SGML

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, and all participants will be in a listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After the prepared remarks, there'll be a question-and-answer session for participants. At that time, further instructions will be provided. I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead, Ana.

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, Ana. With that, I commence 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. With that, I would very much like to present the Sigma Lithium 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 timetable. We prioritized our operations, and we brought in a larger fleet that has the capacity to match our Greentech 3.0 plant. At that plant, we have been achieving record recoveries in clean tech industrial processing. We have the most advanced DMS plant in the world.

Our lithium is 100% sustainable. We have reached the Quintuple Zero Lithium a few years ago. Zero tailing dams, zero hazardous chemicals, zero accidents for 1,010 days. We use 100% renewable electricity, and 100% of the water is reused and recycled. We do not use potable water. There's nothing like Sigma. We have reached our most profitable quarter since production started three 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 margins, unadjusted, as posted, published in our financial statements, and 26% profit margins. At the same time, our debt and cash positions has strengthened our balance sheet. We have significantly decreased total debt, 32% in two years, 21% in one year, total debt.

Our cash increased to $28 million as of May 15, 2026, today. That's financial resilience achieved throughout the down cycle. Production has resumed cadence of high sales of high-purity lithium oxide concentrate. 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 phase II. That would 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 high-purity lithium fines, we have achieved a record lithium price equivalent to $2,150 this quarter on the high-growth material sold. We're very proud to show that Sigma has one of the best safety records in the industry.

We reached 1,010 days with zero 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 floor, which actually is responsible to help us deliver these enhanced performance. Our TRIFR was zero, which is an incredible source of proud to all of our team. 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 2026 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, unadjusted, as published, and 33% operating margin in the quarter. In the meanwhile, we've delivered a total debt repayment of 33% over two years. That's a significant deleverage. Over the last year, we've delivered a total debt repayment of 21%. Our revenues are also up 48% quarter-on-quarter. 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 15th, 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 it to double production capacity during 2027 and triple production capacity by the end of next year with Plant 3. Over the last two years, we have significantly increased our margins. They are the highest in our history. In the first quarter of 2026, this quarter, we have posted 61% gross margins. That compares to 23% in the first quarter of 2024. On EBITDA, our EBITDA margins was 39% this quarter. That compares to 9% in the first quarter of 2024. Our operating margin had the same behavior, 33% in our first quarter compared to -1% in the first quarter of 2024.

Net profit, we had a 26% net profit margin compared to -19% in the first quarter 2024 when we were just starting our operations. This demonstrates how Sigma has been thriving 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 two 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 two 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 repayment and help us fund growth CapEx. Last year, we signed and closed a $96 million prepayment on a 70,500 ton offtake agreement for one year. That repayment has been paid to us in installments, and the purpose of it is to fund working capital. In fact, that offtake helped us deliver the upgrade of our mining operations. Last quarter, we also announced and signed a $50 million conventional offtake with prepayment. The purpose of that offtake is to help us repay the total debt that was 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 prepayment. We're also working in a few contract negotiations for a similar transaction for another $50 million that will basically tie up 50,000 tons for 2026 and 70,000 tons for 2027 in offtakes. Those are going to be conventional offtakes with prepayments 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 prepayments for our production starting into 2027, and that will be delivered throughout the five years or the seven 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 phase III, as we could double down on this prepayment for $100 million given the scale of our current production with just one plant. Meaning, with the current production forecasts for the next 12 months, we could actually honor all of these offtakes from 2026, 2027, 2028 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, May 15th, 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 fines. We've had $19 million of operating costs, so that all in, that represents net inflows of $34 million. We've had $3 million of CapEx, and then we had $11 million of interest and debt repayment, as we've discussed in previous slides. That led us to a cash at the end of 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.

