Q3 2025 Sigma Lithium Corp Earnings Call
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Speaker #1: meeting. Good morning, ladies and
Speaker #2: Gentlemen, welcome to Sigma Lithium 2025, third quarter earnings conference call. We'd like to inform you that this event has been recorded, and all participants will be in listen-only mode during the conference presentation.
Speaker #2: There will be a replay of this call on the company's website. After the prepared remarks, there will be a question-and-answer section for participants.
Speaker #2: At that time, further instructions will be provided. I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations.
Speaker #2: Please go ahead,
Speaker #2: Anna. I'd like to welcome you to
Speaker #3: our third quarter earnings conference call. Joining me on the call today is Anna Cabral, CEO of Sigma Lithium. Our third quarter 2025 earnings press corresponding documents are available on release presentation and our website.
Speaker #3: I will now turn the call over to Anna.
Speaker #3: Cabral. Good morning,
Speaker #4: everyone. It's with great pleasure to present Sigma Lithium's third quarter of 2025 results directly from the Amazon, where COP 30, the United Nations Climate Conference, is being held.
Speaker #4: Sigma is here as a member of the Brazilian delegation; we have been engaged in high-level dialogues with other delegations from all over the world, and we are showcasing how we have implemented an executed on every single one of our targets: 2017 when we sustainability, set out in made the original investment in the company.
Speaker #4: Since then, we have managed to build the most sustainable lithium beneficiation plant in the world, digitalized and using algorithms they employ bots or AI to become more and more efficient in treating the mineralogy of our mines and increasing plant recovery.
Speaker #4: So our plant is where technology meets metallurgy, meets mining, and delivers sustainability. Doing more with less. Please kindly read the disclaimers; we're going to make quite a number of forward-looking statements and projections and guidances, as we go through this presentation.
Speaker #4: Of our accomplishments in the third quarter, we're very proud, especially considering the state of the lithium markets throughout the quarter. We have managed to increase the resilience of our business significantly.
Operator 2: Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2025 Q3 Earnings Conference Call. We would like to inform you that this event is being recorded, and all participants will be in listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After the prepared remarks, there will be a question and answer section for participants. At that time, further instructions will be provided. I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead, Anna.
Speaker #4: Achieving the following five initiatives: first, we substantially increased our net revenues. Through optimum commercial strategy, we increased revenues by 69% quarter on quarter, and by 36% if compared to the third quarter of last year.
Speaker #4: We have generated cash of $31 million resulting from final price settlements of sales that happened throughout the year. In addition, we expect cash generation from sales of our processing high-purity, high-grade middlings, which are the result of our sustainable efforts.
Anna Hartley: I'd like to welcome you to our Q3 Earnings Conference Call. Joining me on the call today is Ana Cabral, CEO of Sigma Lithium. Our Q3 2025 earnings press release presentation and corresponding documents are available on our website. I will now turn the call over to Ana Cabral.
Speaker #4: We have approximately 1 million tons of those dry stacked high purity materials. We are also in the process of successfully upgrading our mining operations.
Ana Cabral-Gardner: Good morning, everyone. It's a great pleasure to present Sigma Lithium's Q3 2025 results directly from the Amazon, where COP30, the United Nations Climate Change Conference, is being held. Sigma is here as a member of the Brazilian delegation. We have been engaged in high-level dialogues with other delegations from all over the world, and we are showcasing how we have implemented and executed on every single one of our targets of sustainability set out in 2017 when we made the original investment in the company. Since then, we have managed to build the most sustainable lithium beneficiation plant in the world, digitalized and using algorithms that employ bots or AI to become more and more efficient in treating the mineralogy of our mines and increasing plant recovery.
Speaker #4: Our plant has already restarted this week. Our mine is expected to resume operations within two to three weeks. And Sigma will operate the mine with equipment leased directly from the manufacturer.
Speaker #4: Lastly, we continue to maintain financial discipline, and that's demonstrated by the leveraging on our short-term trade finance debt by 43% this year despite the challenging lithium pricing environment.
Speaker #4: On this page, we showcase the financial highlights of the third quarter of '25 related to the increased cash margins and the deleveraging of our short-term trade finance debt.
Speaker #4: Our revenues have increased by 69% compared to last quarter. More importantly, we increased revenues by 36% versus the third quarter of last year.
Ana Cabral-Gardner: Our plant is where technology meets metallurgy, meets mining, and delivers sustainability, doing more with less. Please kindly read the disclaimers. We're going to make quite a number of forward-looking statements and projections and guidances as we go through this presentation. We're very proud of our accomplishments in Q3, especially considering the state of the lithium markets throughout the quarter. We have managed to increase the resilience of our business significantly, achieving the following 5 initiatives. First, we substantially increased our net revenues through optimum commercial strategy. We increased revenues by 69% quarter-on-quarter, and by 36% if compared to Q3 of last year. We have generated cash of $31 million resulting from final price settlements of sales that happened throughout the year.
Speaker #4: Our pricing also increased by 33% versus last quarter. So the revenues increase are a result of our efficiency increase. Our margins also increased; the operating margin increased in 42% versus the third quarter.
Speaker #4: And the net margin increased in 67% of last year. Both margins also increased substantially versus the previous quarter. By showcasing the increase versus last year, we highlight the resilience and strength of the business.
Speaker #4: Our deleveraging is demonstrated by the year, we demonstrate how we decrease in trade finance. We managed to pay down export financing short-term debt in 43% this year.
Speaker #4: The remaining balance is just $33.8 million. As of November 13th, our cash has also increased by a quarter, which is a 42% increase versus the last trend. This is very different from our peers, who have burned through cash.
Ana Cabral-Gardner: In addition, we expect cash generation from sales of our processing high-purity, high-grade middlings, which are the result of our sustainable efforts. We have approximately 1 million tons of those dry stacked high-purity materials. We are also in the process of successfully upgrading our mining operations. Our plant has already restarted this week. Our mine is expected to resume operations within 2 to 3 weeks, and Sigma will operate the mine with equipment leased directly from the manufacturer. Lastly, we continue to maintain financial discipline, and that's demonstrated by deleveraging on our short-term trade finance debt by 43% this year, despite the challenging lithium pricing environment. On this page, we showcase the financial highlights of Q3 2025 related to the increased cash margins and the deleveraging of our short-term trade finance debt. Our revenues have increased by 69% if compared to last quarter.
Speaker #4: Our current cash today is 21 million dollars plus 8 million dollars off incremental trade receivables all related to sales realized until the third quarter of 2025.
Speaker #4: On this page, we discuss record of zero our stellar accidents; we have achieved 787 consecutive days without accidents with lost time injury. It's over two years with zero records.
Speaker #4: This demonstrates our operational excellence in addition to managing to continuously decrease our costs. So we haven't cut costs at the expense of health and safety.
Speaker #4: Our TRFIR is 1.79 amongst the lowest in the world. This result in employee is a direct connection to the factory floor, which leads us to enhanced performance and engagement and safety processes ideas for cost optimization coming straight from our employees.
Ana Cabral-Gardner: More importantly, we increased revenues by 36% versus Q3 of last year. Our pricing also increased by 33% versus last quarter. The revenues increase are a result of our efficiency increase. Our margins also increased. The operating margin increased in 42% versus Q3, and the net margin increased 67% of last year. Both margins also increased substantially versus the previous quarter. By showcasing the increase versus last year, we demonstrate how we increased the resilience and the strength of the business. Our deleveraging is demonstrated by the decrease in trade finance. We managed to pay down export financing short-term debt in 43% this year. The remaining balance is just $33.8 million as of 13 November.
Speaker #4: So it's a self-fulfilling circle where focusing on safety enables us to keep on getting better both operationally by increasing efficiency but also cost-wise by gaining ideas directly from employees on how to be lower cost.
Speaker #4: We're very proud of this. On this page, we're going to start to discuss our financial performance this quarter. On this slide, we demonstrate how Sigma achieved an optimum commercial strategy, which allowed us to price efficiently our material capturing the price cycle.
