Automakers have to build their own batteries & have stakes in lithium mines, page-7

Now let's have a look at what is available in the market to buy for Tesla or BYD and others.

And compare them with LTR.

It is rumoured by Reuters and Bloomberg News on Feb 17 2023 that Tesla was considering bid for Sigma Lithium. Then it was rumoured that Tesla was considering Sigma is expensive.

I believe Tesla will not buy Sigma. Tesla is no stupid or desperate to buy Sigma.

I'll tell you in advance before giving it's technical info; Sigma Lithium is nothing close to LTR's KV project, it's inferior to KV project.

Sigma Lithium has a mcap of US$3.9b (AU$5.7b). If Tesla wants to take over then it will pay at least a 20% premium and the mcap would be AU$7b.

If Sigma is $7b today, then LTR is at least $15b TODAY.

(It seems the US buyers have now understood that by our team's presos and they are buying in LTR atm).

Then you will ask why Tesla is not buying LTR?

You might also ask; Why didn't Tesla see what you see 5 years ago?

I'll answer the 2nd question first. Elon sees everything but but he can't do everything at the same time. He sees the big picture but there are many strategic key areas he needs to fix. He sometimes misses some of them. Lithium mining was one one them IMO. He failed to see the importance of lithium resources.

He could have bought LTR 3 years ago in March 2020 when just Covid was starting. LTR was around 10c (even it went down to 5.3c). The mcap was only $200m. He could have paid $1b (5x) and bought LTR at that time. He missed out.

Answer to first question;
Yes Tesla would love to buy LTR but they are too late IMO.
TG wouldn't sell it any less than $7 per share or $15b mcap I guess.
I think Elon would think LTR is too expensive even for Tesla now.

Actually LTR is still not expensive even at $15b mcap,
if Tesla thinks to pay $7b to Sigma.

Sigma is too expensive at $7b because it's not a Tier-1 resource.

Sigma's project has serious disadvantages.

Firstly, LTR KV project is 3 times larger than Sigma's patchy resource.

It has 3 different separated deposits by 8km away from each other).

A river goes through the middle of the main pit. And two other pits are next to rivers. That is a huge flood risk for the pits as the project is at the lower Amazon region. I am talking about Amazones !!!

Only 13 year mine life,

16:1 strip ratio in pits which means very high ration of removing waste ore. (High costs)

High grade but single steep declining pegmatites in every pit (Like CXO's main pegmatite)

Can only produce 5.5% spod concentrate, no more.

50-60% recover rate; very low... because only DMS processing,

Second hand Metso machines in process plant. That is going to be a very unreliable process plant. A process plant has to run 24/7. If it stops by a reason then the restarting is being very costly. You have to have the spares of critical machines.

Sigma is rushing to start its production in Q1-2023 but I don't know if they can. If they can I don't how long it will go in these conditions. There are a lots of risks in this project. I would never buy a project like this if I was Elon. I would come and talk to LTR again and make longer offtake agreements with more than 5 years with more 5 year options. (Tesla didn't take any optional 5years like LG and Ford as you know, only 5 years!!!)

LTR is superior in comparison to Sigma.


This is from Sigma's latest preso on Jan 2023;



Sigma considers LTR as the largest next generation producer.. Good on you Sigma.




Sigma will start 270kt 5.5% spod production this year (Phase-1) and then start Phase 2 and 3 next year.





The below is the plan of the Sigma's project.

They will start with Xuxa deposit which is a single high grade pegmatite with 11mt resource, but it's steeply declining and a river goes through the middle of it. So they have to open two pits at two sides of the river. I don't know how they will stop the river water running into the pits. They they will do it. .

The process plant is built next to Xuxa deposit.
The other 2 deposits are 8km away from the plant.

They will start digging in the other two deposits next year which both have around 21mt resource. And the ore will be transported to the plant next to Xuxa deposit.

The whole mine life is only 13 years.

As far as I can see there is a huge flood risk in this area.




This is the cross-section of Xuxa deposit below and Sigma's explanation.
One single pegmatite!

And a river goes through it.



And a river goes through it.
So Sigma will have to open pits next to it.
I hope they can stop the pits from flooding.






This is the cross-section Barreiro Deposit. It's again a single pegmatite which is steeply declining. The strip ratio is still very high.
21mt resource.




This the cross-section NDC (Nezinho Do Chicao) Deposit,
Again a single and steeper pegmatite.
21mt resource



Spod concentrate will be transported to the port by a 520km road through the jungle.



Good luck to Sigma nd its holders.