Today, we've had $28 million in cash in our bank as of May 15th. In this quarter, we are also expecting inflows already signed of approximately $40 million, again, related to the $96 million prepayment for 70,000 tons we discussed earlier. In addition, we expect the signed prepayment for the offtake for 40,000 tons to close, and that will bring inflows 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. 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 two years of down cycle, we have increased our efficiency and increased our discipline. We have maintained that discipline entering into this bull cycle. 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 production volumes delivered by Sigma Lithium every quarter. It demonstrates how we resumed sales cadence of our primary product, the high-grade lithium concentrate. We go through all the stages of our outlook. In other words, how we have upgraded our industrial plant from first quarter 2024 all the way through the fourth quarter 2024.

We have reached and maintained industrial cadence throughout 2025. It shows how in the third quarter 2025 we had demobilized the mining contractor. It also shows how in the first quarter 2026 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 product, basically the low-grade funding the upgrade of the mine. We have ramped up our mine tracking to 33,000 ton plan on schedule. This quarter, we have already achieved 20,000 tons as of now, May 2026. The outlook of 33,000 tons for the second quarter is perfectly reachable and perfectly achievable. Entering into the next quarter, we have larger fleet fully mobilizing.

In fact, the 60 ton trucks are fully mobilized, and then we have the 75 ton excavators fully mobilized. That increased our haulage capacity significantly. We came from 40 ton trucks into 60 ton trucks. That's a 50% overall increase in haulage capacity. Going into the next quarter, we're gonna have an additional fleet continuing to mobilize, additional large fleet continuing to mobilize trucks and compatible excavators. All in all, the geometry optimization and the stripping have gone as planned. Our ongoing mine develop 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.

We are guiding to 240,000 tons for the next 12 months, we're maintaining our guidance of 200,000 tons 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 three different price scenarios: $1,500 per ton, $2,000 per ton, and $2,500 per ton. It's important to remind that the current prices sit around $2,900-$3,000 per ton. As far as production guidance in volumes, we simply condensed 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 three years sequentially, cadently, because we are an established producer. The historical production for 2024 was 240,000 tons. In 2025, we delivered 180,000 tons as a result of the upgrade on the mine that we decided to promote precisely for this moment. In the next 12 months, we're very well positioned to deliver approximately the same 240,000 tons or 270,000 tons that we have been historically delivering over the last three years. For this year, we will be delivering 200,000 tons. That translates into the numbers for cash flow we are forecasting here.

Again, at $1,500 per ton with just one plant, we are planning to produce $130 million of cash flow. That's just one plant at 240,000 tons 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 with just one plant, we are forecasting to achieve $330 million for the next 12 months and again, using just 240,000 tons of production forecasts, which, as you can see, is very much in line with the levels of production forecasts we've been achieving over the last three years of operation.

Now, near-term growth. Once we complete the second plant at 520,000 tons of production, we are estimating forecasts at least these three different price scenarios that range from $320 millin-$760 million approximately, which are very robust numbers. This slide, in summary, demonstrate that Sigma, because of our cost discipline, because of our operational efficiency, is a cash 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 ton. This slide basically recaps how we are going to execute the near-term growth. It is a recap slide, it ties well with the previous slide.

Is just to remind everyone that we have actually initiated the construction of Plant 2. We advanced quite a lot on it. More importantly, we have been benefiting in that construction process from a streamlined timetable because the infrastructure has been already built way back in order to support Plant 1. 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 a construction schedule have already been built or have already been executed, such as earthworks and foundations, water drainage, and the recycling recirculation systems. 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.

As a continuing, again, what is our production profile going to look like? For 2026, 200,000 tons. For the next 12 months, 240,000 tons. Once we complete Plant 2, 520,000 tons. That's fully funded. Once we complete Plant 3, 770,000 tons of lithium oxide. Reminding everyone that Plant 3 is not yet funded. However, each one of these new plants cost just $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 and to access 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 upgrade, 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%. Here is our mine. This slide is a picture that I particularly like very much because it merges two concepts that are very dear to us, operational efficiency with these very large haulage trucks, but more importantly, they are pausing 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. All these conversations about our piles are just much ado about nothing because there are two kinds of piles. Rock piles are gonna look like this, hills incorporated to the landscape. Our tailings are actually being sold, so very soon this year, we're gonna be zero tailings. Why? Because we dry stack them, reprocess 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.