Speaker #4: Despite the price volatility that took over the metals market throughout the period that followed liberation day, and the tariffs, you can see on this chart in red the sales on provisional prices, and in green the sales on final prices.
Speaker #4: And it's a much higher final price as we managed to authorize our clients to resell the visible that we were able to capture products and settle our final prices.
Ana Cabral-Gardner: Our cash has also increased by 42% versus last quarter, which is a trend very different from our peers, which has burned cash. Our current cash today is $21 million plus $8 million of incremental trade receivables, all related to sales realized until Q3 2025. On this page, we discuss our stellar record of zero accidents. We have achieved 787 consecutive days without accidents with lost time injury. It's over 2 years with zero records. This demonstrates our operational excellence, in addition to managing to continuously decrease our costs. We haven't cut costs at the expense of health and safety. Our TRIFR is 1.79 amongst the lowest in the world.
Speaker #4: These adjustments resulted in incremental cash revenues for this quarter. So a picture is a thousand words. And here is how that translates into cash generation.
Speaker #4: This commercial success resulted in incremental cash from the final settlement with the trade partners. And you can see that by looking at the initial cash position at the end of the second quarter, the increasing cash from operations on a provisional price basis of $30 million, then the generation of trade receivables booked on sales up until the third quarter on provisional prices of $20 million.
Speaker #4: That got converted into cash as of now, but that refers to sales with a cutoff on the third quarter. In addition to that, we had another incremental increase in trade receivables because of the extra increase in prices that we have been experiencing today.
Ana Cabral-Gardner: This results in employee engagement in safety processes, a direct connection to the factory floor, which leads us to enhanced performance and ideas for cost optimization coming straight from our employees. It's a self-fulfilling circle where focusing on safety enables us to keep on getting better, both operationally by increasing efficiency, but also cost-wise by gaining ideas directly from employees on how to be lower cost. We're very proud of this. On this page, we're gonna start to discuss our financial performance this quarter. On this slide, we demonstrate how Sigma achieved an optimum commercial strategy, which allowed us to price efficiently our material, capturing the price cycle despite the price volatility that took over the metals market throughout the period that followed Liberation Day and the tariffs. You can see on this chart in red the sales on provisional prices and in green the sales on final prices.
Speaker #4: At 1,700 dollars per ton. So that's another 8 million dollars. Which means that there were 28 million dollars extra that resulted from our optimum commercial strategy.
Speaker #4: So when you observe our cash as of today, we have 21 million dollars in the bank plus 8 million dollars of settled trades at current market prices.
Speaker #4: Now, in addition, we have 33 million dollars of potential sale of lithium middlings, which are high purity middlings or dry stack material that currently sits both at the port and at our plant.
Speaker #4: At current market prices, the quota in the Shanghai metal markets is $112 per ton, net of transportation costs, to port for part of it, and to China for the material sitting at the port.
Speaker #4: So, a significant cash boost is coming from materials that have already been produced. But more importantly, it is a direct result of our investment in dry stacking our tailings and recycling, reprocessing, and optimizing our plant.
Ana Cabral-Gardner: It's visible that we were able to capture a much higher final price as we managed to authorize our clients to resell the products and settle our final prices. These adjustments resulted in incremental cash revenues for this quarter. A picture is 1,000 words. Here is how that translates into cash generation. This commercial success resulted in incremental cash from the final settlement with the trade partners. You can see that by looking at the initial cash position at the end of Q2, the increase in cash from operations on a provisional price basis of $30 million. The generation of trade receivables booked on sales up until Q3 on provisional prices of $20 million. That got converted into cash as of now, but that refers to sales with a cutoff on Q3.
Speaker #4: lithium green tech industrial On this page, we show what that cash position managed to pay down our short-term trade enabled us to do. finance We 60% year to date to November.
Speaker #4: As of October, we have cut it off and paid it down by 44%. That's a significant debt reduction, especially considering the down markets in lithium prices and the volatility we experienced this year.
Speaker #4: So, we had a cash increase and we decreased our short-term trade finance expensive debt. That's a significant accomplishment in our financial results for a year such as these in lithium markets.
Speaker #4: On this page, we demonstrate how the debt maturity profile will be lengthened further because all that's left now is essentially $10 million that we already paid down plus $100 million that will be paid down next year in December, which relates to our shareholder debt.
Ana Cabral-Gardner: In addition to that, we had another incremental increase in trade receivables because of the extra increase in prices that we have been experiencing to date at $1,700 per ton. That's another $8 million. Which means that there were $28 million extra that resulted from our optimum commercial strategy. When you observe our cash as of today, we have $21 million in the bank, plus $8 million of settled trades at current market prices. Now, in addition, we have $33 million of potential sale of lithium middlings, which are high purity middlings or dry stack material that currently sits both at the port and at our plant.
Speaker #4: Whose generosity has allowed us to get here, to commission our green tech plant, and to continue to make improvements to achieve the stellar operational performance the plant has been delivering.
Speaker #4: So we are in a very comfortable debt position as of November 13th. We demonstrate here on this page all the short-term debt that we have managed to pay down or roll.
Speaker #4: This page demonstrates our low-cost resilience and the fact that we are source of responsible lithium production in this industry. We have managed to maintain the highest sustainability and ethical sourcing standards throughout market pricing.
Ana Cabral-Gardner: At current market prices quoted at Shanghai Metals Market of BRL 112 per ton, net of transportation costs to port for part of it and to China for the material sitting at the port. A significant cash boost coming from materials that have already been produced. More importantly, a direct result of our investment in dry stacking our tailings and recycling and reprocessing and optimizing our Lithium Greentech industrial plant. On this page, we show what that cash position enabled us to do. We managed to pay down our short-term trade finance 60% year to date to November. If you cut it off as of October, we paid it down 44%. That's a significant debt reduction, especially considering the down markets and the lithium prices volatility we experienced this year.
Speaker #4: Meaning our resilience is here to stay even with the slight decrease in production which is shown here in the little green over our regular costs, we're still lower than the lowest cost producer for non-integrated lithium oxide concentrate in Africa.
Speaker #4: And this location to the very left of the non-integrated supply curve is exactly where we plan to remain throughout the foreseeable future. On this page, we lower production levels in September demonstrate how the have not really affected our low-cost position.
Speaker #4: In other words, the slight increase in cost maintained us on guidance for the all-in sustaining cost. And that's demonstrated by the chart to the right where we show the nine months all-in sustaining cost versus the full year guidance we provided at the beginning of the year.
Speaker #4: This all-in sustaining cost includes interest, CapEx, maintenance, all of it. Royalties, SG&A, environmental and social that is voluntary. So we're very much on track.
Ana Cabral-Gardner: We had a cash increase, and we decreased our short-term trade finance expensive debt. That's a significant accomplishment in financial results for a years such as these in lithium markets. On this page, we demonstrate how the debt maturity profile will be lengthened further because all that's left now is essentially $10 million that we already paid down, plus $100 million that will be paid down next year in December, which relates to our shareholder debt, whose generosity has allowed us to get here to commission our Greentech Plant and to continue to make improvements to achieve the stellar operational performance the plant has been delivering. We are in a very comfortable debt position as of November 13th. We demonstrate here on this page all the short-term debt that we have managed to pay down or roll.
Speaker #4: We're issuing guidance of this all-in sustaining cost becoming 560 dollars, meaning lowering to 560 dollars for 2026 based solely on production from the first plant.
Speaker #4: CIF cash costs and Now, the increase in plant gate costs are easily corrected once we return to full production in the first quarter of '26.
Speaker #4: our low-cost position is unmatched So unchanged. On this slide, we basically outline the off-take agreements expected for this year. They're basically enabled by the significant commercial leverage and power we achieved by being an ethical producer and one of the lowest cost producers of lithium concentrate globally.
