Sigma Lithium Corporation

Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2025 Third Quarter Earnings Conference Call. We would like to inform you that this event has been recorded and all participants will be enlisted on the 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 section 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, Anna.

I'd like to welcome you to our third quarter earnings conference call. Joining me on the call today is Anna Cabral, CEO of Sigma Lithium. Our third quarter 2025 earnings press release presentation and corresponding documents are available on our website. I will now turn the call over to Anna Cabral.

Good morning, everyone. It's with great pleasure to present Sigma Lithium's third quarter of 2025 results directly from the Amazon, where COP 30, the United Nations Climate Conference, is being held. Sigma is here as a member of the Brazilian delegation, We have been engaged in high level dialogues with other delegations from all over the world. And we are showcasing how we have implemented and executed on every single one of our targets. sustainability set out in 2017, when we made the original investment in the company. Since then, we have managed to build the most sustainable lithium beneficiation plant in the world, digitalized and using algorithms that employ bots or AI to become more and more efficient in treating the mineralogy of our mines and increasing plant recovery. So our plant is where technology meets Metallurgy meets mining and delivers sustainability, doing more with less. Please kindly read the disclaimers. We're going to make quite a number of forward-looking statements and projections and guidances as we go through this presentation. We're very proud of our accomplishments in the third quarter, especially considering the state of the lithium markets throughout the quarter. We have managed to increase the resilience of our business significantly, achieving the following five initiatives. First, we substantially increased our net revenues through optimum commercial strategy. we increased revenues by 69% quarter on quarter and by 36% if compared to the third quarter of last year. We have generated cash of $31 million resulting from final price settlements of sales that happened throughout the year. In addition, We expect cash generation from sales over processing high purity, high grade middlings, which are the result of our sustainable efforts. We have approximately a million tons of those dry stacked high purity materials. We are also in the process of successfully upgrading our mining operations. Our plant has already restarted this week. Our mine is expected to resume operations within two to three weeks, and Sigma will operate the mine with equipment leased directly from the manufacturer. Lastly, we continue to maintain financial discipline, and that's demonstrated by the leveraging on our short-term trade finance debt by 43% this year, despite the challenging lithium pricing environment. On this page, we showcase the financial highlights of the third quarter of 25, related to the increased cash margins and the deleveraging of our short-term trade finance debt. Our revenues have increased by 69% if compared to last quarter. More importantly, we increased revenues by 36% versus the third quarter of last year. Our pricing also increased by 33% versus last quarter. So the revenues increase as a result of our efficiency increase. Our margins also increased. The operating margin increased in 42% versus the third quarter. And the net margin increased 67% of last year. Both margins also increased substantially versus the previous quarter. But by showcasing the increase versus last year, we demonstrate how we increase the resilience and the strength of the business. Our deleveraging is demonstrated by the decrease in trade finance. We managed to pay down export financing short-term debt in 43% this year. The remaining balance is just $33.8 million as of November 13th. Our cash has also increased by 42% versus last quarter, which is a trend very different from our peers, which had burned cash. Our current cash today is $21 million plus $8 million off cash. incremental trade receivables, all related to sales realized until the third quarter of 2025. On this page, we discuss our stellar record of zero accidents. We have achieved 787 consecutive days without accidents with lost time injury. It's over two years with zero records. This demonstrates our operational excellence in addition to managing to continuously decrease our costs. So we haven't cut costs at the expense of health and safety. Our TRFIR is 1.79 amongst the lowest in the world. This results in employee engagement and safety processes, a direct connection to the factory floor, which leads us to enhanced performance and ideas for cost optimization coming straight from our employees. So it's a self-fulfilling circle where focusing on safety enables us to keep on getting better, both operationally by increasing efficiency, but also cost-wise by gaining ideas directly from employees on how to be lower cost. We're very proud of this. On this page, we're going to start to discuss our financial performance this quarter. On this slide, we demonstrate how Sigma achieved an optimum commercial strategy which allowed us to price efficiently our material, capturing the price cycle, despite the price volatility that took over the metals market throughout the period that followed Liberation Day and the tariffs. You can see on this chart in red the sales on provisional prices and in green the sales on final prices. And it's visible that we were able to capture a much higher final price as we managed to authorize our clients to resell the products and settle our final prices. These adjustments resulted in incremental cash revenues for this quarter. So, a picture is a thousand words. And here is how that translates into cash generation. This commercial success resulted in incremental cash from the final settlement with the trade partners. And you can see that by looking at the initial cash position at the end of the second quarter. the increasing cash from operations on a provisional price basis of $30 million. Then the generation of trade receivables booked on sales up until third quarter on provisional prices of $20 million. That got converted into cash as of now, but that refers to sales with a cutoff on the third