Sigma Lithium Q2 Earnings Call Highlights

Key Points

• Record Q2 performance: Sigma Lithium produced 35,400 tons of lithium concentrate, up 52% quarter over quarter, generating a record $55 million in revenue, a 60% gross margin and a 47% EBITDA margin.
• Temporary operational suspension: Mining and industrial operations were paused amid negotiations with Minas Gerais officials, though management described discussions as constructive and expected a restart within one to two weeks.
• Expansion and liquidity plans remain on track: Sigma reduced costs and debt, expects approximately $60 million in third-quarter cash receipts, and continues plans to expand capacity to 330,000 tons annually by 2027 and potentially 830,000 tons by 2028.

Sigma Lithium NASDAQ: SGML reported record second-quarter revenue and profitability as higher production volumes and lower costs supported margins, while the company also addressed a temporary suspension of mining and industrial operations tied to negotiations with the state of Minas Gerais.

Chief Executive Officer Ana Cabral-Gardner said the company produced 35,400 tons of lithium oxide concentrate during the second quarter, a 52% increase from the first quarter and 6% above guidance. Net revenue reached a quarterly record of $55 million, while first-half revenue totaled $97 million.

The company reported a 60% gross margin, a record EBITDA margin of 47%, and an operating margin of 32%. Cabral-Gardner said Sigma generated $27 million of cash from operations during the first half of 2026 and maintained a positive net margin.

Costs Decline as Production Ramps

Sigma said plant-gate costs were $401 per ton in the quarter, while CIF costs were $452 per ton and all-in sustaining cash costs were $668 per ton. Cabral-Gardner said plant-gate and CIF costs declined by more than 30% and that the company had lowered its 2026 all-in sustaining cash-cost guidance to $668 per ton, reflecting its second-quarter performance.

The company realized a net price of $2,089 per ton for SC5 material, according to Cabral-Gardner. She said Sigma’s cost structure provided approximately $1,400 per ton of cash profit compared with CIF Asia pricing after adjusting for grade.

Management also highlighted debt reduction. Cabral-Gardner said Sigma repaid 25% of its total debt over the past year and 43% over the past two years, reducing total debt by roughly half during that period.

Operations Temporarily Suspended During State Negotiations

During the question-and-answer session, Cabral-Gardner said Sigma temporarily halted both mining and industrial operations after receiving notifications associated with negotiations over a TAC agreement with Minas Gerais. She said the wording of the notifications made it difficult to determine precisely which operations were required to stop, prompting the company initially to suspend both areas.

Cabral-Gardner said discussions with the state had been constructive and that the company expected a potential conclusion the following week. She said Sigma sought to be “fully cleared” of what she characterized as false accusations raised by local inspectors rather than simply reach a settlement.

She said the company could restart industrial operations and expected that the only benefit of doing so before a complete resolution would be restarting its reprocessing circuit. In response to a question about timing, Cabral-Gardner said the best-case scenario would be a mining restart the following week, while the worst-case scenario could take about two weeks.

Despite the suspension, Sigma continued to ship lower-grade material, which it calls low-grade high-purity material rather than middlings. Cabral-Gardner said the company had approximately 300,000 tons of fines available and had received a bid of $65 per ton. These materials are sold on a spot basis rather than through offtake agreements, she said.

Cash Receipts and Offtake Agreements

Cabral-Gardner said Sigma had received $60 million to date under a $96 million offtake prepayment agreement covering 70,500 tons over one year. Additional payments under that agreement were expected during the third quarter.

She said the company was negotiating an increase to a separate agreement involving 40,000 tons annually over three years. Once financially closed, proceeds from that agreement would be used to repay debt, she said, adding that Sigma expected to repay or refinance the relevant debt by the end of the third quarter.

Management said $27 million of sales had not converted to cash as of June 30, and that these proceeds, along with sales of lower-grade material, were expected to contribute to third-quarter cash receipts. Cabral-Gardner said the company had approximately $60 million expected to be received in the third quarter based on material already sold or available for sale.

Expansion Plans Remain in Place

Sigma said it is proceeding with a fleet upgrade in the third quarter, deploying 75-ton trucks and 98-ton excavators to increase haulage capacity and support a revised mine design. Cabral-Gardner said the new pit shell provides access to a high-grade ore block that is 83% larger than the previously accessible block.

The company said the block contains 1.1 million tons of fresh ore at a grade of 1.4% and could produce 200,000 tons of lithium oxide concentrate. Sigma expects the larger equipment and redesigned pit geometry to support production from both its main processing circuit and reprocessing circuit.

Sigma maintained its forecast for 240,000 tons of high-grade lithium concentrate during the next 12 months from its first plant. By the end of 2027, it expects first-plant capacity, including the reprocessing circuit, to reach 330,000 tons annually. The company plans to green-light Plant 2 at the beginning of 2027 and said it could potentially begin construction of Plant 2 and Plant 3 simultaneously. Sigma expects installed capacity of 830,000 tons per year by the end of 2028 if three plants are developed.

Cabral-Gardner said the company’s expansion strategy is intended to capitalize on what management views as growing lithium demand, including demand related to battery storage supporting energy security and artificial-intelligence data centers.

About Sigma Lithium (NASDAQ:SGML)

Sigma Lithium Corp. is a Canada-based mineral exploration and development company focused on the sustainable production of battery-grade lithium from hard rock deposits. The company’s flagship asset is the Grota do Cirilo lithium project, located in the state of Minas Gerais, Brazil. Grota do Cirilo comprises a fully permitted, low-altitude spodumene mine and processing plant designed to produce high-purity lithium concentrate and downstream lithium hydroxide for the global electric vehicle and energy storage markets.

Since its founding in 2018, Sigma Lithium has pursued a vertically integrated approach, overseeing each stage of production from ore extraction and beneficiation to chemical conversion.

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