in line with our expectations and are encouraged by the team’s solid execution.

For fiscal 2024, we are raising our full year revenue guidance to $1,045 – $1,065 million from $1,020 – $1,060 million previously, representing robust year-over-year growth of approximately 30% at the mid-point of guidance compared to 2023 levels. We are narrowing our full year adjusted EBITDA range to $205 – $210 million from $200 – $210 million previously, representing approximately 19% – 20% adjusted EBITDA margin. We reaffirm our expectations that capital expenditures will be $200 – $220 million, comprising primarily growth investments to support CHORUS and the previously outlined growth initiatives across our three business areas. We continue to expect favourable working capital contributions related to the Telesat Lightspeed program to result in positive free cash flow in 2024 allowing us to continue to deleverage our balance sheet

FINANCIAL OVERVIEW  

KEY INDICATORS SUMMARY

REVENUES BY BUSINESS AREA

Revenues

Consolidated revenues for the third quarter of 2024 were $282.4 million, representing an increase of $77.7 million (or 38.0%) from the third quarter of 2023. The year-over-year increase in revenues was driven by higher work volumes across our business, with strong contributions from our Satellite Systems and Robotics & Space Operations businesses.

By business area, revenues in Geointelligence for the third quarter of 2024 were $48.3 million, which represents a decrease of $0.1 million (or 0.2%) from the same period in 2023 reflecting steady work volumes. Revenues in Robotics & Space Operations for the third quarter of 2024 were $66.5 million, which represents an increase of $4.6 million (or 7.4%) from the same period in 2023. The year-over-year increase is primarily driven by higher volume of work performed on the Canadarm3 program. Revenues in Satellite Systems for the third quarter of 2024 were $167.6 million, which represents an increase of $73.2 million (or 77.5%) from the same period in 2023 driven by higher contributions in the latest quarter from new programs including Telesat Lightspeed and the authorization to proceed (ATP) for an undisclosed customer for a NGSO satellite constellation (announced in Q4 2023). 

Consolidated revenues for the nine months ended September 30, 2024 were $733.5 million, representing an increase of $130.9 million (or 21.7%) from the same period of 2023. The year-over-year increase in revenues was primarily driven by increased work volume from our Satellite Systems and Robotics & Space Operations businesses.

By business area, revenues in Geointelligence for the first nine months of 2024 were $154.7 million, which represents an increase of $7.1 million (or 4.8%) from the same period in 2023 reflecting higher work volume on CSC and other new programs in 2024. Revenues in Robotics & Space Operations for the first nine months of 2024 were $215.1 million, which represents an increase of $31.6 million (or 17.2%) from the same period in 2023. The year-over-year increase is primarily driven by the higher volume of work performed on the Canadarm3 program. Revenues in Satellite Systems for the first nine months of 2024 were $363.7 million, which represents an increase of $92.2 million (or 34.0%) from the same period in 2023 driven by higher contributions from new programs including the Telesat Lightspeed program and the ATP for an undisclosed customer for a NGSO satellite constellation. 

Gross Profit and Gross Margin

Gross profit reflects our revenues less cost of revenues. Q3 2024 gross profit of $75.7 million represents a $18.0 million (or 31.2%) increase over Q3 2023 driven by higher work volume in the current quarter. Gross margin in Q3 2024 was 26.8%, which is in line with the Company’s expectations and compares to gross margin of 28.2% in Q3 2023. The year- over-year change in gross margin is driven by evolving program mix and higher depreciation expense as new assets come into service. 

For the nine months ended September 30, 2024, gross profit of $199.8 million represents a $13.6 million (or 7.3%) increase over 2023 levels. Gross margin for the nine months ended September 30, 2024 was 27.2% which is in line with the Company’s expectations and compares to 30.9% for the same period in 2023. The year-over-year change in gross profit and gross margin metrics is driven by evolving program mix and higher depreciation expense as new assets come into service. 

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA for the third quarter of 2024 was $55.5 million compared with $42.8 million for the third quarter of 2023, representing an increase of $12.7 million (or 29.7%) year-over-year driven by higher volume of work and steady operating expenses. Adjusted EBITDA margin of 19.7% for the third quarter of 2024 is consistent with the Company’s full year margin guidance of 19-20% and compares to adjusted EBITDA margin of 20.9% reported in the third quarter of 2023.

