Sigma Lithium Resources Corp. [SGMA-TSXV; SGMLF-OTCQB] plans to complete a non-brokered private placement of up to 7.5 million common shares of the company to be issued at a price of $4 per common share for aggregate gross proceeds of up to $30-million.
Institutional investors, including leading global investors focused on ESG & sustainability, are expected to comprise the majority of the investors in the offering. The closing of the offering is subject to customary conditions, including the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
XP Investments US LLC, Cormark Securities Inc. and National Bank Financial Inc. acted as financial advisors and may receive a finder’s fee. This compensation will be comprised of cash fees of up to 6% of the proceeds from subscribers introduced by finders and warrants equal to up to 6% of the shares purchased by subscribers (each such warrant entitling the finder to acquire one common share at an exercise price of C$4.00 per share and exercisable for one year after closing of the offering). Other parties, including the A10 Group, shall also receive a finder’s fee.
In this regard, Sigma entered into an agreement with the A10 Group to provide services in respect of the offering, and will be entitled to finder’s compensation for purchases by subscribers it introduces.
Net proceeds of the offering as outlined below and for general corporate purposes. The expected specific uses of net proceeds are to fund the workstreams added in December 2020 aimed at upsizing the 100%-owned Grota do Cirilo lithium project in Brazil, solidifying Sigma’s unique market leadership as a future supplier of “low-carbon” high-purity 6% battery-grade lithium concentrate.
Development of Phase 2 production (the Barreiro deposit) is planned for 2023 with the preparation of a pre-feasibility study (and subsequently a feasibility study) to update the technical report of the Project to include Phase 2 in addition to Phase 1 (the development of the Xuxa deposit).
Pre-development of Phase 3 production planned for 2024-2025 includes a 20,000-metre diamond drill program aimed at adding mineral resources and preparation of a preliminary economic assessment study, which is also to be used to update the Feasibility Study Report.
In February 2 trading, shares of Sigma gained $0.19 to $4.30, or 4.5%, on a volume of 27,200 shares traded.