Ana Cabral-Gardner: This page demonstrates our low-cost resilience and the fact that we are a source of responsible lithium production in this industry. We have managed to maintain the highest sustainability and ethical sourcing standards throughout market pricing, meaning our resilience is here to stay. Even with the slight decrease in production, which is shown here in the little green over our regular costs, we're still lower than the lowest cost producer for non-integrated lithium oxide concentrate in Africa. This location to the very left of the non-integrated supply curve is exactly where we plan to remain throughout the foreseeable future. On this page, we demonstrate how the lower production levels in September have not really affected our low cost position. In other words, the slight increase in cost maintained its own guidance for the all-in sustaining costs.
Speaker #4: Now, what we've done with tailored different types of off-takes to cater for different specific client needs across geographies. So this year, what we have is three different kinds of off-takes being discussed with three very different kinds of clients.
Speaker #4: The first kind is what we call the three-month rolling off-take. They're done at market prices, and these are prepayments of upcoming production until March.
Speaker #4: The objective is to provide sigma with low costs working capital. off-take is a 20,000 The second kind of for 25 million dollars. It's a small long-term off-take and the user proceeds will be to pay for the mining equipment that will help us upgrade our mining operations.
Speaker #4: largest scale trucks and overall excavators and mining Meaning the equipment. The third category is a conventional off-take with prepayment being negotiated with a global European trading company.
Ana Cabral-Gardner: That's demonstrated by the chart to the right, where we show the 9-month all-in sustaining costs versus the full-year guidance we provided at the beginning of the year. This all-in sustaining cost includes interest, CapEx, maintenance, all of it, royalties, SG&A, environmental and social that is voluntary. We're very much on track. We're issuing guidance of this all-in sustaining cost becoming $560, meaning lower to $560 for 2026, based solely on production from the first plant. Now, the increase in CIF cash costs and plant gate costs are easily corrected once we return to full production in Q1 2026. Our low-cost position is unmatched and unchanged. On this slide, we basically outline the offtake agreements expected for this year.
Speaker #4: So the user proceeds is to deploy towards our expansion plans remaining on track for our growth strategy next year. We are in contract negotiation stages with that one.
Speaker #4: Now, for 2026, we still have another 120,000 tons of product uncommitted to be contracted into off-takes. The objective is to strike conventional off-takes for both amounts.
Speaker #4: The first amount for 80,000 tons will be assigned to a regular end user. The objective is to repay the long-term shareholder debt that was generously offered to Sigma in December 2022 and enabled us to get here.
Speaker #4: To this very strong operational position. We are in contract negotiations for that one. The second off-take is going to be achieved against an agent.
Speaker #4: Meaning a trading company, which is again going to be a typical conventional off-take, once again deployed towards building and delivering on our growth strategy.
Ana Cabral-Gardner: They're basically enabled by the significant commercial leverage and power we achieved by being an ethical producer and one of the lowest cost producers of lithium concentrate globally. Now, what we've done, we tailored different types of offtakes to cater for different specific client needs across geographies. This year, what we have is 3 different kinds of offtakes being discussed with 3 very different kinds of clients. The first kind is what we call the three-month rolling offtake. They're done at market prices, and these are prepayment of upcoming production until March. The objective is to provide Sigma with low cost working capital. The second kind of offtake is a 20,000 tons for 3 years for $25 million.
Speaker #4: Meaning building a second plant. And this off-take is under contract negotiation. So we're expecting to announce three off-takes still this year and two more next year.
Speaker #4: This page demonstrates our production and cost guidance for the upcoming years, 2026 and 2027. Our cash flow is poised to increase as our production efficiency increases with the execution of our strategic plan.
Speaker #4: We've planned one alone where bound to generate an all-in sustaining cost of 560 dollars per ton. And that includes everything including interest expenses. Now, at the current price levels of 1,000 dollars per ton, that represents a cash flow free cash flow generation of 132 million dollars.
Ana Cabral-Gardner: It's a small long-term offtake, the use of proceeds will be to pay for the mining equipment that will help us upgrade our mining operations, meaning the larger-scale trucks and overall excavators and mining equipment. The 3 category is a conventional offtake with prepayment being negotiated with a global European trading company. The use of proceeds is to deploy towards our expansion plans, remaining on track for our growth strategy next year. We are in contract negotiation stages with that one. For 2026, we still have another 120,000 tons of product uncommitted to be contracted into offtakes. The objective is to strike conventional offtakes for both amounts.
Speaker #4: Once we complete plant two, by the end of next year, we expect to have 550,000 tons of production throughout 2027, which will lower our all-in sustaining cost to 500 dollars approximately.
Speaker #4: That at current price points for lithium is expected to generate a free cash flow of approximately 270 million dollars. So this page really demonstrates how by remaining the lowest cost producer globally, we are bound to benefit with excess returns from this relatively increase in lithium prices.
Ana Cabral-Gardner: The first amount for 80,000 tons will be assigned to a regular end user, and the objective is to repay the long-term shareholder debt that was generously enough offered to Sigma in December 2022, and enabled us to get here to this very strong operational position. We are in contract negotiations for that one. The second offtake is going to be achieved against a agent, meaning a trading company, which again is gonna be a typical conventional offtake. Once again, deployed towards building and delivering on our growth strategy, meaning building a second plant. This offtake is under contract negotiation. We're expecting to announce 3 offtakes still this year and 2 more next year. This page demonstrates our production and cost guidance for the upcoming years, 2026 and 2027.
Speaker #4: From $700 per ton at mid-third quarter to $1,000 per ton as of now, November 13th. This page demonstrates how our green tech plant upgrade into the 3.0 version, concluded and executed in November '24, was not accompanied by de novo, de novo do zero.
Speaker #4: Dois, três. This page demonstrates how the upgrade in our green tech plant into a 3.0 version, which was concluded in November of '24, one year ago, was not followed by our mining operations.
Speaker #4: Here at Sigma, just to recap, we have two different operations which are integrated. We have a mine that delivers raw material to a state-of-the-art industrial lithium beneficiation plant.
Ana Cabral-Gardner: Our cash flow is poised to increase as our production efficiency increases with the execution of our strategic plan. With Plant 1 alone, we're bound to generate an all-in sustaining cost of $560 per ton. That includes everything, including interest expenses. Now, at the current price levels of $1,000 per ton, that represents a free cash flow generation of $132 million. Once we complete Plant 2 by the end of next year, we expect to have 550,000 tons of production throughout 2027, which will lower our all-in sustaining cost to $500 approximately. That, at current price points for lithium, is expected to generate a free cash flow of approximately $270 million.
Speaker #4: The green tech plant. That is automated, digitalized, and run by an algorithm. Throughout the first nine months of this year, what we could demonstrate is that the plant outperformance was compensating for the mine.
Speaker #4: You can clearly see that in the chart at the bottom left of the slide, we had an 11% increase in production in the first nine months of this year.
Speaker #4: Now, the chart above shows and demonstrates the significant upgrade that took place in the green tech year. When from the beginning of '24 to the end of '24, the production went up 43%.
Speaker #4: In other words, the plant can produce 300,000 tons of lithium concentrate if properly fed with fresh rock, fresh spodumene ore. It processes it efficiently because the plant recoveries are 70%.
Ana Cabral-Gardner: This page really demonstrates how by remaining the lowest cost producer globally, we are bound to benefit with excess returns from this relative increase in lithium prices from $700 per ton at mid Q3 to $1,000 per ton as of November 13. This page demonstrates how the upgrade in our Greentech Plant into a 3.0 version, which was concluded in November 2024, of last year, one year ago, was not followed by our mining operations. Here at Sigma, just to recap, we have two different operations which are integrated. We have a mine that delivers raw material to a state-of-the-art industrial lithium beneficiation plant, the Greentech Plant, that is automated, digitalized, and run by an algorithm.
Speaker #4: Now, that made it clear that a mining upgrade was required. So we reassessed our mining plant and concluded that we needed larger equipment scale to basically ensure higher volumes that would be moved faster.
Speaker #4: More importantly, that would also ensure that we would maintain our stellar safety and health record at our operations. The chart on the right breaks down the two quarters.
