Earnings call transcript: Sigma Lithium Q3 2025 reports strong revenue growth

Sigma Lithium Corp (SGML) reported its Q3 2025 earnings, showcasing a robust financial performance with significant revenue growth and operational improvements. The company posted a notable increase in revenues, driven by advancements in its Greentech Industrial Plant, and a strategic focus on sustainability. Despite the challenging market conditions, Sigma's stock saw a 3.22% increase, closing at $5.90, reflecting investor optimism about the company's future prospects.

Key Takeaways

• Sigma Lithium's revenues increased by 69% quarter-on-quarter.
• The company achieved a 42% rise in operating margin.
• Stock price increased by 3.22% post-earnings announcement.
• Plant upgrades enhance production capabilities to 300,000 tons of lithium concentrate.
• Q1 2026 production guidance set at 73,000 tons of lithium oxide concentrate.

Company Performance

Sigma Lithium demonstrated strong performance in Q3 2025, with revenues rising by 69% compared to the previous quarter and 36% year-over-year. The company managed to generate $31 million in cash from final price settlements, significantly improving its cash position and reducing short-term trade finance debt by 43%. These results underscore Sigma's strategic focus on enhancing operational efficiency and expanding production capabilities.

Financial Highlights

• Revenue: Increased by 69% quarter-on-quarter and 36% year-over-year.
• Operating Margin: Improved by 42% compared to the previous year.
• Net Margin: Increased by 67% year-over-year.
• Cash Balance: $21 million, with an additional $8 million in trade receivables.

Market Reaction

Following the earnings announcement, Sigma Lithium's stock price rose by 3.22%, closing at $5.90. In pre-market trading, the stock further increased by 0.68%, reaching $5.94. This positive market reaction reflects investor confidence in the company's strategic direction and operational improvements, despite the broader market volatility.

Outlook & Guidance

Looking ahead, Sigma Lithium has set ambitious production targets, with Q1 2026 guidance projecting 73,000 tons of lithium oxide concentrate. The company aims to produce 550,000 tons by 2027, with all-in sustaining costs expected to decrease to $560 in 2026 and $500 in 2027. This forward-looking strategy positions Sigma to capitalize on the anticipated robust lithium market in 2026.

Executive Commentary

CEO Ana Cabral highlighted the company's commitment to sustainability, stating, "We have managed to build the most sustainable lithium beneficiation plant in the world." She emphasized the importance of stabilizing lithium prices before making major equipment purchases, illustrating a cautious yet strategic approach to expansion.

Risks and Challenges

• Market Volatility: Fluctuating lithium prices could impact profitability.
• Supply Chain Disruptions: Potential delays in equipment upgrades or raw material supply.
• Regulatory Changes: Shifts in environmental regulations could affect operations.
• Competition: Increasing competition in the lithium market may pressure margins.
• Economic Conditions: Broader economic downturns could affect demand for lithium products.

Q&A

During the earnings call, analysts inquired about the absence of a green premium and the company's plans to monetize existing inventory. Sigma's management confirmed their focus on exploring offtake agreements to support expansion and reiterated their strategy of waiting for price stability before making significant equipment investments.

Full transcript - Sigma Lithium Corp (SGML) Q3 2025:

Conference Moderator: Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2025 Third Quarter 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 conference 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 Ana Hartley, Vice President of Investor Relations. Please go ahead, Ana.

Ana Hartley, Vice President of Investor Relations, Sigma Lithium: I'd like to welcome you to our Third Quarter Earnings Conference Call. Joining me on the call today is Ana Cabral, CEO of Sigma Lithium. Our Third Quarter 2025 earnings press release presentation and corresponding documents are available on our website. I will now turn the call over to Ana Cabral.

Ana Cabral, CEO, Sigma Lithium: Good morning, everyone. It's a great pleasure to present Sigma Lithium's third quarter 2025 results directly from the Amazon, where COP30, the United Nations Climate 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. 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 the third quarter, 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 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. 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. 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 two to three weeks, and Sigma Lithium 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 the third quarter of 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. More importantly, we increased revenues by 36% versus the third quarter of last year. Our pricing also increased by 33% versus last quarter. The revenues increased as a result of our efficiency increase. Our margins also increased.

The operating margin increased in 42% versus the third quarter, and the net margin increased in 67% of last year. Both margins also increased substantially versus the previous quarter, but 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 November 13th. Our cash has also increased by 42% versus last quarter, which is a trend very different from our peers, which had burned cash. Our current cash today is $21 million, plus $8 million of incremental trade receivables, all related to sales realized until the third quarter of 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 is over two years with zero records. This demonstrates our operational excellence in addition to managing to continuously decrease our costs. We have not cut costs at the expense of health and safety. Our TRIFR is 1.79, amongst the lowest in the world. This results in employee engagement and 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 is 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 are very proud of this. On this page, we are 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, 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. It is 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 a thousand 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 the second quarter, the increase in cash from operations on a provisional price basis of $30 million, then the generation of trade receivables booked on sales up until third quarter on provisional prices of $20 million. 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 to date at $1,700 per ton. That is 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 stacked material that currently sits both at the port and at our plant. At current market prices, quoted at Shanghai Metal Markets of $112 per ton, net of transportation costs to port for part of it and to China for the materials sitting at the port. A significant cash boost coming from materials that have already been produced, but 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. 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 year 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 Industrial 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. 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 us on guidance for the all-in sustaining cost. That is demonstrated by the chart to the right where we show the nine-month all-in sustaining cost 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 are very much on track. We are issuing guidance of this all-in sustaining cost becoming $560, meaning lowering 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 the first quarter 2026. Our low-cost position is unmatched and unchanged. On this slide, we basically outline the offtake 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. Now, what we've done, we tailor different types of offtakes to cater for different specific client needs across geographies. This year, what we have is three different kinds of offtakes being discussed with three 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 three years for $25 million.

