Sigma Lithium Stock

It's my pleasure to present you with our preview of our third quarter of 2026, which we are happy to leave behind us, although the point in this preview is to demonstrate the resilience and the cash generation we've achieved throughout the quarter.

Please look at the disclaimers because we're going to make a number of forward-looking statements in this presentation. The disciplined financial and ESG-centric execution steered our company during the third quarter. We resumed operations successfully after each stoppage, state and federal, but we also obtained landmark victories for our ESG credentials. They have been scrutinized, tried, and prevailed in a court of law, which shows they're bulletproof. And more importantly, this is the result of us thinking through executing in an ESG-centric way since well before we had revenues in 2021.

Our financial discipline also came through. We've achieved high gross margins of 32%, low costs and commercial strength even this quarter. We also, to wrap all of that, on the back of this delivery, were able to extend our debt maturity into June 2027, gaining significant runway of about 7 months to think through how to continue on our deleveraging path.

First, let's recap how our production has gone through throughout the last 2 years. We got to a production cadence that we planned carefully once we upgraded our industrial technological plant in 2024. That cadence culminated in 77,000 tons of production in the fourth quarter of December '24. That's what we're planning to replicate going forward.

We kept on doing it throughout the year of 2025, but mining held us back. So with the primarization, we were well on the way to get back to those levels. Up until the second quarter, we were hitting our every target.

In the second quarter, we surpassed the target. We got to 35,000 tons on that quarter, and we were going to get to where we needed and we are. Now what happened in the third quarter was simply a result of the 2 stoppages, a blip, because as we resumed into that trajectory on the third quarter, we got to, in the third quarter, demonstrate through production and inventories that we can get there. When you add all the numbers back up, we are kind of back to the second quarter levels, boding quite well to deliver the 240,000 tons we're forecasting for the next 12 months and the 330,000 tons forecasted for '27.

That will be a direct result of our upgraded industrial plant. Here it is. 68,000 tons a quarter is what we've been doing, even before primarizing mining. The 15,000 extra comes from the reprocessing circuit, which has been tried live and has kept the company going throughout the last year.

So as we forecast our levels, when we show daily production, we're simply continuing to execute cadence as we were in December '24. In other words, this plant can do and has already done 920 tons, 950 tons, sometimes even 1,000 tons of high grade a day. So we're just showing that what we're forecasting is what we did and what we can do with cadence delivered to the ROM pad every day.

And here is why the reprocessing circuit optimized the plant, delivers 100% circularity and reprocessing fines, intermediates, helping us deliver strong cash flow, freeing up capacity for the high-grade circuit, so we can do more production with the same amount of material. More importantly, we're one of the few plants in the world of any metal to be 100% circular. Nothing is lost. Nothing is put to waste.

Here's our piles. We are able to take every lithium unit and sell and monetize. Here is the key part in all of that. We have continued to do so in a competitive, low-cost delivery. So any lithium prices enable us to be successful because our CIF costs are just $518. Our Plant Gate costs are just $424.

Even this quarter, when we had lower volumes, these are actual costs. So we can keep doing our operations at low costs and keep becoming what we are, meaning we are the floor. At $518 CIF, under current prices, we still have a vast $700 per ton of cash margin. When you look at the left, that's the reason why our all-in sustaining costs is basically $670. That's what we posted in the second quarter. So here in the third quarter, CIF just shows us how competitive Sigma is. We're the floor, our prices are below Africa.

This page is what makes us prouder. We have been uniquely combining a low cost with a top global safety record. This quarter, we got to 1,175 days with 0 accidents and fatalities. This is a unique track record. It was a result of rigorous safety protocols. Our employees go back to their families every day because they are engaged in the strict processes. We have a direct connection to the factory floor. We get enhanced performance from that positive loop created with direct connection with our employees. More beautifully, we celebrated ecumenically how this safety record is a result of our considerable blessing in being able to maintain this day in, day out. All of our employees work together in an event so overwhelming that it had to be televised live on YouTube.

Now let's talk about the future, our production and capacity and our '26, '27 operational outlook. When we look at the next 12 months, we're putting forth guidance for 240,000 tons. When you think about '27, we're putting forth guidance for 330,000 tons. Now on the right, you can see what does that mean in cash flow generation, free cash flow generation under any realized lithium prices.

If you take current prices, we have 240,000 tons per year for the next 12 months, but then generating $200 million of free cash flow. That's quite significant. When we delivered 330,000 tons in '27, that same prices would enable us to generate $275 million of free cash flow. If lithium goes back to $1,000 or goes up to $2,000, the free cash flow is robust, and that is the position of our low cost where we are the floor of the industry.

When it comes to delivering those volumes, that's enabled by our primarization, which has been a direct result of our commercial partnership with the equipment supplier, SANY China. We have upgraded our mining fleet and capacity increase. We are able to haul more because we now have bigger trucks. With 60-ton trucks, we're hauling 50% more than we did with our previous contractor.

With a new fleet coming in at 75 tons and 100 tons over, we would be hauling twice as much than we did before, clearly increasing productivity, efficiency, and lowering cost per ton. So as we upgrade fleet resulting from the direct relationship with our equipment provider, we become more efficient and crystallize our low cost.

The same goes for excavators. We started with 36-ton excavators. We're now at 75 tons, twice as big, more capacity, more efficiency, loading trucks faster. As we move up to 105-ton excavators, we can load the trucks 3x faster than before with 36-ton excavators under our previous contractor. It's all about the numbers. Clearly, the crystallized low costs come from the efficiency.

Here is how all of that translates into the future. We've shown the first 2 quarters in charts, but this is how Sigma is expected to look like once we build a second plant and a third plant. Irrespective of lithium prices, we're looking at very healthy cash flow levels. Let's say, at current prices, $0.5 billion of annual free cash flow with 2 plants and $730 million of free cash flow with 3 plants.

This is our future in numbers at current lithium prices, which means we're going to continue to do what we do day in, day out because we built resilience into our DNA by focusing on being low cost above everything. When we think about our future in our industry, we are enthusiastic. We are AI-enabled in lithium. More importantly, in a way sadly, we are geoeconomics enabled. Rising energy prices creates more demand for clean energy. So lithium is forecasted to get to 2.4 million tons of demand in 2026. This number is significantly higher than 2025, the kind of growth of demand you very rarely see in commodities. Within the next decade, lithium demand is set to double. The key thing is prices may not follow. So this is where Sigma is so well positioned. We built resilience into our prices.

Now we're presenting the financial highlights of the third quarter '26. The financial discipline in the third quarter maintained our low-cost leadership during the quarter. First, production and inventory. We produced 7,293 tons of high-grade volume. That was coupled with 6,000 tons of intermediate volume and 15,000 tons of high-grade equivalent of low-grade volume. As we discussed earlier, our processing circuit can turn both of these inventories into cash flow, which is what we've been doing throughout last year. All the while, we're able to maintain low-cost leadership. In the third quarter, we have been able to deliver $424 per ton of cost at Plant Gates. CIF that becomes $518 per ton.

If one contrasts that to current lithium prices, one can see why Sigma maintains such high gross operating margins and such high, large operational free cash flow. Our gross revenue despite the paralyzations was quite healthy. That, together with our low margins, enabled us to sail through the quarter. So we were able to deliver $23 million of revenues in the third quarter '26 despite everything.

So now as we enter the fourth quarter and 2027, we will even strengthen further our position. As a result of this disciplined financial execution, we were able to negotiate an outstanding outcome for our short-term debt. We extended it to June 2027, giving us considerable runway to think through our balance sheet and conclude the balance sheet turnaround we've been successfully delivering for the last 2 years.

Here is a picture of the turnaround. We've paid down 40% of our total debt, retiring it throughout the last 2 years, even with the depressed lithium prices and then with the 2025 primarization and upgrade preparing us for the future. So when you look at the short-term debt, the picture of extending it gives us that breathing room where we actually decreased it by 83% just over the last year, a sizable change.

In the short-term debt now, all we have is $13 million, which we plan to roll over. Those are just trade lines that we typically use in the normal course of our business. Here is what that extension does to our leverage ratio. The net debt to EBITDA, when we look at the cash flow forecasted under any lithium price in the future, is quite healthy.

Take, for example, current prices, $1,500 per ton. Our net debt to EBITDA will be just 0.6x. If you think about lithium going down to $1,000 per ton, our net debt to EBITDA will be a very comfortable 1.6x using our total debt as part of that calculation.

So what we've accomplished over the last 2 years in terms of financial discipline despite lithium prices and preparing for primarization that leads us to a very resilient future is our core strength. We're building a business to last. Here is how all of it comes together. Our gross margins are healthy. So in the second quarter, when we beat all of our targets, we posted 60% gross margin. In our third quarter, despite stoppages, we posted 32% gross margin, a fantastic result for a company that has gone through what we've gone through.

That's resilience, and it's grounded on operational discipline. This page is how our healthy liquidity pipeline supported by contracted sales and upcoming offtake prepayments come together to deliver us cash. We demonstrate here how disciplined we are. Throughout the quarter, we started with $17 million, but we just burned $4 million. So we closed the quarter with $10 million.

Now when we think about what comes ahead of us, we have more sales coming in. They already got into our balance sheet in the fourth quarter. We closed $10 million in high-grade sales, and we still have $52 million in other sources of short-term liquidity. For example, sales of high-grade equivalent of lithium fines and outstanding installments in our $96 million offtake from last year that was not fully drawn yet.

So we are in a pretty good position to continue producing, delivering, and executing throughout the fourth quarter because we're so disciplined. Now this quarter, what was behind all of it? Our ESG credentials, they were tested in the courts of law and they prevailed, delivering us 2 outstanding victories. On this page, you can see how Sigma Lithium adheres to the highest global mining standards. Our Quintuple Zero Lithium is fully traceable. And here, you see pictures. Pictures are a thousand words. Our rock piles with active germination with grass basically look like hills in the landscape of our region. This is adhering to the highest possible standards. Other G7 countries with very high standards have rock piles and tailings dams.

These are high standards. But our standards are actually equivalent to the best of the best. So much ado about nothing. Our Quintuple Zero Lithium is easily ascertainable: 5, zero tailings dams; zero use of drinking water; zero hazardous chemicals; 100% renewable electricity; zero accidents. So it's just a matter of counting. When we think about Sigma-fueled jobs, the shared prosperity business model prevailed in the court of law. Sigma was declared too big to stop because of the outsized economic impact in the state of Minas Gerais, a stoppage could cause to Sigma. That provides almost a shield against future stoppages. After all, there are 19,000 jobs with 80,000 family members that rely on us in the state.

Minas Gerais is the second wealthiest state of Brazil and of core importance. The landmark victories demonstrated the impeccable ESG credentials of the company. Essentially, we were able to demonstrate the institutional stability of Brazil. Our rule of law has been upheld. We were able to maintain our licenses and operations in the state and in federal challenges. Rule of law and democracy showed we had the right to defense. And as we defended ourselves, we showcased our ESG credentials, which prevailed because they are clear, immaculate, and unique like no other. We also got swift resolutions and protection. We were awarded a TAC by state government, which is an overarching shield around state litigation.

We also were awarded a classification of Too Big To Stop, which means we have sizable economic impact in the state. The 19,000 jobs and their 80,000 family members prevail over bogus claims. We safeguarded our operating licenses and our operational status that way. With very limited financial exposure, the TAC just cost us $1 million to be spent throughout next year to do the active regeneration of the piles we showed earlier. We're going to go grass the rock piles throughout our operations. No additional royalties can be levied in Brazil without Congress. So again, all of it was much ado about nothing. But it showed also that we are a good citizen company.

We had positive engagement with our state government and with federal appeal courts. We created awareness of the amount of jobs that are connected to our operations and how 17 towns have people who rely on us through our network of direct employees, our network of local suppliers, and our social productive jobs. Sigma directed a positive spotlight towards our Quintuple Zero Environmental Stellar Track-Record. And so we believe there was a silver lining in the quarter where now there's a big light shining on who we are and how we prevail environmentally and socially.

Brazil is a mining jurisdiction with rule of law and democracy. All of the large global mining companies are investing. On top, these are the companies investing in our state and at the bottom, are companies investing in other parts of the state. Our governor said that in Minas Gerais, government wants to make life easier for those who work, creating an environment that makes investment immune to political interference, instilling trust in investors that here in Minas Gerais can do business and be rewarded with swift application of rule of law.

We're very happy with this because, again, we've shown a spotlight into our operations. Brazil is also ranked very high in the Fraser Institute Mining Investment Attractiveness. We sit just below Western Australia, but above other jurisdictions that would at first glance, be perceived to sit below Brazil.

So we are in quite a good place here. The TAC in Minas Gerais is simply this. These are our grass waste piles, rock piles. They look like hills. We're going to do it throughout the other areas where we have rock piles. So they will blend into the landscape. How do we do it? This way. First, we start with polymers, then we plant grass. The grass grows, as you can see here, and they get to this here.

It's another picture of an actual rock pile regrassed, fully regenerated within 18 months throughout the rainy season. We also built access roads for 2 houses and 8 people, which was part of the causes of the state stoppage. So we built gravel roads for those 2 houses, fantastic access where there was none.

Those families were just walking in, and they didn't have the gravel roads because they were not even in our licensed area. They were sitting outside of our environmentally licensed area. But we went there and we did what we were told and we created access like all the other 180 kilometers of roads like this, we did for communities within our environmentally licensed areas. Here is another important picture that's a thousand words. You can see the water we preserved for the community. It's a seasonal creek. Here is the North pit, which has been the object of speculation. This pit has been deactivated since '24. We're mining the South pit. So we keep going strong. Our operations continuing into the next 12 months where we plan to deliver 240,000 tons of material and on the way to deliver 330,000 tons of material for 2027.

This is another picture of the river and our resistance bridge. We made a point in preserving the water for the community. Concluding, here's just a summary of what we've gone through. But more importantly, we're operating normally with a Too Big To Stop recent federal court ruling because we got 19,000 jobs and 80,000 family members relying on us. This material is available for you on our website. But what's the takeaway? Rule of law and institutional protection, both in the state and in federal, a TAC signed on a no-fault with a very favorable ruling for Sigma.

That was state. In federal, we were awarded Too Big To Stop when the entire state of Minas Gerais saw our outsized economic effect in the state. More importantly, in the region that was formerly destitute and now grows significantly because of Sigma. Our priority now is to execute and achieve the rerating, showing the significant growth profile of production, showing our proven execution capabilities that will be delivered with our experienced team and showing the operational resilience, financial discipline, and structurally low-cost advantage.

Here is the rerating we plan to achieve in the market. We're negotiating at basically half of a peer with the same production capabilities as we do. We generate quite a lot of cash flow. So as we continue to execute, the rerating will actually materialize normally. Thank you so much.

Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2026 Second Quarter Earnings Conference Call. I would like to inform you that this event is being recorded. [Operator Instructions]

I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead.

I'd like to welcome you to our second quarter 2026 earnings conference call. Joining me on the call today is Ana Cabral, Co-Chair and CEO of Sigma Lithium; and Felipe Peres, CFO of Sigma Lithium.

I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, update on mining operations, the timing of our projects and market conditions may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation and press release which are available on the Sigma Lithium website.

I will now be turning the call to Ana Cabral.

Thank you, Anna. I'm now going to introduce you to Sigma Lithium second quarter of 2026 earnings presentation. Without further ado, I'll go into the next slide.

During this quarter, we continued to deliver on execution excellence, cost control and operational resilience, driving value creation for our shareholders. Sigma is a large-scale, low-cost, and traceable producer of lithium materials. We do not have a tailings dam, we do not use drinking water. We do not use hazardous chemicals. We do not use energy, 100% of our energy is renewable and we have now no had an accident in over 1,100 days.

At the bottom, there are 3 pictures that illustrate that pictures are more than 1,000 words. We uphold at Sigma the highest global mining standards. When you look at the lab, you see our mining waste rock piles. We actively regenerate them blunting grants, so they are integrated into the environment. That's the highest G7 standards. When you look at the G7 countries, to high standards, you can see the same waste rock pile next to the environment. And again, this is a high standard waste rock pile. We go above and beyond what others do. Some other countries have tailing dams. And again, very high standard, but we don't have any of them. That's why we believe that we can generate significant efficiency operational because we can deliver a material and maintain traceability and sustainability.

For example, we have managed to upgrade our mining operations in record time. Moreover, we have managed to achieve record recoveries in our clean tech industrial processing plant. On this slide, you can see the images of our waste rock piles fully rehabilitated and regenerated with vegetation grass. Once these piles come to their final shape of usage, that's the work we do. We do artificial germination and they become beautiful, integrated to the landscape. One can only see their waste piles because of the tariff in. In front of them, there's a beautiful new fleet. Again, a picture is thus works.

Now without further ado, I'm going into the financial highlights of the second quarter of 2026. We've had an incredible quarter. The reliably disciplined execution enabled us to surpass all of our targets. We delivered a very large cash flow generating $27 million in cash from operations during the first half of the year, we also were able to generate high margins as a result of disciplined cost control. We maintained our high gross margin 60% and we delivered a record 47% EBITDA margin, the highest in our history. That's a result of disciplined cost control, lower costs and increased production volumes. We delivered 35,400 of litumarc-site concentrate this quarter, an increase of 52% over the first quarter.

As a result, we also had another record, the highest net revenues in our history at $55 million this quarter. Again, discipline, we remain our low-cost leader decreasing costs even further. 41 per tonne plant, $452 per ton CIF, $668 per ton all-in cash costs. That gives us tremendous resilience and entrenched competitive advantage and an ability to be a cash machine. At current price levels were well into excess return territory. Due to our commercial flexibility, we were able to realize pretty good net lithium prices for ST5, which demonstrates how our clients are supportive and are fans of our high-purity product, $2,089. This page illustrates Carter what our low-cost stewardship does for us delivers strong cash flow and high profitability. It is all about the costs. We increased production by 52%.

Then as a result of the low cost, we were able to deliver the margins we referred to before. More importantly, the revenues of $97 million for the first half of the year. All of it enabled us to continue to repay debt. in a very disciplined approach to our balance sheet. We managed to repay 25% of our debt over the last year. Total debt. Over the last 2 years, we deleveraged the balance sheet in half. We repaid 43% of our total debt. We're now at probably the lowest levels of debt ever in our history. This enables us to continue to execute on our significant near-term growth strategy. By the year-end 2027, without building a second plant, we will be able to increase production capacity by almost 2x.

Once we build 2 plants we will be able to increase production capacity by 2.5x from 2027 to 830,000 tons that capacity will be installed by the end of 2028. That's the result of 2 additional plants. We decided to embark on this growth strategy to take full advantage of our efficiency and the very favorable let markets. This slide illustrates further our cost leadership. This is the result of the financial discipline and precision in growth strategy and CapEx again, a page with numbers, there are thousand words. We delivered a decrease of double digits across the board. Blockgate and CIF cost decreased over 30% and -- now all-in sustaining costs are back to normal, which were third quarter of 2025, which means that we still can decrease them a bit further. Then as we increase volumes and normalized production, our all-in sustaining cost was $668 per ton in the second quarter.

Again, that puts us well into excess return territory at current lithium prices. Here is an additional illustration of that. If we compare net prices, meaning price adjusted to 5% grade, we are delivering against CIF Asia approximately $1,400 per tonne of cash profit. Now when you compare that with our competitors, you can see that we're almost neutral to lithium prices, almost as if we are the floor. That cost discipline, which enabled us to execute on our strategy so successfully has been now reflected into our cost guidance. We are now adjusting our updated guidance in lowering it to reflect the executed delivered all-in sustaining cash cost in the second quarter. So that comes down to $668 per tonne for the year of 2026. Therefore, we are on track to deliver on the year of 2027 guidance of $620 all-in cash costs, total cash costs per ton as we continue to increase production volumes. This page illustrates how we have been able to deliver on some of the lowest costs in our industry, while at the same time, maintaining 1 of the world's best safety records for employees.

Over 11,000 days have gone by and our employees go back home to their families safely. This is a result of our own employee engagement and our strict safety processes. Everyone feels that they are responsible for their safety and their colleague safety. Our TRIFR is 0. That's another 0, again, demonstrating our execution excellence. This next page illustrates how we've been able to achieve operational efficiency and maintain our high margins across the board.

Gross margin stayed at 60% and EBITDA margins were all-time record of 47%. Operating margins remained at 32%, and we maintain profitability with a positive net margin. Therefore, here, it is an illustration of our debt reduction enabled by financial discipline. We repaid 25% of total debt in the last year, 43% of our total debt, but significant deleverage over the last 2 years. When it all comes together, 1 can see how our strong performance translates into cash and fully convert, making our operation self-sustaining and resilient. We sell everything, not only the high grade, but also our tailings, which are dry stack that adds quite a lot to our cash generation.

As you can see on this page, we actually had in June 30 end of second quarter, a cash position that was enhanced by a sale of lithium materials, or high grade. In addition to it, we're also being able to sell current inventory of lithium materials of varying grids, mostly high grade. In other words, we are going to be 100% circular very soon and just sell everything that Alan generates. From high grade to low grade, we have a very wide spectrum of high-purity products. that just increased our resilience and help us be fully sustainable. Without further ado, I'm going to start on our operational highlights and our production and capacity outlook especially in light of the recent events. We have surpassed our high-grade leach oxide production, and we're demonstrating significant operational efficiency. Our mining ramp-up surpassed guidance, and we delivered 35,000 tons in the second quarter, 26%.

That was an increase of 6% over guidance. We are on track to deliver on our previous guidance. We just pushed it forward by 3 months. We are in a very good position to negotiate an agreement with the state of Minas Gerais. And we have cleared most of our main points. As a result, we're going to execute as planned, our additional fleet upgrade and deploy 75-ton trucks and 98 done excavators to our site in order to increase college capacity. That's how confident we are that we're going to be able to successfully advance into primarizing our mining operations and continuing to ramp up our production.

So when you look at it as a whole, a year later, the conclusion is that the increase in safety -- the increase in operational efficiency fully validated the decision to primarize our mine. We have all of our operations under full control, and we are deploying haulage and ability to vasculate through the excavators that significantly increased our productivity and our capabilities to increase geometry of the mine as we will discuss further into this section. Here is a detailed discussion of our continued execution of the fleet upgrade that is going to take place in the third quarter of 26. We delivered on our first half targets increasing the scale of the haulage capacity by 40%. So we're continuing on the upgrade by now bringing the excavators of 98 tonnes, replacing some of the 75-ton excavators in bringing in the 75-ton trucks to add to the fleet of 60-tonne trucks.

Now that geometry is wider, we actually have more flexibility at the waste removal areas. So this is the second stage of deployment of large equipment. Larger machinery means more productivity. So it enables us to maintain our low cash cost operating position. Therefore, it increases our resilience as a company that help us navigate throughout the cycles. This slide illustrates visually how the work we've been conducting for the last couple of months of reassessing the geometry has paid off. We designed a new pit shell, a new mining pit shell that enabled the company to access a large amount of high grade spodumene ore we construction ramps brought in larger trucks. So we were able to unlock this larger block of material that will feed our industrial plant. The results are on the page quantified. The size of the block is 83% larger than the block we were able to access with the old design. -- at 1.1 million tonnes of fresh ore, we can produce 200,000 tons of lithium oxide concentrate. So all in, an 83% increase in raw material delivers almost 100% increase in oxide concentrate production.

Lastly, this ore is a very high grade, 1.4% of fresh rock. This is how we are able to operate throughout the remaining months in full capacity, meaning using the main circuit and the reprocessing circuit because of the amount of high-grade fresh ore being delivered to the plot. This slide is basically to outline how our production expansion plans remain on track. Our forecasts were pushed forward by just 3 months. So the production forecast with only Plant 1 for the 12 months forward remains at 240,000 tonnes of high-grade lithium concentrate per year. By the end of 2027, including all circuits that the first plant has, and that includes the recirculation circuit our production forecast is at 330,000 tonnes per year. That's a result of the plant recovery of 70% and in the main circuit and a fully working reprocessing circuit for the other material.

As it comes to construction, we plan to have an installed capacity at the end of 2027 once we complete the construction of the second plant of 580,000 tonnes of high-grade lithium concentrate per year. That incorporates the first plant and its reprocessing circuit capacity. Therefore, we plan to just greenlight Plant 2 at the beginning of January. We have flexibility on how to execute our construction plants. There is a scenario where we could greenlight both plants, Plant 2 and Plant 3 at the same time, at the beginning of 27 in January. But if we don't, we would build them sequentially.

So by the end of 2028, we expect to have 30,000 tons of installed capacity for production. With that kind of capacity and with our current plan, the cash flow forecast and again, we just estimating Plant 1, which is already built. They vary just according to current price range as estimated by all street reserve challenges. So at the low end of the range at $1,500 per ton, we could be generating cash flows that would go from $166 million if you take into account 12 months forward or $360 million once we contemplate production during 2027. I -- if the prices go to $2,500 per tonne, we would be looking at cash flows that would be $235 million -- if we just stay on the production for 12 months forward, but once we deliver the 2027 production, which again can be done in just 1 plant, we reach billion in cash flow. This is a direct result of our low-cost position, high margins and efficiency. In other words, we do not need a lot of volume to generate quite a substantial amount of cash.

We're now going to make our final remarks and the conclusion of our second quarter 2026 earnings presentation. signal lithium plans to deliver substantial returns to shareholders this year in 2026. Thus, because of our significant growth profile of production within the next 12 months. We plan also to significantly increase incremental industrial capacity. We're going to resume construction of and potentially build plan 3 at the same time, given that we are in a very robust let market environment, as we're going to discuss later, this is the time to build and to building scale. More importantly, we have proven execution capabilities in a very experienced team. We have built our first plant in record time and commissioned it even faster.

Just recently, we primarize and automated our entire mining operations. upgrading the fleet once and now we're upgrading it again to increase voltage capacity. All of that done while maintaining the world record in employee safety. With over 1,100 days without accidents. Our operational resilience is based on these 2 pillars. This financial discipline regarding when to deploy CapEx for growth and timing is now, but more importantly, on relying and monetizing our structural cost advantages to convert that into cash flow, which basically sustains the company throughout all lithium markets.

Our sector is going through a unique moment in growth. We are enabled by AR instead of disrupted by AR. The demand growth from battery storage is in fact driving lithium global growth demand. AI data centers and energy security require battery storage. Battery storage requires lithium. And therefore, lithium demand is set for a decade long growth period. The bar charts below demonstrate that. If you compare 2025 year-end demand with 2026 expected lithium demand in lithium carbonate equivalent, we have a growth of 900,000 tons of LCE -- if that is translated into our product, lithium oxide, you multiply by 8. So that is approximately 7 million tons of lithium oxide concentrate to supply this year's demand projections. If we forward that almost over the decade to 2035 Global demand is expected to be 5 million tonnes of LCE. If 1 was to translate that into our lithium oxide concentrate product there will be approximately 40 million tonnes of production.

In other words, that's multiple sides of Sigma. At that level, in other words, at 100,000 tons per year expected in 2028, which is going to be our expected production with 3 plants we will be supplying a question of global expected demand, approximately 2% only. That is the scale of the growth of the sector and that is a demonstration of how companies need to be well positioned to deliver growth with low CapEx cost, which is precisely what we plan to do by 2028. Our share price, if you look at the lag has behaving very much in line with the sector. And that is actually a very piece of good news.

Again, the demand growth in the fundamentals are far too strong and raise all the short-term volatility and noise. Our company has very strong operational and financial performance fundamentals, and that is the foundation of our value. Here, our low cost and our strong cash generation are those foundations, Therefore, we're clearly positioned for a re-rating because at an expected 75,000 tons of LCE equivalent of production capacity constructed by the end of next year. We're very much in line with some of our peers, which have market caps, which are double our market cap. So that is what we expect to happen over the course of the year. a significant rerating.

And now we move on to the Q&A. Thank you very much for joining us today.

[Operator Instructions] Our first three questions comes from Joel Jackson from BMO Capital Markets. First what was your exact production in Q2 of normal lithium concentrate and exact production in Q2 of the lower grade concentrate fine/tailings. Two, you generated $30 million of cash flow in Q2, if the mine does not restart for the rest of Q3, what is your expected cash flow or burn? Three, what are the best and worst-case scenarios for mine restart? And when it restarts, how many months will it take Sigma to ramp it to full grade lithium concentrate production?

Joe, it's great to hear from you. Let me just do the following. Let me put the page of the presentation on the screen so that I can actually better answer your question. Can you see my screen?

So now -- the entire production for the quarter was high-grade material. And we've done that so that we would highlight that the plant and the mine have gone back to fully ramped position of production of oil. So that's the first part of the question. The lower grade that we produced during the second quarter wasn't sold and it's going to be sold now. When you look at the cash flow projections, this number here, the BRL 32 million do include the low-grade material that was produced during the second quarter, and we deliberately did not sell in order to have a clean quarter of production and sales. So that I answer the first part of your question.

