Q1 2024 Sigma Lithium Corp Earnings Call

Operator: Excuse me, ladies and gentlemen, this is the operator. Today's conference call is scheduled to begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Please wait; the conference will begin shortly.

Excuse me, ladies and gentlemen, this is the operator today's conference call is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.

Speaker Change: Please wait the conference will begin shortly.

Speaker Change: [music].

Music: Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music

Dennis: Good morning, everyone. My name is Dennis, and I will be your operator today. Welcome to the Sigma Lithium first quarter 2024 earnings conference call. Today's call is being recorded and is broadcast live on Sigma's website. On the call today are Company CEO, Ana Cabral Gardner, and Company Executive Vice President, Matthew DeYoe. We will now turn the call over to Matthew DeYoe.

Speaker Change: Okay.

Dennis: Good morning, everyone. My name is Dennis and I will be your operator today.

Dennis: Going to the equipment with the first quarter of 2024 earnings Conference call.

Today's call is being recorded and is broadcast live on <unk> website on the call today is the company's CEO, Anna Cabral Gardner and accompany the executive Vice President Matthew D.

Speaker Change: We will now turn the call over to Matthew D F.

Matthew DeYoe: Good morning, everyone. Thank you for joining us on our first quarter 2024 earnings conference call. On the call with me today is company CEO Ana Cabral. This morning, before the market opened, we published our 1Q earnings release and posted our financial results, which would be available through CDER and SEC. Before we begin, I'd like to cover two items. First, during the presentation, you'll hear certain forward-looking statements concerning our plans and expectations. We note that actual events or results could differ materially from changes in market conditions in our operations.

Speaker Change: Thank you Dennis good morning, everyone. Thank you for joining us on our first quarter 2024 earnings conference call.

Speaker Change: On the call with me today is the company's CEO Anna Cabral.

Speaker Change: This morning before market open we published our <unk>, our earnings release and posted our finance results, which would be available through SEDAR and SEC.

Matthew DeYoe: Additionally, earnings referenced in this presentation may exclude certain non-core and non-recurring items. Reconciliations to the most comparable IFRS financial measures and other associated disclosures, including descriptions of adjustments, can be found in the back of the release.

Speaker Change: Before we begin I'd like to cover two items first during the presentation you will hear certain forward looking statements concerning.

Ana Cabral: Our plans and expectations, we note that actual events or results could differ materially from changes in market conditions and our operations. Additionally earnings referenced in this presentation may exclude certain noncore and nonrecurring items reconciliations to the most comparable <unk> financial measures and other associated disclosures, including descriptions of.

Ana Cabral: Adjustments can be found in the back of the release with that I'll pass it over to Anna Anna.

Ana Cabral: Hi, thank you, Matt. Good morning, everyone.

Matthew DeYoe: With that, I'll pass it over to Ana. Ana? Hi. Thank you.

Anna: Thank you, Matt and good morning, everyone.

Anna: We're delighted to present you with our first quarter 2024 results without further Ado I encourage you to go to the following page.

Ana Cabral: We're delighted to present you with our first quarter 2024 results. And without further ado, I encourage you to go to the following page. We are extremely enthusiastic about our prospects as we have been advancing towards key catalysts of our planned double production capacity by 2025. The four key deliveries of this quarter were first the delivery of an increased premium pricing where we achieved a fixed floating formula of nine percent of the London Metals Exchange lithium equivalent, basically reaching a $1,290 price, that represents an 11% increase to the April 24th, Realize Pricing, the numbers we released for the first quarter of 2024.

Speaker Change: We are extreme.

Anna: Extremely enthusiastic about our prospects as we have been advancing towards key calculation of our plan to double production capacity.

Anna: 2025.

Anna: The four key deliveries of this quarter.

Anna: First the delivery of an increased premium pricing, where we achieved a fixed floating formula of 9% of the London metals exchange lithium equivalent.

Anna: Basically reaching eight $1290 price that represents an 11% increase to the April 24.

Anna: Uh huh.

Speaker Change: Realized pricing.

Speaker Change: The numbers, we released for the first quarter of 2024.

Speaker Change: So.

Ana Cabral: That clearly demonstrates that the pricing trend is upwards, an 11% increase from the previous month in an overall almost 30% increase from the average price of the previous quarter. The second catalyst is that we have been reaching our marks on achieving a low cost of production. We became the world's second lowest cost lithium concentrate producer this quarter, reporting a cost of $397 per ton.

That clearly demonstrate that the pricing trend is upwards and 11% increase from previous months in an overall.

Speaker Change: Almost 30% increase from the average pricing of the previous quarter.

Speaker Change: The second catalyst is that we have been reaching our marks on achieving a low cost of production. We became the worlds second lowest cost lithium concentrate producers this quarter reporting.

Speaker Change: Yes.

Cost of three.

Speaker Change: $397 per ton.

Ana Cabral: So more importantly, we have also managed to increase the operating life of the company to 25 years. We increased mineral reserves by 40%, auditing 77 million tons, 43 101. We also made a final investment decision on a fully funded expansion to double production to 520,000 tons annually, equivalent to 70,000 tons of LCE. On the next page, we demonstrate that we've been delivering our vision to combine this large-scale production with low cost and higher standards of environmental and social sustainability in lithium. These three elements are rarely achieved together.

Speaker Change: So more importantly, we have.

Speaker Change: Also managed to increase the operating life of the company to 25 years, we increased mineral reserves by 40%.

Speaker Change: Auditing 77 million tons 43 101.

Speaker Change: We also made a final investment decision on a fully funded expansion to double production to 520000 tons annually equivalent to 70000 tons LTE.

Speaker Change: So on the next page.

Speaker Change: <unk> demonstrates that we've been delivering on our vision to combine this large scale production with low cost and highest standards of environmental and social sustainability lithium. These three elements are rarely achieved together.

Ana Cabral: More often than not, scale and cost are achieved at the expense of traceability and environmental and social high standards. Alternatively, scale and traceability, and environmental and social high standards are achieved at the expense of delivering a resilient business, maintaining lowest production costs. So here we are delivering on all three, rather paradoxically, fronts. The next slide illustrates one of our key deliveries for the quarter, demonstrating how we became the fourth largest producing lithium industrial mineral complex globally. So Sigma is now the first non-Australian in the top five.

More often than not scaling costs are achieved at the expense of traceability and environmental high standards, Alternatively scale, and traceability and environmental and social high standards are achieved at the expense of delivering.

Our resilient business maintaining lowest production costs. So here, we are delivering on all the three rather paradoxically Bronx.

Speaker Change: The next slide illustrates one of our key deliveries for the quarter.

Speaker Change: Demonstrating how we became the fourth largest producing lithium industrial mineral complex globally. So Sigma now is the first non Australian and the top five.

Ana Cabral: We're trailing behind Greenbushes, Philbara, and Wadjina. Grota do Cirilo is now at 4.8 million tons of LCE equivalent, with a very high grade average at 1.4%. And that's the result of very well concatenated exploration, development, and feasibility deliveries achieved over the last 12 months. In this quarter, we delivered feasibility, and therefore we declared mineral reserves of 77 million tons, which were increased by 40%. It's a significant milestone. Why is that?

Speaker Change: We are trailing behind green bushes fuel Barbara and watching the.

Speaker Change: <unk> is now at $4 8 million tons of LTE equivalent with a very high grade average at one 4% and Thats. The result of a very well concatenated exploration development and visibility.

Speaker Change: Deliveries achieved over the last 12 months in this quarter, we delivered visibility and therefore, we declared mineral reserves.

Speaker Change: 77 million tons, which were increased in 14% is a significant milestone.

Ana Cabral: Because it lengthens the life of the project to 25 years. Therefore, as we expand to double capacity, we now have an operation that will be sustainable for 25 years. That is a moving target.

Speaker Change: Why is that because it lengthens the life of the project to 25 years and therefore as we expand to double capacity. We now have a operation that is sustained for 25 years that is a moving target in other words as we move.

Ana Cabral: In other words, as we move forward with our expansion plans, we will continue to unlock and transform the mineral resources we have into mineral reserves, backing up a similar duration in operational lives. Therefore, with this..., a mineral resource work executed, we demonstrate that Sigma Lithium is not at all constrained by the scale, the sheer scale of the mineral resources available on its properties. And here we are demonstrating the mineral resources in one of our four properties. With that, I move forward to page seven, where we again deliver on the mathematics of our number. And we love mathematics because numbers don't really bring an opinion with them.