Speaker #4: The second quarter '25 and the third quarter '25. And it clearly shows that the last month of the third quarter when the mining equipment provider was the mobilized was where we had a significant production decrease.
Speaker #4: Because they were simply demobilizing and phasing down their efforts in operating and moving material at the expected productivity rates. This page shows what's the way forward.
Speaker #4: Well, we have mastered dense media separation technology, achieving 70% recovery. Let me go back to the beginning. Pause, pause. Again. This page demonstrates our way forward and our operational plan.
Speaker #4: Clearly, we have mastered dense media separation technology for lithium processing. Achieving 70% recovery rates. That's equivalent to flotation. We have demonstrated also greater efficiency and reliability throughout 2025.
Ana Cabral-Gardner: Throughout the first nine months of this year, what we could demonstrate is that the plant outperformance was compensating for the mine. You can clearly see that in the chart at the bottom left of the slide, where we had an 11% increase in production in the first nine months of this year. The chart above show and demonstrate the significant upgrade that took place in the Greentech Plant last year, when from the beginning of 2024 to the end of 2024, the production went up 43%. In other words, the plant can produce 300,000 tons of lithium concentrate if properly fed with fresh rock, fresh spodumene ore. It processes it efficiently because the plant recoveries are 70%. That made it clear that a mining upgrade was required.
Speaker #4: And now we're going to match it by upgrading our mining operations. First, our plant. It has already restarted. So it restarted processing high-grade material that's in our current operating site.
Speaker #4: The target for 2026 is to achieve full plant operational capacity of 300,000 tons. Of lithium oxide concentrate. We have been recurrently achieving unprecedented recovery levels throughout the year, up until the third quarter.
Speaker #4: So that's where our confidence comes from—from this track record. Now, on the feed of the plant, clearly a mining upgrade was required and is underway.
Ana Cabral-Gardner: We reassessed our mining plan and concluded that we needed larger equipment scale to basically ensure higher volumes that would be moved faster. More importantly, that would also ensure that we would maintain our stellar safety and health record at our operations. The chart on the right break down the 2 quarters, Q2 2025 and Q3 2025. It clearly shows that the last month of Q3, when the mining equipment provider was demobilized, was where we had a significant production decrease because they were simply demobilizing and phasing down their efforts in operating and moving material at the expected productivity rates. This page shows what's the way forward. Well, we have mastered dense media separation technology, achieving 70% recovery. Let me go back to the beginning. Pause. Again. This page demonstrates our way forward in our operational plan.
Speaker #4: We reassessed the mining plant and the geometry. We observed that we have mined about 798,000 tons in July and 669,000 tons in August.
Speaker #4: We continue to mine waste and strip in order to optimize geometry. And that is something I talked about during our second quarter '25 announcement.
Speaker #4: The ore grade is being perfectly aligned with our mine plan, with no significant dilutions, so we maintain the cadence of the ore grade fed to the plant.
Speaker #4: As a result, we're very well positioned to resume our mining operations within two to three weeks once we're able to mobilize large-scale equipment so that we can increase the volume mined and the operational speed at which we advance the geometry and increase mining volumes.
Speaker #4: So with those upgrades, we expect to evolve our production capabilities at the plant already in the first quarter 73,000 tons of lithium oxide concentrate produced.
Ana Cabral-Gardner: Clearly, we have mastered dense media separation technology for lithium processing, achieving 70% recovery rates. That's equivalent to flotation. We have demonstrated also greater efficiency and reliability throughout 2025. Now we're going to match it by upgrading our mining operations. First, our plant. It has already restarted. It restarted processing high-grade material that's in our current operating site. The target for 2026 is to achieve full plant operational capacity of 300,000 tons of lithium oxide concentrate. We have been recurrently achieving unprecedented recovery levels throughout the year, up until Q3. That's where our confidence comes from this track record. Now, on the feed of the plant. Clearly, a mining upgrade was required and is underway. We reassessed the mining plan and the geometry.
Speaker #4: That's the guidance for the first quarter of '26, reaching '26. This slide demonstrates how, by being the low-cost and most sustainable producer at large scale, we have been able to obtain significant support by our clients to execute our expansion on our expansion plans.
Speaker #4: That's financial support and offtake support. We plan to reach 80,000 tons of lithium carbonate equivalent upon completion of our Phase Two expansion next year.
Speaker #4: By just adding a third production already on site, we expect it to achieve 120,000 tons line which infrastructure is of LCE equivalent of production.
Speaker #4: That is a consequence of Sigma already being a pillar throughout the global lithium supply chain. So this underpins the financial support that we receive from our very large clients downstream in the lithium supply chain.
Ana Cabral-Gardner: We observed that we have mined about 798,000 tons in July and 659,000 tons in August. We continue to mine waste and strip in order to optimize geometry. That is something I talked about during our Q2 2025 announcement. The ore grade is being perfectly aligned with our mine plan, with no significant dilutions, so we maintain the cadence of the ore grade fed to the plant. As a result, we're very well positioned to resume our mining operations within 2 to 3 weeks once we're able to mobilize large scale equipment, so that we can increase the volume mined and the operational speed at which we advance the geometry and increase mining volumes.
Speaker #4: So we also conclude by outlining how we're going to continue to deliver on our strategic plan for 2025. First, we're going to conclude our offtake agreements as we have outlined in the presentation.
Speaker #4: Second, we have achieved financial strength, but we're going to continue to do so by continuing to close final prices on the provisional price sales that we have achieved year to date until the third quarter and will continue to deliver throughout the fourth quarter.
Speaker #4: We have delivered and will continue to deliver by basically paying down expensive short-term trade finance debt. We're also going to monetize existing lithium products that currently sit in our plant and in a port, taking advantage of the current robust pricing environment where demand for these products becomes actual.
Speaker #4: Currently, these products are priced at about 120 dollars per ton, which could bring the additional revenues dollars throughout the fourth of 33 million quarter.
Ana Cabral-Gardner: With those upgrades, we expect to evolve our production capabilities at the plant, already in Q1 2026, reaching 73,000 tons of lithium oxide concentrate produced. That is the guidance for Q1 2026. This slide demonstrates how by being the low cost and most sustainable producer at large scale, we have been able to obtain significant support by our clients to execute on our expansion plans. That is financial support and offtake support. We plan to reach 80,000 tons of lithium carbonate equivalent upon completion of our phase II expansion next year. By just adding a third production line, which infrastructure is already on site, we are expected to achieve 120,000 tons of LCE equivalent of production. That is a consequence of Sigma already being a pillar throughout global lithium supply chains.
Speaker #4: Thirdly, we are going to upgrade our mining operations to increase the green tech plant production scale, more feed, more concentrate. So there's another advantage to that, which means we're going to lower the structural costs of this company by lowering the plant gate costs.
Speaker #4: By volume, and by actually increasing production decreasing the absolute number of mining costs, which represent two-thirds of our plant gate costs. Fourth, we're going to continue to partner with our very large clients with very large balance sheets to create commercial strategies that allow us to navigate lithium price seasonality.
Speaker #4: Benefiting from achieving higher prices during the high seasonality. Number five, we're going to continue to increase the scale of our suppliers so that we can obtain working capital support.
Speaker #4: This is a strategy where we simply match or copy what the global leaders in downstream including battery makers and car makers receive from their own suppliers in the duration of their account payables.
Ana Cabral-Gardner: This underpins the financial support that we receive from our very large clients downstream in the lithium supply chain. We also conclude by outlining how we're going to continue to deliver on our strategic plan for 2025. First, we're going to conclude our offtake agreements as we have outlined in the presentation. Second, we have achieved financial strength, but we're going to continue to do so by continuing to close final prices on the provisional price sales that we have achieved year to date until Q3, and we'll continue to deliver throughout Q4. We have the leverage and will continue to delever by basically paying down expensive short-term trade finance debt. We're also going to monetize existing lithium products that are currently sitting in our plant and in the port, taking advantage of the current robust pricing environment, where demand for these products become actual.