Then the second part of your question, regarding the fact that we generated $13 million of cash flow in Q2. Well, it was more if you look at the accounting, but then you have the net inflows given that EUR 27 million was sold but did not convert into cash, right? How much do we expect to generate into Q3? Well, that's the exact $27 million that didn't convert into cash that was sold is going to be added to the material that was produced. That was not high grade, and that will be sold. So for the third quarter, just to begin with, as of today, we have approximately $60 million to receive in cash flow. That's the value in blue, 32 and the value in dash grain. Best and worst case mine restarts.

Well, best case will be the restart next week. Worst-case restart, I think it will take about 2 weeks -- the dialogue is going quite well. Conversations have been very constructive. But given the nature of the notifications we received and given the fact that -- these are mostly full caissons executed by local inspectors, we are being quite strict when it comes to the terms of the agreement. Because we want to be clear of any wrongdoing. It won't be just a settlement. We would like to be fully cleared given that the acquisitions are false. And as we have a significant amount of cash flow to come in into Q3, we are obviously negotiating that in a position of strictness. After all is a reputation on the line and reputation.

Our next three questions comes from [indiscernible] from [indiscernible]. First one, regarding the offtake prepayments, the BRL 96 million associated with the 7,500 ton 1-year agreement and the EUR 50 million associated with the 4 million ton per year, 3-year agreement. Could you clarify how much cash Sigma has actually received from each agreement to date and specifically, has the $50 million being used to repay that as previously indicated. Two, regarding the temporary suspension related to the TAC negotiations, could you please clarify exactly which operations have been suspended. Is the suspension limited to mining activities or have both mining and processing operations being suspended?

Secondly, given that a production suspension is clearly a material operational event for the company, why wasn't the market and shareholders informed immediately when the suspension occurred. Could you explain the company's reasoning behind the timing of the disclosure? Three, during the current production suspension, are you still able to process and ship lithium middlings. How much lithium middlings did the company ship in the last quarter? And how much are you planning to ship this quarter? Also, have you signed any additional sales or offtake agreements for lithium Midlands.

That's a lot to unpack. So let me take your question in pieces, right? First, regarding the offtake agreement for BRL 96 million. we have received $60 million to date. Then in the third quarter, there's -- there are additional amounts of that payment to be received. So Out of the EUR 96 million, we received EUR 60 million. So that's the first part of your question that are a 70,000-ton 7,500 tonne offtake agreement. Then regarding the second offtake regarding 40,000 tons of material to be shipped over 3 years, given our exceptional ramp-up, we are increasing the amount of that uptake and we're currently negotiating that increase. And indeed, when that agreement gets closed, meaning financially closed post increase, it will be 100% used to repay debt as we announced earlier. In fact, we're going to repay the debt, no matter what, most likely by the end of the third quarter.

There are few liquidity alternatives available to us in order to repay that debt, that will either way repay or refinance it with other creditors. The reason is our substantial cash generation position made it clear that we are in a very good position to move forward. The second part of your question, which is related to the TAC, -- we did disclose that immediately. In fact, I was on vacation when that happened. And we put together a press release immediately thereafter as soon as we could make sense of the notifications we received.

So that ties back to the rest of your question, meaning, is it limited to mining activities or have both mining and processing operations being suspended? Well, if you read the notifications, is pretty difficult to say exactly what is supposed to be suspended. So we undertook the initial approach of stopping both operations, mining and industrial later as negotiations progressed, we learned that it was a temporary suspension. But as we settle on the table from a position of strength, we did not reinitiate industrial operations. They're vertically integrated anyway. So the only thing that we would gain by resuming industrial operations would be to restart the reprocessing circuit. So now we're probably in a position to restart industrial operations, and we will but we hope to have a overall final conclusion of this by next week.

So I think that answers the second part of your question. But I think I'd like to reiterate, in the middle of my vacation, in July, we did put out a pretty clear announcement about the take and the suspension. Unfortunately, because I was on vacation. So during the current production suspension, are we still able to process and ship Leumiddlens? Absolutely. And that's what we've been doing. That, in fact, is the source of our resilience. When you look at the third quarter financials, the BRL 32 million and the BRL 27 million reflect just that in addition to high-grade material that had not been sold for the cutoff of June 30 that we hadn't shipped to the Board in time to make it to the sales got off on June 30.

So when you look at the volume sold of 24,000 versus the volume produced of 35,000, there's still a bit of high-grade material there that was sent to be shipped -- the remaining of this amount here shown are middlings. We don't call it Midlands, we call it low grade low-grade high purity because middlings are materials produced by flotation plants, where particles spodumene is broken. That's why our material carries significant value. In a DMS plant, the particle spodumene isn't broken, that Crystal is intact. So it can be easily reprocessed with a 60% recovery into sometimes 4.7% material by our clients. Lastly, you asked whether we had signed any additional sales or offtake agreements for these materials. Well, we don't sell them on offtake basis. We sell them on a spot basis. and we're going through a very healthy bidding process for these materials.

Just to illustrate, we have 300,000 tons of materials left, and we have a bid for $65 per ton. And again, as we decided not to sell any fines in the second quarter to have a clean quarter, that will probably be in addition to these 2 amounts, on the screen. The 32 plus 27%, we got 300,000 tons of 5 high-grade at currently $65 per ton in a bit. So very healthy market, very robust demand. I guess I answer all of your questions.

Our next question comes from David [indiscernible] from CICC. Ana, may we know if the new time line for plant construction of Phase II or Phase III is more relevant to mining plan adjustment, funding consideration or any other factors?

Not really. Let me go back to the forecast here. Good things happen out of, let's say, difficult situations. So last year, when we changed mine contractor, we started to basically rely on our reprocessing circuit at the current lithium ox plant. So that circuit was perfected, adjusted tested with a very amounts and types of feed. So the result was that we learned the plant capacity, current plant capacity is actually 330,000 tonnes per year once it's fully fed with fresh ore. Why is that? Because both circuits are working at the same time, the high-grade circuit and then the low-grade circuit, which then gets reprocessed and turned into high grade 5.1%, 5.2% of concentrate. So we full feet of fresh ore, meaning 160,000 tons of fresh ore, that plant can actually deliver 330,000 tonnes of material. We've known that since 2024, December when we upgraded the plant, if you look at the amount produced in the fourth quarter of '24, when we solely fed the plant fresh ore that was the annualized throughput.

As we vastly disclosed here and discussed we have not been able to deliver fresh ore at a cadence to the plant ever since because the troubles with the old mining contractor began right after that during the first quarter and then in the second quarter. And by the third quarter, we ended up changing contractors and dismissing that contractor all along and primarizing the mine. So essentially, what we will do is to go back to full capacity of the block by having both main circuit and reprocessing circuits a full child once this mine delivers material at fresh or material in full -- in full capacity, which is 160,000 tonnes of ore per month. What we've done this quarter is a demonstration of it with 35 tonnes 35,000 tonnes of - we produced 35,000 tonnes of concentrate because we've been feeding fresh ore to the plant.

This concludes our question-and-answer section. Now I am returning to our CEO, Ana Cabral, for her final remarks.

Well, I want to thank you all for bearing with us during this presentation. And again, we're very confident in what we're doing. We have a significant growth profile. We've proven that we can execute in under fire, and we have the experience to deal with pretty much most issues. More importantly, we can prove, and we have been proving that we're doing at 1 of our shareholders said is validation of ESG under stress.

In other words, our governance is in compliance are being tested out there in use our social and environmental credentials and track record withstand any attempts to challenge it and withstand all the scrutiny our operational resilience is there. Look how far we got. No 1 expected us to do this without raising additional capital. That's the result of our structural low cost in financial discipline.

So again, I reiterate what's happening in the market, plus the way this company has been battle casted positions us incredibly well for what's coming ahead in the second half of the year. Thank you very much for listening.

The second quarter of 2026 conference call of Sigma Lithium has concluded. For further information, please visit the company's website at www.sigmalithiumresources.com. You may disconnect now, and have a nice day.

Hello, and welcome to the Annual Meeting of Shareholders of Sigma Lithium Corporation. Please note that today's meeting is being recorded. If you participate in today's meeting, and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you'll be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure.

[Operator Instructions]

It is now my pleasure to turn today's meeting over to Marcelo Freire de Paiva. Marcelo, the floor is yours.

Good morning. My name is Marcelo Freire de Paiva and as the co-Chair of the Board of Directors, I will act as Chair of this meeting. It is my pleasure to welcome you to the Annual General Meeting of Shareholders of Sigma Lithium Corporation. The Board and management very much appreciate your interest and attendance today. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of the same.

If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the company that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure.

As this meeting is held virtually via live webcast, we think it's necessary to set out a few rules for the orderly conduct of the meeting. One, questions in respect of a motion can be submitted by any registered shareholder or duly appointed proxy holder at any time by clicking on the Message icon. Please note that there will be a slight delay in the publication of the communications received.

Two, when asking a question, please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Three, questions will generally appear shortly after they are submitted, but will only be addressed during the question period at the end of the meeting, provided the questions regarding procedure matters or directly related to the motions before the meeting may be addressed during the meeting.

Four, for the purpose of the meeting today, voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy shareholders will be asked to vote on each business item after the presentation of all business items.

Five, when you are asked to vote, you'll be able to cast your vote by clicking on the buttons, for or withheld or against as applicable that are under the Vote icon for each business item. You will only have a certain amount of time to do so when the polls are open.

We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move and second all motions.

Two, call to order and appointment of Secretary. I now ask that the Annual General Meeting of the shareholders of the company come to order. I appoint Bruno Tamassia as Secretary of the meeting. Three, appointment of scrutineers. For the purpose of this meeting, I appoint Computershare Trust Company of Canada through its representatives as scrutineers to compute the votes of any polls taken at this meeting and to report thereon to me. Four, constitution of meeting. The purpose of today's meeting are set out in the management information circular of the company dated June 1, 2026, the circular.

The notice calling this meeting, the circular and the form of proxy were mailed to shareholders on or around June 3, 2026, along with the audited consolidated financial statements of the company for the fiscal period ended December 31, 2025, and related MD&A to shareholders of the company who requested such statements and related MD&A.

Unless there is any objection, I will dispense the reading of the notice of meeting. Copies of the management information circular and other meeting materials are available under the company's profile on the SEDAR website.

Our transfer agent, Computershare Trust Company of Canada has attested to the proper mailing of the notice calling this meeting. Proof of the service of such mailing has been filed with me, provided by the company's transfer agent. I direct that a copy of such proof of service be annexed to the minutes of this meeting as scheduled.

Five, quorum. The bylaws of the company provided the quorum at the shareholders' meeting is met if there are 2 persons present holding or representing by proxy an aggregate of at least 25% of the outstanding common shares of the company entitled to vote at the meeting. I've been provided the preliminary report of the scrutineer, which indicates that there are shareholders present in person or represented by proxy at this meeting representing more than 25% of all outstanding common shares of the company present, and therefore, a quorum of shareholders of the company is present, and the meeting is properly called and duly constituted for the transaction of business.

I have received the scrutineer's report and I direct that the formal report be annexed to the minutes of the meeting -- of this meeting as a schedule.

Six, financial statement. As the first item of business on the agenda for today's meeting, I now present to the meeting the audited consolidated financial statements of the company as at and for the fiscal period ended December 31, 2025, together with the auditor's report to the shareholders thereon. Copies of such documents have been mailed to the shareholders who requested such statements, and it is not proposed to read them at the meeting.

Seven, resolutions for voting.

Eight, number of directors. The first item of business is to set the number of directors for the ensuing year. Management proposes to set the number of directors to be elected to the Board at five. I move and second that the number of directors for the ensuing year be set at 5. Unless there are any questions, I will move to the next item of business.

B, election of directors. The next item of business is the election of directors. The company did not receive notice of any director nominations in connection with the meeting in accordance with its advanced notice bylaw. Accordingly, the only persons eligible to be nominated for election to the Board of Directors of the company are the management nominees.

The directors elected by the shareholders of the company shall hold office until the close of business of the next Annual Meeting of Shareholders of the company or until their successors are elected or appointed. Ana Cristina Cabral, Marcelo Paiva, Junaid Jafar, Alexandre Rodrigues Cabral and Kátia Abreu have been nominated as directors for the ensuing year or until their successors are elected or appointed.

Each of the persons nominated has confirmed that he or she is prepared to serve as a director. Since there are no other nominations, I move and second that Ana Cristina Cabral, Marcelo Paiva, Junaid Jafar, Alexandre Rodrigues Cabral and Kátia Abreu be nominated for election as the director of the company to hold office until the next Annual meeting of shareholders or until the successor is elected or appointed. Unless there are any questions, I will move to the next item of business.

C, appointment of auditors. The next item of business is the appointment of auditors of the company for the ensuing year and to authorize the directors of the company to fix the remuneration of the auditors. I move and second that Grant Thornton Auditores Independentes Limitadas be appointed auditors of the company until the next Annual Meeting of shareholders and that the Board of Directors be authorized to fix their remuneration.

Unless there are any questions, I will move to the voting portion of the meeting. As we mentioned, voting today will be conducted by electronic ballots. I will now take a moment to ask that the balloting be opened to registered holders and appointed proxy holders.

The polls are open, and you can now proceed.

Opening the polls. The polls are now open and at this point, all registered holders and proxy holders who have properly logged in with their control numbers or user name and wish to vote will be able to see on the screen all motions being brought forth at this meeting.

Nine, voting on items of business. Please register your votes by accessing the Voting page and selecting the for or against buttons next to the name of each proposed director and for or withhold next to the resolution with respect to the appointment of Grant Thornton Auditores Independentes Limitadas as the company's auditors. We will provide registered shareholders and duly appointed proxy holders approximately 1 more minute to complete the electronic ballots.

Once the electronic balloting closes, the voting page will disappear and your vote will automatically be submitted.

[Voting]

Voting is now closed. Based on the proxies received as at the proxy cutoff, each motion has been passed. However, I would ask that the scrutineer compile the report regarding the results of voting on all business matters and the results be published on SEDAR and by press release.

Termination and question period. A, termination. The formal items of business as set out in the notice of meeting have now been dealt with. I move and second that this meeting now terminate. As there is no further business to come before the meeting, I declare the formal part of the meeting to be concluded. And now I will be pleased to answer any questions you may have.

B, question-and-answer period. I ask that all attendees who would like to ask a question to use the instant messaging feature of the virtual interface to do so. We will answer as many relevant questions as time permits. When asking your question, please state your name, the entity you represent, if any, and confirm you are registered shareholders or duly appointed proxy holder. Please limit your questions to topics relating to today's subject matter and keep your questions short and to the point. We will now give attendees a moment to type in the questions.

For each question we answer, we'll summarize the question and read aloud the name of the person who asked such question. And if applicable, the entity such person represents. We would like to remind you that questions which were already answered or that are redundant or repetitive will not be published nor answered.

