Canada’s move to protect mining sector shields takeover targets
Teck Resources spent much of last year fending off Glencore’s $23 billion takeover attempt before the Swiss company opted instead to just buy the company’s steelmaking coal business.
Sigma Lithium (NASDAQ, TSXV: SGML) said on Wednesday its strategic review process has now advanced to the final stage, with consortiums formed among certain interested parties, and a decision is expected by the end of the year.
In September, the Brazilian lithium miner announced that it was evaluating strategic alternatives for the company. Its flagship Grota do Cirilo project, located in Minas Gerais, is in its first phase with an annual production capacity of 36,700 tonnes of lithium carbonate equivalent.
Prior to the announcement, Sigma had already received multiple proposals for its lithium business, in particular the Grota do Cirilo project, whose production could reach 104,200 tonnes of LCE annually once in the third and final phase.
According to Sigma’s estimation, the deposits comprising the Grota do Cirilo project have total mineral reserves of 979,000 tonnes of LCE contained within 54.8 million tonnes of ore grading 1.44% lithium oxide. Only one deposit is currently in production.
The mine operation also places emphasis on efficiency and sustainability. Lithium concentrates are being produced from a plant that uses 100% renewable energy, 100% recycled water and 100% dry-stacked tailings.
In Wednesday’s update, the company noted that the “significant global strategic interest in the process” is a result of its large mineral resource scale, coupled with a low-cost open pit mineral reserves and leading position on environmental and social sustainability.
Sigma’s biggest investor, holding more than 40%, is A10 Investimentos, a Brazilian private equity fund that Sigma co-chief executive officer Ana Cabral-Gardner helped establish.
Shares of Sigma Lithium rose 4.2% at noon EDT following the update, with a market capitalization of C$3.9 billion ($2.8bn). However, for the year, the stock has fallen by about 8.0%.