Adjusted EBITDA for the nine months ended September 30, 2024 was $146.2 million compared with $132.1 million for the same period in 2023, representing an increase of $14.1 million (or 10.7%) year-over-year. The improvement was driven by higher volumes of work performed year-over-year somewhat offset by program mix. Adjusted EBITDA margin was 19.9% for the nine months ended September 30, 2024 compared with 21.9% for the same period in 2023.

Adjusted Net Income

Adjusted net income for the third quarter of 2024 was $34.7 million compared with $21.7 million for the third quarter of 2023, representing an increase of $13.0 million (or 59.9%) year-over-year driven by higher operating income in the latest quarter.

Adjusted net income for the nine months ended September 30, 2024 was $76.0 million compared with $70.1 million for the same period in 2023, representing a increase of $5.9 million (or 8.4%) year-over-year driven by the aforementioned gross profit variance. 

Backlog

Backlog is comprised of our remaining performance obligations which represent the transaction price of firm orders less inception to date revenue recognized and excludes unexercised contract options and indefinite delivery or indefinite quantity contracts. Backlog as at September 30, 2024 was $4,578.1 million, an increase of $1,509.4 million compared with the backlog at September 30, 2023 driven by new order bookings, partially offset by continued conversion of our backlog into revenue. The following table shows the build up of backlog for Q3 2024 as compared with the same period in 2023. 

CONFERENCE CALL AND WEBCAST

MDA Space will host a conference call and webcast to discuss these financial results on Friday, November 15, 2024 at 8:30 a.m. ET. Interested parties can join the call by dialing 416-764-8609 (Toronto area) or 1-888-390-0605 (toll-free North America) or +44-800-652-2435 (toll-free United Kingdom) and entering the conference ID 94799731. A live webcast of the conference call and an accompanying slide presentation will be available at https://mda-en.investorroom.com/events-presentations.

A replay of the conference will be archived on the MDA Space website following the call. Parties may also access a recording of the call which will be available until November 22, 2024, by dialing 1-888-390-0541 and entering the passcode  799731 #.

NON-IFRS FINANCIAL MEASURES

This press release refers to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, the measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Earnings per Share, Order Bookings, Net Debt and Free Cash Flow, to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We define EBITDA as net income (loss) before: i) depreciation and amortization expenses, ii) provision for (recovery of) income taxes, and iii) finance costs. Adjusted EBITDA is calculated by adding to and deducting from EBITDA, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management’s view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) unrealized foreign exchange gain or loss ii) unrealized gain or loss on financial instruments and iii) share-based compensation expenses, and iv) other items that may arise from time to time. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. Order Bookings is the dollar sum of contract values of firm customer contracts. Adjusted Net Income is calculated by adding to and deducting from net income, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management’s view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) amortization of intangible assets related to business combinations, ii) unrealized foreign exchange gain or loss, iii) unrealized gain or loss on financial instruments, and iv) share-based compensation expenses, and iv) other items that may arise from time to time. Adjusted Earnings per Share represents Adjusted Net Income divided by the weighted average number of shares outstanding. Order Bookings is indicative of firm future revenues; however, it does not provide a guarantee of future net income and provides no information about the timing of future revenue. Net Debt is the total carrying amount of long-term debt including current portions, as presented in the Q2 2024 Financial Statements, less cash (or plus bank indebtedness) and excluding any lease liabilities. Net Debt is a liquidity metric used to determine how well the Company can pay all of its debts if they were due immediately. Free Cash Flow is a supplemental measure used to monitor the availability of discretionary cash generated, and available to the Company to repay debt, make strategic investments, and meet other payment obligations. We define Free Cash Flow as operating cash flows less net capital expenditures.

FORWARD-LOOKING STATEMENTS

This press release may contain forward‐looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking information. Such risks and uncertainties include, but are not limited to the factors discussed under “Risk Factors” in the Company’s Annual Information Form (AIF) dated February 28, 2024 and available on SEDAR+ at www.sedarplus.com. MDA Space does not undertake any obligation to update such forward‐looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

ABOUT MDA SPACE

Building the space between proven and possible, MDA Space MDA is a trusted mission partner to the global space industry. A robotics, satellite systems and geointelligence pioneer with a 55-year+ story of world firsts and more than 450 missions, MDA Space is a global leader in communications satellites, Earth and space observation, and space exploration and infrastructure. The MDA Space team of more than 3,000 space experts in Canada, the US and the UK has the knowledge and know-how to turn an audacious customer vision into an achievable mission – bringing to bear a one-of-a-kind mix of experience, engineering excellence and wide-eyed wonder that’s been in our DNA since day one. For those who dream big and push boundaries on the ground and in the stars to change the world for the better, we’ll take you there. For more information, visit www.mda.space.

