Sigma Lithium Corporation Q2 FY2025 earnings call

• Safety: Achieved 2 years without lost-time accidents and 0 fatalities, ranked top 2 in ICMM with TIRFR 1.92.
• Costs: Lowered operating costs across the board; plant gate costs down 4% YOY, CIF China cash cost down 14%, all-in sustaining costs down 24%.
• Production: Maintained cadence, production up 40% YOY, on track for 270,000 tonnes annual guidance.
• Deleveraging: Short-term debt reduced by 57% YOY and 15% QOQ.
• Commercial: Diversified trading relationships, used provisional pricing to preserve pricing power, stored 28,000 tonnes during price volatility.
• Phase 2: Adopted disciplined phased approach, redeployed CapEx to Mine 1 for immediate returns to lower costs.

Sigma Lithium produced 270,000 tonnes of lithium oxide concentrate, equivalent to approximately 40,000 tonnes of LCE, on track to meet the full-year 2025 guidance. Gross sales revenues for the second quarter were USD 21 million from the sale of approximately 40,350 tonnes. Plant gate costs decreased 4% year-on-year to $348 per tonne, CIF China cash cost decreased 14% to $442 per tonne, and all-in sustaining costs dropped 24% to $594 per tonne.

• On track to achieve 270,000 tonnes per year guidance for 2025.
• Q3 sales expected to match production, normalizing from prior abnormal conditions.
• Phase 2 completion targeted for mid to third quarter 2026.
• Anticipates positive price adjustments in Q3 from recent high resale prices.

• Market volatility, influenced by paper markets like GFEX in China which are susceptible to sentiment and news.
• Dependence on China for refining, as current refining business has negative margins.
• Potential tariff impacts, though customer base is diversified.

Q: Can you talk about inventories and trading relationships?

A: We've diversified trading relationships with large companies globally. Inventories normalized post-quarter cutoff as we held back product during volatile market conditions to benefit from later price recoveries.

Q: What are sales expectations for Q3?

A: Sales will match production, normalizing from the abnormal conditions of the second quarter.

Q: Status of prepayments/offtakes?

A: Negotiating definitive offtake agreements, will announce once documents are completed; value of 80,000-tonne 3-year offtake could be ~USD 100 million at current prices.

Q: U.S. tariffs and refining plans?

A: Customer base is diversified; we're taking a wait-and-see approach to refining as it currently has negative margins.

Q: Provisional pricing and Phase 2 commissioning?

A: Provisional pricing will continue; Phase 2 commissioning is targeted for mid to third quarter 2026, depending on price recovery.

Q: Recent price action and market outlook?

A: Lithium market is volatile, driven by GFEX futures in China. Expect RMB 80,000 for lithium chemicals to hold, with robust demand from EV growth leading to more stable pricing in the future.