Speaker Change: Forward with our expansion plans, we will continue to unlock and transform the mineral resources, we have into mineral reserves backing up a similar duration in operational life. Therefore with this.

Speaker Change: Mineral resource work executed we demonstrate that Sigma lithium is not at all constrained by the scale the sheer scale of Dominion resources available on these properties and here. We just are demonstrating the mineral resources in one of our <unk>.

Speaker Change: <unk> properties.

Speaker Change: With that I move forward to.

Speaker Change: The following page to page seven where we again deliver on the mathematics.

Speaker Change: Your numbers.

Speaker Change: We love mathematics, because numbers don't really bring an opinion without.

Ana Cabral: In 2024, as we discussed, we are delivering on every operational target we set out for ourselves, some of those were quite ambitious. And again, the numbers demonstrate the resilience and the longevity of our project, essentially combining scale, cost, and the highest global standards of environmental and social sustainability. We are sustaining nameplate capacity; we have been sustaining nameplate capacity since December 2023. In the first 10 months of production, we have already reached 178,000 tons, which delights us all, given our pioneering dry stacking circuit of the Dense Media Separation Industrial Plant, the Green Tact Plant.

Speaker Change: In 2024 as we do.

Speaker Change: Discussed we are delivering on every operational targets, we set out for ourselves some of those were quite.

Speaker Change: Issues.

Speaker Change: And again the numbers demonstrate the resilience and the longevity of our project essentially combining scale cost and the highest global standards of environmental and social stability.

Speaker Change: We are sustaining nameplate capacity that we have been sustaining nameplate capacity since December 2023.

Speaker Change: In the first 10 months of production we already reached.

Speaker Change: 178000 tons, which the licenses all given our pioneering.

Speaker Change: Dry stacking circuit of the dense media separation industrial plant the green Dot plant.

Ana Cabral: In parallel, the highest premium and the highest quality that our product exhibits is translated into premium pricing, and we have been able to do that consistently. The economics for our ninth shipment are again reaching our mark of capturing a nine percent share of the value of the lithium hydroxide posted at the London Metals Exchange, which is now equivalent to $1,290 per ton. That number is a fixed floating formula, and it will be adjusted by the Lithium Metals Exchange price one month after delivery. We were able to achieve that and, in parallel, deliver on our very low marks, on our very ambitious targets of a low cash cost at the plant.

Speaker Change: In parallel.

Speaker Change: The highest premium and the highest quality that our product is.

Speaker Change: Zibet is translated into premium pricing and we have been able to do that consistently.

Speaker Change: The economics for our nine shipment is again, reaching a mark.

Speaker Change: Of capturing a 9% share of the value of the lithium hydroxide posted at the London metals exchange.

Speaker Change: Which now equivalent is equivalent to $1290 per ton.

Speaker Change: That number is a fixed floating formula and you will be adjusted by that lithium metals exchange price.

Speaker Change: One month after delivery.

We were able to achieve that in parallel to deliver on a very low marks on our very ambitious March of our low cash cost at the plant. So we got to $397 per ton at industrial plant gate, which basically places as the lowest cost producer among.

Ana Cabral: So we got to $397 per ton at Industrial Plant Gate, which basically places us as the lowest cost producer amongst all lithium concentrate hard rock producers, all of our peers in Australia. So we're demonstrating that despite not yet getting to that scale, we have the cost discipline to be in second place, which makes us incredibly resilient to the lithium cycle. So we're here to stay.

Speaker Change: All lithium concentrate hard rock producers all of our peers in Australia. So we're demonstrating that despite not yet getting to that scale. We have the cost discipline to be at the second up position, which makes us incredibly resilient to.

Speaker Change: Lithium cycle let.

Speaker Change: Lithium cycles.

Speaker Change: So we're here to stay.

Ana Cabral: In the meantime, we've also maintained our liquidity. So, our cash position on March 31 at the end of the quarter was $108 million US. So phase two, the second green plant construction that will deliver double capabilities, is fully funded with cash at hand in the balance sheet. And we will continue to work on improving the capital structure to fund that construction. But regardless, the funding is in the bank, as we said, so we'll keep going with the construction project to meet our delivery timetables of around this time next year. We've been initiating the construction with Earthworks Engineering, Design, and the teams.

Speaker Change: In the meantime, we've also maintained our liquidity.

Our cash position in March 31 at the end of the quarter was 108 million U S dollars. So the phase III.

Speaker Change: The second Green plant construction that will deliver double capabilities is fully funded with cash at hand in the balance sheet and we will continue to work on improving the capital structure to fund that construction, but regardless the funding is in the bank as we speak.

Speaker Change: We will keep going with the construction project.

Speaker Change: Our delivery timetables off around this time next year.

We've been initiating the construction with earthworks engineering design. The teams we have our second construction team in place. So we bifurcated our teams so that we ensure reliable timely and on budget delivery of the second Green Dot plant.

Ana Cabral: We have our second construction team in place, so we bifurcated our teams so that we ensure reliable, timely, and on-budget delivery of the second green tech plant. And again, you will lead us to double capacity to approximately 70,000 tons of LCE equivalent or 520,000 tons of lithium concentrate. And lastly, we already talked about this; we delivered the longevity that will back up the operational life for 25 years with a 77 million ton proven improbable mineral reserve.

Speaker Change: And again, you will lead us to double capacity to.

Speaker Change: Approximately 70000 tons of LTE equivalent or 520000 tons of lithium concentrate.

Speaker Change: And lastly, we already talked about this we delivered the longevity that will back up the operational life for 25 years with <unk>.

Speaker Change: 70 77 million ton.

Speaker Change: Proven and probable mineral reserves.

Ana Cabral: And again, it's always very, it makes us very proud to remind everyone that we're the only global producer that has achieved the zero carbon, very sought-after objective, so that we're delivering lithium products aligned with the ethos of the electric car industry that we serve. So on the next page, I'll initiate this section, and then I'll hand over to my partner, Matthew DeYoe.

Speaker Change: And again, it's always very it makes us very proud to remind everyone that we are the only global producer that has achieved the zero carbon.

Speaker Change: A very sought after objective Joe that we delivering lithium products aligned with those of the electric car industry that we service.

Speaker Change: Yes.

Speaker Change: So on the next page I will initiate the section and then I'll hand over to my partner Matthew Deyoe.

Ana Cabral: We wanna again reiterate how resilient and how reliable and how consistent our business has been since we made our first shipment. We have reached scale during 2023, and we have been shipping, like clockwork, 22,000 tons, approximately, of lithium concentrate materials every 35 days. More importantly, at the top of the market, we actually initiated a premiumization drive that has been delivering these premium prices through auction slash price discovery conversations with our customers.

We want to we want to again reiterate how resilient and how reliable and how consistent.

Matthew DeYoe: Our business has been since we made our first shipment we have reached scale during 2023, and we have been shipping like Clockwork 22000 tons approximately of lithium concentrate materials every 35 days.

Speaker Change: More importantly, the.

Speaker Change: Drop of the market, we actually initiated a premium amortization drive they have been delivering these premium prices to auction slash price discovery conversations with our customers.

Ana Cabral: That demonstrates that we've been increasingly gaining commercial leverage as our clients try and experience the savings they can achieve with our product, which reach 20 to 30 percent over competing products in the marketplace. And that translates into commercial leverage. So mathematically, we demonstrate that with a 25 percent increase from the realized prices in the first quarter of this May shift. The page also illustrates in two colors, in the yellow color, what we believe to be the market benchmark and, in the blue color, what we believe to be our own pricing benchmark.

Speaker Change: That demonstrate that we are being increasingly gaining commercial leverage as our clients.

Speaker Change: <unk> and experience the.

Speaker Change: Savings they can achieve.

Speaker Change: With our product, which reached <unk>, 220% to 30% over competing products in the marketplace and that translates in commercial leverage so mathematically we demonstrate that with a 22, 5% increase from the realized prices in the first quarter.

Speaker Change: <unk>.