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. Our mine now honors our state-of-the-art 3.0 Greentech lithium oxide plant. Wrapping up our quarterly presentation, we're gonna talk about what we expect regarding shareholder returns for the rest of the year. This slide just quantifies why we believe Sigma is very well positioned for a re-rate for our shareholders. On the page, we show 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 in current delivery.

At 40,000 tons of lithium carbonate equivalent, we are valued at $2.3 billion, which is a significant discount to some of our peers in other parts of the world. More importantly, even to some of our peers that do not even produce, they have a similar valuation to the company. It's basically the rerate quantified and demonstrated in numbers. Now I open for Q&A from the current shareholders and the current audience to this quarterly presentation. Thank you very much for listening to us.

Thank you very much for the presentation. We will now begin the Q&A section. To ask questions, just queue the question in the Q&A button. Please be aware that your company's name should be visible for your question to be taken. Please hold while we poll for questions. Our first question comes from Joel Jackson with BMO. It seems you expect production to be 13,000 tonsin June, then 24,000 tons in July. How do you get such a large jump in production month-over-month?

Thank you for the question. Hi, Joel. Well, essentially, we haven't given monthly guidance, but as you can see in one of the slides, we've 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 with mobilization, we increase 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 four shifts. We've gone from getting the equipment available, large scale equipment, to commencing it with one shift, then moving from one shift to two shifts, and then as personnel went through basic security training, we've gone from two shifts to four shifts. Why so? That's the night shift.

We commenced personnel on the day shift, and that split into two shifts, and then we just moved into the night shift at once they received very detailed protocols for night operations. 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 tons of material on the quarter.

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

Thank you. 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 resume. There's a timetable what we've done so far on phase II. We basically paused in civil works, 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're being fully funded by the Development Bank, given the progress we've delivered so far on resuming our operations in full, at full capacity. If once we resume construction at that stage, what needs to happen? We need to order equipment and receive equipment. We're giving ourselves a quite conservative timetable for that to take place.

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 mid-year next year. Phase III could happen in parallel or could happen sequentially. As we made it clear in the slide, phase III isn't funded, but again, for the same reasons, we don't see funding phase III, again, just another $100 million as an issue. We're quite confident that we will be able to either sequentially continue on phase III, or funding available, we could actually engage in two constructions 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 three lines, three industrial plants.

As we pause short of two lines, in other words, as we just built one plant, the infrastructure is there. What we call phase II and III is simply industrial lines, and that's it. These actually have quite a reduced timetable, and we can build them quite expeditiously.

Our next question comes from Joel Jackson with BMO. Back on slide 16 and providing 200,000 tons production guidance for the year, are we wrong in assuming you expect Q3 at 72,000 tons?

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. What we try 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. Thank you for the question, Joel.

Next question from Ailing Chen with Hot Win. 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 continues negotiation with existing and potential offtake partners, could management comment on whether future contracts may also include floor 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 floor prices. Could we get them? Absolutely. Do we need them? No, we don't. Given that our production costs are 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.

As we thought through our offtake strategy, given that we do not need floor prices, and it does carry a price in terms of amount of product being made available to the customer to actually bring a floor price mechanism into the contract, we've just forsaken them because we're solving for another objective, which is to commit as little product as possible. We've shown that in the two offtakes already signed and that have already been ongoing here at Sigma. For example, the first offtake for $96 million basically ties up only 70,500 tons of product for just one year. If one divides one amount per another, you get to an implied what we call premium price or offtake rights price of about $1,300, 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. Again, it carries an implied monetization price of $416, which, it's actually higher than some of these announcements with floor prices we've seen. It's essentially a commercial discussion. It's not a one-size-fits-all, but I really wanna highlight the fact that given that there are agreements being signed with floor 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. Again, I must highlight that we're not locking future prices. These aren't derivative agreements. These aren't for 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 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 defense to, you know, 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 going into what we call barges. It 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 Ailing Chen with Hot Win. Sigma currently has approximately 300,000 tons 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 Sigma's lithium oxide intermediate products? Is pricing linked to lithium concentrate benchmarks, fixed price agreements, or negotiated on a spot basis? 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-$80 ex works at plant in the market. We price these products off DSO as per Shanghai Metals Market. If one looks at these benchmarks, they are updated daily, sometimes weekly, but no more often than daily. It's quite straightforward to calculate how valuable these products are for our clients because these are not DSO. These are processed low-grade high purity materials at about 1% and 1.1% of lithium oxide content, which are pre-crushed in a way and pre-separated. They're bringing a 30% savings for our customers, hence the heightened demand.