MDA Space Ltd.
Unaudited Interim Condensed Statement of Comprehensive Income
For the three and nine months ended September 30, 2024 and 2023
(In millions of Canadian dollars except per share figures) 

MDA Space Ltd.
Unaudited Interim Condensed Statement of Financial Position
September 30, 2024
(In millions of Canadian dollars) 

MDA Space Ltd.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
For the three and nine months ended September 30, 2024 and 2023
(In millions of Canadian dollars) 

RECONCILIATION OF NON-IFRS MEASURES

The following tables provide a reconciliation of net income to EBITDA, adjusted EBITDA, and adjusted net income:

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SOURCE MDA Space

HIGHLIGHTS

• Sigma Lithium achieved strong operational performance at its Greentech industrial plant.
  • Produced 60,237t of Quintuple Zero Lithium Concentrate in 3Q24, higher than the 60,000t guidance 
  • Further increased shipping cadence to quasi monthly volumes sold of 22,000t
  • Sales volumes totaled 57,483t in 3Q24, increasing 9% q-on-q
  • Successfully executed Plant 1 efficiency capex revamp implementation
  • Expects 4Q24 production and sales volumes of at least 60,000t
• Maintained one of the lowest cash unit operating costs in the industry, with CIF China averaging US$ 513/t, down from US$ 515/t in 2Q24.
• Commercial strategy adapted to capitalize on seasonal restocking trends, weather seasonality more effectively, and outperform market price benchmarks
  • Average CIF sales price for the third quarter of US$ 820/t
• Robust operating cash flow generation of US$ 34 million in the third quarter enabled the Company to maintain a healthy cash position of US$ 66 million at quarter-end while reducing debt by $40 million
• Signed final development loan agreement with the BNDES, fully financing its plant 2 expansion, further de-risking construction
  • Term: 16 years with 18 months amortization grace period
  • Sub-Treasury Interest Rate: BRL 7.53%, or USD 2.5% at prevailing swap rates
• Continued to advance Plant 2 construction with earthworks and engineering

Conference Call Information

The Company will conduct a conference call to discuss its financial results for the third quarter at 8:00 a.m. EST on Friday, November 15, 2024. Participating in the call will be Co-Chairperson and Chief Executive Officer, Ana Cabral, Chief Financial Officer, Rogerio Marchini, and Executive Vice President for Corporate Affairs and Strategic Development, Matthew DeYoe. To register for the call, please proceed through the following link Register here. For access to the webcast, please Click here.

SÃO PAULO, Nov. 15, 2024 /PRNewswire/ — Sigma Lithium Corporation SGML BVMF: S2GM34,SGML, a leading global lithium producer dedicated to powering the next generation of electric vehicles with carbon neutral, socially and environmentally sustainable lithium concentrate, announces its results for the third quarter ended September 30, 2024.

Ana Cabral, Co-Chairperson and CEO said: “This quarter we achieved our production and low industry cost targets, generating robust free cash flow and demonstrating our operational resilience to lithium cycles. We also benefited from our shifted commercial strategy to navigate industry seasonality, enabling us to secure higher average realized prices compared to benchmarks.

“Over the last year we are proud to have transformed Sigma from an emerging producer into an industry leader, demonstrating the operational and financial resilience of a mature producer, with dependability and consistency. Meanwhile we have delivered on all of our climate goals, reaching  Net Zero one year in advance of our target and 27 years ahead of the industry, with our Quintuple Zero Green Lithium. We are confident that over the lithium cycles, our capabilities to execute to strategy will deliver long-term value for Sigma and all of its stakeholders“, Ms. Cabral concluded.

Key Performance Metrics for Quarter Ended September 30, 2024 (US$)

Revenues in the third quarter totaled US$44.2 million or US$20.9 million net of provisional price adjustments.

The Company has undergone a significant evolution in its commercial relationship with trading companies, strengthening commercial conditions. As a result of this change in strategy the Company concluded the final settlement of provisional sales invoices from previous quarters conducted through our traders, generating an accounting adjustment of US$(23.3) million. Importantly, these are primarily non-cash accounting closing settlements and do not have an effect on the future earnings potential of the Company.

In 3Q, Sigma Lithium maintained one of the lowest cash unit operating costs in the industry, with CIF China averaging US$ 513/t, down from US$ 515/t in 2Q24, in line with target levels.  

