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Sigma Lithium Resources & Mitsui ink lithium supply pact

Mining News - Published on Mon, 08 Apr 2019

Image Source: Darwin Investing Network
Sigma Lithium Resources Corporation announced that it has entered into a binding heads of agreement for a strategic transaction with Mitsui & Co Ltd of Japan for a significant portion of the funding required for the capital expenditures and construction of Sigma’s commercial production plant at its Grota do Cirilo lithium project in Brazil. Sigma is also pleased to announce that it has received the initial tranche payment as per the Agreement.

Pursuant to the Agreement, Mitsui and Sigma have agreed as follows:

Production Pre-Payment: Mitsui will pre-pay Sigma the amount of USD 30,000,000 for battery-grade lithium concentrate supply of up to 55,000 tonnes annually over six years, extendable for five years. The initial tranche payment of USD 3,000,000 has been received by Sigma, while the disbursements of the remaining tranches are subject to customary conditions.

Offtake Rights: Mitsui has the right to annually buy from Sigma, at then-prevailing market prices, a supplementary amount of 25,000 tonnes of Products over a period of six years, extendable for five years.

Advancement of Deposit for Long-Lead Items: Mitsui will support Sigma in meeting its construction timetable by negotiating the terms of a disbursement of up to US$7,000,000 that will be used for the deposits required to purchase long lead items for the construction of the commercial production plant. Such payments are subject to Mitsui’s approval and will be deducted from the overall Pre-Payment.

Strategic Collaboration: Mitsui’s and Sigma’s technical, logistics and marketing teams will leverage Mitsui’s considerable global logistics and battery materials marketing expertise, whereby Sigma grants to Mitsui logistics, transportation and certain additional marketing and distribution rights to the Products. Both companies have also agreed to continue their current discussions regarding additional funding for further exploration and development of Sigma’s vast mineral properties.

Mitsui’s Participation in Sigma’s Future Capital Expenditure Financings and Offtake Rights for Production Expansion: As more fully described below, Mitsui will have the right to purchase a portion of future production expansion at the Grota de Cirilo project if it provides a relevant portion of the capital expenditure funding for the expansion.

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Posted By : Rabi Wangkhem on Mon, 08 Apr 2019
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