quarter. In addition to that, we had another incremental increase in trade receivables because of the extra increasing prices that we have been experiencing to date at $1,700 per ton. So that's another $8 million, which means that there were $28 million extra that resulted from our optimum commercial strategy. So, when you observe our cash as of today, we have $21 million in the bank, plus $8 million of settled trades at current market prices. Now, in addition, we have $33 million of potential sale of lithium middlings, which are high purity middlings or dry stacked material that currently sits both at the port and at our plant. at current market prices quoted at Shanghai metal markets of $112 per ton, net of transportation costs to port for part of it and to China for the materials sitting at the port. So, a significant cash boost coming from materials that have already been produced. but more importantly, a direct result of our investment in dry stacking our tailings and recycling and reprocessing and optimizing our lithium green tech industrial plant. On this page, we show what that cash position enabled us to do. We managed to pay down our short-term trade finance 60% year to date to November. If you cut it off as of October, we paid it down 44%. That's a significant debt reduction, especially considering the down markets and the lithium prices volatility we experienced this year. So we had a cash increase and we decreased our short-term trade finance expensive debt. That's a significant accomplishment in financial results. for a year such as these English markets. On this page, we demonstrate how the debt maturity profile will be lengthened further because all that's left now is essentially $10 million that we already paid down, plus $100 million that will be paid down next year in December, which relates to our shareholder debt, whose generosity has allowed us to get here, to commission our green tech plant, and to continue to make improvements to achieve the stellar operational performance the plant has been delivering. So, we are in a very comfortable debt position as of November 13th. And we demonstrate here on this page all the short-term debt that we have managed to pay down or roll. This page demonstrates our low-cost resilience and the fact that we are a source of responsible lithium production in this industry. we have managed to maintain the highest sustainability and ethical sourcing standards throughout market prices. meaning our resilience is here to stay, even with the slight decrease in production, which is shown here in the little green over our regular costs, we're still lower than the lowest cost producer for non-integrated lithium oxide concentrate in Africa. And this location to the very left of the non-integrated concentration supply curve is exactly what we plan to remain throughout the foreseeable future. On this page, we demonstrate how the lower production levels in September have not really affected our low cost position. In other words, the slight increase in cost maintain the zone guidance for the all-in sustaining cost. And that's demonstrated by the chart to the right, where we show the nine-month all-in sustaining cost versus the full-year guidance we provided at the beginning of the year. This all-in sustaining cost includes interest, capex, maintenance, all of it. royalties, SG&A, environmental and social that is voluntary, so we're very much on track. We're issuing guidance of this only sustaining cost becoming $560, meaning lowering to $560 for 2026, based solely on production from the first plant. Now, the increase in CIF cash costs and plant gate costs are easily corrected once we return to full production in the first quarter of 26. So, our low-cost position is unmatched and unchanged. On this slide, we basically outline the offtake agreements expected for this year. They're basically enabled by the significant commercial leverage and power we achieved by being an ethical producer and one of the lowest cost producers of lithium concentrate globally. Now, what we've done, we tailored different types of off-takes to cater for different specific client needs across geographies. So this year, what we have is three different kinds of off-takes being discussed with three very different kinds of clients. The first kind is what we call the three-month rolling off-take. They're done at market prices, and these are prepayment of upcoming production until March. The objective is to provide Sigma with low-cost working capital. The second kind of offtake is a 20,000 tons for three years for $25 million. It's a small long-term offtake. And the use of proceeds will be to pay for the mining equipment that will help us upgrade our mining operations, meaning the larger scale trucks and overall excavators and mining equipment. The third category is a conventional offtake or prepayment being negotiated with a global European trading company. So the user proceeds is to deploy towards our expansion plans remaining on track for our growth strategy next year. We are in contract negotiation stages with that one. Now, for 2026, we still have another 120,000 tons of product uncommitted to be contracted into offtakes. The objective is to strike conventional offtakes for both amounts. The first amount for 80,000 tons will be assigned to a regular end user. And the objective is to repay the long-term shareholder debt that was generously enough offered to Sigma in December 2022 and enabled us to get here to this very strong operational position. We are in contract negotiations for that one. The second offtake is going to be achieved against an agent, meaning a trading company, which, again, is going to be a typical conventional offtake, once again deployed towards building and delivering on our growth strategy, meaning building a second plot. and this offtake is under contract negotiation. So we're expecting to announce three offtakes still this year and two more next year. This page demonstrates our production and cost guidance for the upcoming years, 2026 and 2027. Our cash flow is poised to increase as our production efficiency increases with the execution of our strategic plan. With Plant 1 alone, we're bound to generate an all-in sustaining cost of $560 per ton, and that includes everything, including interest expenses. Now, at the current price levels of $1,000 per ton, that represents a free cash flow