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 ton ex works. However, as we are still finalizing deliveries on the previous sale of 400,000 tons announced last quarter, we would just commence deliveries of these products somewhere in beginning of third quarter. 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're back at full processing lithium oxide from fresh rock.

On a 12-month basis, we generate about 250,000-300,000 tons of what we call the lithium fines, the lithium low-grade materials. Therefore, this could become an ongoing business if prices remain at the current levels. One could forecast the extra cash flow coming from these businesses on whichever basis one uses for lithium oxide pricing. It's roughly a tenth of the pricing. These markets are becoming more and more mainstream. I highlight the sale that one of our peers in Australia has done 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 works, which is cost at plant. Assuming lithium prices remain robust as they are, these markets for low-grade materials do continue.

The contribution to cash flow is essentially the 250,000-300,000 tons of material times I mean, currently, that would be $80 per ton. On an ongoing basis, it would vary based on the lithium oxide price forecasts for each one particular analyst.

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

I wanna thank all of you for your participation on this call. I wanna 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 in the middle of 2023. We barely caught a bull market. The best is yet to come, given that whatever comes our way now as far as prices is excess returns, given our very low extremely low-cost position, always to the left of most African, all African producing nations. We're very excited and very enthusiastic about the near-term future, the short-term future, the midterm, and the long term, because we were built to withstand any moment or any point of the lithium cycle.

Thus we conclude the first quarter of 2026 conference call of Sigma Lithium.

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, and all participants will be in a listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After the prepared remarks, there will be a question-and-answer session for all participants. At that time, further instructions will be provided. I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead.

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.

Hi, everyone. Well, thank you, Anna, for showing us this video of our operations. As you can all tell, we're very proud of what we've built here in Vale do Jequitinhonha. 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 gonna make quite a lot of forward-looking statements, and we would like to encourage you to read the disclaimer of this presentation that's gonna 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 interests 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 start with five points. We do not have tailings dams, so zero. We do not use drinking water. 100% of the water is reused and recycled from sewage. Zero. We use zero hazardous chemicals in our operation. DMS is basically a physics-based process, so third zero.

We use 100% clean energy, so zero dirty energy. We have had zero accidents with lost time for almost three years. Again, a picture is 1,000 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. We went through the sustainability initiative of actually planting the rock into a green mountain. 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 zero drinking water. We have zero hazardous chemicals. We have zero dirty power. 100% of our power comes from clean electricity. We have had zero accidents for two years and seven months. Five zeros. At the bottom, a picture is 1,000 words.

You see the before and after of our waste tailings piles, which are basically the rocks removed from the pits. Rocks, very stable, geotechnically stable. 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. 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. In the picture, you can see that we have a state-of-the-art industrial plant integrated into a mine. The plant is not just an industrial plant.

It's a state-of-the-art clean technology lithium processing facility where we achieve 70% recovery of the lithium, which is among 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. Still, every year, we serve three million meals so that the new waves of people keep coming to help build this Lithium Valley. We have a build-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 zero 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. More importantly, we have demonstrated speed of execution, low CapEx to build and to restructure operations, such as will be done with mining.

We are in a low-cost operating country, which supports us to achieve all of that. Now I'm gonna go through the operational and financial highlights of 2025, and I'm gonna 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 2025 for deliveries throughout 2026. The total is $96 million for 70,000 tons of deliveries.