This concludes the meeting. I give the floor back to Computershare.

This concludes the meeting. You may now disconnect.

Good morning, ladies and gentlemen. Welcome to Sigma Lithium's 2026 First Quarter Earnings Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions] I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead, Anna.

I'd like to welcome you to our first quarter 2026 earnings conference call. Joining me on the call today is Ana Cabral, Co-Chair and CEO of Sigma Lithium.

Our earnings press release and presentation are available on our website.

I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, update on mining operations, the timing of our projects and market conditions may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation and press release.

I will now be turning the call to Ana Cabral.

Thank you, Anna. And with that, I commenced Sigma's First Quarter 2026 Earnings Presentation. Please notice the forward-looking statements that we're going to make in this presentation. We're going to talk quite a lot about our predictions and expectations.

And with that, I would very much like to present a Sigma lithium's 2026 version. We are at our most efficient, most competitive. We became a financially resilient low-cost, and we're very well prepared to deliver on our high growth this year.

Well first, we'll talk about our enhanced operational efficiency. We have upgraded our mining in record time table. We primarized our operations, and we brought in the larger fleet that has the capacity to match Greentech 3.0 plant. At that plant, we have been achieving rapid recoveries in cleantech industrial processing. We have the most advanced [indiscernible] plants in the world.

Our lithium is 100% sustainable. We have reached the Quintuple Zero lithium a few years ago, zero paying dams, zero hazardous chemicals, zero accidents for 1,010 days, we use 100% renewable electricity and the 100% of the water is reused in the cycle we do not use potable order. There's nothing like Sigma.

We have reached our most profitable quarter since production started 3 years ago. On margins, we have reached the highest profitability in our history. We're very, very proud to present 61% gross margins, 39% EBITDA margin, unadjusted, as posted, published in our financial statement, and 26% profit margins. At the same time, our debt and cash position has strengthened our balance sheet. We have significantly decreased total debt, 32% in 2 years, 21% in 1 year total debt.

Our cash increased to $28 million as of May 15, 2026, today. So that's financial resilience achieved throughout the down cycle.

Production has resumed cadence of high sales of high [indiscernible] lithium hydroxide. We are on track to deliver 240,000 tons of lithium oxide within the next 12 months. That positions us to deliver on our growth. We are executing significant near-term growth. We're going to resume construction of Plant 2 that will allow us to double production during 2027.

Meanwhile, our commercial team has outstandingly delivered to the company. In addition to opening up a whole new business selling low-grade [indiscernible] lithium oxide, we have achieved a record lithium price equivalent to $2,150 this quarter on the high-growth materials sold.

We're very, very proud to show that Sigma has one of the best safety records in the industry. We reached the 1,010 days with 0 accidents and we've never had a fatality in our 14-year history. That's a result of our rigorous safety protocols that begins with employee engagement in very strict processes, a direct connection to the factory's floor, which actually is responsible to help us deliver these enhanced performance.

Our TR FIR was zero, which is an incredible source of proud to all of our team.

Now I'll start with the financial highlights of the quarter. First, I want to talk about the financial resilience and debt repayment we were able to achieve as a result of our robust margins.

Profitability for the first quarter '26 clearly demonstrated that numerically. We achieved 61% gross margins and 26% net profit margin.

On our EBITDA and operating margins, which are proxy to cash flow generation, we delivered 39% EBITDA margins in the quarter, and adjusted as published, and 33% operating margin in the quarter.

In the meanwhile, we've delivered a total debt repayment of 33% over 2 years. That's a significant deleverage. Over the last year, we've delivered a total debt repayment of 21%.

Our revenues are also up 8% quarter-on-quarter. And here, we compare with the third quarter of 2025, which is the most comparable quarter as we were ramping down our mining operations in order to execute the upgrade. If we compare with the previous quarter, our revenues are up 150%.

Our cash is $28 million as of today, May 15, which demonstrates that we're actually very profitable in delivering on these numbers. Cash is cash. That positions us very well to execute the significant new growth opportunities that we have ahead of us. First, we're going to resume construction of Plant 2. That will enable us to double production capacity during 2027 and triple production capacity by the end of next year with Plant 3.

Over the last 2 years, we have significantly increased our margins. They are the highest in our history. In the first quarter of '25, this quarter, we have posted 61% gross margin. That compares to 23% in the first quarter of 2024. On EBITDA, our EBITDA margin was 39% this quarter. That compares to 9% in the first quarter 204.

Our operating margin had the same behavior, down to 3% in our first quarter compared to minus 1% in the first quarter of 2024. And then net profit, we had a 26% net profit margin compared to minus 19% in the first quarter to before when we were just starting an operation. So this demonstrates how Sigma has been driving through the down cycle, and we are extremely well positioned to now enjoy our first bull market since we began our operations. Everything from here will be excess returns.

This slide demonstrates our disciplined financial execution. We have repaid 75% of our short-term bank trade debt in the last year. Those were the trade finance lines that we used to finance our operations throughout the last 2 years. They've gone from $90 million down to $13 million only. That is a staggering 75% reduction.

Not just that, in the last quarter alone, we managed to decrease these lines in 46%. That's a quantification of our ability to generate cash. As we generated cash, we paid down short-term expensive debt.

This slide is another demonstration of our disciplined financial execution. Over the last 2 years, we repaid 33% of our total debt and 21% of our total debt was repaid over the last year. Our debt went from $201 million in the first quarter of 2024 to $134 in the first quarter of 2026. This is significant deleveraging. The total debt is essentially the short-term bank trade finance debt that we discussed in the previous slide, plus the shareholder and development bank debt that sits in our balance sheet now as short-term debt because it's due in December of this year. $134 million is an amount that's easily obtained by Sigma through cash flow generation and through the monetization of its future production through prepayment of offtakes.

The point I made in the previous slide is demonstrated on this page. Our offtake agreements enable our debt repayments and help us fund growth CapEx. Last year, we signed and closed a $96 million repayment on a 70,500 tonne offtake agreement for 1 year. That prepayment has been paid to us in installments. And the purpose of it is to fund working capital. In fact, that uptake helped us deliver the upgrade of our mining operations.

Last quarter, we also announced and signed a $50 million conventional offtake with prepayments. The purpose of that uptake is to help us repay the total debt that we've shown in the previous page. Half of our total debt approximately that sits in the short term and is due in December will be repaid with the proceeds of this offtake with prepayments.

We're also working in a few contract negotiations for similar transactions for another $50 million that will basically tie up 50,000 tonnes for 2026 and 70,000 tonnes for 2027 in offtakes. Again, those are going to be conventional offtakes with repayments that will have proceeds directed to complete the repayment of the total debt we've shown in the previous page.

We're also in contract negotiations for $100 million of prepayment for our reduction starting into 2027 and that will happen throughout -- that will be delivered throughout the 5 years or the 7 years onwards from 2027. The use of proceeds of that contract will be for growth CapEx, meaning building our next Plants, Plant 1 and perhaps Plant 3 as we could double down on this prepayment for $100 million given the scale of our current production with just 1 plant. Meaning, with the current production forecast for the next 12 months, we could actually honor all of these offtakes from '26, '27, '28 and beyond. And with those proceeds fund the debt repayment, and also our growth CapEx.

This slide illustrates our cash position for the first quarter of 2026 and a bit beyond. Here, I illustrate how we have actually built up our current cash position of $28 million as of today, [indiscernible] 2026. We started with $6 million at the end of the first quarter. And then we've had net inflows of $34 million. Receivables from materials sold and delivered and prepayment installments from that $96 million offtake and additionally, prepayment installments from low-grade sales, meaning the sales of our tailing [indiscernible]. We had $19 million of operating costs, so that all in, that represents net inflows of $34 million. Then we've had $3 million of CapEx, and then we had $11 million of interest and debt repayments, as we've discussed in previous slides. So that led us to a cash at the end of the first quarter of $4 million plus $22 million of receivables for materials delivered to the clients. Due to cut off, those receivables came to our balance sheet in the days following the 30th of March. So today, we've had $28 million in cash in our bank as of May 15.

Now in this quarter, we are also expecting inflows already signed of approximately $40 million, again related to the $96 million repayment for at 70,000 tonnes we discussed earlier. In addition, we expect the signed prepayment for the offtake for 40,000 tonnes to close and that will bring in flows of an additional $50 million.

This page summarizes our published first quarter financial statements. But more importantly, it demonstrates how our low-cost position underpins Sigma Lithium's financial resilience. We sit at the very low end of the cost curve for hard rock lithium material industrial manufacturers. And as a result, we have been very well positioned to enjoy excess returns entering into the secular cycle for lithium.

More importantly, as we went through the last 2 years of down cycle, we have increased our efficiency and increase our discipline. And we have maintained that discipline entering into this bull cycle. And that is why we have this entrenched competitive advantage. We have always been to the left of some of the African country producers, which just demonstrates how well positioned we are as far as the global lithium industry.

This next section talks about the operating highlights for the first quarter of 2026, and our outlook. This slide outlines the projection volumes delivered by Sigma Lithium every quarter, and it demonstrates how we resume sales cadence of our primary product, the high-grade lithium oxide. We go through all the stages of our outlook. In other words, how we have upgraded our industrial plant from first quarter '24 all the way through the fourth quarter '24, then we have reached and maintained industrial cadence throughout 2025. And then it shows how, in the third quarter '25, we have demobilized the mining contractor. And then it also shows how, in the first quarter '26, we have managed to primarize and upgrade our mining operations in record time.

We have mobilized our fleet on schedule, combining sales of low-grade and high-grade products, basically the low-grade funding the upgrade of the mine. Then we have ramped up our mine tracking to 33,000 tonne plant on schedule. This quarter, we have already achieved 20,000 tonnes as of now, May 2026. So the outlook of 33,000 tonnes for the second quarter is particularly reasonable and perfectly achievable.

Entering into the next quarter, we have larger fleets fully mobilized. In fact, the 60-tonne trucks are fully mobilized. And then we have the 75-tonne excavators fully mobilized. That increased our haulage capacity significantly. We came from 40-tonne trucks into 60-tonne trucks. That's a 50% overall increase in haulage capacity.

Going into the next quarter, we're going to have an additional fleet continuing to mobilize -- additional large fleets continuing to mobilize trucks and compatible excavators. All in all, the geometry optimization and the stripping has gone as planned. Our ongoing mine developed has unlocked very large mine blocks, which then have been transformed into lithium oxide into our upgraded 3.0 Greentech plant.

The next step up in the third quarter will be to maintain that pace and maintain that cadence. Hence, we are guiding to 240,000 tons for the next 12 months, but then we're maintaining our guidance of 200,000 tonnes for the year 2026.

This slide makes it quite simple for our shareholders. We're forecasting the cash flows, and we here demonstrate our robust cash flow generation forecasted for 2026 and beyond. We have actually created a forecast for 3 different price scenarios, $1,000 per tonne, $2,000 per tonne and $2,500 per tonne. It's important to remind that the current prices sit around $2,900 to $3,000 per tonne.

Now as far as production guidance in volumes, we simply convinced the quarterly forecast and the quarterly historical production demonstrated in the previous slide. Again, what we are guiding is not different than what we have achieved over 3 years sequentially [indiscernible] because we are an established producer. So the historical production for 2024 was 240,000 tonnes. And then in 2025, we delivered 180,000 tonnes as a result of the upgrade on the mine that we decided to promote precisely for this moment, so that in the next 12 months, we're very well positioned to deliver approximately the same 240,000 tonnes or 270,000 tonnes that we have been historically delivering over the last 3 years.

For this year, we will be delivering 200,000 tonnes. So that translates into the numbers for cash flow we are forecasting here. So again, at $1,500 per tonne with just 1 plant, we are planning to produce $130 million of cash flow. That's just 1 plant at 240,000 tonnes estimated to be achieved in the next 12 months. That is a quite conservative cash flow forecast.

Again, at the top end of our forecast, we are still 20% below the current prices. And we just 1 plant, we are forecasting to achieve $330 million for the next 12 months and again, using just 240,000 tonnes of production forecast, which, as you can see, is very much in line with the levels of production forecasts we've been achieving over the last 3 years of operation.

Now near-term growth. Once we complete the second plant, at 520,000 tons of production, we are estimating forecasts at these 3 different price scenarios that range from $320 million to $760 million approximately, which are very robust numbers.

This slide in summary demonstrates that Sigma, because of our cost discipline, because of our operational efficiency is a flow machine. That is essentially what we are. We are wired and structured as a company to deliver cash flow to our shareholders, organic cash flow, in any market scenario beginning with $1,500 per tonne.

This slide basically recaps how we are going to execute the near-term growth. It's a recap slide, but it does well with the previous slide. It's just to remind everyone that we have actually initiated the construction of Plant 2, and we advanced quite a lot on it. But more importantly, we have been benefiting in the construction process from a streamlined time table because the infrastructure has been already built way back in order to support Plant 1. So as you can see in the schedule, we are at civil foundations over halfway through that because, again, most of the long-term duration items in the construction schedule have already been built or have already been executed such as earthworks and foundations or drainage and the recycling recirculation systems. So we're mostly with the construction in place.

Where are we in construction? We needed to order and assemble machinery, which is the expensive part of construction, which we do plan to resume in the second half of the year.

So as a continuing, again, what is our production profile going to look like? For '26, 200,000 tonnes, for the next 12 months 240,000 tonnes, and then once we completes Plant 2, 520,000 tonnes. That's fully funded. And then once you complete Plant 3, 70,000 tons of lithium oxide. Reminding everyone that Plant 3 is not yet funded. However, each 1 of these new plants cost just USD 100 million. If you compare that with the cash flows we've shown that we expect to generate, one can see that these numbers are actually quite low in the big picture for Sigma today given our robust margins and our ability to generate cash flow into excess cash flow with our clients through prepayments of our future production and of our current production.

We're very proud of these pictures, and we have a video that we posted on our website that we encourage everyone to see. These pictures were taken last week and they demonstrate the upgrades, the modernization and the significant capacity increase of our mining fleet. What you see here are trucks, which have a 50% higher haulage capacity than the previous fleet we have, 50%. So here is our mine.

This slide is a picture that I particularly like very much because it merges 2 concepts, they are very dear to us. Operational efficiency with a very large haulage trucks, but more importantly, they are burning there on a brief Sunday shift change against the backdrop of our rock piles. These rock piles are just material taken from the pit, and we actually actively regenerate them by planting them with grass. So the rock piles become incorporated to the landscape. So all these conversations about our piles are just much they do about nothing because there are 2 kinds of piles. Rock piles are going to look like this, hills incorporated to the landscape. And our tailings are actually being sold. So very soon this year, we're going to be zero tailing. Why? Because we dry stack back them, we process them, so we are actually able to sell them as high-purity low-grade lithium oxide.