Speaker #4: The average of the largest car makers in the world is from 130 days to 180 days to 210 days of deadlines for suppliers. So we're lengthening that period by leaning on larger suppliers that are as large as days.
Speaker #4: The average of the largest car makers in the world is from 130 days to 180 days to 210 days of deadlines for suppliers. So we're lengthening that period by leaning on larger suppliers that are as large as days.
Speaker #1: presentation. We'll now begin the Q&A section. To ask questions, just cue the question in the Q&A button. Please be aware that your company name should be visible for a question to be taken.
Speaker #1: Our first question
Speaker #1: comes from Bavita from Bloomberg. Hi, thanks for the Glen Ladder tea on the cash balance. Based on page nine, is current cash balance at
Ana Cabral-Gardner: Currently, these products are priced at about $120 per ton, which could bring the additional revenues of $33 million throughout Q4. Thirdly, we are going to upgrade our mining operations to increase the Greentech Plant production scale. More feed, more concentrate. There's another advantage to that, which means we're going to lower the structural costs of this company by lowering the plant gate costs, by increasing production volume, and by actually decreasing the absolute number of mining costs, which represent two-thirds of our plant gate costs. Four, we're going to continue to partner with our very large clients with very large balance sheets to create commercial strategies that allows us to navigate lithium price seasonality, benefiting from achieving higher prices during the high seasonality.
Speaker #2: Million. The 33 are basically bids we received on the current lithium material we already have, and we've been barely doing 30.
Speaker #2: we were mentioning. That exists in the port and at the plant.
Speaker #1: Our next question comes from Lian Cruz here. What is the origin of lithium middlings from the process circuits? What is their LI20 grade even as a
Speaker #1: range? Yes, these
Speaker #2: are typical materials that are processed through the DMS circuit. They're more valuable because the chemical broken. In other words, it's a very structure of the particle hasn't been different manner of processing lithium ore than the flotation plant.
Speaker #2: So the lithium grade goes from 1% to 1.3%. There's an official quote for these products at Shanghai Metals Market, which can be validated daily.
Ana Cabral-Gardner: Number five, we are going to continue to increase the scale of our suppliers so that we can obtain working capital support. This is a strategy where we are simply matching or copying what the global leaders in downstream, including battery makers and car makers receive from their own suppliers in the duration of their account payables. The average of the largest car makers in the world is from 130 days to 180 days to 210 days. We have been barely doing 30 days of deadlines for suppliers, so we are lengthening that period by leaning on larger suppliers. There are as large as us.
Speaker #2: So in current market environments where it's actually a search for physical materials to close open positions in Guangzhou, we've been getting bids for these materials.
Speaker #2: A hundred thousand of which are at the port already, which makes their cost simply shipping to China, which is 40 dollars a ton. And then we have another 850,000 ton of these materials at the plant.
Speaker #2: Which makes their costs approximately 85 dollars. So when we banked on 33 million dollars, it's just pure profit. Given incurred in transportation. So the that they're cost number is net of transportation.
Ana Cabral-Gardner: I wanna thank you for the opportunity to present you our Q3 earnings, and I'm now gonna open the floor for the Q&A questions that are gonna be submitted to our moderator through the chat function of this Zoom.
Speaker #2: The current quote for these materials at Shanghai Metals Market is 120 dollars per ton. They're roughly 11-ish percent of current lithium oxide concentrate prices as of today.
Operator 2: Thank you very much for the presentation. We'll now begin the Q&A section. To ask questions, just queue the question in the Q&A button. Please be aware that your company name should be visible for a question to be taken. Our first question comes from Vivita from Bloomberg. Hi. Thanks for the clean clarity on the cash balance. Based on page nine, is current cash balance at $29 million plus $33 million or only $29 million? Thank you.
Speaker #2: which is about $1,070 to $1,080 per ton.
Speaker #1: Our next question comes from Armando Wolfrid. Could you please provide some more info on the 100 million shareholders credit and the status of your BNDS loan disbursement for phase two?
Speaker #1: Thank you.
Speaker #2: Absolutely. Well, we're going to lean on our suppliers on our credit clients the same way we have been leaning on them for a number of advancements we've been doing here, including the mining upgrade.
Speaker #2: There are a number of ways to basically disburse the BNDS loan. However, as we discussed earlier, we were awaiting for a quarter of lithium price stability given the highly volatile pricing environment we experienced this year.
Ana Cabral-Gardner: No, the current cash balance is BRL 29 million. The BRL 33 million are basically bids we received on the current lithium material we already have. We were mentioning that exists in the port and at the plant.
Speaker #2: I mean, we were one of the few companies to actually generate cash this year. Our peers were mainly cash burning. So our board decided to wait for a quarter of stability so that we could basically green light purchasing equipment.
Operator 2: Our next question comes from Rowan Crozier. What is the origin of lithium middlings from the process circuits? What is their Li2O grade? Even as a range?
Speaker #2: So, it could happen as early as January or late January. Given the current price environment being very robust, we’re going to utilize the same structures we’ve been using, which are large customer balance sheet support, to basically disburse what we’re doing about expansion to ensure.
Ana Cabral-Gardner: Yes. These are typical materials that are processed through the DMS circuit. They are more valuable because the chemical structure of the particle hasn't been broken. In other words, it's a very different manner of processing lithium ore than the flotation plant. The lithium grade goes from 1% to 1.3%. There's an official quote for these products at Shanghai Metals Market, which can be validated daily. In current market environments, where there's actually a search for physical materials to close open positions in Guangzhou, we've been getting bids for these materials. 100,000 of which are at the port already, which makes their cost simply shipping to China, which is $40 a ton. We have another 850,000 tons of these materials at the plant, which makes their costs approximately $85.
Speaker #1: Mrs. Mrs. Anna, your connection just dropped in the middle of the answer. If you can repeat that part, please.
Speaker #2: Geometry.
Speaker #2: Okay. Yes. So regarding the structure for disbursing BNDS, our board was awaiting for at least a quarter of price stability. Given the volatility in lithium prices the market experienced this year.
Speaker #2: So what we are planning to do, if the lithium prices environment continues to be as robust as it is now, is probably green light equipment purchasing as early as January, late January of '26.
Ana Cabral-Gardner: When we banked on $33 million, it's just pure profit, given that there are costs incurred in transportation. The number is net of transportation. The current quote for these materials at Shanghai Metals Market is $120 per ton. They're roughly 11% of current lithium oxide concentrate prices as of today, which is about $1,070 to $1,080 per ton.
Speaker #2: But more importantly, we have already disbursed a certain amount and filed that with BNDS. So it's all basically ready to be deployed once we continue on equipment purchases, which is the plant portion of phase two.
Speaker #2: Now, the key element in ensuring the timeliness of a potential 2026 commissioning of the plant was adjusting mine geometry so that we could see the plant with the same geometrology that we are feeding our current plant one.
Operator 2: Our next question comes from Armando Wolfray. Could you please provide some more info on the BRL 100 million shareholders credit and the status of your BNDES loan disbursement for phase 2? Thank you.
Ana Cabral-Gardner: Absolutely. Well, we're gonna lean on our suppliers, on our credit clients the same way we have been leaning on them for a number of advancements we've been doing here, including mining upgrades. There are a number of ways to basically disperse the BNDES loan. However, as we discussed earlier, we were awaiting for a quarter of lithium price stability, given the highly volatile pricing environment we experienced this year. I mean, we were one of the few companies to actually generate cash this year. Our peers were mainly cash burning. Our board decided to wait for a quarter of stability so that we could basically green-light purchasing equipment. Once we do so, it could happen as early as January or late January, given current price environment being very robust.
Speaker #2: So feeding plant one and plant two with the same geometrology would ensure a shorter ramping up period given that we would have more chemical certainty of the ramp up.