It's a small long-term offtake, and 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 third category is a conventional offtake or 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. 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 enough offered to Sigma Lithium 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 an agent, meaning a trading company, which again is going to 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 are expecting to announce three offtakes still this year and two more next year. 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.

With plant one 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 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 approximately. That, at current price points for lithium, is expected to generate a free cash flow of approximately $270 million. 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-third quarter to $1,000 per ton as of now, November 13th.

This page demonstrates how our Greentech Industrial Plant upgrade into the 3.0 version, concluded and executed in November 2024, was not accompanied with... Pause. De novo. De novo. Do zero. One, two, three. This page demonstrates how the upgrade in our Greentech Industrial Plant into a 3.0 version, which was concluded in November of 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 Industrial 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.

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. Now, the chart above shows and demonstrates the significant upgrade that took place in the Greentech Industrial 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%. 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.

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, the second quarter 2025 and the third quarter 2025. It clearly shows that the last month of the third quarter, 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. We have mastered dense media separation technology, achieving 70% recovered. Let me go back to the beginning. Pause, pause. Again. This page demonstrates our way forward and our operational plan. 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 the third quarter. 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. We reassessed the mining plan and the geometry. 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 second quarter 2025 announcement. The ore grade is being perfectly aligned with our mine plan with no significant dilutions. We maintain the cadence of the ore grade fed to the plant. As a result, we are very well positioned to resume our mining operations within two to three weeks once we are 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. With those upgrades, we expect to evolve our production capabilities at the plant already in the first quarter 2026, reaching 73,000 tons of lithium oxide concentrate produced. That is the guidance for the first quarter of 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 our expansion 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 two 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. 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 are 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 the third quarter, and we'll continue to deliver throughout the fourth quarter. We have delivered and we'll continue to deliver 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 a port, taking advantage of the current robust pricing environment where demand for these products becomes actual. Currently, these products are priced at about $120 per ton, which could bring the additional revenues of $33 million throughout the fourth quarter.

Thirdly, we are going to upgrade our mining operations to increase the Greentech Industrial Plant production scale, more feed, more concentrate. There is another advantage to that, which means we are 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. Fourth, we are 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, benefiting from achieving higher prices during the high seasonality. 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're 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've been barely doing 30 days of deadlines for suppliers. We're lengthening that period by leaning on larger suppliers that are as large as us. I want to thank you for the opportunity to present to you our third quarter earnings. I'm now going to open the floor for the Q&A questions that are going to be submitted to our moderator through the chat function of this Zoom. Thank you very much for the 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. Our first question comes from Bhavita from Bloomberg. Hi. Thanks for the cleaning letter key on the cash balance. Based on page nine, is current cash balance at $29 million plus $33 million or only $29 million? Thank you. No, the current cash balance is $29 million. The $33 million are basically bids we received on the current lithium material we already have and we were mentioning that exists in the port and at the plant. Our next question comes from Lian Crozier. What is the origin of lithium middlings from the process circuits? What is their LI20 grade, even as a range? Yes, these are typical materials. They are processed through the DMS circuit. They're 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. 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. 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. And then we have another 850,000 ton of these materials at the plant, which makes their costs approximately $85. So when we banked on $33 million, it's just pure profit, given that their costs incurred in transportation. So 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-$1,080 per ton. Our next question comes from Armando Wolfred. Could you please provide some more info on the $100 million shareholders credit and the status of your BNDES loan disbursement for phase two? Thank you. Absolutely. We are 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 mining upgrade. There are a number of ways to basically disburse 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 greenlight purchasing equipment. Once we do 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 utilizing, which are large customer balance sheet support to basically disburse. What are we doing about expansion is ensure. Mrs. Ana, your connection just dropped in the middle of the answer. If you can repeat that part, please. Okay. Yes. Regarding the structure for disbursing BNDES, our board was awaiting for at least a quarter of price stability, given the volatility in lithium prices the market experienced this year.