We're very, very proud of continuing on this trajectory of becoming or being one of the most sustainable lithium operations in the world.

This is another picture of our upgraded modernized and increased capacity. So we have all these trucks lined up so that we demonstrate our haulage is actually much higher, much more efficient and much more modern than what we had before. So our mine now honors our state-of-the-art 3.0 Greentech lithium oxide plant.

So wrapping up our quarterly presentation, we're going to talk about what we expect regarding shareholder returns for the rest of the year. This slide just quantify why we believe Sigma is very well positioned for a re-rate for our shareholders.

On the page, we saw that our production cadence for high growth being reached now in addition to our growth plans in execution for the second plant basically demonstrate that Sigma is not rated to its cash flow generation capabilities and current delivery. So at 40,000 tonnes of lithium carbonate equivalent, we are valued at USD 2.3 billion, which is a significant discount to some of our peers in other parts of the world. And more importantly, even to some of our peers that do not even produce, they have a similar valuation to the company. So it's basically the re-rate quantified and demonstrated in numbers.

And now I open for Q&A from the current shareholders in the current audience to this quarterly presentation. Thank you very much for listening to us.

[Operator Instructions] Our first question comes from Joel Jackson with BMO Capital.

it seems you expect production to be [ 13 kt ] in June than [ 24 kt ] in July. How do you get such a large jump in production month over month?

Thank you for the question. Well, essentially, we haven't given monthly guidance, but as you can see in one of the slides, we significantly increased the haulage capacity of the fleet, and we have even larger fleet being fully mobilized. In other words, as we commence mobilization in February, and we continue on the mobilization, we increased the number of shifts continuously with the mobilization. In other words, it wasn't just about getting the equipment to site, it was about getting the equipment to basically be available to us for 4 shifts. So we've gone from getting the equipment available, large-scale equipment, to commencing out a shift then moving from 1 shift to 2 shifts. And then as personnel went through basic security training, we've gone from 2 shifts to 4 shifts. Why so? That's the night shift.

So we commenced personnel on the day shift and that's split into 2 shifts. And then we just moved into the night shift at once, one they receive a very detailed protocols for night operations. So again, without giving guidance per month, this is sort of how we have actually a very beautiful mobilization curve throughout this quarter as we try to give as much detail as possible to everyone in a very specific slide, where we end up with 33,000 tonnes of material in the quarter.

Our next question comes from David Fang with CICC. Regarding Phase II and III expansion, may we have more color on a detailed time line for Phase II and Phase III construction commissioning ramp-up period?

Thank you very much for the question. We've given quite a lot of detail on Phase II. In other words, we are planning to -- there's a timetable what we've done so far on Phase II, and we basically paused in civil works and just sort of the last layer of civil works. We are planning to resume that in the second half of the year. As we have discussed, financing is quite available given where the industry is, given, obviously, the fact we've been fully funded by the development bank, and given the progress we've delivered so far on resuming our operations in full -- at full capacity.

So if -- once we resume construction at that stage, what needs to happen? We need to order equipment and receive equipment. So we're giving ourselves a quite consider the timetable for that to take place. So even if we put in a 12-month basically equipment assembly, commissioning arc that would basically get Phase II fully running within just sort of midyear next year. Phase III could happen in parallel or could happen sequentially. And as we made it clear in the slide, Page III is [indiscernible], but again, for the same reasons, we don't see planning Phase III, again, just another $100 million as an issue. Therefore, we're quite confident there we will be able to either sequentially continue on Phase II, or funding available, we could actually engage into construction at once.

One key point about both phases is they're both supported by existing infrastructure in place. In 2022, as we built our first plant, we built infrastructure to support 3 plants, 3 industrial plants. And as we pause short of 2 lines, in other words, as we just built 1 plant, the infrastructure is there. So what we call these 2 and 3 are simply industrial lines and that is -- so these actually have quite a reduced line table, and we can build them quite expedition.

Our next question comes from Joe Jackson with BMO

Back on Slide 16 and providing 200 kt production guidance for the year, are we wrong in assuming you expect Q3 at 72 Kt?

You're not wrong. We're just trying to be conservative, but that could happen. I mean, again, why? Because we've done it before. So what we're trying to do is to anchor our forecast into very achievable numbers. And that's why we've kind of given investors as much as we could as far as building blocks for forecasted production. But thank you for the question, Joe.

Next question from Alan Chan with Catland. Many Australian lithium producers have recently signed offtake agreements that include floor price mechanism to provide downside protection during periods of lithium price weakness. As Sigma Lithium continued negotiation with existing and potential offtake partners, could management comment on whether future contracts may also include 4 price provisions?

In addition, could you provide an update on the current status of Sigma's ongoing offtake negotiations, including how much future production is currently under discussion, the level of interest from customers and whether the company expects to finalize any new agreements in the near term?

It's a great question. Thank you for the question. Let me unpack your question. The first thing it's commendable what the Australian producers have done in getting full prices. Could we get that? Absolutely. Do we need them? No, we don't. Given that our production cost is so low as we've shown in one of the slides, we don't really focus on floor prices. What we focused on was to commit as little production as possible so that we can maximize the amount of prepayments obtained from our customers. So as we talk through our offtake strategy, given that we do not need floor prices, and it does carry a price in terms of amount of products being made available to the customer to actually bring a floor price mechanism into the contract, we just [indiscernible] them because we're solving for another objective, which is to commit a little product as possible. And we've shown that in the 2 uptakes already signed, and I have already been ongoing here Sigma.

For example, the first offtake for $96 million basically ties up only 70,500 tons of product for just 1 year. So if 1 divides 1 amount for another, you get to an implied, what we call, premium price for offtake rights price of about $1,300. And that's a very good monetization of future production.

The second, we've initiated discussions about it, last year, when the lithium price curves were slightly different. But again, it carries an implied monetization price of $416, which is actually higher than some of these announcements with full prices we've seen.

So it's essentially a commercial discussion is not a one size fits all, but I really want to highlight the fact that given that there are agreements being signed with full prices, we've seen -- we've got a demonstration right there of how robust is the interest from clients to secure the right to purchase production. And again, I must highlight that we're not locking future prices. These are derivative agreements design forward sales. These are just clients paying producers in advance for the security of having the product made available to them as they deliver on their own growth.

Why is that? Because we are in a very a robust environment for demand growth. We are delivering manufacturing, advanced manufactured products into advanced manufacturing industries. And they now run the gamut from EVs to data center battery storage materials to the fans to a whole array of advanced manufacturing industries to transportation, electrification of what we call larger and larger haulage transport vehicles beginning with large-scale trucks now go into what we call barges. So it is is actually fascinating what is happening with the diversification of the demand for our products and how rapidly the demand grows in the current scenario for energy security and energy transition worldwide.

Next question from Balin Ken with [indiscernible]. Sigma currently has approximately 300,000 tones lithium oxide intermediate products inventory. Could management provide an update on the current commercialization and sales progress of this material, specifically, how much of the existing inventory has already been sold or committed? What is the current market pricing for segments lithium oxide intermediate products? Is pricing linked to lithium concentrate benchmarks, fixed price agreements were negotiated on a spot basis. And how should investors think about the potential cash flow contribution from this inventory?

That's a great question. Yes, we do have 300,000 tons of lithium oxide low-grade products available. They are currently commanding a price of about $77 to $80 ex work at plant in the market. We priced these products of DSO at [indiscernible] high metal market. Therefore, if one looks at these benchmarks, they are updated daily, sometimes weekly, but not more often than daily, and it's quite straightforward to calculate how valuable these products are for our clients because these are not DSO, these are processed low-grade hyper materials at about 1% and 1.1% of lithium oxide content, which are pretty crushed in a way and pre separated. So they're bringing a 1% savings for our customers, hence the heightened demand.

So again, unpacking your question, we are in a wait-and-see strategy to decide what to do with these products given that the prices are now settling around these levels of $80 per tonnes ex work. However, as we are still finalizing deliveries on the previous sale of 400,000 tonnes announced last quarter, we would just commence deliveries of these products somewhere in beginning of third quarter. And so most likely, we will wait until then to decide what to do with those materials as prices continue to be quite robust and demand is very much there.

One point I want to highlight about your question is, on an ongoing basis, we will continue to generate that kind of inventory given that we are back at full processing of lithium oxide oxide from crush rock. On a 12-month basis, we generate about 250,000 to 300,000 tonnes of what we call the lithium fines, the lithium low-grade materials. And therefore, this could become an ongoing business if prices remain at the current levels. And so one could forecast the extra cash flow coming from these businesses on whichever basis one uses for lithium oxide pricing. It's [indiscernible] the pricing. These markets are becoming more and more mainstream.

I highlight the sale that one of our peers in Australia has gone to one of our European trading companies recently at about $290 per ton CIF. Transportation costs vary, but I just gave you my cost ex work, which is costs at plant. So assuming let prices remain robust as they are, these markets for low-grade materials do continue.

The contribution to cash flow is essentially the to 50,000 to 300,000 tonnes of material times, I mean, currently, that would be $80 per tonne. On an ongoing basis, it would vary based on the lithium oxide price forecast for each one particular [indiscernible].

We are showing no further questions. I am returning to our CEO, Ana Cabral, for her final remarks.

I want to thank all of you for your participation on this call. I would thank our incredible team for having gone through last year and coming out stronger, fitter, more resilient and ready for our first bull market. As you may recall, Sigma initiated production at -- in the middle of '23, we very caught a bull market. So the best is yet to come given that whatever comes our way now as far as prices, it's excess returns given our very low -- extremely low cost position always to the left of most Africa -- all African producing nations. So we're very excited and very enthusiastic about the near-term future, the short-term future, the midterm and the long term because we will build to expand any moment or any point in the lithium cycle.

We conclude the first quarter of 2026 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website, www.sigmalithiumresources.com. You can disconnect now.

Good morning, ladies and gentlemen. Welcome to Sigma Lithium's 2025 Fourth Quarter Earnings Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions]

I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead.

I'd like to welcome you to our 2025 earnings conference call. Joining me on the call today is Ana Cabral, Co-Chair and CEO of Sigma Lithium. Our earnings press release, presentation and corresponding documents are available on our website.

I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, update on mining operations, the timing of our projects and market conditions may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation, MD&A and press release.

Before turning the call to Ana Cabral, we will be showing you a short corporate video as we think the pictures will paint a thousand words about what's happening at Sigma.

[Presentation]

Hi, everyone. Well, thank you, Anna, for showing us this video of our operations. As you can all tell, we're very, very proud of what we built here in Vale do Jequitinhonha. So without further ado, I'll go straight into the fourth quarter 2025 earnings release presentation, which covers the entire full year 2025 annual financial results. We're going to make quite a lot of forward-looking statements, and we would like to encourage you to read the disclaimer of this presentation that's going to be posted on our video.

Sigma is the largest industrial mineral producer in the Americas. We've delivered operational excellence. We are a low-cost operation, and we are executing a high-growth strategy for 2026, 2027 and 2028. This is because we are a management operator company where our interests are fully aligned with the interest of our shareholders, which are to build long-term value.

Our main competitive advantage is our resilience, which comes from operational efficiency. Our efficiency is, again, driven by the fact that the management is owner of the company. More importantly, we are located in a country in Brazil, which is a politically stable traditional mining jurisdiction, where we have a very low-cost operating environment.

On sustainability, we are 100% sustainable. We have the Quintuple Zero lithium, which starts with 5 points. We do not have tailing dams, so 0. We do not use drinking water, 100% of the water is reused and recycled from sewage, 0. We use 0 hazardous chemicals in our operation. DMS is basically a physics-based process, so third zero. We use 100% clean energy, so 0 dirty energy. And we have had 0 accidents with lost time for almost 3 years. Again, a picture is a thousand words.

Here's a picture of our waste tailings before and after the artificial germination program. It's blended into the landscape. It's basically stacked up rock, fully geotechnically stable. And we went through the sustainability initiative of actually planting the rock into a green mountain. So what you see now is essentially the picture below. We are 100% sustainable. We produce the Quintuple Zero lithium. We have zero tailing dams. We have 0 drinking water. We have zero hazardous chemicals. We have 0 dirty power. 100% of our power comes from clean electricity. We have had 0 accidents for 2 years and 7 months, 5 zeros.

At the bottom, a picture is a thousand words. You see the before and after of our waste tailing piles, which are basically the rocks removed from the pits. Rocks, very stable, geotechnically stable. But more so, we have planted the face of those rocks with artificial germination. We basically did what we call proactive regeneration and the picture shows how it looks like now just a year after those piles were created. So geotechnically safe, sustainable, blended into the landscape, which further enhance the environment.

We have built the fifth largest industrial mineral lithium producing complex in the world. So in the picture, you can see that we have a state-of-the-art industrial plant, integrated into a mine. But the plant is not just an industrial plant, is a state-of-the-art clean technology lithium processing facility where we achieved 70% recovery of the lithium, which is amongst the highest in the sector, and it compares with processing methods, which are a lot less sustainable.

Sigma is the economic engine for developing the valley of Jequitinhonha. We lifted the valley towards prosperity. That is a key region of Minas Gerais, which is the second richest state in the Republic. We created 1,000 jobs, 11,000 indirect jobs and 21,000 beneficiaries from our social programs of microcredit and small-scale agriculture. We also have granted drinking water access to 18,000 people. 85% of our workforce is regional. 50% of the economically active population has benefited from our social programs. We have renovated, created and built schools that put over 500 children in after-schools or school programs. We have been instrumental in delivering 6.8% of GDP growth for the whole state of Minas Gerais. And still, every year, we serve 3 million meals so that the new waves of people keep coming to help build this lithium valley.

So we have a built to last company. It's a resilient business that's been thriving throughout lithium cycles. That's what we have achieved in 2025, and that's what we will continue to deliver in 2026, large scale, low production costs and traceability. We have had 0 accidents for 2.7 years. We uphold the highest health and safety standards in the world, top ranking amongst all companies in metals and mining. But more importantly, we have demonstrated speed of execution, low CapEx to build and to restructure operations, such as what we've done with mining. And we are in a low-cost operating country, which supports us to achieve all of that.

So now I'm going to go through the operational and financial highlights of 2025, and I'm going to give you a preview of the first quarter 2026 estimated. We have had unparalleled resilience throughout the last year to date. We have generated cash flows across 2025 lithium volatility. Our business was built to last and to endure the cycles.