• Cash unit operating costs⁽³⁾ for lithium concentrate produced at the Company’s Grota do Cirilo operations in the third quarter averaged US$ 395/t (including a temporary US$25/t for mobile crushers).
• On an FOB Vitoria⁽³⁾ basis (which includes transportation and port charges) costs averaged US$449/t.
• On a CIF China basis⁽³⁾ (includes ocean freight, insurance and royalties) costs averaged US$513/t.

Robust operating cash flow generation of US$ 34 million in the third quarter enabled the Company to maintain a healthy cash position of US$ 66 million, ultimately reflecting the non-cash nature of the accounting adjustments to the quarter.

• The Company delivered third quarter cash adjusted EBITDA⁽⁴⁾ of US$(10.6) million. Reported EBITDA for the third quarter totaled US$(12.8) million.
• The cash adjusted EBITDA number excludes US$0.8 million of non-recurring expenditures, primarily related to capital markets and cost initiatives, and US$1.4 million in non-cash stock-based compensation expenses.

Net income in the quarter totaled US$(25.1) million or US$(0.23) per diluted share outstanding. These reported results were affected by the aforementioned US$(23.3) million in accounting adjustments.

Operational Update

Sigma Lithium achieved strong operational performance at its Greentech industrial plant in the third quarter. Production of Sigma Lithium’s Quintuple Zero Lithium Concentrate totaled 60,237t, up 22% from 2Q24 and ahead of the 60,000t guidance. This includes numerous daily production records and periods of sustained operations above 860t per day. The Company expects 4Q24 production of lithium concentrate to reach at least 60,000 tonne.

Commercial Strategy Update

Sigma Lithium sold 57,483 tonnes of its Quintuple Zero Green Lithium concentrate in the third quarter, when its operational performance enabled it to further increase shipping cadence to quasi monthly volumes sold of 22,000t. As a result, the Company made two full 22,000t shipments during the quarter and supplemented these volumes with 13,483t sold at the Port customs warehouse.

Operational reliability and a consistent shipment pattern lowered the Company’s export credit risk, increasing the availability and lowering the interest rate of its trade finance lines. This generated direct benefits for Sigma’s commercial strategy, enabling the Company to further geographically diversify its accounts receivables, shipping to three distributors across the world: Glencore AG (Europe), Mitsubishi Corporation RtM International Pte. Ltd (Japan/ Singapore), and International Resources Holdings (UAE/Abu Dhabi).

The interest rate cost of the Company’s trade finance export credit lines decreased substantially over the year from nearly 15.5% in 4Q23 to 9.0% in 3Q24. In parallel, the amount of available export trade lines exceeded US$ 100 million in the year.

The increased financial flexibility enabled the Company to strengthen its commercial strategy and change its distribution relationship with trading companies from “traders as principals” to “traders as distributors”. This strategy shift allows Sigma to capitalize on annual restocking trends of chemical refiners, weather seasonality more effectively and outperform market price benchmarks, achieving average CIF sales price for the third quarter of US$ 820/t.

While Sigma Lithium ships and sells monthly to its trading partners, its goal is to build maximum flexibility in the final re-sale to clients to benefit from the established seasonality of refiners’ restocking periods. When combined with its superior metallurgical properties and the associated value-in-use driven cost savings to customers, Sigma believes it has positioned itself to drive superior price realizations over time.

This commercial strategy of “trader as a distributor” was not yet in place during Company’s second through seventh shipments, when trading partners served as the principals to the transaction. The accounting provisional price adjustment booked in this quarter was mainly a result of the booking of final invoice settlement and closing of these trades.

Phase 2 Expansion

Recall, on April 1, 2024, the Board of Directors announced a Final Investment Decision for the Company’s Phase 2 Greentech Plant expansion. The project is expected to add 250,000 tonnes of production capacity to the current Phase 1 operation. Importantly, the Company has already received all relevant licenses to build and operate this second Greentech Plant. 

In 3Q, Sigma Lithium initiated earthworks by completing clearing of the terrain for arid and semi-arid vegetation suppression (including fauna capture and classification) for the entire industrial project, including future phase 3 construction of production plant. Total building and commissioning are expected to occur over a 12-month period, with budgeted capex for Phase 2 of BRL492 million (approximately US$90mm at current exchange rates).

On August 29, the National Brazilian Bank for Economic and Social Development (BNDES) delivered a binding commitment to Sigma for a BRL 487mm development loan to finance this expansion.