Speaker Change: In this nation.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: The page illustrates also into two callers in yellow color, what we believe to be the market benchmark in the blue color, what we believe to be our own pricing benchmark. So as you can see in the arrows from the February which as lunar new year drops of the industry onward, we'd be.

Ana Cabral: So as you can see in the arrows, from February, which is the Lunar New Year, throughout the industry onward, we've been able to premiumize our prices by 25%. From last month alone, we were able to achieve an 11% price increase.

Speaker Change: Able to premium and is 25% prices from last month alone we were able to.

Speaker Change: We were able to achieve an 11% price increase so that's again, a mathematical numeric demonstration of increased commercial leverage.

Ana Cabral: So that's, again, a mathematical numeric demonstration of increased commercial leverage. And it results in a partnership, in a win-win partnership with our clients, given that our product does bring them measurable chemical savings if compared to other available competing products in the marketplace. So by no means is it a win-lose game; it's just the flourishing of commercial partnerships with our clients.

Speaker Change: And it results in a partnership in a win win partnership with our clients given that <unk> got it does bring to clients.

Speaker Change: Measurable chemical savings if compared to other available competing products in the marketplace. So by no means is it when.

Speaker Change: Win lose gain is just the up dip.

Speaker Change: The floor is seeing off commercial partnerships with our clients.

Ana Cabral: And in this chart, we also illustrate the translation of our prices into value capture of the lithium hydroxide as priced on the London Metals Exchange, where we've gone from 8.75% of it to 9% of the index. So an increased value capture over the lithium hydroxide chemical, and again, in a mathematical demonstration of this partnership with the clients that win as they acquire our product. Typically, the average premiumization we've achieved hovers around 10% over similar competing products, which again, given that we bring 20 to 30% of cost savings to our clients, it clearly demonstrates that the clients are still achieving 20 to 10% savings.

Speaker Change: And at the chart. We also illustrate the translation of our prices into value capture of the lithium hydroxide as priced in the London metals exchange, where we've gone from $8, 75% of it two 9% of the index. So.

Speaker Change: An increased value capture over the lithium hydroxide chemical and again in a mathematical demonstration of this.

Speaker Change: Partnership with clients that win as they acquire our product.

Speaker Change: Typically the average <unk> would be and achieve hoover's around 10% over the similar competing products, which again given that we bring 20% to 30% of cost savings to our clients. It clearly demonstrates that the clients are still achieving a 20.

Speaker Change: To 10% savings so clearly a win win relationship with our steel customers.

Ana Cabral: So, clearly, a win-win relationship with our esteemed customers. On the next page, it's interesting when we place costs in perspective. We're demonstrating that Sigma is one of the lowest cost producers in the world. We have clearly secured our position in the global supply chain.

Speaker Change: On the next page.

Speaker Change: It's interesting when we placed costing perspective, we're demonstrating the Sigma is one of the lowest cost producers in the world. We clearly secured our position in our global supply chain, we have a low cost and traceable sustainable product.

Ana Cabral: We have a low cost and traceable, sustainable product. And, more interestingly, we show that this market hinges on a, let's say, fine balance, given that the trinity we discussed earlier is not always easily achieved by lithium producers. In other words, to combine low cost, sustainability, and scale is actually the only thing that's rare in the lithium industry. In other words, exceptional execution.

Speaker Change: And and and more interesting and more interestingly, we show that this market hindrance hinges on a let's say fine balance given that the Trinity. We discussed earlier is not always easily achieved.

Speaker Change: Lithium producers in other words, two combined low cost sustainability and.

Speaker Change: Our scale is actually the only thing that's rare in the lithium industry in other words.

Speaker Change: Exceptional execution. So that's what we've been able to deliver and here in Green you can see sigma as to the.

Ana Cabral: So that's what we've been able to deliver. And here, in green, you can see Sigma as the second lowest cost producer. This is actually a benchmark minerals standard cost curve, and we're also highlighting in brown the producers that sit in the traceability zone of producing countries. So when you add up those players, this is a hard raw cost curve with the other brine source material from the traceability zone, you actually end up with just 900,000 tons of LCE equivalent projected for 2025. If you add up everyone in the low cost traceability quartile all the way up to the midpoint of the cost curve, you end up with a million tons of LCE. Why am I making this point?

Speaker Change: The second lowest cost producer this is actually a benchmark minerals standard cost curve and we're also highlighting in our brown the producers that sit on the traceability zone.

Producing countries. So when you add up those players. This is a this is a hard rock cost curve with the other brine source material from the traceability zone, you actually end up we just 900000 tons of LTE equivalent.

Speaker Change: Our projected for 2025, if you add up everyone in the low cost traceability.

Speaker Change: Dial all the way up to the mid point of the cost curve you end up with a million tons of LC why am I, making this point if you. Please turn it over to the next page page 11, you can clearly see that the lithium demand being robust in the supply of medium to low cost sources.

Ana Cabral: If you please turn over to page 11, you can clearly see that lithium demand is robust and the supply of medium to low cost sources being what it was on the previous page. And again, that's a benchmark minerals cost curve. If you look at 24 this year, we're hinging on a fine balance. These are demand estimates, again, from benchmark minerals. And when you look at 25, unless something miraculous happens, we're going to be reaching a slight tension point. What does that mean? It means something very simple.

Speaker Change: What it is in the previous page and again Thats, a benchmark minerals cost curve.

Speaker Change: If you look at 24 this year were hinging on a fine balance if diesel demand.

Speaker Change: Estimates again from benchmark minerals and when you look at 25.

Speaker Change: Less something miraculous happens, we're gonna be reaching up slide tension point, what does that mean it means something very similar simple prices will have to move again upwards.

Ana Cabral: Prices will have to move, again, upwards, inching towards the higher production cost zone so that it brings forth the product from the higher cost producers to meet the supply-demand equilibrium. So the numbers on this page have to be observed in tandem with the numbers on the previous page so that when we look at the gap, we can mathematically see why the gap has been covered or will be covered increasingly with high-cost products unless another sigma pops up.

Speaker Change: Inching towards the higher up production cost zone, so that he brings forth.

Speaker Change: The product from the higher cost producers.

Speaker Change: To meet the supply demand equilibrium. So the numbers on this page have to be observed in tandem with the numbers on the previous page. So that when we look at the gap. We can mathematically see why the gap. It has been covered well will be covered increasingly with high cost.

Speaker Change: Unless another Sigma Pops up.

Ana Cabral: And on that, it's important to note that if the 2030 projections or 2027 projections are correct, and we do believe they are based on sheer EV growth in China alone, as you can see on the charts on the right, the world will need between 30 and 50 new sigmas that will have to pop up between now and 2030. Which, again, demonstrates that on a low-cost, traceable, and large scale, there's clearly a shortage of operational companies.

Speaker Change: That is.

Speaker Change: It is important to note that if the 2030 projections, our 'twenty to 'twenty seven projections.

Speaker Change: Our <unk>.

Speaker Change: Correct and we do believe they are based on sheer easy easy growth.

Speaker Change: In China alone as you can see on the charts on the right. There will do we will need between <unk> and <unk>.

Speaker Change: 15, new Sigma.

Speaker Change: That will have two pop up between now and two answer Charlie.

Speaker Change: Which again demonstrates that on the low cost traceable and large scale.

Speaker Change: There is clearly a shortage of.

Speaker Change: Operational companies. So prices will eventually have to move to make feasible the high cost.

Speaker Change: Traceability challenge our product on the right hand of the cost curve that we saw on the previous page.

Ana Cabral: So prices will eventually have to move to make the high-cost traceability challenge products on the right end of the cost curve that we saw on the previous page. And with that, I will move to the next section, and I'll pass over to Matt Dayle, my partner here, so that he can discuss some of our financial first quarter 24 earnings highlights. Thank you, Ana.

Speaker Change: And with that I will move to the next section and I'll pass over to Matt Deyoe My partner here. So that he can discuss some of our financial.

Matthew DeYoe: First quarter 'twenty four earning highlights.

Matthew DeYoe: Thank you, Ana. So, in the first quarter, the company sold 52,857 tons of lithium concentrate, which consisted of two full shipments and a partial sale of warehouse inventory to Glencore towards the end of the quarter. Production totaled just over 54,000 tons, and reported revenue for the quarter totaled $37.2 million, which included a $12 million impact from provisional adjustments associated with prior shipments, particularly our November shipment. This reduction, or this is a reduction, versus the $30 million we experienced in 4K.