Four key examples, we signed $146 million in offtake agreements with very robust intrinsic values. Intrinsic value is the advancement we receive from clients for the right to have deliveries of tonnage throughout periods. First offtake agreement was basically to fund working capital. It was signed in '25 for deliveries throughout 2026. The total is $96 million for 70,000 tonnes of deliveries. The second was a $50 million typical offtake prepayment that was signed for 40,000 tons of annual deliveries throughout the next 3 years commencing in 2026.

Second, we have been the demonstrators that a commercial strategy well executed can actually yield actual results even in this market, even throughout volatility. We have been tracking seasonality, and we have achieved $67 million in net sales in the fourth quarter of '25 and the first quarter of '26, solely a result as this sound commercial policy.

First, we monetized lithium seasonality to by basically receiving price adjustments in the fourth quarter, working with our clients to time the deliveries and the final sales, resales of their products throughout the contract season of 2025. That has resulted in the revenues for the fourth quarter. More importantly, we have generated cash flow from a whole new line of business, which is selling the lithium fines, high-purity lithium oxide fines that we have reprocessed through our industrial plant out of our dry stack tailings. That happened initiated in 2025 and then throughout 2026.

We've deleveraged our balance sheet and we repaid debt. That was our third highlight. 60% of our short-term debt has been repaid. 35% of our total debt has been repaid in the years such as 2025.

On top of that, number four, we have upgraded and restructured our mining operations completely for safety, for efficiency, for low cost, for cadence and for better delivery. We transitioned from an outside contractor to full operational control, and we are poised to demonstrate those efficiency gains and cost optimizations throughout the next quarters.

Here are pictures that, again, a thousand words. It just shows the lithium fines piles being moved across to the shipping halls already at the port. The result of those sales have actually monetized what we used to call green premium, which doesn't really exist. But the fact that we actually created this new line of product out of the dry stack tailings definitely delivered to our investors what we call a sustainability premium, meaning actual financial results from the investment we made on a dry stack unit for the Greentech Plant.

This is a page with our offtake agreements. The offtake agreements single-handedly enabled our mining upgrade, our long debt repayment and the capacity expansions. We have an announcement. We signed a 40,000 tonne a year typical offtake agreement that is going to net us $50 million in a true prepayment to be closed within the next 3 months. That amount is equivalent to 120,000 tonnes to be delivered over the next 3 years. The use of proceeds will be for our growth strategy.

We also announced and signed the 70,500 tonne 1-year offtake agreement for a total of $96 million. That offtake agreement is for deliveries throughout 2026 and the purpose of it is for working capital. That's the working capital that enabled the mining upgrade and some of the debt repayments.

Now in 2026, we have two more offtakes to conclude. First, we're going to amend our contract for the equipment leases of the mining upgrade large-scale machines that have been backed by an offtake for 3 years. Initially, it was for 11,000 tonnes. The number probably will increase depending on the scale of machinery that we are able to secure in the second quarter. So again, the continuity of the mining upgrade to better, more efficient, more cost-efficient and safer operation.

The second offtake that we're about to close is the 80,000 tonne a year for 3 years that is going to net us $100 million in a typical prepayment. That conventional offtake will have used proceeds to pay down the long-term debt that currently is sitting in our balance sheet as short-term debt because it matures in December of 2026. That was a 4-year shareholder that has been gracefully given us by our shareholders in late 2022 to enable us to have working capital to commission our plant. So that debt will be replaced by an offtake, which is a very sound and very logic operational move for Sigma.

On this page, we again demonstrate how the competitive advantage of low costs create resilience from the price pressures that lithium has undergone this year, especially coming from new regions, sometimes not necessarily compliant or traceable product, but more importantly, from the constant refining innovation that the main markets have demonstrated by bringing the ceiling of this industry constantly lower. The ceiling for, for instance, lepidolite that once was $20,000 to $25,000 per tonne is now around $17,000 to $18,000 per ton, but going lower to a target of probably $15,000 per ton.

It doesn't matter. Irrespectively, we are actually working below the floor of the industry, which is product coming from the African new supply regions. So long as we are sitting exactly where we are in the cost curve, we have the resilience of operations that allow us to, for instance, sign offtakes without floors and continue to deliver excess returns every time prices are in the current levels.

On the left, we demonstrate the resilience with our total cash cost, which are all-in sustaining costs plus interest. On the left in green, we show the full year achieved all-in sustaining costs plus interest and the guidance. So we're pretty much in the same ballpark. And as a result, we felt comfortable to put in the guidance of $532 for all-in sustaining costs plus $60 for interest for 2026.

In the next slide, we show the numbers of how we are able to bring our people safe to their families every single day, day after day. And this is what we work for. We have never had a fatality in 13 years of operations. We have been producing for almost 3 years. We have never had a fatality. But more importantly, we're getting to almost 2.7 years with 0 accidents with lost time. So our people go home every day and come back to work the following day. That is the highest operational global safety standard in the entire battery materials industry, but more so, we sit at the top of the ranking across all metals and mining companies. We have had 1,600 employees here. We now have 1,000 employees. It's a large operation, and we still achieved that, 966 days consecutively without accidents. We're very, very proud of it.

So here is to the numeric operational excellence. A number is a thousand words. The unique resilience and robust cash flows can be demonstrated by each and every one of the main items of our 2025 and first quarter '26 estimated operational performance. First, offtakes. We had signed a $96 million offtake prepayment in '25 that enable us to receive working capital by having our production paid in advance. Then we just signed a $50 million traditional offtake for 3 years of 40,000 tonne deliveries totaling 120,000 tonnes to be delivered over the next 3 years. But in advance, up until June this year, we're going to receive $50 million, traditional typical offtake.

Irrespectively, we have managed to repay debt to a magnitude that is significant considering the volatility in low points lithium prices reached in 2025. We paid 60% of our short-term debt and 35% of our total debt.

That was basically because of cash flow generation. This company was built for cash flow generation. We are a cash machine. In the fourth quarter of '25, we generated $31 million of cash from operations. In the third quarter of '25, the previous quarter, we generated $23 million. So we increased our cash flow generation in 35% from third quarter to fourth quarter of 2025.

More importantly, the lithium materials production has had a decrease in volumes because of the full restructure we conducted in mining. But given that we are an industrial operation, we delivered another source of revenues. In fact, we built another business, which was reprocessing the dry stack tailings into what we call low-grade lithium fines. So ultimately, we had equivalent of 70,000 tonnes of the main high-grade product in revenues sitting as inventory accumulated throughout the last years. And that material became this new line of business of what we call high-purity lithium fines.

So for the full year of 2025, we produced 183,000 tonnes of high-grade premium lithium oxide. For the full year of 2024, we produced 240,000 tonnes of high-grade premium lithium oxide. So our annual production decreased in 24%.

However, how did we generate so much cash flow? How did we accomplish so much repaying debt? By basically creating a new line of business, which is what we call the sustainability monetization, the green premium in numbers. We reprocessed the lithium contained in our lithium fines in our dry stack piles, and we created a whole new business, which is selling high-purity lithium fines, which have a lower grade, but in monetary value, it's equivalent to 70,000 tonnes of the high-grade premium lithium oxide.

So all in all, we're not even solving for volumes. We're solving for cash flow and cash flows were delivered, and debt was repaid. And here are the numbers, which speak for a thousand words and do not have an opinion, numbers are numbers. What we want to show on this slide is, again, the quantification and a pictorial of how commercial successful strategy actually helped us to deliver revenues in the third quarter of '25 and in the fourth quarter of '25.

We have fantastic clients who are commercial partners. So we sell them the material. We do a final sale and they take the risk. That sale takes place using a provisional price. So we take some of the risk, but we also gain some of the upside. In other words, when our clients resell their product, resell to their clients, we have a profit sharing gain or a profit sharing loss. Last year, we had a loss. This year, we had a substantial gain. Again, this was achieved by mapping seasonality and seasonality in this industry is pretty clear. It happens in the restocking period that takes place after September. It's called contract season.

So our commercial partners worked with us to basically execute their final resales mostly after October of 2025, which allowed us to reap the benefits of a much better pricing environment than what was experienced throughout the whole year because of the tariff volatility in the metals market.

So when you look at the greens, you can see the resales by our clients. When you look at the red, you can see the sales from Sigma to the client. And you look at the line, you see the lithium prices and the tremendous volatility that happened throughout the year. In partnership with our clients, we captured not only the first peak of volatility, which happened in August, but also the subsequent curve of price increases that happened throughout contract season beginning in October 2025. That helped us book over $20 million in final price adjustments in the third quarter of 2025, and it helped us book over $14 million in final price adjustments in the fourth quarter of 2025. These are substantial revenues, so that's a quantification of what a sound commercial strategy is.

On this slide, I'll go very slowly because we have quite a lot of information to unpack. But again, it's the financial discipline that generated the high operating cash margins. High operating cash margins are the source of the cash flow we posted. In 2025, if you compare the fourth quarter of '24 with the fourth quarter of '25, we have substantially increased our operating cash margin. If you compare the full year 2024 full year and 2025 full year, our gross margins have decreased, yes, because the pricing environment in '25 was very challenging. But what is interesting is that the cash margins and the cash flow generation came from one thing and one thing only, we were able to reduce our costs faster than the decrease in our revenues. So despite the mining restructuring, despite price volatility, we were focused on what we could control and what we can control and on what we always control, which are our costs.

So if you look at the bottom of the page, you can see that the quarterly comparison between fourth quarter '24 and fourth quarter '25 shown a 77% reduction in costs. That's way more than just variable costs. When you look at the annual cost reduction, you can see that full year '24 to full year '25, we've had a 21% decrease in costs. So when we talk about these operating costs, we had operating costs, SG&A, ESG plus all others. So it's truly an achievement of financial discipline. We're always cutting what we control. We're always optimizing costs.

So with that, we can go back to revenues. In other words, when you look at net sales revenues on a quarterly basis, we've had fluctuations, which again just demonstrate how volatile lithium prices were. More notably, from the third quarter to the fourth quarter, when we restructured mining operations, we had a 41% decrease in net sales revenues. However, when we look at the first quarter 2026 estimate, we more than compensated for that decrease. Why is that? Because we not only opened this new line of lithium fines, which were the low-grade high-purity business that we created out of our dry stack tailings, but also all the work we've done in mine restructuring began to show results.

So on an annual basis, the revenues decreased 27%. And so when you look at the bigger picture here, what is actually visible that, yes, revenues decreased 27% on an annual basis. Cost decreased 21% on an annual basis. So costs decreased less than revenues on an annual basis, but we were very quick to compensate that and to fix it in the fourth quarter, where we cut costs and we decreased costs in 77%. So this is how financial discipline is demonstrated with numbers.

In this slide, we show the quantification of the financial discipline, but now on balance sheet optimization. We have significantly deleveraged despite all the price volatility, despite all that happened with revenues. From fourth quarter '24 to the fourth quarter '25, we lowered our short-term debt in 60%. From the fourth quarter '24 to the estimate of first quarter '26, which is actually the numbers that we have closing, we lowered it by 68%. So the work continued. We didn't stop. Then when you look at the third quarter '25 against current, we lowered the debt in 49%. That's a complete restructuring in the way we fund ourselves, in the short term, in a way we look at working capital even, meaning clients are now funding our operation because of our successful commercial partnerships with our clients. We make it win-win so that it cost us less in working capital and we deleverage our balance sheet.

This slide, I'll go very slowly on it because it shows our cash flow generation outlook. It's quite simple. It's quite straightforward. And again, it just demonstrates how Sigma is a cash machine. Why? Because we have high margins. We are built for cash flow generation.

We have estimated that in the next 12-month period for Phase 1, we're going to probably have 240,000 tonnes of production. As we've shown before, for the year, we're going to deliver 200,000 tonnes. Now because of our optimum cost efficiencies, we are going to be yielding an all-in sustaining cost, including interest of $592. That's our estimation for the next 12 months, as we've shown you in guidance.

That creates cash flows no matter what. If lithium retrocedes to $1,500 a tonne, we're going to be generating about $158 million in free cash flow after interest, free cash flow. If lithium stays around where it is now between $1,800 and $2,000 a tonne, we can generate anything between $218 million to $260 6 million of free cash flow just with one phase. As we double capacity, which will be in place by the end of next year, capacity and we prorate production as we commission, you can sharpen your pencils and you can do the math of how much cash flow we're going to have with two plants. More importantly, as we calculate all-in sustaining costs and all-in cash costs, the only optimization we've done were on G&A and ESG. You don't need 2 of me or 2 of most of our personnel to run these businesses on the administrative side and interest because we're going to cut interest in half, given that the interest is on the total debt that we are going to contract precisely to build plant 2.

So we have not factored in the actual operational scale gains that come from running 2 plants using infrastructure that is built and utilized now for 1 plant. So the infrastructure sharing of 2 plants are probably going to bring more cost gains, which are not here in these cash flows. But just with this conservative analysis of doubling operations and having some synergies on G&A and interest, we're bound to generate basically $600 million in free cash flow if prices stay where they are. If prices retroceded to about $1,500, that's okay, too. We'll generate $384 million in free cash flow, meaning after interest at those levels.

What becomes really interesting is when we build a third line, which could be done concomitant with the second line. That means that at 770,000 tonnes of production, and again, we're just calculating efficiencies here on G&A, ESG and interest. And we flattened the interest. We haven't cut interest further. We just cut G&A further because, again, to be a commercial person or to be an administrative person, you don't need to triple your numbers when you have triple plants. So interest is flat, but G&A and ESG was the only number that was reduced.

What does that mean? Our all-in cash sustaining costs, including interest, goes down to $495 per tonne with 3 lines. So if prices retroceded to $1,500 by the end of '28, when we plan to have this capacity in place, we could be generating $581 million in free cash flow. If the prices stay where they are, we could be generating $900 million in free cash flow. That's a significant amount. And it just shows how building long-term value means building a company that is geared to generate operating efficiency, operational excellence and quite a lot of free cash flow to shareholders. As management operators, our interests are 100% aligned. We're building a business to last. We're building a business to create shareholder value for all of us, management and outside shareholders.

So this slide shows the cash flow bridge, the cash bridge with its respective explanation. So again, more numeric demonstration that the disciplined execution that we have delivered in '25 and continue to deliver throughout '26 has created this operational resilience despite the very volatile market conditions. We have had operating cash generation. This is why we didn't raise capital because we were able to generate the amount of cash to deliver and to execute on plan, on target.

So let's start at the end of the third quarter of '25. We had $6 million in cash. As forecasted and as discussed in those materials, and I encourage you to go back to them, we continued on the trend to deliver cash flow from operations. So on a net basis, we delivered $31 million in cash from operations, mainly final price adjustments from transactions from sales that had taken place on a provisional price basis as we discussed earlier.

