It completed the equity funding requirement to build the Grota do Cirilo lithium project in an August placement, upsized by a third to US$13.3 million, priced at C$2.15 per share.

It had signed a term sheet for a US$45 million senior secured project finance facility with Societe Generale in June.

These amounts would be complemented by a $27 million production pre-payment agreement with Mitsui & Co to fully fund the project, Sigma said yesterday.

"The company reached major milestones despite the challenging circumstances created by the global pandemic and a very poor pricing environment in lithium markets," it said.

"Although Sigma has secured the funding package for the development of the first phase of production, subject to finalising certain agreements, the company plans to continue to work closely with the Brazilian financial institutions with which it has been in discussions to access funding to potentially accelerate the second phase of production."

The first phase is designed to produce 220,000 tonnes per year of high purity, battery grade 6% lithium concentrate.

The second phase, currently slated for 2023, is expected to double production to 440,000tpa.

Sigma started producing lithium concentrate on a pilot scale in 2018.

Its plans for the coming months included executing an EPC contract.

It also planned to conclude formalising the binding take or pay agreement with Mitsui & Co for the first phase of production, increasing it to 160,000tpa of lithium concentrate.

A 2019 feasibility study for Grota do Cirilo's Xuxa deposit put initial capex at US$98.4 million, the after-tax NPV8 at $249 million and IRR at 43.2%, using a life of mine average price of $733/t CIF China for 6% lithium concentrate.

In its latest MD&A, Sigma said there was consensus lithium demand would experience a contraction in 2020 for the first time in nine years due to COVID-19.

"Despite the recent market weakness, the growth rate is still widely expected to be, on an average basis, about 20% per year up to 2030," it said.

"Management believes that, as a result of its potential production costs of 6% battery grade spodumene concentrate being amongst the lowest reported in the world, the project is expected to have attractive returns and sustainable economics, even at current market prices for lithium."

Sigma shares (TSXV: SGMA) rose from C$1.30 in June to $3 in July.

They last traded at $2.35, valuing it about $165 million (US$126 million).