Matthew DeYoe: Thank you Anna.

Matthew DeYoe: So on the first company in the first quarter the company sold 52857 tons of lithium concentrate.

Matthew DeYoe: Which composed of two full shipments and a partial sale of warehouse inventory to glencore towards the end of the quarter.

Matthew DeYoe: Duction totaled just over 54000 tons.

Anna: Reported revenue on the quarter totaled $37 2 million, which included a $12 million impact from provisional adjustments associated with prior shipments, particularly our November shipment.

Speaker Change: This reduction or this is a reduction versus the $30 million we experienced in <unk>.

Matthew DeYoe: The company assesses revenue for business conducted during the first quarter at $49 million. And against our volumes, that would imply a realized price for business conducted during the first quarter of $930 a ton. Operating cash costs per ton at the plant gate of $462 a ton, down about 16% sequentially, and delivers a 50% FOB margin against that $930 per ton price. Reported adjusted EBITDA of $6 million drives a margin of nearly 16%.

Speaker Change: The company assesses revenue for business conducted during the first quarter at $49 million and against our volumes that would imply a realized price for business again conducted in the first quarter of $930 a ton.

Speaker Change: Operating cash cost per ton at plant gate of $462 per ton down about 16% sequentially and delivers a 50% F O b margin against that $930 per ton price.

Speaker Change: Reported adjusted EBITDA of $6 million drives a margin of nearly 16%. So again, we assess EBITDA for business conducted in <unk> and thats, excluding the provisional implications and about $17 million, which reflects an EBITDA margin closer to 35%.

Matthew DeYoe: So again, we assess EBITDA for business conducted in 1Q, and that's excluding the provisional implications, at about $17 million, which reflects an EBITDA margin closer to 35%. Importantly, as we want to note, as prices rallied during the first quarter, the implications of these provisional adjustments subsided, and given our fixed shipment in April and the material correction we've seen in market prices, these adjustments should be immaterial going forward. I want to move, I guess, to our cost bridge. We believe our guided targets are very much within reach.

Speaker Change: Importantly, as we want to note as prices rallied during the first quarter. The implications of these provisional adjustments subsided and given our fixed shipment in April and a material correction, we've seen in market prices. These adjustments should be immaterial going forward.

Speaker Change: When a move I guess two are cost bridge.

Speaker Change: We believe our guided targets are very much in reach.

Matthew DeYoe: Importantly, as we're moving past much of the noise associated with commissioning activity, it's really helping us deliver a much cleaner quarter and a much cleaner look into the company's advantage cost structure. Cash cost per ton, as Ana had mentioned earlier, was $397 for the first quarter, which drives an FOB cost at Vitoria of $462. The difference here to COGS represents only royalties, non-cash DNA, and a small stocking effect associated with production of concentrate in 1Q that will sell in the second quarter. As we said though, guidance is clearly within reach.

Speaker Change: Shortly as well as we're moving past much of the noise associated with commissioning activity, it's really helping us deliver a much cleaner quarter in a much cleaner look into the companys advantaged cost structure.

Speaker Change: Cash cost per ton as Anil had mentioned earlier was $397 for the first quarter, which drives an fob.

Speaker Change: Cost at Vittorio of $462.

Differential here to Cogs represents only royalties noncash DNA in a small stocking effect associated with production of concentrate in <unk> that we'll sell in the second quarter.

Speaker Change: As we said the guidance is clearly within reach recall from our earlier conversations the company expects to $370 a ton plant gate and 400 20-F O B the authority during the second quarter for the <unk>.

Matthew DeYoe: Recall from our earlier conversations, the company expects to hit $370 a ton plant gate and 420 FOB Vithoria during the second quarter of the 3Q. Absolute dollar costs are already there. As you can see, the main hindrance to achieving these numbers in 1Q was production.

Speaker Change: Absolute dollar costs are already there as you can see the main hindrance for achieving these numbers in <unk> production is a normalization for cost base for <unk> production, we leave plant gate cost of $359 in the first quarter.

Matthew DeYoe: As a normalization for cost base for 4Q production, we leave plant gate costs at $359 in the first. Production improved through the course of the first quarter, leaving us confident again that we can hit these targets, which would put us comfortably, although we already are, at the second lowest cost hard rock project in the world, at least that we know of. Next, I'll move to our cash balance. As Ana mentioned, we ended 1Q at $108 million, which primarily reflects the cash gained from trade finance and trade facilities, partially offset by an annual interest payment and a modest build in working capital. Operations proved to be neutral to our earnings formula as revenues were offset by a partial adjustment in operating costs.

Speaker Change #100: Production improved through the.

Speaker Change #101: Of course of the first quarter, leaving us confident again that we can hit these targets, which would put us comfortably. Although we already are at the second lowest cost hard rock project in the world at least that we know.

Next I'll move to our cash balance.

Speaker Change #101: So as Don had mentioned we ended <unk> at $108 million, which primarily reflects the cash gains from trade finance trade facilities, partially offset by an annual interest payment and a modest build in working capital operations proved to be neutral to our earnings formula as revenues were offset by a partial adjustment in operating costs going forward.

Matthew DeYoe: Going forward, as we mentioned, as prices improve, we should move past provisional headwinds, and we should begin to accrue substantial amounts of free cash. The next slide points to what we believe to be the cash flow potential on the recurring base. The model or the column at current price or $11.60 reflects broadly the current market, while the cost to our targets, though is stated above, is within reach. This isn't an explicit cash flow guidance for this year, as the numbers just portray at capacity and don't reflect, perhaps, the realities of 1Q, but it gives a good idea of the potential of the company on a go-forward basis. And as you can see, we're comfortably above the $100 million required to fund our expansion. So with that, I'll pass it back.

Don: As we had mentioned as prices improve we should move past provisional headwinds, we should begin to accrue substantial amounts of free cash.

Don: Yeah.

Don: The next slide points to what we believe to be the cash flow potential on a recurring basis.

Speaker Change #103: The model or the column at current price of $11 60 reflects broadly the current market, while the cost of our targets, though as stated above within reach.

This isn't an explicit cash flow guidance for this year is the numbers just portray of capacity and don't reflect perhaps the realities of <unk>, but it gives a good idea of the potential of the company on a go forward basis and as you can see we are comfortably above the $100 million required to fund our expansion.

Speaker Change #104: With that I'll pass it back on.

Speaker Change #104: So.

Ana Cabral: Going straight to the point where Matt left off of doubling production capacity. Again, we show the drone aerial picture of the simplicity of that project. And you can clearly see in the back, the expansion area highlighted in red, where we already have the trunk, the truck maintenance patio installed. It's an area without vegetation.

Speaker Change #104: Going to straight to the point, where Matt left off of doubling production capacity.

Speaker Change #105: Again, we show the drone aerial picture of the simplicity of that project and you can clearly see in the back.

Speaker Change #106: The expansion area highlighted in Red where we already have the jet truck maintenance patio installed. It's an area. We know vegetation, it's pretty it's basically form of pasture areas. So very straightforward perpendicular to the elevation of the terrain.

Ana Cabral: It's pretty, it's, it's basically the form of pasture areas. So very straightforward, perpendicular to the elevation of the terrain, perfect for the installation of an ROM pad that will feed a second green tag production plant. That second line train will be equivalent to the one highlighted in yellow, and it will be sustained by the existing infrastructure in green, which could also sustain a third green tag line expansion, which we do plan to execute the moment we commission the second green tag plant.

Speaker Change #107: For the installation of our <unk> pad.

Speaker Change #108: That will feed our second green tax production plant.

Speaker Change #109: That second line train will be equivalent to the one.

Speaker Change #109: Highlighted in yellow.

Speaker Change #110: And it will be sustained by the existing infrastructure in green.

Speaker Change #111: <unk> also could sustain a third green Tech line expansion, which we do plan to execute the moment, we commissioned the second greenlaw Greentech plant so.

Ana Cabral: So infrastructure, which costs almost $40, $45 million, is no longer necessary because it sustains two additional green tech plant expansions. So with that, we again would like to reiterate that the cash to build it is at hand. We've been able to secure robust and resilient trade lines as a result of our consistent, resilient performance of production, shipping, delivery, and customer acceptance of our product throughout the first 10 months of operation.