Then we had our cash operating costs. We have executed CapEx towards the mining upgrade, and we had $26 million of debt repayment and interest repayment as we've shown in #1 and #2. Debt repayment was just debt repayment, amortization of principal. Interest expense was the annual cash expense for the $100 million of long-term debt we've had in our balance sheet. So we had a flat cash position between the third quarter '25 and the fourth quarter of '25. This is financial discipline. We conserve cash. We burned 0 cash.

So with the knowledge that there was a whole new business of lithium fines coming on stream, which, again, we flagged during our third quarter presentation, we had inflows in the first quarter '26, which were the cash sales of those lithium fines that we affected and closed on the beginning of the year. So we achieved $30 million on the sales of the lithium fines, and we achieved $5 million on the sales of the premium high grade. That was the beginning of sales resulting from our mining restructuring. Then we had a $24 million CapEx bill for the mining upgrade, mining restructuring and all that we had to do. But as we conserve cash and as we generate cash from that new line of business, which was reprocessing dry stack tailings, we were able to not only pay our CapEx for mining restructuring and upgrade, but also to continue to do debt principal repayment. So we paid down another $5 million in debt, which means we increased our cash position in the first quarter of 2026 by 100%. So we doubled the cash position.

So this is, again, numbers. Numbers don't have an opinion. And it's very much in line with the strategy for cash flow discipline that we have laid out in the third quarter '25. We're giving you an advancement here or a preview as we call it. We have another $14 million of cash sales from the -- we call lithium fines business, the reprocessed dry stacking tailings. Then we have another $50 million of a true long-term offtake agreement prepayment that is poised to close by the end of the second quarter. And then we have about $32 million of the first installment of the $96 million offtake that we signed just in 2025 for the high-grade premium lithium, which is the 70,000 tonnes that we are planning to deliver in 2026.

So again, we closed the first quarter '26 with $12 million in cash, and we have a significant amount of cash coming our way in the second quarter of '26, having executed pretty much most of the mining upgrade, as you can see in the CapEx bill for $24 million we paid in the first quarter of '26 plus the $4 million we initiated in the fourth quarter of 2025.

Now we're going to do a bit about the operational work we have done to restructure our mining operations. This was done for, again, the construction of long-term value for shareholders. We had to do this. We had to take control of our mine because without that, we would not be ready to deliver the cadence that was necessary to affect the capacity expansions of the second and third industrial plants.

Just to recap, we are a fully integrated industrial mining operation. We have this proprietary cleantech technology that produces what we call the clean lithium. That means we have a mine that's integrated into an industrial facility. And again, stopping the mine doesn't mean the industry stops. Obviously, what we want is having a mine at full tilt and then the plant receiving fresh rock. But the plant can do many things given that we have dry stack materials. But once we think about doubling capacity and tripling capacity, we mean that our mines need to operate at full tilt and in perfect cadence so that our plant can deliver on the 70% recovery levels it actually is -- it has demonstrated it can achieve in the fourth quarter of 2024.

Think of it as a blast furnace. If we turn it on and off, it will not maintain those levels of efficiency. So if the same amount of material is not fed into that dense media separators per hour, it won't achieve 70% recovery. And for that, we need mine planning, mine execution that delivers piles or delivers fresh rock to the ROM pad on the same quantities regularly, at least on a weekly schedule. So this is kind of the overall concept of 100% vertically-integrated operation.

Here is a picture of a Greentech Plant at night, unquestionably a beautiful, beautiful industrial installation. This is what we've done with the Greentech plant that allow us to get to the 70% recovery. We had a 2.0 version of the plant, which was the version we operated from July '23 until November 2024. That was not recovering 70%. It was recovering anything between 50%, low 60s, almost 60%. The dry stack tailing units was not working as we wanted anyway. We actually invested a significant amount of CapEx to get the plant to what we call the current stage, which is the 3.0 version that we plan to double and triple, meaning we're building another one of this and then we're building a second one of this.

But in order for that to happen, as we said earlier, we need mine and plant to work in cadence. How did we get to the 70% recoveries? We automated industrial operations. We have software, we have scatter, we have algorithms. We have detection of anomalies automatically. We have correction recommendations automatically. It's self-learning metallurgy, self-learning for mineralogy. It's a bot that basically keeps on getting better and better and better when it's fed the same mineralogy. This is a picture of our fully automated control room.

Then we have the mine. The mine had quite a lot of work to be done. It was using less than efficient small equipment. It was using too many pieces of equipment. At one point, there were 48 small 40-tonne trucks trafficking through the mine. So a lot had to be done there.

First, we had to fix geometry. It had to be widened. And here on the picture, you already see the result of widening the geometry. So we've done intermediary strip with the objective of widen geometry and increase the mine life and increase access and open other areas with ore that were closer to surface. So what we've done, we basically open additional mine fronts now to accelerate the ramp-up. How did we do this? By using larger equipment, larger fleet to remove strip faster. So larger equipment increases efficiency on the excavators, on trucks across the board.

In parallel, while we did that mostly in the fourth quarter, the Greentech Plant continued to operate. So we reprocessed the lithium materials from the dry stack tailings during the fourth quarter '25 and the first quarter '26 with superior recovery, not the 70% recovery, but it enriched it enough to create decent cash flow to create a decent sale value, a decent value added so that it could generate the cash flow and the revenues we achieved both in the later fourth quarter, but also throughout the first quarter. So what we're hoping to happen, and we've seen happening already now in March was that recoveries get closer to 70% as we resume delivering fresh rock to the plant.

Now this is how we're going to bring all that software knowledge to the plant. We started and we continue. So we have fast mining implemented in process for mine planning. We have the same software implemented for fuel control. We have fatigue automatic software detection. We have a cost control app sitting on iPads and iPhones for all the mine operators. So we have loading and blasting simulations for optimal results with minimum loads, minimum vibrations. So we're bringing the same software technologies, the same intelligence to the mining operation. And that is starting in the control room for mining, which is here, as you can see in the picture.

This is a picture of the first wave of larger equipment. The equipment is going to get bigger and bigger. This is the kind of the small large equipment. So -- but more important than that, we own production control. We drive production control. Mine planning is ours, blasting control is ours. We hired a third-party driller for blasting. So we're managing different contractors with our own in-house mining team. That allow us to gain confidence on deploying larger equipment, on investing in larger equipment and on basically doing the calculated analysis of where should we be blasting for safety, for optimal geometry, but also for efficient ore recovery.

Now I'm going to talk about how we're going to continue to expand. We are resuming the construction of Plant 2 this year. So we're going to double industrial capacity for the high-grade premium lithium oxide. And we're not that far. In other words, once we get to it, we're going to go from the 240,000 tonnes that we're guiding to 520,000 tonnes, and that is not that far away. More importantly, there's the potential that we may build 2 and 3 sequentially. So we are never going to decommission the construction crews, given that the CapEx involved here is actually very little and the CapEx efficiency is very high, meaning it's going to cost us $80 million to conclude the second plant, and it's going to cost us $100 million to build a third plant. So with $180 million we are able to take our production from 240,000 tonnes a year to 770,000 tonnes a year. That's a substantial increase, and that's one of the most efficient CapEx ratios in the whole industry.

So this demonstrates what can happen when we double and then triple production. We run the fifth largest industrial mineral complex in the world. We are the largest lithium mineral producer in the Americas. But here, we have all of our peers. We have the lithium producers in the Americas that produce from the lakes in Argentina, and that includes the Chilean and the American producers. We also have the producers from Australia, and we have the producers from Africa. So although we are the fifth largest industrial mineral complex in the world, and we're the largest industrial mineral producer in the Americas, we are the eighth ranked producer in the world as a whole.

Now look what happens when we double and we triple. When we double, we go from #8 to #6 or #5. Then when we triple, we go to # 4. All of these companies have valuations substantially higher than ours. In fact, we're valued as a nonproducing company. So the effect of doubling production and tripling production is not just numeric, it's also a clear demonstration that we can be up there in the rankings with a concomitant valuation. And that is what it means for us to build long-term shareholder value. And this is what we're planning to do.

This is a slide that shows how close we are to getting there. We have made a decision in the fourth quarter '24 and in the first quarter '25 of accelerating the construction of Plant 2. And unfortunately, because of tariff volatility, lithium prices collapsed in more than 50%. So we deployed CapEx and we deployed our liquidity in the fourth quarter '24 and in the first quarter '25 towards the construction. Well, that is not the so good news. We managed, we delivered throughout '25 as we've shown. We overcame because the business was structured to generate cash flows and live through organic cash flow generation.

But here's the good news. We're almost there. We've almost finished civil foundations. So what is missing really? Ordering equipment and assembling equipment, and that can be done quite rapidly. In the first plant, we were able to order equipment and assemble equipment in much less than 12 months. So this is how finishing building the second plant is actually a very expedited exercise in construction, managing procurement of equipment and managing assembly of equipment. And that's it. This is a fully licensed construction, fully licensed operation is just within our control to do this.

So Sigma is very well positioned to deliver substantial returns to shareholders in 2026. And here, we're going to show why. This slide demonstrates how Sigma continued cash flow generation, production cadence in '26 and growth by building Phase 2 that will yield 520,000 tonnes of lithium will certainly position us for a re-rating of our stock.

Why is that? When you look at our peers that produce lithium industrialized oxide from minerals in Australia, they have a larger nameplate production and a significantly larger cash flow. However, as we increase production, that means our cash flow will much more than increase because we have this competitive advantage of high margins, low cost and operational resilience. So our increase in nameplate production will bring a disproportionately larger increase in cash flow generation. More so, that happens irrespectively of pricing environment because of our low-cost operational resilience.

The next slide just shows how we're going to get there. We've demonstrated operational discipline. We delivered on all fronts in '25. That's what we've seen on the right. We deleverage and repaid debt, we increased operating cash margins. We built a new line of revenues. We're now selling lithium fines high purity from our dry stack tailings. We increased mineral reserves by 40%, which shows we can operate for 66 years with 1 line for over 25 years with 2 lines and most likely for over 25 years with 3 lines. We strengthened commercial strategy by basically capturing seasonality. We monetized final prices in line with contract seasonality in the fourth quarter. And we closed 2 significant offtakes, almost $150 million in offtakes, $96 million to fund our working capital throughout 96 (sic) [ '26 ] to fund our upgrade and restructuring of mining operations and then a $50 million typical offtake that will basically be invested in building Phase 2.

So how are we going to continue to deliver in all fronts in 2026? We're going to resume steady-state production from the mining operations, that integration mine plant cadence that we've shown before that will resume the cadence of what we call the premium high-grade lithium. We're going to close financially on the offtakes transaction signed, and we're going to close on 2 more offtakes as we disclosed when we discussed offtakes here. We're going to receive the development bank disbursement for the funding we already spent on Phase 2, and we are in discussions with several other banks for Phase 3. We're going to repay $100 million of shareholder debt funded by one of the offtakes that are in negotiation, 80,000 tonnes per year for 3 years. And we're planning to commission the Plant 2, the Greentech 2 by the end of 2026.

So with that, I close -- very proudly close the full year results of 2025, where we crossed the Rubicon of probably one of the most volatile lithium environments this industry has seen. And we're entering 2026, awash in significant cash generation coming from numerically delivering operational efficiency.

So with that, I close this presentation for the full year of 2025. We're very, very proud of our team. We're incredibly proud of how we work, how hard we work to cross the Rubicon of one of the most volatile lithium pricing environments I have ever seen, and I've been here for 10 years as a C-level executive. We've done it without raising capital. We've done it without a hiccup in our operations.

We're entering 2026 in a much strengthened position. Why? We have the resilience that's basically quantify. We already earned our revenues by building a completely different product line. We resumed production cadence at the end of the first quarter, and we're entering '26 with roughly $48 million of quarterly revenues, which is a significant accomplishment considering we're just coming out of a volatile 2025.

All of that without raising any dollars of new capital, pure organic, disciplined cash generation. And that is the quintessential competitive advantage of this company. This operations efficiency delivered and quantified in the numbers we've shown you. We're very proud of our team, and I want to thank all of our clients and stakeholders who have been there with us, holding hands and helping us cross '25 and enter '26 in this very strengthened position.

[Operator Instructions] Our first question comes from Fortune Era. The company has indicated a production target of 520 kt in 2027. Does this imply that Plant 2 is expected to reach full capacity by the end of 2026? More specifically, when do you currently expect Plant 2 to begin commissioning? And how long do you expect the ramp-up to full capacity to take?

We are going to have another presentation on plant construction, but we'll tell you what we're planning to do now. As we've shown in the slide previously, what there is between us and new production is essentially resuming ordering equipment, assembling equipment and commissioning that plant. That can be done quite rapidly. If we use the timetable from the previous plant, it could be easily done in under a year. We are going to order equipment in the summer after the close of the second quarter. The reason being the offtake we just signed will be the main driver for us to deposit and prepay the equipment that we need to build Plant 2.

We believe that it will take us anything between 8 to 12 months to actually build and commission that line. So Plant 2 will be fully commissioned early 2027. And as a result, the guidance for '27 is not a guidance for production, it's a guidance for installed production capacity, and we will be further updating the market as that unfolds. But what we can say is we're almost there with three-fifths of our timetable accomplished in the construction of Plant 2. And what stands between us and that level of production is purchasing, building and commissioning, which we've shown we can do quite rapidly.

A follow-up question. In the guidance section titled cash flow forecast at various realized lithium prices, could you please clarify whether the price assumptions of $1,500 and $1,700 refer to Sigma's expected average realized selling price for its concentrate or the benchmark SC6 China FOB price. For Sigma's concentrate grade of approximately 5.2% to 5.5% lithium oxide, what is the typical realized price as a percentage of the SC6 benchmark price?

So we are using -- we're not using the gross prices. We're using adjusted prices. So when you think about the nameplate price, we take nameplate price from SMM. And then we typically ship 5.2, 5.3 lithium oxide grade product. So the adjustment is done dividing that level of oxide by SC6 in older contracts. In the newer contracts, we divide by 5.5. The results are kind of the same. So when you look at the prices on that table, they are net prices. As you probably are all aware, gross prices have reached $2,400 just 2 days ago. So $1,800 and $1,500 are far below the current level of nameplate prices at Shanghai Metals Market.

Our next question comes from Lamartine Gomes. Question for Ana Cabral. Can you give us your directional sense of how much each plus USD 10 per barrel increase in oil prices impacts the demand for lithium?

Unfortunately, I don't have that number, and I am not really an oil expert. What we can say, though, is 15% to almost 20% of the fossil fuels we use here are just the fuels that power the trucks that run around our operations. In other words, every liter of diesel in Brazil has mandatorily 15% of biodiesel. Now that percentage is slated to increase. So we actually are, let's put it that way, 20% less impacted by the increase in diesel prices than any other country in the world because we have this fantastic, we call, biofuels program in the country, which was actually created 30 years ago during the last oil crisis for this exact reason for energy security of Brazil.