Speaker #2: In other words, any ramp up issues could be only narrowed to processing, which are relatively easy to fix. So the work on mine geometry would continue the same way we carried on geometry work throughout the second quarter, despite the lithium prices
Speaker #2: volatility. Our next question comes from
Speaker #1: Hub Ho. Will production be fast tracked if the lithium market tightens and the market price of lithium increases heavily? Thank you.
Speaker #2: Yes, that's exactly why we're carrying through the mining upgrade. You were spot on, meaning we know what the plant can't do. I mean, we have a state-of-the-art green tech lithium plant that can't do 300,000 tons of lithium oxide concentrate on its own.
Ana Cabral-Gardner: We're gonna utilize the same structures we've been utilizing, which are large customer balance sheet support to basically disperse. What are we doing about expansion is ensure?
Speaker #2: What we needed to do was to match mine to plant. And this is exactly what we're doing. Taking advantage of the relatively muted lithium price environment that we observed on the
Operator 2: Mrs. Sena.
Ana Cabral-Gardner: So mine geometry-
Operator 2: Mrs. Sena, your connection just dropped in the middle of the answer. If you can repeat that part, please.
Speaker #2: third. Production a Thank you. year.
Ana Cabral-Gardner: Okay. Yes. Regarding the structure for dispersing BNDES, our board was awaiting for at least a quarter of price stability, given the volatility in lithium pricings the market experienced this year. What we are planning to do if the lithium prices environment continue to be as robust as it is now, is probably green-light equipment purchasing as early as January, late January of 2026. More importantly, we have already disbursed a certain amount and filed that with BNDES. It's all basically ready to be deployed once we continue on equipment purchases, which is the plant portion of phase II.
Speaker #1: Mrs. Anna, your connection dropped
Speaker #1: again. Okay.
Speaker #2: So resuming. What we are doing is basically spot on. In other words, we are basically matching the reason to decide on the upgrade of the mine was exactly what you asked us.
Speaker #2: In other words, we know what the plant can do. The plant can deliver 300,000 tons of lithium oxide concentrate per year. If properly fed with fresh rock.
Speaker #2: So by upgrading the plant, by revisiting the mine plan and moving more material, what we're doing is making more product available for the robust lithium price environment that we were expecting in 2026.
Ana Cabral-Gardner: Now, the key element in ensuring the timeliness of a potential 2026 commissioning of the plant was adjusting mine geometry so that we could feed the plant with the same geometallurgy that we are feeding our current plant one. Feeding plant one and plant two with the same geometallurgy would ensure a shorter ramping up period, given that we would have more chemical certainty of the ramp-up. In other words, any ramp-up issues could be only narrowed to processing, which are relatively easy to fix. The local mine geometry would continue the same way we carried on geometry work throughout Q2, despite the lithium prices volatility.
Speaker #2: We took advantage of the muted price environment still in the third quarter to make that decision. And it was the accurate timing to do so.
Speaker #2: Because as we enter '26, we will already enter with an upgraded quarterly production as we indicated to 73,000
Speaker #2: tons. Our next
Speaker #1: The question comes from Benson Chen. What’s your estimated CapEx for bringing phases two and three online, respectively, and what could be the risk of further delays?
Speaker #1: Could you not utilize some credit lines to speed up the expansion and avoid delays? Thank
Speaker #1: You well, we have a credit signed.
Speaker #2: with BNDS, which is the best possible credit we can get. But to your point, the off-dates as I outlined on the discussion that we had about them, and it was quite detailed, are meant for that.
Operator 2: Our next question comes from Hubbo. Will production be fast-tracked if the lithium market tightness and the market price of lithium increase happily? Thank you.
Speaker #2: words, we have the In other conventional off-takes when we declare the user proceeds is to fund the growth. What they will be doing is essentially closing that gap.
Ana Cabral-Gardner: Yes, that's exactly why we're carrying through the mining upgrade. That you were spot on. Meaning, we know what the plant can do. I mean, we have a state-of-the-art Greentech Plant that can do 300,000 tons of lithium oxide concentrate on its own. What we needed to do was to match mine to plant, and this is exactly what we're doing. Taking advantage of the relatively muted lithium price environment that we observed on the third-
Speaker #2: As off-takes get closed this year, what we will do is redirect those proceeds for the plant, phase two, given that the mining upgrade has been fully covered by our current
Speaker #2: clients. This is a reminder.
Speaker #1: If you wish to ask a question, please use the raise hand button. Wait while pool for questions. Our next question comes from Joe Jackson from BMO Capital Markets.
Operator 2: Wait.
Ana Cabral-Gardner: ton of production a year.
Speaker #1: Please confirm as of today how much production Sigma had at the mine in Q4 due for and how much inventory there is as of today.
Operator 2: Mrs. Sena, your connection dropped again.
Ana Cabral-Gardner: Resuming. What we are doing is basically spot on. In other words, we are basically matching the reason to decide on the upgrade of the mine was exactly what you asked us. In other words, we know what the plant can do. The plant can deliver 300,000 tons of lithium oxide concentrate per year if properly fed with fresh rock. By upgrading the plant, by revisiting the mine plan and moving more material, what we're doing is making more product available for the robust lithium price environment that we were expecting in 2026. We took advantage of the muted price environment still in Q3 to make that decision.
Speaker #1: Thank
Speaker #1: you. Yes.
Speaker #2: Well, we are planning to do, Joe, is to issue guidance for fourth and first quarter together. We issued the first quarter guidance, and we're going to issue fourth quarter guidance soon when we show a remobilization plan.
Speaker #2: What we have though is the full cost to upgrade mining operations, which is 25 million dollars, which is being fully covered by our clients.
Speaker #2: So what we need to do, what we need to do now is to just wrap up what we call the mobilization curve for large tonnage equipment, which is either twice the tonnage of what we got or probably two and a half times the tonnage of what we got.
Speaker #2: Depending on the mobilization curve, which will be announced promptly, we will be able to perhaps have a surprise for the fourth quarter. And given the first quarter guidance and the fourth quarter guidance will be given as soon as we wrap up the mobilization curve for the very large tonnage equipment that's been made available to us by the manufacturer directly.
Ana Cabral-Gardner: It was the accurate timing to do so, because as we enter 2026, we will already enter with an upgraded quarterly production, as we indicated, to 73,000 tons.
Operator 2: Our next question comes from Benson Chang. What is your estimated CapEx for bringing phase 2 and 3 online, respectively, and what could be the risk of further delays? Could you not utilize some credit lines to speed up the expansion and avoid delays? Thank you.
Speaker #2: By the way, one more point that's very important. The 25 million dollars are not going to be paid at once. They're going to be paid in very nice, soft installments throughout two to three years at very low rates.
Ana Cabral-Gardner: Well, we have a credit signed with BNDES, which is the best possible credit we can get. To your point, the off-takes, as I outlined on the discussion that we had about them, and it was quite detailed, are meant for that. In other words, we have the conventional off-takes. When we declare that use of proceeds is to fund the growth, what they will be doing is essentially closing that gap. As off-takes get closed this year, what we will do is re-redirect those proceeds for the plant phase II, given that the mining upgrade is being fully covered by our current clients.
Speaker #2: So for plus under one or one percent. Again, facilitated by our very supportive clients, given that we are the pillars of global downstream supply chains.
Speaker #2: So you'll be like an, you'll be an off-take like any
Speaker #2: other.
Speaker #1: Our next question comes
Speaker #1: from Ricardo Fernandez. Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized
Speaker #1: prices? Well, it's spot.
Speaker #2: Essentially, we close provisional prices at spot. Today, fortunately, there's a very liquid market for both chemicals and spodumene, or as we call it, lithium oxide concentrate.
Operator 2: Just as a reminder, if you wish to ask a question, please use the Raise Hand button. Wait while pool for questions. Our next question comes from Joel Jackson from BMO Capital Markets. Please confirm, as of today, how much production Sigma had at the mine in Q4 so far, and how much spodumene inventory there is as of today. Thank you.
Speaker #2: Shanghai Metals Market, Guangzhou. I mean, they're literally moving with significant volumes. For example, last night, Guangzhou negotiated over 600,000 tons of LCE of open interest contracts.