Speaker Change #111: Infrastructure.

Speaker Change #112: Cost is almost $40 $45 million.

Speaker Change #113: Is no longer necessary because it sustains two additional green that plant expansions.

Speaker Change #113: So with that.

Speaker Change #114: Again, we'd like to reiterate that the cash to build it is at hand.

Speaker Change #115: We've been able to.

Speaker Change #116: Secure robust and resilient trade lines as a result of our consistent Brazilian performance of production shipping delivery and customer acceptance of our products throughout the first 10 months of operation So that reliability gives us <unk>.

Speaker Change #117: As to trade line mandatory funding it is called AC East in Brazil advancement on export contract.

Ana Cabral: So that reliability gives us access to trade line mandatory funding. It's called ACEs in Brazil, Advancement on Export Contracts, which are the main source of funding for this construction at the moment. It's cash sitting in our treasury right now.

Speaker Change #118: Which are the main source of funding for this construction at the moment is cash sitting in our treasury.

Speaker Change #119: Right now we.

Ana Cabral: We will continue to work to improve the capital structure for the construction of the project, and we have a very interesting plan to tap debt capital markets and debt loan markets throughout the course of the next few months. But without it, or irrespectively of it, or irrespectively of any additional source of financing, we are confident that we can carry on and execute our doubling of production capacity plans. And again, the commercial uptake is there. We could be selling far more boats if we had the material to deliver them.

Speaker Change #120: We'll continue to work to improve the capital structure for the construction of the project.

Speaker Change #120: And we have.

Speaker Change #121: Very interesting plans to tap.

Speaker Change #122: That capital markets debt low markets throughout the course of the next few months, but without it or irrespectively of it or irrespectively of any additional source of financing. We are confident that we can carry on and execute our doubling of production capacity plans and again the commercial uptake is there we could be.

Speaker Change #123: Selling far more.

Speaker Change #124: Boats, if we had the material to deliver so ultimately we're sitting in a very comfortable position in the industry. Now. So our objective is to continue to bank on the comp.

Ana Cabral: So ultimately, we're sitting in a very comfortable position in the industry now. So our objective is to continue to bank on the comfort of our business position in the global lithium industry at the moment. So this page just shows, again, the only thing that's rare in the lithium industry, which is exceptional execution.

Speaker Change #126: The comfort of our business position in the global lithium industry at the moment. So here. The following page just shows again, the only thing that is rare in the lithium industry, which is exceptional execution. So we're going to do it again.

Ana Cabral: So we're going to do it again. We've already done the licensing for the industrial plant. We've achieved the initial financing through the securing of the trade lines. We have completed the engineering, FEL3, and CAPEX quoting. Throughout the course of the last year, essentially, we've been working on this for actually more than 12 months now. We are actually comfortable with the capital structure we have. We're going to work to improve it and finance it.

Speaker Change #125: We've already done the licensee at the industrial plant we've.

Speaker Change #124: <unk>.

Speaker Change #128: The initial financing through securing of the trade lines, we completed engineering.

Speaker Change #127: L. Three capex quoting throughout the course of the last year essentially we've been working at this we're actually more than 12 months as of now.

Speaker Change #130: We actually are comfortable with the capital structure, we have we're going to work to improve it and finance it but again it averaged nine 3% up cost for trade lines Thats, a pretty reasonable cost considering the returns we will achieve our volumes and production on a cash generation basis, and so with <unk>.

Ana Cabral: But again, at an average 9.3% cost for trade lines, that's a pretty reasonable cost considering the returns we will achieve out of volumes and production on a cash generation basis. And so with that confidence, and with the confidence in the execution ability and execution prowess of our team, the board of directors cleared and gave us the final approval and final investment decision for the construction of phase two in the quarter. With that, I go on to the next page. So Matt, I'm passing this on to Matt.

Speaker Change #129: That confidence.

Speaker Change #131: The confidence in the execution ability and execution prowess of our team our board of directors cleared and gave US a final approval and final investment decision for the construction of phase two in the quarter.

Speaker Change #129: With that I go on to the next page so Matt passing on to Matt.

Speaker Change #129: <unk>.

Matthew DeYoe: Yeah, I mean, again, from the perspective of the company, right? We have a unique track record of being able to build on time and on budget. And we're going to do that again.

Matthew DeYoe: Yes, I mean again from the perspective of the company right, we have a unique track.

Matthew DeYoe: <unk> record of being able to build on time and on budget and we're going to do that again so.

Matthew DeYoe: So, as Ana mentioned, April 1st, Sigma's Board of Directors issued the Phase II FID. As we said, the CapEx budget is only about $100 million to add 250,000 metric tons, which is enough lithium equivalent for about 850,000 EVs. EPCM teams are finishing earthworks engineering, and mobilization is ongoing. And the phase two flow sheet importantly follows phase one. The goal is to reduce risks as much as possible as we go through this process.

Matthew DeYoe: So as John had mentioned April one Sigma Board of directors. This should the phase two.

Speaker Change #132: As we said the Capex budget is only about $100 million to add 250000 metric tons, which is enough lithium equivalents for about 850000 Evs.

PCM teams: PCM teams are finishing earthworks engineering and mobilization is ongoing phase two flow sheet importantly follows phase one the goal is to reduce risks as much as possible as we go through this process. The local EPC team is the same the parts design team is the same but we're going through phase II with.

Matthew DeYoe: The local EPCM team is the same, the parts design team is the same, but we're going through phase two with the knowledge and experience gained through phase one, which should mean a faster ramp and a faster path to free cash flow as we move forward. This is just a, you know, higher level path to where we're going. And as Ana mentioned, there's a third phase coming on the back end, which is already supported through the infrastructure.

Speaker Change #134: The knowledge and experiences gained through phase, one, which should mean, a faster ramp and a faster path to free cash flow as we move forward.

Don: This is just in a higher level path to where we're going and as Don had mentioned Theres, a third phase coming on the backend.

Speaker Change #135: Which is already supported through the infrastructure. Yeah. So here is kind of the whole picture right. This is the industrial plan, we submitted to our development bank into our investors earlier in the year and that kind of shows graphically, where we are and where we have it and how disciplined we have been in adding.

Ana Cabral: Yeah, so this is kind of the whole picture, right? This is the industrial plan we submitted to our development bank and to our investors earlier in the year. And that kind of shows graphically where we are and where we're headed and how disciplined we have been in adding production capacity based essentially on the one element in short supply, our ability to execute on time and on budget and comfortably because we're maintaining our operations at the highest standards of performance we set out for ourselves.

Speaker Change #137: Capacity based essentially on the one element in short supply our ability to execute on time and on budget and comfortably up because we are maintaining our operations at the highest standards of performance, we set out for ourselves.

Ana Cabral: So we got here in 23 days with what we've delivered over the last 12 months. So 23 today actually is 175,000 tons produced. So that goes over to now. Then we have that cash flow to propel us and to give us a base. That's our safety net, let's put it that way.

Speaker Change #136: We got here in 'twenty, three where we've delivered or.

Speaker Change #136: Over the last 12 months so 23.

Speaker Change #138: So these 175000.

Speaker Change #139: Tons produced so that goes over to now than we have that cash flow to propel us to give us a base. That's our safety net let's put it that way and then up if you annualized 24 from now we would have 270000 tons of production.

Ana Cabral: And then, if you annualize 24 from now, we would have 270,000 tons of production. And again, furthering that safety net of cash generation. So we're building double capacity, approximately double capacity, another green tech line at 250,000 tons. So we're in construction of what equates to 35,000 tons of LCE. And then again, we're gonna do the third line, as I showed you earlier with the drone pictures that are supported by the existing infrastructure that will get us to another 250,000 tons.

Speaker Change #140: And again furthering that safety net of cash generation. So we're building up double capacity up approximately double capacity another green tax line at 250000 tons.

Speaker Change #141: So were in construction.

Speaker Change #141: What equates to 35000 tonnes LC and then again, we're going to do the third line as I showed you earlier with a drone pictures that supported by the existing infrastructure that will get us to.