And we are the beneficiary of that when it comes to our emissions. So our trucks generate 20% less emissions because the fuel by law has 15% and we're putting 20-ish percent biofuels for every liter of diesel.

Our next question comes from Robert Cook. Please detail the timing of Phase 2 and 3 to completion both 2028. Anything more specific?

Well, I was mentioning what we're going to do on Phase 2. And again, we're going to keep giving the market updates pretty regularly on that. Phase 2, by the summer, we're going to be ordering equipment. So close second quarter order equipment. As we demonstrated, that will be funded by the growth offtake we signed, $50 million or more than enough to prepay or deposit towards the equipment we need.

To be specific, now what's between that order equipment and production is essentially assembly. In the previous plan, we had 1,000 man on site assembling that plant, that line. That was done in 8 months. We use what we call air procurement for some of the parts that were delayed so that we could cut short delivery times. We use a lot of what we call acceleration techniques, which in this budget are factored in. If we use the accelerated timetable, it means we're going to spend another $7 million for extra man, extra shifts and air freight for some of the equipment.

What does that mean? It means that we could have a built plant by the first quarter of 2027, assuming we start in the summer. And then there's commissioning. What is the advantage of doing a plant that is a carbon copy of a plant we've been operating by then for almost 4 years. That is the plant we really know. And as a result, we believe we can cut commissioning times significantly. And more importantly, start benefiting from the get-go, begin with the same levels of recoveries instead of going through the curve of going -- starting with 50% recoveries up to 70% recoveries we underwent from the 2.0 version of the plant to the 3.0 version of the plant.

So without being more specific, we're quite confident that we're going to have Plant 2 by any time in the first half of next year. But that's the reason why we're making a clear distinction between installed production capacity and production. Production is dependent on the commissioning, and we're going to keep the market vastly updated as we go along.

Now Plant 3. Plant 3 is what we're very proud of actually because given our operational success, given our cost resilience and given our strength as a business throughout cycles, what we've shown basically in 2025 has not gone unnoticed by the main development banks throughout the world, by the main players throughout the world, by the main financiers throughout the world. So we do have dialogues going on for building Plant 3.

Building Plant 2 and 3 together is not new. In fact, in December '22, when we filed our DFS for expansion, that was the plan. So much so that we invested in building infrastructure for 3 lines. The goal was to do 1, 2 and 3 sequentially and maximize what we call construction synergies. Unfortunately, lithium took a tumble in '24, and we quickly aborted that plant, and we stuck to just the first plant.

By the end of '24, we resumed Plant 2, and we went all in, again, with the volatility of tariffs in '25, we aborted that plant and we stuck to Plant 1. But doing 1, 2, 3 is actually what we have been designing this industrial complex for. Why? We spent the money in the infrastructure, and that was not a small feat, meaning we have the water to feed 3 lines. We licensed to feed 3 lines. We have the sewage inbound treatment station to feed 3 lines. We have the power substation to build -- to feed 3 lines. So from an infrastructure point of view, we are ready for 3 lines. And this is why we're delighted to actually say that, that has not gone unnoticed. And we have, let's say, no shortage of choices from where to get funded with the appropriate kind of debt, development financing debt to build these 3 lines.

Our next question comes from David Feng with CICC. Can we have some color on how Sigma would mitigate any potential fluctuations in fuel costs and power costs? What percentage does diesel costs account for in your cash cost or AISC?

I don't have the number by heart, but I can talk about power. It will have 0 effect in power. In other words, when you think about power, our power is fixed at $2 per kilo -- $0.02 of $1, meaning $0.02, $0.02 of $1 per kilowatt hour. This is fixed. One important point, power is renewable here in Brazil. So it's coming from a hydroelectricity dam. And we have a 5-year agreement, which is set to expire 2.5 years from now. So we're going to be good with power.

Diesel is the element that is a little bit less straightforward to explain. First, because we got biofuels on the mix, and that is mandatory by law. Secondly, because our oil company is state-owned, and they have what we call a diesel compensation account, which works like a shock absorber during oil crisis. In other words, the diesel costs don't go straight to the consumer as they increase globally. Petrobras absorbs some of that shock initially using what we call the oil compensation account and then it releases in the market.

And that was created because all transport in the country mostly is done by trucks so that -- and trucks are individual entrepreneurs so that they have time to plan to actually send that cost into their customers. So we're going to revert back to you on the percentage of diesel in our costs with that knowledge.

This concludes the question-and-answer section. I am returning to our CEO, Ana Cabral, for her final remarks.

Well, I want to thank you all of you. And in fact, everyone watching us for the trust. We have gone through 2025, which was one of the most volatile years in lithium, delivering exactly as we said we were delivering resilience, demonstrating operational excellence and executing to plan. We already started '26 on a fantastic note because of what we've learned in 2025 as far as becoming more and more and more resilient. So that's the effort, the collective effort of our management team, of our workers, of the team here in Vale do Jequitinhonha, essentially working like what we call racing horses. We lowered the flap, we focus on our lane and we raised our own race without looking to the sides, focusing on the target. And that's how we've been running this business, and this is why we achieved these results.

So once again, I want to thank on behalf of our management-operated shareholders here that work at the company and control the company, we want to thank all of our outside shareholders and reiterate our interest cannot be further aligned. There isn't another company in the sector that's management-owned, management-operated, where employees are shareholders. So for all of you watching, we're in this together. And I want to thank you for staying our shareholders because we crossed 2025, and we are incredibly well positioned to deliver stellar 2026.

Thank you. Thus, we conclude the fourth quarter of 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website, www.sigmalithiumresources.com. You can disconnect now.

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. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions]

I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead, Anna.

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.

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, the employee bots or AI to become more and more efficient in treating the mineralogy of our mines and increasing plant recovery.

So our plan 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 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 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 2 to 3 weeks, and Sigma will operate the mine with equipment lease 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 showcased 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.

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. 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, and the net margin increased 67% [Technical Difficulty] quarter of last year. Both margins also increased substantially versus the previous quarter. But by showcasing the increase versus last year, we demonstrate how we increase 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 13. Our cash has also increased by 42% versus last quarter, which is a trend very different from our peers, which had burned current 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 0 accidents. We have achieved 787 consecutive days without accidents with lost time injury. It's over 2 years with 0 records. 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.

Our TRFIR 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 enhance performance and ideas for cost optimization coming straight from our employees. 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. 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 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. And 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. So a picture is a thousand words. And here is how that translates into cash generation. 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 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. So that's another $8 million, which means that there were $28 million extra that resulted from our optimum commercial strategy. So 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 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 material sitting at the port.

So 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. So 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 plant and to continue to make improvements to achieve the stellar operational performance the plant has been delivering.

So we are in a very comfortable debt position as of November 13. And 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 nonintegrated lithium oxide concentrate in Africa. And this location to the very left of the nonintegrated 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 this on guidance for the all-in sustaining cost, and that's demonstrated by the chart to the right, where we show the 9-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. So we're very much on track. We're 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 '26. So 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 tailored different types of offtakes to cater for different specific client needs across geographies. So 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 3-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. 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. So 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 them. Now 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.

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 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 plot. And this offtake is under contract negotiation. So 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. 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 tonne, and that includes everything, including interest expenses. Now at the current price levels of $1,000 per tonne, that represents a cash flow -- free cash flow generation of $132 million.

Once we complete Plant 2 by the end of next year, we expect to have 550,000 tonnes 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.

So 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 November 13. This page demonstrates how our Greentech Plant upgrade into the 3.0 version concluded and executed in November '24 was not accompanied with [Foreign Language] this page demonstrates how the upgrade in our Greentech Plant into a 3.0 version, which was concluded in November of '24 of last year, 1 year ago, was not followed by our mining operations.

Here at Sigma, just to recap, we have 2 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. Throughout the first 9 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 9 months of this year.

Now the chart above show and demonstrate the significant upgrade that took place in the Greentech Plant last year when from the beginning of '24 to the end of '24, the production went up 43%. In other words, the plant can produce 300,000 tonnes of lithium concentrate if properly fed with fresh rock, fresh spodumene ore. It processed efficiently because the plant recoveries are 70%. Now that made it clear that a mining upgrade was required.

So 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, 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 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% recovered. Let me go back to the beginning, pause, pause again. This page demonstrates our way forward in 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.

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. The target for 2026 is to achieve full plant operational capacity of 300,000 tons of lithium oxide concentrated. We have been recurrently achieving unprecedented recovery levels throughout the year up until the third quarter. 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. We reassessed the mining plan and the geometry. So we observed that we have mined about 798,000 tonnes in July and 659,000 tonnes in August. 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. The ore grade has been 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.

So with those upgrades, we expect to evolve our production capabilities at the plant already in the first quarter '26, reaching 73,000 tonnes of lithium oxide concentrate produced. That's the guidance for the first quarter of '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 -- on our expansion plans. That's financial support and offtake support.

We plan to reach 80,000 tons of lithium carbonate equivalent upon completion of our Phase 2 expansion next year. By just adding a third production line, which infrastructure is already on site, we expect it 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. So this underpins the financial support that we receive from our very large clients downstream in the lithium supply chain.

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. 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 deleveraged and we'll 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 a port, taking advantage of the current robust pricing environment where demand for these products become actual. Currently, these products are priced at about $120 per tonne, 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 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 by increasing production volume and by actually decreasing the absolute number of mining costs, which represent 2/3 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. Number five, we're 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 with the global leaders in downstream, including battery makers and carmakers receive from their own suppliers in the duration of their account payables. The average of the largest carmakers in the world is from 130 days to 180 days to 210 days. We've been barely doing 30 days of deadlines for suppliers.

So we are 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.

And 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.

[Operator Instructions] Our first question comes from [ Bavida ] from Bloomberg.

Thanks for the granularity on the cash balance. Based on Page 9, is current cash balance at USD 29 million plus USD 33 million or only USD 29 million.

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 [ Leanne Crozier ]. What is the region of lithium middlings from the process circuits? What is their LI 20 grade even as a range?

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. 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.

So in current market environment, where it'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 tonne. And then we have another 850,000 tonnes of these materials at the plant, which makes their costs approximately $85. So when we bank on $33 million, it's just pure profit, given that there are costs incurred in transportation.

So the number is net of transportation. The current quote for these materials at Shanghai Metals Market is $120 per tonne. They are roughly 11-ish percent of current lithium oxide concentrate prices as of today, which is about $1,070 to $1,080 per tonne.

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 BNDES loan disbursement for Phase 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 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.

So 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. So we're going to utilize the same structures we've been utilizing, which are large customer balance sheet support to basically disburse [Technical Difficulty] what are we doing about expansion is ensure [Technical Difficulty].

Ms. Ana, your connection just dropped in the middle of the answer, if you can repeat that part, please.

Okay. Yes, so regarding the structure for this bus in BNDES, our Board was waiting for at least 1/4 of price stability given the volatility in lithium prices, the market experienced this year. So 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 '26.

But more importantly, we have already disbursed a certain amount and file that with BNDES. So it's all basically ready to be deployed once we continue on equipment purchases, which is the plant portion of Phase 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 feed the plant with the same geometallurgy that we are feeding our current Plant 1. So feeding Plant 1 and Plant 2 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. So 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 [ Habbou ]. Will production be fast-tracked if the lithium market tightness and the market price of lithium increase happily?

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 Greentech lithium plant that can't 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 [Technical Difficulty] production a year.

Ms. Ana, your connection dropped again. If you can repeat...

Okay. 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. In other words, we know what the plant can do. The plant can deliver 300,000 tonnes of lithium oxide concentrate per year. If properly fed with fresh rock. 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. 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 because as we enter '26, we will already enter with an upgraded quarterly production, as we indicated, to 73,000 tonnes.

Our next question comes from [ Benson Chen ]. 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?

Well, we have a credit signed with BNDES, which is the best possible credit we can get. But 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 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 2, given that the mining upgrade has been fully covered by our current clients.

[Operator Instructions] Our next question comes from Joe Jackson from BMO Capital Markets.

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.

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 has been fully covered by our clients. So 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 2.5x 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. And we've 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.

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, SOFR plus under 1% or 1%, again, facilitated by our very supportive clients given that we are the pillars of global downstream supply chains. So you'll be like -- it'll be an offtake like any other.

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 at prices?

Well, it's spot essentially. We closed 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 tonnes of LCE of open interest contracts. That's a term of global lithium demand. So there's [Technical Difficulty] quite precise pricing.

Last night, prices hovered around $1,070 a tonne. So that level of liquidity allows for spot to be quite precise, meaning clients bid and hedge immediately into chemicals. 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. And what we've done this year, given volatility, we basically closed the provisional pricing.

And 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 third quarter at the moment, as we explained in detail in our cash from operations section of this presentation.

Our next question comes from Shiva Kumar.

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

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 carmakers globally 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. 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 showcased so far. 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.

But unfortunately, there is no green premium. And we do not believe there will be a green premium. If -- hopefully, that could be, but it's years ahead. What there is, is a green [Technical Difficulty] commercial advantage.

Our next question comes from David Feng.

Ana, this is David from CICC Research, and thanks for the presentation. 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.

Yes. 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? 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 for $120 even for middlings, which is -- 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 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?

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 and 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 date of September 30, 2025. 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. 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 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 their 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 850,000 tonnes 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. So what we're working on is to thinking through berthing 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.

So essentially 2 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. And that's the sustainability advantage. We are able to monetize it to a net of USD 33 million, which is a considerable sum. It's equivalent to a boat or a bit more actually, pure profit.

[Operator Instructions] Our next question comes from [ Olin Chen ].

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.

Yes, we're not there 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-tonne trucks to up to 95-tonne trucks, which is a significant increase from the small [Technical Difficulty] trucks we were [Technical Difficulty] 75-ton truck can move twice much material than a 40-tonne truck, a 60-tonne truck could move 50% more material.

A 95 to 120-tonne truck, same access size can move 3x more material. Cost, not that dissimilar because it's diesel, one driver instead of -- I mean, it's 4 drivers per equipment. So we are decreasing the number of men involved, 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 the equipment, which is currently taking place. I was in China for 2 weeks, just go back 1.5 days ago. And we're making progress in strides on that front.

And 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.

Thank you. This does conclude the Q&A section. I'll now return the floor to our CEO, Ana Cabral, for her final remarks. Please, go ahead, Ana.

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 where 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.

And so 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.

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 is heading Investor Relations, and 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.sigmalithiumresources.com. You can disconnect from now on and have a wonderful day.