Speaker #2: That's a third of global lithium demand. So there's quite precise pricing. Last night, prices hovered around 1,070 dollars a ton. So that level of liquidity allows for spot to be quite precise, meaning clients bid and hedge immediately into chemicals.
Ana Cabral-Gardner: Yes. What we are planning to do, Joel Jackson, is to issue guidance for Q4 and Q1 together. We issued the Q1 guidance, and we're gonna issue Q4 guidance soon when we show a remobilization plan. What we have, though, is the full cost to upgrade mining operations, which is $25 million, which is being fully covered by our clients. What we need to do now is to just wrap up what we call the mobilization curve for large tonnage equipment, which is either twice the tonnage of what we got or probably two and a half times the tonnage of what we got. Depending on the mobilization curve, which will be announced promptly, we will be able to perhaps have a surprise for Q4.
Speaker #2: So we believe pricing is becoming more and more efficient, which helps producers like us, given that there's less opacity, more transparency. And again, what we do though is depending on the season, we close at final or we close at provisional.
Speaker #2: And what we've done this year, given volatility, we basically close the provisional pricing. And now we're benefiting from having the clients to lean on and realizing final pricing.
Speaker #2: Hence, the cash boost we received from sales up to the third quarter at the moment, as we explained in detail in our cash from operations section of this.
Ana Cabral-Gardner: We're given the Q1 guidance, and the Q4 guidance will be given as soon as we wrap up the mobilization curve for the very large tonnage equipment that's been made available to us by the manufacturer directly. By the way, one more point that's very important. The $25 million are not going to be paid at once. They're going to be paid in very nice soft installments throughout 2 to 3 years, at very low rates, so for plus under 1% or 1%. Again, facilitated by our very supportive clients, given that we are the pillars of global downstream supply chains. It'll be an off-take like any other.
Speaker #2: presentation. Our next question comes
Speaker #1: from Sifa Kumar. Are you getting any premium at all of the green lithium compared to the market price? Thank you.
Speaker #2: No. No. Unfortunately, not. I'm here COP 30. That's been one of the frustrations. What the advantage is though is commercial power, meaning given that global supply chain are being rearranged, what we have is similar battery makers, supplying car makers globally.
Speaker #2: In the West, in the East, all over. So there's a huge focus on traceability, on sustainability, on health and safety. And what we have is essentially a brand that safeguards us from any questions.
Speaker #2: I mean, it's very easy to ascertain the quintuple zero advantage. And that's what we have: a commercial advantage, which translates into what we showcase so far.
Operator 2: Our next question comes from Ricardo Fernandes. Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized prices?
Speaker #2: Our ability to negotiate provisionals when we believe it's reasonable to negotiate provisionals. Our ability to lean on our clients' balance sheets for support for mining upgrades and so on and so forth.
Ana Cabral-Gardner: Well, it's spot, essentially. We close provisional prices at spot. Today, fortunately, there's a very liquid market for both chemicals and spodumene, or we call lithium oxide concentrate. Shanghai Metals Market, Guangzhou, I mean, they're literally moving with significant volumes. I mean, just for example, last night, Guangzhou negotiated over 600,000 tons of LCE of open interest contract. That's a third of global lithium demand. There's this liquid for quite precise pricing. Last night, prices hovered around $1,070 a ton. That level of liquidity allows for spot to be quite precise, meaning clients bid and hedge immediately into chemicals. We believe pricing is becoming more and more efficient, which helps producers like us, given that there's less opacity, more transparency.
Speaker #2: But unfortunately, there is no green premium. And we do not believe that will be a green premium. Hopefully, that could be, but it's years ahead.
Speaker #2: What there is, is a green commercial.
Speaker #2: advantage. Our next question
Speaker #1: comes from David Fang. Hi, Anna. This is Dave from CICC Research. And thanks for the presentation. We can see that there's still over 30 QT of spodumene concentrate inventory by comparing your production and shipments.
Speaker #1: Just wondering, shall we expect all these inventories to be sold in Q4 2025? And what would your inventory management strategy be if lithium prices continue to rise?
Speaker #1: Thank you.
Speaker #2: Yep.
Speaker #2: Thank you, David. We'll sell it all down. I mean, at current prices, the plan is to basically monetize everything we have, including the what we call in China middlings, right?
Ana Cabral-Gardner: Again, what we do, though, is depending on the season, we close at final or we close at provisional. What we've done this year, given volatility, we basically closed the provisional pricing. Now we're benefiting from having the clients to lean on and realizing final pricing. Hence, the cash boost we received from sales of the Q3, at the moment, as we explained in detail in our cash from operations section of this presentation.
Speaker #2: And we have high purity middlings with an intact what we call intact spodumene chemical structure because it comes from DMS and it hasn't been affected chemically by the flotation.
Speaker #2: Nor by organic contaminants, nor by the chemicals utilized in flotations. Hence, we can get a straight quotation of $420, even for middlings, which just shows that the current strategies to monetize all the lithium we currently have.
Operator 2: Our next question comes from Siva Kumar. Are you getting any premium at all of the green lithium compared to the market price? Thank you.
Speaker #1: Our next question comes from John Christian. Can you confide in US dollars how much working capital will be required to restart the mine and the fourth quarter 2026?
Ana Cabral-Gardner: No, unfortunately, no. I mean, here at COP30, that's been one of the frustrations. What the advantage is, though, is commercial power, meaning given that global supply chains are being rearranged, what we have is similar battery makers supplying car makers globally in the West, in the East, all over. There's a huge focus on traceability, on sustainability, on health and safety. What we have is essentially a brand that safeguards us from any questions. I mean, it's very easy to ascertain the Quintuple Zero advantage. That's what we have, a commercial advantage, which translates into what we showcase so far. Our ability to negotiate provisionals when we believe it's, it's reasonable to negotiate provisionals. Our ability to lean on our clients' balance sheets for support for mining upgrades, and so on and so forth.
Speaker #1: And can you bridge the six million on third Q ending cash balance to 21 million today considering your slideshow 20 million debt paid down in the four Q so far?
Speaker #1: Where did that approximately 35 million come from in the past six weeks? Thank you.
Speaker #2: Well, no, we discussed that. I mean, if you look at lithium price behavior, it came from the final price settlements. I mean, the lithium prices have rallied considerably.
Speaker #2: RMB contracts for LCE in Guangzhou were close to 88,000, 87,000. So we were able to receive the final price settlement adjustment from the sales of product that took place up until the cutoff 2025.
Speaker #2: So that's where the adjustment comes from, from actual cash from these settlements. And more importantly, there's extra adjustments from the settlements that haven't been closed yet.
Ana Cabral-Gardner: Unfortunately, there is no green premium, and we do not believe there will be a green premium. Hopefully, that could be, but it's years ahead. What there is a green commercial advantage.
Speaker #2: We started to close settlements at 875, and we kept going until the latest ones, which were 1,035 just last week. But again, these were shipments of material in boats in the water.
Operator 2: Our next question comes from Wei Fang. Hi, Ana. This is David Fang from Mizuho Securities, and thanks for the presentation. We can see that there's still over 30 QT of spodumene concentrate inventory by comparing your production and shipments. Just wondering, shall we expect all these inventories to be sold in Q4 2025? What would your inventory management strategy if lithium price continues to rise? Thank you.
Speaker #2: We were literally shipping everything and selling everything. The other question you asked was about the 33 million. That's essentially middlings, which are monetized. They're bids out.
Speaker #2: We are awaiting to work out on logistics. The profit varies significantly on logistics 100,000 at the port. That because we have is simply $40 to China.
Speaker #2: 120 minus 40, that's net profit, pure profit, no cost associated with it. Then we have 850,000 tons of those middlings, high purity, with chemical structure intact at the plot.