Speaker Change #142: Another 250000 tonnes. So you will get us to 770000 tonnes of annual capacity so approximately.

Ana Cabral: So you get us to 770,000 tons of annual capacity, so approximately what we call the magic number of 100,000 tons of LCE a year. Gentlemen and ladies, there are very few companies that can actually deliver and operate at these levels. And they're called the super majors.

Speaker Change #143: What we call the magic number of 100000 tons of LTE.

Speaker Change #144: Gentlemen, and ladies they're very few companies that can actually deliver and operate at these levels and their coldest supermajors and with our careful.

Ana Cabral: And with our careful, conservative, and disciplined execution, we plan to get there most likely at the beginning of 2026 with three green tag production lines. And we are already on the way with the ongoing earthworks construction for the second one. One point that's important, if warranted, and again you'll be a function of pre-immunization, we do have plans to potentially build an integrated intermediate chemicals line connected to the third line in 2026. And again, that is already in the works.

Speaker Change #146: And service and disciplined execution, we plan to get there most likely at the beginning of 2026 with three Greentech production lines and we are already underway with the ongoing artworks construction for the second one.

Speaker Change #145: One point that's important.

Speaker Change #147: Warranted and again youll be a function of the premium amortization, we do have plans to in 2026 potentially building an integrated intermediate chemicals line connected to the third line and again that is already in the works would be scouting locations for us.

Ana Cabral: We've been scouting locations for a potential setting for this industrial plant. Given that, as we like to say in our industry, 2026 is literally around the corner in the metals industrial industry time, 18 months away.

Potential setting of this.

Speaker Change #148: Industrial plant given that as we like to say in our industry 2026 is literally around the corner in the metals.

Speaker Change #148: Industrial industry.

Ana Cabral: So with that, I go on to the closing remarks. I mean, essentially, the future has arrived. Sigma is the sixth largest producer globally, and we are on the way to becoming the fourth as soon as we conclude the construction of the second green tech plant. We have the same team, the same execution, the same engineers, even the same suppliers. That's how conservative we have been.

Speaker Change #148: Yeah.

Speaker Change #149: 18 months away so with that I go on to the closing remarks, I mean, essentially the future has arrived I mean Sigma is the sixth largest producer globally.

Speaker Change #150: We are on the way to become the fourth.

Speaker Change #151: As soon as we conclude the construction of the second.

Speaker Change #152: Greentech plant, we have the same team the same execution the same engineers, even the same suppliers, that's how conservative we have been.

Ana Cabral: So the one unfortunate thing that hasn't happened is that we have not reprised from developer to producer, but we believe that with our resilience and with the cadence and the continued successful execution, that will happen in due course. So, and clearly, you can see on this slide an illustration of the disconnect between Sigma and its peer, peer producers. The following page illustrates that further using fractions, which is a very clear way of prorating valuation to production. So if we were to do that exercise comparing to an America's player or an Australian player, we would end up with similar disconnect asymmetrical results.

Speaker Change #151: No.

One unfortunate thing that Hasnt happened is that we have not repriced from developer producer, but we believe that we have our resilience and with the cadence and the continued successful execution that shall happen in due course, so and clearly you can see on this slide an illustration of the disconnect.

Speaker Change #153: Between Sigma and spear tier producers.

Speaker Change #153: The following page illustrates that further using fractions, which is a very clear way of pro rating valuation to production. So we want to do that exercise comparing to.

Speaker Change #154: On Americas play, our or an Australian player. We would end up at similar disconnect asymmetrical results. So.

Ana Cabral: So this is an exercise that just shows why we are so steady, steady fast on delivering cadence execution, consistent execution throughout the year because we do plan to close that gap with mathematical deliveries. And again, it's just a fraction of the market cap of our current market cap with the market cap of players in the Americas or players in Australia vis-a-vis the production they actually deliver currently today. Our production, for instance, compared to a player in the Americas, is essentially a fifth.

Speaker Change #155: This is an exercise that just shows why are we so steady steady fast on delivering a cadence execution consistent execution throughout the year, because we do plan to close that gap with mathematical deliveries.

Speaker Change #155: Uh huh.

And again, it's just a fractional pro rating of our current market cap with the market cap of our players in the Americas or players in Australia. These avi the production they actually deliver currently today.

Speaker Change #156: Oil production for instance, if compared to a player in the Americas is essentially a fifth however, our market cap is in a fifth of theirs. If you are over to the west to the east to Australia.

Ana Cabral: However, our market cap isn't a fifth of theirs. If you were over to the West, to the East, to Australia, our production is half that of a very large player in Australia, but our market cap is a lot less than half. It's almost a fourth of their market cap, which again demonstrates such a disconnect.

Speaker Change #157: Production is half of a very large player in Australia, but our market cap is a law has been half its almost a force of their market cap, which again demonstrates such disconnect and with that I'll close.

Ana Cabral: And with that, I'll close. And again, with the key valuation benchmark that we have already delivered, and, again, outlining the targets that we set out for ourselves, which are actually quite ambitious. I mean, first, we are planning to achieve the cost guidance we set out for ourselves. We are already the industry's second-lowest cost player, and we do plan to stay that way. However, we have a few more dollars of costs to shave from our T1 plant cash costs, and we're planning to march towards that further cost savings as we reach an operational cadence, reaching a year of operations. I mean, again, it's actually important to remind everyone that this is our first year.

Speaker Change #157: And again.

Speaker Change #158: With the key valuation with our key valuation benchmarks that we have already delivered.

Speaker Change #158: And.

Speaker Change #159: Again outlining the targets that we set out for ourselves, which actually quite ambitious I mean first we are planning to.

<unk>.

Speaker Change #159: Achieve the cost guidance, we set out for ourselves we are already the industry second lowest cost player and we do plan to stay that way. However, we have a few more dollars of costs to shave from our Tijuana plant plant cash costs.

Speaker Change #159: And we're planning to March towards that further cost savings as we reach.

Speaker Change #160: Operational us operational cadence, reaching a year of operations I mean again is actually important to remind everyone that this is our first year. So technically we would shut it should have given ourselves some margin for commissioning, but we haven't because the lithium pricing environment didn't allow us to have.

Ana Cabral: So, technically, we should have given ourselves some margin for commissioning, but we didn't because the lithium pricing environment didn't allow us to have any margin of error. So, we set out to meet the ambitious low-cost targets almost out of the gate, and here we are. The next milestone will be to commission the second green tech production line, and we're already up with earthworks construction engineering underway. So, we do believe that we're going to meet the same exact construction milestones as last time. We have the same team, similar leadership, engineers the same, everyone's basically the same. As I said earlier, not even suppliers were risking to change.

Speaker Change #161: Any margin of errors. So we set out to meet the ambitious low cost targets almost out of the gate and here. We are the next milestone will be to commission. The second Green tax production line and we already up with earthworks construction engineering underway. So we do believe.

Speaker Change #162: We're going to meet the same exact construction milestones. This last time, we had the same chi.

Speaker Change #163: Similar leadership engineers, the same everyone's basically the same as I said earlier, not even suppliers, who are risking to change that's how conservative we all so it's basically a repeat of what will be done before one line at a time.

Ana Cabral: That's how conservative we are. So it's basically a repeat of what we've done before, one line at a time. So this is on the left, how much we deliver. And you can see for yourselves, I mean, we deliver zero carbon; we expanded the resource to estimated 150 million tons. And we're drawing from that resource into proven improbable 2P reserves, which we just increased on feasibility to 77 million tons expanded by 40%.

Speaker Change #164: So this is on the left how much we've delivered and you can see for yourselves I mean, we delivered zero carbon we expanded the resource to estimated resource.

Speaker Change #165: 50 million tons and withdrawing from their resource into proven and probable reserves, which we just increased our visibility up to 77 million tons, expanding 40% would be delivering consistent monthly shipments of around 22000 tons every 35 days.

Ana Cabral: We've been delivering consistent monthly shipments of around 22,000 tons every 35 days. We mobilized phase two, delivered the final investment decision on phase two, and began construction. So again, we set up a target. We focus on execution, and we deliver, which, as I'll reiterate again to close, is the one thing that scars in this industry, superb execution, superb resilience, as it has been demonstrated by our team, which faced market headwinds in our first year of operations and came out on top of the industry, second lowest cost producer and sixth largest, second lowest cost, sixth largest producer. And thank you for every, thank you everyone for your trust. Thank you everyone for your confidence in us. And with that, I close our first quarter 24 earnings presentation, and we'll take questions. Yes, thank you.