On October 10, Sigma and the BNDES signed the final binding loan agreement, concluding the closing of the loan package. The first disbursement of the development loan is pending the Company posting bank guarantees with BNDES. This disbursement shall reimburse the capex already disbursed by the Company since first approval of the development bank loan.

The key terms and conditions of the development loan are:

• Amount: BRL 487 million
• Term: 192 months (16 years)
• Interest Rate: BRL 7.53% per year (US$ at approximately 2.5% at prevailing swap rates).
• Amortization Grace Period: 18 months – Calendarized Amortization: 174 months
• Assets in Collateral: Not required. Development Loan shall be secured by letter of credit (“fianca bancaria”) issued by a BNDES registered financial institution.

Balance Sheet & Liquidity

Robust operating cash flow generation of US$ 34 million during the third quarter enabled the Company to maintain a healthy cash position. Sigma Lithium ended the third quarter with US$65.6 million in cash and cash equivalents.

Free cash flow in the quarter totaled US$32 million primarily related to a reduction in working capital associated with the collection of accounts receivable.

Cash generation in the third quarter enabled the Company to repay certain export credit debt, reducing outstanding trade line balances. At the end of the quarter, the Company had US$181 million in short-term and long-term debt. This included US$59 million in drawn and available, but unutilized, additional liquidity through trade finance lines.

Capital expenditures during the third quarter totaled US$2.5 million (C$3.1 million) directed towards maintenance, mining, Phase 2 expansion work, and incremental investments in the Greentech Plant. 

ABOUT SIGMA LITHIUM

Sigma Lithium SGMLSGML BVMF: S2GM34)) is a leading global lithium producer dedicated to powering the next generation of electric vehicle batteries with carbon neutral, socially and environmentally sustainable chemical-grade lithium concentrate.

Sigma Lithium is one of the world’s largest lithium producers. The Company operates at the forefront of environmental and social sustainability in the EV battery materials supply chain at its Grota do Cirilo Operation in Brazil. Here, Sigma produces Quintuple Zero Green Lithium at its state-of-the-art Greentech lithium beneficiation plant that delivers net zero carbon lithium, produced with zero dirty power, zero potable water, zero toxic chemicals and zero tailings’ dams.

Phase 1 of the Company’s operations entered commercial production in the second quarter of 2023. The Company has issued a Final Investment Decision, formally approving construction to double capacity to 520,000 tonnes of concentrate through the addition of a Phase 2 expansion of its Greentech Plant.

Please refer to the Company’s National Instrument 43-101 technical report titled “Grota do Cirilo Lithium Project Araçuaí and Itinga Regions, Minas Gerais, Brazil, Amended and Restated Technical Report” issued March 19, 2024, which was prepared for Sigma Lithium 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; and William van Breugel, P.Eng (the “Updated Technical Report”). The Updated Technical Report is filed on SEDAR and is also available on the Company’s website.

For more information about Sigma Lithium, visit our website 

Sigma Lithium

LinkedIn: Sigma Lithium
Instagram: @sigmalithium
X: @SigmaLithium

FORWARD-LOOKING STATEMENTS

This news release includes certain “forward-looking information” under applicable Canadian and U.S. securities legislation, including but not limited to statements relating to timing and costs related to the general business and operational outlook of the Company, the environmental footprint of tailings and positive ecosystem impact relating thereto, donation and upcycling of tailings, timing and quantities relating to tailings and Green Lithium, achievements and projections relating to the Zero Tailings strategy, achievement of ramp-up volumes, production estimates and the operational status of the Grota do Cirilo Project, and other forward-looking information. All statements that address future plans, activities, events, estimates, expectations or developments that the Company believes, expects or anticipates will or may occur is forward-looking information, including statements regarding the potential development of mineral resources and mineral reserves which may or may not occur. Forward-looking information contained herein is based on certain assumptions regarding, among other things: general economic and political conditions; the stable and supportive legislative, regulatory and community environment in Brazil; demand for lithium, including that such demand is supported by growth in the electric vehicle market; the Company’s market position and future financial and operating performance; the Company’s estimates of mineral resources and mineral reserves, including whether mineral resources will ever be developed into mineral reserves; and the Company’s ability to operate its mineral projects including that the Company will not experience any materials or equipment shortages, any labour or service provider outages or delays or any technical issues. Although management believes that the assumptions and expectations reflected in the forward-looking information are reasonable, there can be no assurance that these assumptions and expectations will prove to be correct. Forward-looking information inherently involves and is subject to risks and uncertainties, including but not limited to that the market prices for lithium may not remain at current levels; and the market for electric vehicles and other large format batteries currently has limited market share and no assurances can be given for the rate at which this market will develop, if at all, which could affect the success of the Company and its ability to develop lithium operations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether because of new information, future events or otherwise, except as required by law. For more information on the risks, uncertainties and assumptions that could cause our actual results to differ from current expectations, please refer to the current annual information form of the Company and other public filings available under the Company’s profile at www.sedarplus.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Financial Tables