What we are planning to do, if the lithium prices environment continues to be as robust as it is now, is probably greenlight 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 is all basically ready to be deployed once we continue on equipment purchases, which is the plant portion of phase two. 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 geometry that we are feeding our current plant one. Feeding plant one and plant two with the same geometry 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 work on mine geometry would continue the same way we carried on geometry work throughout the second quarter, despite the lithium prices volatility. Our next question comes from Hub Ho. Will production be fast-tracked if the lithium market tightens and the market price of lithium increases happily? Thank you. Yes, that's exactly why we're carrying through the mining upgrade. You were spot on, meaning we know what the plant can do. I mean, we have a state-of-the-art Greentech Industrial 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. This is exactly what we're doing, taking advantage of the relatively muted lithium price environment that we observed on the third quarter.

That's production a year. Mrs. Ana, your connection dropped again. Okay. 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 are 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 the third quarter to make that decision.

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. Our next question comes from Benson Chen. What's your estimated CapEx for bringing phase two and three 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. We have a credit signed with BNDES, which is the best possible credit we can get. To your point, the offtakes, 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 offtakes. When we declare that the use of proceeds is to fund the growth, what they will be doing is essentially closing that gap.

As offtakes get closed this year, what we will do is redirect those proceeds for the plant, phase two, given that the mining upgrade is being fully covered by our current clients. Just as a reminder, if you wish to ask a question, please use the raise hand button. Wait while we pool for questions. Our next question comes from Joe Stauff from BMO Capital Markets. Please confirm as of today how much production Sigma had at the mine in Q4 due for and how much spodumene inventory there is as of today. Thank you. Yes. What 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.

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 the fourth quarter. We are 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 has been made available to us by the manufacturer directly. By the way, one more point that is 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 two to three years at very low rates, so for plus under 1%, again, facilitated by our very supportive clients, given that we are the pillars of global downstream supply chains. It'll be like an offtake like any other. Our next question comes from Ricardo Fernandez. Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized prices? 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 contracts.

That's a third of global lithium demand. There is a liquidity 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 is less opacity, more transparency. Again, what we do, though, is depending on the season, we close at final or we close at provisional. What we have done this year, given volatility, we basically close the provisional pricing. Now we are benefiting from having the clients to lean on and realizing final pricing. Hence, the cash boost we received from sales up to third quarter at the moment, as we explained in detail in our cash from operations section of this presentation. Our next question comes from Sifa Kumar.

Are you getting any premium at all of the green lithium compared to the market price? Thank you. No, unfortunately not. I'm 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 is 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 is what we have, a commercial advantage, which translates into what we showcase so far, our ability to negotiate provisionals when we believe it is reasonable to negotiate provisionals, our ability to lean on our clients' balance sheets for support for mining upgrades, and so on and so forth. Unfortunately, there is no green premium. We do not believe there will be a green premium. Hopefully, there could be, but it is years ahead. What there is is a green commercial advantage. Our next question comes from David Fang. Hi, Ana. This is David from CICC Research, and thanks for the presentation. We can see that there is 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 4Q 2025? What would your inventory management strategy be if lithium price continues to rise?

Thank you. Yeah, thank you, David. We'll sell it all down. I mean, at current prices, the plan is to basically monetize everything we have, including what we call in China middlings, right? And we have high purity middlings with an intact, we call 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, $420, even for middlings, which just shows that the current strategy is to monetize all the lithium we currently have. Our next question comes from John Christian. Can you confide in US dollars how much working capital will be required to restart the mine in the first quarter of 2026?

Can you bridge the $6 million on third quarter ending cash balance to $21 million today, considering your slideshow $20 million debt paid down in the fourth quarter so far? Where did that approximately $35 million come from in the past six weeks? Thank you. 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. R&B contracts for LCE in Guangzhou were close to $88,000, $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 September 30, 2025. That is where the adjustment comes from, from actual cash from these settlements. More importantly, there are extra adjustments from the settlements that have not been closed yet.

We started to close settlements at $875, and we kept going until the latest ones, which were $1,035 just last week. These were shipments of material in boats in the water. 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. 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. We have 850,000 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.

What we're working on is thinking through birthing the biggest ships we can obtain and therefore lower the shipping cost 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 zero 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. 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 4Q2025 based on your current operational plans and the ramp-up schedule? Thank you.

Yeah, we're not there yet. I answered a similar question. We issued guidance for the first quarter 2026. As soon as we wrap up 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 were using before. The 75-ton truck could move twice as much material than a 40-ton truck. A 60-ton truck could move 50% more material. A 95-120-ton truck, same axis size, could move three times more material. Cost, not that dissimilar because it's diesel. One driver instead of, I mean, it's four drivers per equipment. We are decreasing the number of men involved. Consumption of diesel, not that dissimilar. 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 two weeks, just got back a day and a half ago. We are making progress in strides on that front. We are delighted with the support we received from manufacturers, clients, because we are pillars of three global supply chains, actually, Europe, Asia, and China. Thank you. This does conclude the Q&A section. I am now returning the floor to our CEO, Ana Cabral, for her final remarks. Please go ahead, Ana. We are very optimistic about 2026. It has been a year where volatility dominated the conversation. It is consensus now where lithium is headed. What is 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 plant 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. We're going to 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. Thank you. This does conclude the third quarter of 2025 conference call of Sigma Lithium.

For further information and details of the company, please visit the company's website at www.sigmalithiumresource.com. You can connect from now on and have a wonderful day.

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