Speaker Change #166: We mobilized phase two delivered final investment decision on phase two began construction. So again, we set up a target.

Speaker Change #167: Focus execution, and we deliver which as I.

Speaker Change #168: We'll reiterate again to close is the one thing that scars in this industry superb execution superb Brazilians as he has been demonstrated by our team which faced market headwinds in our first year of operations and came out the industry second lowest cost producer.

Speaker Change #168: And six.

Speaker Change #169: Sixth largest second lowest cost six largest producer and thank you for thank you everyone for your trust. Thank you everyone for your confidence in us.

Speaker Change #169: And.

Speaker Change #169: With that I close our first quarter 'twenty four earnings presentation, and we will take questions. Yes. Thank you Dennis if you can move now to Q&A that would be great.

Dennis: Yes, thank you, Dennis. If you can move now to Q&A, that would be great. If you would like to ask a question, simply press star and then the number one on your remote control

Dennis: If you would like to ask a question, simply press star, then the number one on your telephone keypad. Once again, to ask a question, please press star one on your telephone keypad. Your first question is from the line of Rock Hoffman with Bank of America. Please go ahead. Paul, I was just wondering, can you provide the latest regarding the strategic review?

Dennis: If you would like to ask a question simply press Star then the number one on your telephone keypad. Once again to ask a question. Please press star one on your telephone keypad.

Dennis: Your first question is from the line of Rock Hoffman with Bank of America. Please go ahead.

Dennis: Okay.

Rock Hoffman: Just wondering can you provide the latest regarding the strategic review and is that currently on pause.

Ana Cabral: Yes, it is. We've been publicly reiterating that phone pause, and again, the reasons are quite clear. I mean, there's a symmetrical disconnect between what we believe our fair value should be.

Speaker Change #171: Yes. It is we've been publicly reiterated that phone pause and again the reasons are quite clear I mean, there is not symmetrical disconnect between what we believe are fair value should be and we decided to given the strength and resilience of operation that will just continue.

Ana Cabral: And we decided, given the strength and resilience of our operation, that we would just continue to deliver. We have a fantastic business, and there's absolutely no pressure to conduct any review from our end. So we will deliver on the targets we set out for ourselves and probably emerge two years from now and decide what we are going to do for the next phase of growth.

Speaker Change #172: You need to deliver it we have a fantastic business and Theres absolutely no pressure to conduct any review from our and so we will deliver on the targets, we set out for ourselves and probably emerge two years from now and decide what we will going to do for the next phase of growth.

Ana Cabral: And just to follow up on the LG press release regarding arbitration, just wondering what the timeline is on that and any updates in that process. Well, we have a very friendly relationship with the LG Group and with South Korea. And there's going to be more positive news on that end that we're going to publicize in due course. But what I can say as of now is that the commercial relationship actually couldn't be better with the LG Group as a whole, and that includes their trading arms, which were actually visiting our plant facilities at the time another subsidiary of the group initiated arbitration and kind of made everyone rather dumbfounded.

Speaker Change #172: Understood.

Speaker Change #173: Just a follow up.

Speaker Change #174: In regards to the <unk>.

Speaker Change #175: LG press release regarding our arbitration just wondering what the timeline is on that and any updates on that process.

Speaker Change #176: Well, we have a very friendly relationship with the LG group and we South Korea.

Speaker Change #177: And theyre going to be more positive news on that and that we're going to publicize in due course, but what I can say as of now is that the commercial relationship actually couldnt be better with the LG group as a whole and that includes their trading arms, which was actually visiting our up plant facilities at the time another subsea.

Speaker Change #178: The area of the group initiated arbitration and kind of made everyone rata dumbfounded, but again thats being mended and we just want to reiterate how we have a fantastic relationship with both the government of South Korea, and with LG group as a whole.

Ana Cabral: But again, that's been mended. And we just want to reiterate how we have a fantastic relationship with both the government of South Korea and with LG Group as a whole, and we don't see any reason to worry.

Speaker Change #179: And we don't see any reason to worry about it.

Speaker Change #180: Alright. Thanks.

Dennis: Dennis, if you want to move on to the next question,

Speaker Change #180: Dennis if you want to move onto the next question.

Dennis: Of course, your next question is from the line of Mack Will with Cormark Securities. Please go ahead.

Of course your next question from live of Mac whale with <unk> Securities. Please go ahead.

Matthew DeYoe: Hi, good morning guys. Congratulations on bringing the cost down quite handily. I was wondering, can you speak a little bit about the two big items in there, Q4 and mining services and consumables. Why such a big decrease in those two items in particular?

Speaker Change #181: Hi, good.

Speaker Change #182: Good morning, guys, Hey, congratulations on bringing the cost down quite and we I was wondering can you speak a little bit too I saw two big items in there for Q4 and mining services and consumables.

Speaker Change #183: Why such a big decrease in those two items in particular.

Speaker Change #183: Yes.

Matthew DeYoe: So, hey Mac, on the consumable side... We got pretty effective at using our ferrosilicon and recycling that through the process. If you recall, we installed the magnetic separator in November, and part of that was on the tailing side of the equation and being able to improve our recyclability of ferrosilicon through our process. Also, some of these purchases may be a little bit lumpy, but we are getting better at optimizing and running the plant, so that's going to explain a good portion of the consumable side, which is going to decrease in the shared services.

Speaker Change #183: So hey, Mac on the consumable side.

Speaker Change #184: We got pretty effective in using our ferrous silicon and recycling that through the process.

Speaker Change #184: If you recall as well we installed the magnetic separator in November and part of that was on the tailing side of the equation and being able to improve our recyclability of ferrous silicon through our process.

Speaker Change #185: So some of these purchases may be a little bit lumpy, but we are getting better at optimizing and running the plant. So.

That is going to explain a good portion of the consumable side.

Speaker Change #186: The decrease in the shared services.

Matthew DeYoe: I'll have to double check, but look, as part of what we've said, we're removing a lot of on-site contractors and replacing them with domestic and local labor. So as the roll-off happens, you're going to see perhaps an overall reduction in costs, but also a little bit of left overs, right overs as some of that stuff gets allocated and reallocated through our cost lines, if that makes any sense.

I'll have to double check, but look at it as part of what we've said.

Speaker Change #187: We're removing a lot of onsite contractors and replacing them with domestic and local local labor.

Speaker Change #187: So as the roll off happens you're going to see perhaps an overall reduction in costs, but also a little bit of left pocket right pocket as some of that stuff gets allocated and reallocated through our cost lines if that makes any sense.

Matthew DeYoe: Yeah, that's helpful. And then on the GNA, your various sort of under the operations line on the, and some of your costs for GNA, in particular, were lower. Is that a good run right now? And we should look at those line items going forward.

Speaker Change #188: Yeah. That's helpful and then on the G&A you various sort of underneath the operations line.

Speaker Change #188: Some of your cost for G&A.

Speaker Change #188: In particular was lower.

Speaker Change #188: Good run rate now and what we should look at those line items going forward.

Matthew DeYoe: Yeah, look, GNA is obviously, as we tried to tell Poor Trey on our 4Q call, right? There's a ton of noise and clutter in the annual SG&A number. And we had a lot of confidence that it would come down. To the extent the strategic review is paused, obviously, some more costs will come out of the business, but it's at a pretty good level, considerably lower than where we were. And again, some of these productivity initiatives that we've been taking take a little bit of time to move through the system.

Speaker Change #189: Yeah look G&A is.

Obviously as we tried to.

Speaker Change #190: Portray on our <unk> call right. There is a ton of noise and clutter in the annual SG&A number and we had a lot of confidence that would come down.

Speaker Change #191: To the extent this strategic review is paused, obviously, some more costs will come out of the business, but is that a pretty good level.

Speaker Change #191: Considerably lower than where we were and again some of these productivity initiatives that we've been taking take a little bit of time to move through the system you can't shut off our cost at the end of the year some of that stuff leads but the.

