Sigma Lithium Corporation Q3 FY2025 earnings call

• Showcased sustainability efforts, having built the most sustainable lithium beneficiation plant using technology, metallurgy, and mining.
• Achieved 787 consecutive days without accidents, demonstrating operational excellence.
• Optimum commercial strategy led to revenue increase and cash generation from final price settlements.
• Deleveraged short-term trade finance debt by 43%.
• Monetizing existing lithium products currently sitting in the plant and port, which could bring additional revenues of $33 million in the fourth quarter.
• Upgrading mining operations to increase the Greentech Plant production scale, aiming to lower structural costs.

Sigma Lithium achieved a 69% quarter-on-quarter increase in net revenues and a 36% year-on-year increase. Cash generated was $31 million from final price settlements. Revenues from optimum commercial strategy contributed to this. Operating margin increased by 42% year-on-year and net margin by 67% year-on-year. Short-term trade finance debt was deleveraged by 43%, and cash increased by 42% quarter-on-quarter. Revenue contribution from the commercial strategy was significant, with adjustments from final price settlements and monetization of existing lithium products.

• Plan to conclude offtake agreements.
• Continue closing final prices on provisional price sales achieved year-to-date until the third quarter and deliver throughout the fourth quarter.
• Continue deleveraging by paying down expensive short-term trade finance debt.
• Monetize existing lithium products sitting in the plant and port.
• Upgrade mining operations to increase the Greentech Plant production scale.
• First quarter 2026 guidance: 73,000 tonnes of lithium oxide concentrate produced.

• Lithium price volatility, which affected the industry and the company's financials.
• Potential delays in upgrading mining operations, which could impact production plans.
• Uncertainty in offtake agreements and their impact on funding growth and deleveraging.

Q: Based on Page 9, is current cash balance at USD 29 million plus USD 33 million or only USD 29 million?

A: The current cash balance is $29 million. The $33 million are bids received on current lithium material already available.

Q: What is the region of lithium middlings from the process circuits? What is their LI 20 grade even as a range?

A: These are typical materials processed through the DMS circuit. Lithium grade goes from 1% to 1.3%.

Q: Could you please provide some more info on the 100 million shareholders credit and the status of your BNDES loan disbursement for Phase 2?

A: The Board was waiting for price stability. Once price environment is robust, equipment purchasing could happen as early as January 2026. BNDES loan disbursement is tied to mine geometry adjustment to feed the plant.

Q: Will production be fast-tracked if the lithium market tightness and the market price of lithium increase happily?

A: Yes, the mining upgrade is being carried out to match mine to plant to take advantage of robust lithium price environment.

Q: What's 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?

A: Offtakes are meant to fund growth. CapEx for Phase 2 is tied to offtakes closing. Risk of delays exists, but offtakes will redirect proceeds for Phase 2 once closed.

Q: Please confirm as of today, how much production Sigma had at the mine in Q4 due far? And how much spodumene inventory there is as of today.

A: Guidance for fourth and first quarter will be issued soon. The $25 million for mining upgrade is covered by clients. Mobilization curve for large tonnage equipment will determine production details.

Q: Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized at prices?

A: Contracts are based on spot price. There's precise pricing in liquid markets like Shanghai Metals Market.

Q: Are you getting any premium at all of the green lithium compared to the market price?

A: No green premium currently, but there is a commercial advantage from sustainability efforts.

Q: We can see that there is still over 30 kt of spodumene concentrate inventory by comparing year production and shipments. Just wondering how we expect all these inventories to be sold in 4Q '25? And what would your inventory management strategy if lithium price continues to rise.

A: Plan to sell all inventories at current prices. Monetize all lithium, including middlings with intact chemical structure.

Q: Can you quantify in U.S. dollars, how much working capital will be required to restart the mine in the first quarter 2026? And can you bridge the $6 million on third Q ending cash balance to $21 million today, considering your slide show $20 million debt paid down in the 4Q so far. Where did that approximately $35 million came from in the past 6 weeks?

A: Cash came from final price settlements of sales. Middlings monetization and logistics costs affect the $33 million figure. Profit varies with logistics costs.

Q: Could you please clarify the expected lithium concentrate production volume for the 4Q 2025 based on your current operational plans and the ramp-up schedule.

A: Guidance for 4Q 2025 will be provided once mobilization curve for large equipment is wrapped up. Progress is being made on mobilization schedule.