Draft Article

This article has not been published, as a result this article will not be visible to the public

Will Sigma Lithium Be Sold?

By Patricia Miller

Aug 17, 2023

3 min read

Amid intensifying global lithium demand, Sigma Lithium (SGML) weighs its options, from a potential sale to strategic partnerships. Could TSLA be interested?

Group of electric cars with pack of battery cells module on platform

As the electric vehicle battery market expands, Sigma Lithium (NASDAQ: SGML) (TSX.V: SGML) (B3: S2GM34), a prominent lithium producer, finds itself at a crossroads. Company leaders recently disclosed discussions about a potential acquisition, facilitated by the Bank of America (NYSE: BAC), against the backdrop of an increasingly constrained lithium supply.

Sigma has newly bolstered its production capabilities. Earlier this year, the company launched operations at the Grota do Cirilo hard rock lithium project in Brazil. This venture aims to allocate roughly a quarter of its yield to South Korea’s LG Energy Solution, with the balance earmarked for spot market sales.

Bank of America, a long-standing partner to Sigma, has spearheaded meetings over the past four months with entities keen on acquiring the miner, revealed Sigma's CEO, Ana Cabral-Gardner. Emphasizing her commitment to stakeholder values, Cabral-Gardner said the firm is "focused on alternatives that embrace the importance of our shareholders' values of social sustainability." However, Bank of America opted not to comment on these proceedings.

#Rumors of Tesla's Interest

Earlier in February, Bloomberg News hinted at Tesla Inc's (NASDAQ: TSLA) potential bid for Sigma, a Vancouver-based enterprise boasting a market valuation of $4.1 billion on Nasdaq. Responding to these speculations, Cabral-Gardner confirmed that "since the rumors started in February, the management continues to work to understand strategic alternatives to strengthen Sigma's and Brazil's unique environmentally competitive position on the midstream of the global supply chain."

#Potential Transaction Considerations

While Bank of America aids in coordinating acquisition meetings, Sigma remains undecided about selecting a financial advisor for potential transactions. Echoing this sentiment, Cabral-Gardner noted, "Maybe I'm not selling. Maybe I'm partnering with someone. I don't know what I'm doing yet." Using a nuptial analogy, she continued, "We need to find someone to marry, and when we find someone to marry, then we choose a priest." Importantly, she also clarified that selling the Brazilian mine separately from the company is not on Sigma's agenda, emphasizing that "the company is the asset."

#Brazil's Lithium Market and Sigma's Financial Outlook

Brazil, predominantly biofuel-driven, witnesses low domestic lithium demand. As a result, the nation's lithium output predominantly targets export markets. Financial projections indicate that Sigma's mine is set to achieve an annual free cash flow of $455 million in its initial production phase. According to FactSet data, seven market analysts currently advocate purchasing Sigma's stock, estimating its value to be 37% above present trading levels. 

#MAJOR Lithium Potential in Nunavik

Amidst the noise of popular investments, there lies value waiting to be discovered in overlooked stocks that hold untapped potential.

Eureka Lithium, a mining company listed on the CSE, has partnered with award-winning prospector Shawn Ryan, one of Canada’s most respected leaders in mineral discovery. What’s more, the company has secured first-mover advantage to uncover the high-grade lithium potential of a geologically abundant part of Quebec.

Nunavik, a vast, largely unexplored area that comprises the northern third of Quebec, is now being recognized for its potential to host deposits of spodumene, a lithium-rich mineral. That’s why Eureka Lithium has been accumulating a strategic land package in this area, making it the largest landowner in Nunavik’s exciting lithium district.

Size isn't everything, but Eureka appears to have impressive numbers to back these acquisitions up. That’s because data from the Quebec government’s sediment database shows the company’s land has lithium concentrations in the 99th percentile of the ENTIRE province.

Additionally, all three of the company’s Nunavik properties have the highest lithium and cesium lake bottom sediment concentrations recorded by the Quebec government’s sediment database. 

Better still, Nunavik currently hosts two nickel mines, highlighting its mineral-rich profile, while it is also close to deep seaport access.

The company’s land packages are situated in Raglan West, Raglan South and New Leaf. Here, Eureka Lithium plans to carry out an extensive exploration program in the near term, which includes drilling tests of high-priority targets in the area. These targets consist of plentiful outcrops, including mapped pegmatites, across the company's land holding.

If you are seeking an opportunity with major upside potential in the lithium sector, ensure Eureka Lithium is on your radar.

Related Articles:

Explore more on these topics:

Metals and Mining Lithium Materials

Important Notice And Disclaimer

PAID ADVERTISEMENT

This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Investing Whisperer on behalf of Eureka Lithium Corp to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of sixty thousand US dollars to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.

CHANGES IN SHARE TRADING AND PRICE

Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.

NO OFFER TO SELL OR BUY SECURITIES

This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.

INFORMATION

Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position.

This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy. Any statements made should not be taken as an endorsement of analyst views.

NO FINANCIAL ADVICE

The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.

FORWARD LOOKING STATEMENTS

This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.

INDEMNIFICATION/RELEASE OF LIABILITY

By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.

TERMS OF USE AND DISCLAIMER

By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here https://www.valuethemarkets.com/terms-conditions/ and acknowledge that you have reviewed the Disclaimer found here https://www.valuethemarkets.com/disclaimer/. If you do not agree to the Terms of Use, please contact valuethemarkets.com to discontinue receiving future communications.

INTELLECTUAL PROPERTY

All trademarks used in this communication are the property of their respective trademark holders. Other than valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than valuethemarkets.com.

AUTHORS: VALUETHEMARKETS

valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above. This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

ValueTheMarkets do not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. ValueTheMarkets have been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of valuethemarkets.com, has been paid for the production of this piece by the company or companies mentioned above.