Matthew DeYoe: You know, you can't shut off all costs at the end of the year. Some of that stuff bleeds, but you know, the goal is to keep a very draconian approach at all costs. If you've talked to me recently, what I say is that I really, I really love $1,200 a ton spodumene because, you know, we can generate cash, and we can grow in this market, but it also keeps everybody honest on cost. And so you should expect the same level of, I can use the word draconian, but you know intensive cost control internally at Sigma to continue to deliver on these numbers as best we can.

Speaker Change #192: Goal is to keep.

Speaker Change #193: A very draconian approach on all costs.

Speaker Change #194: If you talk to me recently, when I say that I really.

Speaker Change #195: Really love $200, a ton spodumene, because we can generate cash and we can grow in this market, but it also keeps everybody honest on costs and so you should expect the same level of.

You can use where Jack O'neill, but intensive cost control internally at Sigma to continue to deliver on these on these numbers to the best we can.

Matthew DeYoe: And do you think this is the, as the environment for pricing improves, are we going to see, like, how will these provisional pricing situations change as we move through the year?

Speaker Change #196: And do you think this is.

Speaker Change #197: As the environment for pricing improves or are we going to see.

Speaker Change #198: Like how will this provisional pricing.

Speaker Change #198: The situations change as we move through the year.

Ana Cabral: I'll take that. Hey, Matt. It's Ana.

Matthew DeYoe: I'll take that Matt.

Matthew DeYoe: All right.

Matthew DeYoe: The provisional pricing we believe.

Speaker Change #199: Our commercial element of the past and in our case it doesn't really connect with as much with the market environment, but it's 100% connected to us basically.

Ana Cabral: Revisional pricing is, we believe, a commercial element of the past. And in our case, it doesn't really connect as much with the market environment, but it's 100 percent connected to us basically beginning in the marketplace. A lot of our clients' experience of our product had been with what we call bulk samples, 100 ton, 200 ton samples. But this last 12 months was the first time they actually got to try full tonnages.

Speaker Change #199: Beginning in the marketplace.

Speaker Change #200: Lot of what our clients experience of our product had been to what we call bulk samples 100 ton 200 ton samples, but this last 12 months was the first time, they actually got to try full tonnages and as he happened.

Ana Cabral: And as it happened, the clients experienced the 20 to 30% cost savings that our product brought to them by themselves. So they actually measured the cost savings in their own refineries. So that actually moved our commercial conversations to a completely different level. Because, as we like to say, lithium prices globally are still in their infancy. It is as if copper concentrate and iron ore got married, and lithium prices for concentrate would borrow from each, like you would borrow purity from copper concentrate and lump size from iron ore. But we weren't seeing any of that in our high purity, coarse, lumpy product.

Speaker Change #201: Declines experienced a 20% 30% cost savings.

Speaker Change #202: Our product brought to them by themselves. So they actually are measured in their own.

Speaker Change #202: <unk> the cost savings.

Speaker Change #202: That actually.

Speaker Change #203: Dark commercial conversations to a completely different level, because as we like to say.

Speaker Change #204: In lithium prices globally are still in its infancy. It is as if copper concentrates <unk> Nagai, Mary and lithium prices for concentrate would borrow from me like you would borrow priority from copper concentrate and you would borrow lump size from iron ore and we don't see we werent seeing any of it.

Ana Cabral: So we believe that as clients experience the product and see for themselves the cost savings we bring to their refineries, they will be more amenable to a non-provisional and final price conversation. And we demonstrated that first with a fixed price that we delivered last month. It was fixed and final, just like the great players in the industry, like ALB and others.

Speaker Change #205: In our high purity course lumpy product. So we believe that as the client experience the product and.

Speaker Change #206: Software themselves the cost savings, we brought to their refineries they would be more amenable to a non provisional and final price conversations than we demonstrated that first with the fixed pricing that we deliver last month it was fixed and final.

Ana Cabral: And then this month we moved to what we call the best place, the holy grail of pricing, which is the fixed floating formula, where we work with our clients. That's why we say it's a partnership. We're not fixing at their expense. We're floating to their quote, which is the hydroxide LME, but we're fixing our value capture to their quote. So we're being friendly with the industry because it floats with them. So we're not squeezing anyone's margins, but we're capturing what we believe to be our premiumization at those prices. And that's how we would like to stay throughout the year.

Speaker Change #207: Just like the great players in the industry like Albion and in others and then we now this month, we moved to what we call the best place the Holy Grail of pricing, which is the fixed fixed.

Speaker Change #208: Fixed floating formula where we work if our client that's why we say it's a partnership we're not fixing at their expense with floating to their quote which is hydroxide allo me, but we are fixing our value capture to their quote so we're being friendly with the industry because it floats with them. So we're not squeezing anyone's margins, but we're capturing what we built.

Speaker Change #209: <unk> to be our premium amortization in those prices and that's how we would like to stay throughout the year.

Matthew DeYoe: I'd say, Mac, I think the last thing, right, it's a little switch, right? We did. April was locked in at a firm price. May, we have the firm 9% lock, but on the floating rate, look, we're fairly confident we're towards the bottom end of the cycle here on price, so we want to retain some of the optionality of that as the cycle improves over time. And so locking in the commitment on the 9% but keeping some optionality on the cycle, and that's, you know. We're a low-cost producer, and you're investing in a lithium company. We want to give everybody, and everybody should have the economics on the upside.

Speaker Change #210: I'd say Mark I think the last thing right. It's a lot.

It'll switch rate we did APRA.

Speaker Change #210: April was locked in firm price may we have the firm 9% locked but on the floating look we're fairly confident we're towards the bottom end of the cycle here on price so.

Speaker Change #211: So we want to retain some of the optionality of that as the cycle improves over time.

Speaker Change #211: Locking the commitment on the 9%, but keeping some optionality on the cycle.

Speaker Change #211: No.

We're a low cost producer and you're investing in a lithium company. We wanted to give everybody and everybody should have the economics on the upside. So that's exactly we could this is this is essentially the core building the customer partnership, which again you look at the copper concentrate industry. The iron ore industry. That's how this industry has evolved into the premium pricing and so we believing partner.

Ana Cabral: So that's awesome. Exactly like that. We can, this is essentially the core building, the customer partnership, which again, you look at the copper concentrate industry, the iron ore industry, that's how these industries evolved into premium pricing. And so we believe in the partnership of our customers, and it's exactly what we're doing. Thank you. Yeah, Dennis, if you want to prompt, but otherwise, we can close down. Once again, thank you for joining us.

Speaker Change #211: Super vault customers and this is exactly what we're doing.

Thank you yeah, Dennis if you want to reprice, but otherwise we cannot close down.

Dennis: Once again, if you would like to ask a question, simply press star one on your telephone keypad. And at this time, you may continue with your closing remarks.

Speaker Change #212: Once again, if you would like to ask a question simply press star one on your telephone keypad.

Speaker Change #213: And at this time you may.

Speaker Change #214: Continue with closing remarks.

Unknown Executive: So I'll just leave it there. Thank you everyone for joining our call. We look forward to updating you as shipments and the company progresses through our 2Q build, and we'll look forward to re-engaging on 2Q earnings. So enjoy the rest of your day. Thank you.

Speaker Change #215: So I'll just leave it there. Thank you everyone for joining our call.

Speaker Change #216: We look forward to updating you as our shipments and the company progresses through our <unk> Bill and we'll look forward to re engaging on <unk> earnings. So enjoy the rest of your day. Thank you. Thank you. Thank you everyone.

Unknown Executive: Thank you. Thank you, everyone. Thank you all for joining us.

Operator: Thank you all for joining today's conference call. You may now disconnect. Please wait; the conference will begin shortly.

Speaker Change #217: Thank you all for joining today's conference call you may now disconnect.

unknown: [inaudible]

Speaker Change #218: Please wait the conference will begin shortly.

Speaker Change #218: Okay.

Speaker Change #218: [music].

Speaker Change #218: Yes.

Okay.

Speaker Change #218: Okay.

Speaker Change #218: Yes.

Speaker Change #218: Okay.

Speaker Change #218: Yeah.

Yes.

Speaker Change #218: Yes.

Speaker Change #218: Yeah.

Speaker Change #218: Okay.

Speaker Change #218: Okay.

Speaker Change #218: [music].

Speaker Change #218: No.