Ana Cabral-Gardner: Well, yeah. Thank you, Wei. We'll sell it all down. I mean, at current prices, the plan is to basically monetize everything we have, including the, what we call in China, middlings, right? We have high purity middlings with an intact spodumene chemical structure because it comes from DMS, and it hasn't been affected chemically by the flotation, nor by organic contaminants, nor by the chemicals utilized in flotations. Hence, we can get a straight quotation for $120 even for middlings, which just shows that the current strategy is to monetize all the lithium we currently have.
Speaker #2: The logistic costs there are different because we need to truck it to port. So what we're working on is to think through berthing the biggest ships we can obtain and therefore lower the shipping costs to perhaps 25, $30 so that 120 minus $70 of logistics back to back, plant to China.
Speaker #2: So essentially, there are two different costs of logistics. These products are zero cost to produce because they are middlings, or what we call dry-stacked high-grade lithium tailings.
Operator 2: Our next question comes from John Christian. Can you confirm in US dollars how much working capital will be required to restart the mine in Q1 2026? Can you bridge the $6 million on Q3 ending cash balance to $21 million today, considering your slideshow, $20 million debt pay down in Q4 so far? Where did that approximately $35 million come from in the past six weeks? Thank you.
Speaker #2: And that's the sustainability advantage. We are able to monetize it to a net of 33 million US dollars, which is a considerable sum. It's equivalent to a boat or a bit more, actually.
Speaker #2: Pure profit.
Speaker #1: So just as a reminder, if you wish to ask a question, please use the Q&A button. Our next question comes from Olin Chan. Could you please clarify the expected lithium concentrate production volume for the four Q 2025 based on your current operational plans and on the ramp-up schedule?
Ana Cabral-Gardner: Well, no, we discussed that. I mean, if you look at lithium price behavior, it came from the final price settlements. I mean, the lithium prices have rallied considerably. RMB contracts for LCE in Guangzhou were close to RMB 88,000, RMB 87,000. We were able to receive the final price settlement adjustment from the sales of product that took place up until the cutoff date of 30 September 2025. That's where the adjustment comes from actual cash from these settlements. More importantly, there's extra adjustments from the settlements that haven't been closed yet. We started to close settlements at RMB 875, and we kept going until the latest ones, which were RMB 1,035 just last week. Again, these were shipments, material in boats in the water. We were literally shipping everything and selling everything.
Speaker #1: Thank
Speaker #1: you.
Speaker #2: Yeah, we're not there
Speaker #2: yet. I answered a similar question. We issued guidance for the first quarter '26. And as soon as we wrap up the what we call the mobilization curve in terms of the scale of the large equipment being made available to us, it could vary from 60-ton trucks to up to 95-ton trucks, which is a significant increase from this small 40-ton truck we were using before.
Speaker #2: The 75-ton truck could move twice as much material as a 40-ton truck. A 60-ton truck could move 50% more material. A 95 to 120-ton truck with the same axis size could move three times more material.
Ana Cabral-Gardner: The other question you asked was about the 33 million. That's essentially middlings, which are monetized. There are bids out. We are waiting to work out on logistics. The profit varies significantly on logistics because we have 100,000 at the port. That is simply $40 to China. $120 minus $40, that's net profit, pure profit, no cost associated with it. Then we have 150,000 tons of those middlings, high purity, with chemical structure intact at the plant. The logistic costs there are different because we need to truck it to port.
Speaker #2: Cost is not that dissimilar because it's diesel. One driver instead of, I mean, it's four drivers per equipment. So we are decreasing the number of men involved.
Speaker #2: Consumption of diesel not that dissimilar. So overall, structurally lowering the cost of this operation. And this is the guidance that we plan to provide in detail as soon as we wrap up mobilization schedule for
Speaker #1: Just got back a day and a half ago . we are And . We're making progress in strides on that front . And we're delighted with the support we received from manufacturers clients we're because pillars of three global supply chains .
Ana Cabral-Gardner: What we're working on is thinking through birthing the biggest ships we can obtain, and therefore lower the shipping costs to perhaps $25, $30, so that $120 minus $70 of logistics back-to-back, plant to China. Essentially two different costs of logistics. These products are 0 cost to produce because they are middlings or what we call dry stacked, high grade, lithium tailings. That's the sustainability advantage. We are able to monetize it to a net of $33 million, which is a considerable sum. It's equivalent to a boat or a bit more actually. Pure profit.
Speaker #1: Actually, Europe, Asia, and China.
Speaker #2: Thank you . This this concludes the Q&A . Section . I'm now return the floor to our CEO Ana Cabral , for her final remarks .
Speaker #2: Please go ahead . Anna .
Speaker #1: Well , we're very optimistic about 2026 . It's been a year where volatility dominated the conversation . Its consensus . Now we're literally headed .
Speaker #1: Now what's important to highlight is lithium is a commodity . Like any other meaning prices will be what they are . We're not talking about price spikes .
Speaker #1: We're talking about prices being at 1000 , 1000 , 100 , which for low cost producers such Sigma , with as current plant gate of costs around 350 , normalized , is a fantastic operating environment .
Operator 2: Just as a reminder, if you wish to ask a question, please use the Q&A button. Our next question comes from Owen Chan. Could you please clarify the expected lithium concentrate production volume for Q4 2025 based on your current operational plans and on the ramp-up schedule? Thank you.
Speaker #1: so And the key is to continue to be a low cost producer . Hence our efforts in upgrading our mining operations to match the exceptional industrial operations we have achieved throughout this year .
Ana Cabral-Gardner: Yeah, we're not there yet. I answered a similar question. We, we issued guidance for Q1 2026, and as soon as we wrap up the what we call the mobilization curve in terms of the scale of the large equipment being made available to us, it could vary from 60 ton trucks to up to 95 ton trucks, which is a significant increase from the small 40 ton trucks we use locally. A 75 ton truck can move twice much material than a 40 ton truck. A 60 ton truck can move 50% more material. A 95 to 120 ton truck, same axis size, can move 3 times more material. Cost is not that dissimilar because it's diesel. 1 driver, instead of I mean, it's 4 drivers per equipment, so we are decreasing the number of man involved.
Speaker #1: So thank you all for listening . Thank you all for being with us on our journey . And we're going to be open for welcoming you all through my colleague Anna Hartley , who's heading Investor Relations , and we'll be visiting some of you through conference calls in the next couple of days .
Speaker #1: Throughout the world .
Speaker #2: you . Thank This does conclude the third quarter of 2025 . Conference call of . For further Sigma Lithium Corp information and details of the company , please visit the company's website at w-w-w-what .
Ana Cabral-Gardner: Consumption of diesel, not that dissimilar, so overall, structurally lowering the cost of this operation. This is the guidance that we plan to provide in detail as soon as we wrap up mobilization schedule for the equipment, which is currently taking place. I was in China for 2 weeks, just got back a day and a half ago. We're making progressing strides on that front. We're delighted with the support we received from manufacturers, clients, because we're pillars of 3 global supply chains actually, Europe, Asia, and China.
Operator 2: Thank you. This does conclude the Q&A section. I'll now return the floor to our CEO, Ana Cabral-Gardner, for her final remarks. Please go ahead, Ana.
Ana Cabral-Gardner: Well, we're very optimistic about 2026. It's been a year where volatility dominated the conversation. It's consensus now where lithium is headed. Now, what's important to highlight is lithium is a commodity like any other, meaning prices will be what they are. We're not talking about price spikes. We're talking about prices being at $1,000, $1,100, which for low cost producers, such as Sigma, with current plunge gate costs of around $350 normalized, is a fantastic operating environment. The key is to continue to be a low cost producer, hence our efforts in upgrading our mining operations to match the exceptional industrial operations we have achieved throughout this year. Thank you all for listening. Thank you all for being with us on our journey.
Ana Cabral-Gardner: We're gonna be open for welcoming you all through my colleague, Anna Hartley, who's heading investor relations. We'll be visiting some of you through conference calls in the next couple of days throughout the world.
Operator 2: Thank you. This does conclude the Q3 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website at www.sigmalithiumcorp.com. You can disconnect from now on and have a wonderful day.
Operator 1: Goodbye.