The second was a $50 million typical offtake prepayment that was signed for 40,000 tons of annual deliveries throughout the next three years, commencing in 2026. Second, we have demonstrated 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 2025 and in the first quarter of 2026, solely as a result of this sound commercial policy. First, we monetized lithium seasonality to a T 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 a year 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 holes already at the port. The result of those sales have actually monetized what we used to call green premium, which doesn't really exist. 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 clean tech 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-ton a-year typical offtake agreement that is going to net us $50 million in a true prepayment to be closed within the next three months.

That amount is equivalent to 120,000 tons to be delivered over the next three years. The use of proceeds will be for our growth strategy. We also announced and signed the 70,500-ton one-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 three years. Initially, it was for 11,000 tons.

The number probably will increase depending on the scale of machinery that we are able to secure in the second quarter. 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 tons a year for three years that is going to net us $100 million in a typical prepayment. That conventional offtake will have use of proceeds to pay down the long-term debt that currently is sitting on our balance sheet as short-term debt because it matures in December of 2026. That was a four-year shareholder debt that has been gracefully given us by our shareholders in late 2022 to enable us to have working capital to commission our plant.

That debt will be replaced by an offtake, which is a very sound and very logical operational move for Sigma. On this page, we again demonstrate how the competitive advantage of low costs create the resilience from the price pressures that lithium has undergone this year, especially coming from new regions, sometimes not necessarily compliant or traceable product. 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 lepidolite, for instance, that once was $25,000 per ton is now around $17,000-$18,000 per ton. 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.

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 costs, 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. We're pretty much in the same ballpark. 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're able to bring our people safe to their families every single day after day.

This is what we work for. We have never had a fatality in 13 years of operations. We have been producing for almost three years. We have never had a fatality. More importantly, we're getting to almost 2.7 years with zero accidents with lost time. 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. 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 achieve 966 days consecutively without accidents. We're very, very proud of it. Here is to the numeric operational excellence. A number is a thousand words.

The unique resilience and robust cash flows can be demonstrated with each and every one of the main items of our 2025 and first-quarter 2026 estimated operational performance. First, offtakes. We had signed a $96 million offtake prepayment in 2025 that enable us to receive working capital by having our production paid in advance. We just signed a $50 million traditional offtake for three years of 40,000-ton deliveries totaling 120,000 tons to be delivered over the next three years. 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 2025, we generated $31 million of cash from operations. In the third quarter of 2025, the previous quarter, we generated $23 million. 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. 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. Ultimately, we had equivalent of 70,000 tons of the main high-grade product in revenues sitting as inventory accumulated throughout the last years.

That material became this new line of business of what we call high-purity lithium fines. For the full-year of 2025, we produced 183,000 tons of high-grade premium lithium oxide. For the full-year of 2024, we produced 240,000 tons of high-grade premium lithium oxide. 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 tons of the high-grade premium lithium oxide. All in all, we're not even solving for volumes, we're solving for cash flow. Cash flows were delivered, and debt was repaid. Here are the numbers which speak for a thousand words and do not have an opinion. Numbers are numbers. What we wanna show on this slide is again, the quantification and a pictorial of how commercially successful strategy actually helped us to deliver revenues in the third quarter of 2025 and in the fourth quarter of 2025. 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. 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. Seasonality in this industry is pretty clear. It happens in the restocking period that takes place after September. It's called contract season. 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.

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. 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. Again, it's the financial discipline that generated these 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 2024 with the fourth quarter of 2025, 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 2025 was very challenging. 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.

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. If you look at the bottom of the page, you can see that the quarterly comparison between fourth quarter 2024 and fourth quarter 2025 shows 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 2024 to full-year 2025, we've had a 21% decrease in costs. When we talk about these operating costs, we add operating costs, SG&A, ESG, plus all others. It's truly an achievement of financial discipline. We're always cutting what we control. We're always optimizing costs. 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%. When you look at the bigger picture here, what is actually visible? That yes, revenues decreased 27% on an annual basis.