The Company’s independent auditor has not performed a review of the unaudited interim consolidated financial statements for the three-month period ended March 31, 2024, the six-month period ended June 30, 2024, or the interim consolidated financial statements for the nine months ended September 30, 2024 in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by the entity’s auditor.

Figure 1: Unaudited Income Statement Summary

Figure 2: Unaudited Balance Sheet Summary

Figure 3: Unaudited Cash Flow Statement Summary

Land Transactions:

In connection with the acquisition of additional properties located in areas of interest for Sigma Mineração S.A. (“SMSA”), an indirectly owned subsidiary of the Company, SMSA has amended the previous Credit Facility Agreement entered with Tatooine Investimentos S.A. (“Tatooine”) in 2023, increasing the amount by US$3 million, of which US$0.8 million is to be disbursed. Tatooine will continue to acquire such properties and shall grant the possession of the area to SMSA, which shall use it to continue with the Grota do Cirilo Project. This agreement and its amendments are qualified as a related party transaction under the policies of the TSXV, given that Marina Bernardini, a current officer of SMSA, has an economic interest in Tatooine.

Footnotes & Reconciliations:

To provide investors and others with additional information regarding the financial results of Sigma Lithium, we have disclosed in this release certain non-IFRS operating performance measures such as realized price per tonne, unit operating costs, EBITDA, EBITDA margin, Adjusted cash EBITDA, and Adjusted cash EBITDA margin. These non-IFRS financial measures are a supplement to and not a substitute for or superior to, the Company’s results presented in accordance with IFRS.  The non-IFRS financial measures presented by the Company may be different from non-GAAP/IFRS financial measures presented by other companies. Specifically, the Company believes the non-IFRS information provides useful measures to investors regarding the Company’s financial performance by excluding certain costs and expenses that the Company believes are not indicative of its core operating results. The presentation of these non-U.S. GAAP/IFRS financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP/IFRS.  A reconciliation of these financial measures to IFRS results is included herein.

1: Average selling price, CIF represents revenues associated with shipments invoiced during the reporting period netted out against total volume shipped. The final price may be higher or lower than the invoiced price based on future price movements.

2: Reported revenue per tonne, CIF equivalent reflects net revenues for the quarter and tonnes shipped. Given a change in accounting policy in 3Q, the Company is not realizing the ocean freight and insurance costs associated with its 3Q shipments until product has been received by the final customer. Thus, this exercise is grossing up the reported revenues for these costs to create a more peer and market comparable figure. The final price may be higher or lower than the estimated realized price based on future price movements.

3. Cash unit operating costs include mining, processing, and site based general and administration costs. It is calculated on an incurred basis, credits for any capitalised mine waste development costs, and it excludes depreciation, depletion and amortization of mine and processing associated activities. When reported on an FOB basis, this metric includes road freight, and port related charges. When reported on a CIF basis it includes ocean freight, insurance and royalty costs. Royalty costs include a 2% government royalty and a 1% private royalty.

For CIF production cost analysis purposes, Sigma is considering the ocean freight costs of product that sailed in the month of reporting. However, for accounting purposes, and thus in this quarter’s reported cost of good sold and revenues, the ocean freight cost is to be recognized the moment material is delivered to the customer. Overtime, this will even out as a consistent pattern of boats are shipped and delivered, but as it is a newly adopted accounting policy, it is translating to a lower reported dollar revenue and cost for 3Q24 than what is implied by our CIF production and revenue accounting above.

4. Adjusted Cash EBITDA is a measure of recurring core earnings profile of the company. It is calculated as revenues minus cash operating and selling expenses. The calculation excludes non-cash items such as depreciation and amortization and stock-based compensation expenses as well as certain non-recurring cash expenses such as legal expenses associated with capital markets or strategic initiatives. 

Adjusted Cash EBITDA Bridge

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SOURCE Sigma Lithium Corporation