Costs decreased 21% on an annual basis. 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 by 77%. 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's happened with revenues. From fourth quarter 2024 to the fourth quarter 2025, we lowered our short-term debt by 60%. From the fourth quarter 2024 to the estimate of first quarter 2026, which is actually the numbers that we have closing, we lowered it by 68%. The work continued. We didn't stop.

When you look at the third quarter 2025 against current, we lowered the debt by 49%. That's a complete restructuring the way we fund ourselves, in the short term, in the 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 costs 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. Again, it just demonstrates how Sigma is a cash machine. Why? Because we have high margins. We're built for cash flow generation. We have estimated that in the next 12-month period for phase I, we're going to probably have 240,000 tons of production.

As we've shown before, for the year, we're going to deliver 200,000 tons. 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 ton, 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 ton, we can generate anything between $218 million and $260 million of free cash flow just with one phase.

As we double capacity, which will be in place by the end of next year, 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 two of me or two 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. We have not factored in the actual operational scale gains that come from running two plants using infrastructure that is built and utilized now for one plant.

The infrastructure sharing of two plants are probably going to bring more cost gains, which are not here in these cash flows. Just with this conservative analysis of doubling operations and having some synergies on G&A and interests, we're bound to generate basically $600 million in free cash flow if prices stay where they are. If prices retrocede 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 tons of production, and again, we're just calculating efficiencies here on G&A, ESG, and interest. 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. Interest is flat, but G&A and ESG was the only number that was reduced. What does that mean? Our all-in sustaining costs, including interest, goes down to $495 per ton with three lines. If prices retrocede to $1,500 by the end of 2028, 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. This slide shows the cash flow bridge, the cash bridge with its respective explanation. Again, more numeric demonstration that the disciplined execution that we have delivered in 2025 and continue to deliver throughout 2026 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.

Let's start at the end of the third quarter of 2025. 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. 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. 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 number one and number two. 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. We had a flat cash position between the third quarter 2025 and the fourth quarter of 2025. This is financial discipline. We conserved cash. We burned zero cash. 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 of 2026, which were the cash sales of those lithium fines that we effected and closed on the beginning of the year. 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.

We had a $24 million CapEx bill for the mining upgrade, mining restructuring and all that we had to do. As we conserved cash and as we generated 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. We paid down another $5 million in debt, which means we increased our cash position in the first quarter of 2026 by 100%. We doubled the cash position. 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 2025. We're giving you an advancement here or a preview, as we call it.

We have another $14 million of cash sales from the lithium fines business, the reprocessed dry stacking tailings. 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. We have about $32 million of the first installments of the $96 million offtake that we signed just in 2025 for the high-grade premium lithium, which is the 70,000 tons that we are planning to deliver in 2026. Again, we close the first quarter 2026 with $12 million in cash, and we have a significant amount of cash coming our way in the second quarter of 2026.

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 2026, 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 clean technology that produces what we call the clean tech, the clean lithium.

That means we have a mine that's integrated into an industrial facility. 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. The plant can do many things given that we have dry stack materials. Once we think about doubling capacity and tripling capacity, meaning 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 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.

If the same amount of material is not fed into that dense media separators per hour, it won't achieve 70% recovery. 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. This is kind of the overall concept of a 100% vertically integrated operation. Here is a picture of a Greentech Plant at night. Unquestionably a 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 2023 until December, November 2024. That was not recovering 70%. It was recovering anything between 50, low 60s, almost 60.

The dry stack tailings 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. 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 SCADA. We have algorithms. We have detection of anomalies automatically. We have correction recommendations automatically. It's self-learning metallurgy, self-learning from 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.

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-ton trucks trafficking through the mine. So a lot had to be done there. First, we had to fix geometry. It had to be widened. Here on the picture, you already see the result of widening the geometry. We've done intermediary strip with the objective of widening geometry and increase the mine life and increase access and open other areas with ore that were closer to surface. 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.

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. We reprocessed the lithium materials from the dry stack tailings during the fourth quarter 2025 and the first quarter 2026 with superior recovery. Not a 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 latter fourth quarter, but also throughout the first quarter. 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 gonna bring all that software knowledge to the plant. We started, and we continue. We have Fastmining 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. We have loading and blasting simulations for optimal results with minimum loads, minimum vibrations. We're bringing the same software technology, 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 gonna get bigger and bigger. This is the kind of small large equipment. 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 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 we're gonna talk about how we're going to continue to expand. We are resuming the construction of Plant 2 this year. We're gonna 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 gonna go from the 240,000 tons that we're guiding to 520,000 tons, and that is not that far away.

More importantly, there's the potential that we may build two and three sequentially, so we're never gonna decommission the construction crews given that the CapEx involved here is actually very little, and the CapEx efficiency is very high, meaning it's gonna cost us $80 million to conclude the second plant, and it's gonna cost us $100 million to build a third plant. With $180 million, we are able to take our production from 240,000 tons a year to 770,000 tons a year. That's a substantial increase, and that's one of the most efficient CapEx ratios in the whole industry. 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.

Here we have all of our peers. We have these 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. 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 number eight to number six or number five. When we triple, we go to number four. All of these companies have valuations substantially higher than ours. In fact, we're valued as a non-producing company. 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. That is what it means for us to build long-term shareholder value. This is what we're planning to do. This is the slide that shows how close we are to getting there. We have made a decision in the fourth quarter 2024 and in the first quarter 2025 of accelerating the construction of Plant 2. Unfortunately, because of tariff volatility, lithium prices collapsed in more than 50%. We deployed CapEx, and we deployed our liquidity in the fourth quarter 2024 and in the first quarter 2025 towards the construction. Well, that is not so good news. We managed, we delivered throughout 2025 as we've shown. We overcame because the business was structured to generate cash flows and live through organic cash flow generation.

Here's the good news. We're almost there. We've almost finished civil foundations. 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. This is how finishing building the second plant is actually a very expedited exercise in construction, managing procurement of equipment, and managing assembling of equipment, and that's it. This is a fully licensed construction, fully licensed operation. It's just within our control to do this. 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 2026, and growth by building phase II that would yield 520,000 tons 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 costs, and operational resilience. Our increase in nameplate production will bring a disproportionately larger increase in cash flow generation. More so, that happens irrespective 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 2025. That's what we've seen on the right. We deleveraged and repaid debt. We increased operating cash margins. We built a new line of revenues. We now sell high-purity lithium fines from our dry stack tailings. We increased mineral reserves by 40%, which shows we can operate for 66 years with one line, for over 25 years with two lines, and most likely for over 25 years with three lines. We strengthened commercial strategy by basically capturing seasonality. We monetized final prices in line with contract seasonality in the fourth quarter.

We closed two significant offtakes, almost $150 million in offtakes, $96 million to fund our working capital throughout 96, to fund our upgrade and restructuring of mining operations, and then a $50 million typical offtake that will basically be invested in building phase II. 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 gonna close on two more offtakes as we disclosed when we discussed offtakes here.

We're gonna receive the development bank disbursement for the funding we already spent on phase II, and we are in discussions with several other banks for phase III. We're gonna repay $100 million of shareholder debt funded by one of the offtakes that are in negotiation, 80,000 tons per year for three years. We're planning to commission the Plant 2, the Greentech 2 by the end of 2026. 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. We're entering 2026 awash in significant cash generation coming from numerically delivering operational efficiency. 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 worked, how hard we worked 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 quantified. We already earned our revenues by building a completely different product line. We resume production cadence at the end of the first quarter, and we're entering 2026 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.

That is the quintessential competitive advantage of this company, this operational 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 2025 and enter 2026 in this very strengthened position.

Thank you very much for the presentation. We will now begin the Q&A section. To ask a question, just queue the question in the Q&A button. Please be aware that your company's name should be visible for your question to be taken. 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 a 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 a timetable from the previous plant, it can 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 8-12 months to actually build and commission that line. Plant 2 will be fully commissioned early 2027.

As a result, the guidance for 2027 is not a guidance for production, it's a guidance for installed production capacity, and we will be further updating the markets as that unfolds. What we can say is we're almost there. We're 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 $1500 and $1700 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%-5.5% lithium oxide, what is the typical realized price as a percentage of the SC6 benchmark price?

Yeah, unmute, let me unmute. Let me unmute. Apology. We are using, we're not using the gross prices. We're using adjusted prices. 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. 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. 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 two days ago. $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 +$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%-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. 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. We are the beneficiary of that when it comes to our emissions.

Our trucks generate 20% less emissions because the fuel by law has 15%, and we're putting 20-ish% biofuels for every liter of diesel.

Our next question comes from Robert Cook. Please detail the timing of phase II and III to completion, both 2028. Anything more specific?

Well, I was mentioning what we're gonna do on phase II. Again, we're gonna keep giving the markets updates pretty regularly on that. Phase II, by the summer, we're gonna be ordering equipment. Close second quarter, order equipment. As we demonstrated, that will be funded by the growth offtake we signed. $50 million are more than enough to prepay or deposit towards the equipment we need. To be specific, now what's between that ordered equipment and production is essentially assembly. In the previous plant, we had 1,000 men on site assembling that plant, you know, that line. That was done in eight months. We used 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 gonna spend under $7 million for extra men, extra shifts, and air freight for some of the equipment. What does that mean? It means that we could have built a plant by the first quarter 2027, assuming we start in the summer. 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 four years? That is the plant we really know. 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 starting with 50% recoveries up to 70% recoveries, we went from the 2.0 version of the plant to the 3.0 version of the plant. Without being more specific, we're quite confident that we're gonna have Plant 2 by, you know, any time in the first half of next year. 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 gonna keep the market closely 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 will be 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. We do have dialogues going on for building Plant 3. Building Plant 2 and 3 together is not new. In fact, in December 2022, when we filed our DFS for expansion, that was the plan. Much so that we invested in building infrastructure for three lines. The goal was to do one, two, and three sequentially and maximize what we call construction synergies. Unfortunately, lithium took a tumble in 2024, and we quickly aborted that plan, and we stuck to just the first plant.

By the end of 2024, we resumed Plant 2, and we went all in. Again, with the volatility of tariffs in 2025, we aborted that plan, and we stuck to Plant 1. Doing one, two, three 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 three lines. We're licensed to feed three lines. We have the sewage in-bound treatment station to feed three lines. We have the power substation to feed three lines. From an infrastructure point of view, we are ready for three lines, and this is why we're delighted to actually say that that has not gone unnoticed.

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 three lines.

Our next question comes from David Fang 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 cost account for in your cash costs or AISC?

I don't have the number by heart, but I can talk about power. It will have zero effect in power. In other words, when you think about power, our power is fixed at $2 per, kilowatt, $0.02, I mean $0.02, $0.02 per kilowatt hour. This is fixed. One important point, power is renewable here in Brazil, so it's coming from a hydroelectric dam. We have a five-year agreement which is set to expire two and a half years from now. We're gonna be good with power. Diesel it's the element that is a little bit less straightforward to explain. First, because we got biofuels in 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. That was created because all transport in the country mostly is done by trucks so that trucks are individual entrepreneurs, so that they have time to plan to actually send that cost into their customers. We're going to revert back to you on the percentage of diesel in our costs with that knowledge.

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

Well, I wanna 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 2026 on a fantastic note because of what we've learned in 2025, as far as becoming more and more resilient. 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 lower the flap, we focus on our lane, and we race our own race without looking to the sides, focusing on the target.

That's how we've been running this business, and this is why we achieve these results. Once again, I wanna thank on behalf of our management-operated shareholders here that work at the company and control the company, we wanna thank all of our outside shareholders and reiterate our interests could not be further aligned. There isn't another company in the sector that's management-owned, management-operated, where employees are shareholders. For all of us, for all of you watching, we're in this together, and I wanna 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.