generation of $132 million. Once we complete Plant 2 by the end of next year, we expect to have 550,000 tons of production throughout 2027, which will lower our all-in sustaining cost to $500 approximately. that at current price points for lithium is expected to generate a free cash flow of approximately $270 million. So this page really demonstrates how by remaining the lowest cost producer globally, we are bound to benefit with excess returns from this relative increase in lithium prices, from $700 per ton at mid-third quarter to $1,000 per ton as of now, November 13th. This page demonstrates how our Green Tech Plan upgrade into the 3.0 version, concluded and executed in November 24, was not accompanied with... Pause, pause. De novo, de novo, do zero. Um, dois, três. This page demonstrates how the upgrade in our Greentech plant into a 3.0 version, which was concluded in November of 24 of last year, one year ago, was not followed by our mining operations. Here at SIGMA, just to recap, we have two different operations which are integrated. We have a mine that delivers raw material to a state-of-the-art industrial lithium beneficiation plant, the Green Tech plant. That is automated, digitalized, and run by an algorithm. Throughout the first nine months of this year, what we could demonstrate is that the plant outperformance was compensating for the mine. You can clearly see that in the chart at the bottom left of the slide, where we had an 11% increase in production in the first nine months of this year. Now, the chart above show and demonstrate the significant upgrade that took place in the green tech plant last year, when from the beginning of 24 to the end of 24, the production went up 43%. In other words, The plant can produce 300,000 tons of lithium concentrate if properly fed with fresh rock, fresh spodumene ore. It processes it efficiently because the plant recoveries are 70%. That made it clear that a mining upgrade was required. So we reassessed our mining plan and concluded that we needed larger equipment scale to basically ensure higher volumes that would be moved faster. More importantly, that would also ensure that we would maintain our stellar safety and health record at our operations. The charts on the right break down the two quarters, the second quarter 25 and the third quarter 25. And it clearly shows that the last month of the third quarter when the mining equipment provider was demobilized was where we had a significant production decrease because they were simply demobilizing and phasing down their efforts in operating and moving material at the expected productivity rates. This page shows what's the way forward. Well, we have mastered dense media separation technology, achieving 70% recovered. Let me go back to the beginning. Pause, pause. Again. This page demonstrates our way forward in our operational plan. Clearly, we have mastered dense media separation technology for lithium processing, achieving 70% recovery rates. That's equivalent to flotation. We have demonstrated also greater efficiency and reliability throughout 2025. And now we're going to match it by upgrading our mining operations. First, our plant. It has already restarted. So it restarted processing high-grade material that's in our current operating site. The target for 2026 is to achieve full plant operational capacity of 300,000 tons of lithium oxide concentrate. We have been recurrently achieving unprecedented recovery levels throughout the year, up until the third quarter. So that's where our confidence comes from, from this track record. Now, on the feed of the plant, clearly a mining upgrade was required and is underway. We reassessed the mining plant and the geometry. So, we observed that we have mined about 798,000 tons in July 2020. and 659,000 tons in August. We continue to mine waste and strip in order to optimize geometry. And that is something I talked about during our second quarter 25 announcement. The ore grade is being perfectly aligned with our mine plan with no significant dilutions. So we maintain the cadence of the ore grade fed to the plot. As a result, we're very well positioned to resume our mining operations within two to three weeks once we're able to mobilize large-scale equipment so that we can increase the volume mined and the operational speed at which we advance the geometry and increase mining volumes. So with those upgrades, we expect to evolve our production capabilities at the plant, already in the first quarter of 26, reaching 73,000 tons of lithium oxide concentrate produced. That's the guidance for the first quarter of 26. This slide demonstrates how By being the low-cost and most sustainable producer at large scale, we have been able to obtain significant support by our clients to execute on our expansion plans. That's financial support and off-take support. We plan to reach 80,000 tons of lithium carbonate equivalent upon completion of our phase two expansion next year. By just adding a third production line, which infrastructure is already on site, we expected to achieve 120,000 tons of LCE equivalent of production. That is a consequence of Sigma already being a pillar throughout global lithium supply chains. So this underpins the financial support that we receive from our very large clients downstream in the lithium supply chain. So we also conclude by outlining how we're going to continue to deliver on our strategic plan for 2025. First, we're going to conclude our take agreements as we have outlined in the presentation. Second, we have achieved financial strength, but we're going to continue to do so by continuing to close final prices on the provisional price sales that we have achieved year to date until the third quarter, and we'll continue to deliver throughout the fourth quarter. We have the leverage, and we'll continue to deliver by basically paying down expensive short-term trade finance debt. We're also going to monetize existing lithium products that are currently sitting in our plant and in the port, taking advantage of the current robust pricing environment where demand for these products become actual. Currently, these products are priced at about $120 per ton, which could bring the additional revenues of $33 million throughout the fourth quarter. Thirdly, we are going to upgrade our mining operations to increase the green tech plant production scale, more feed, more concentrate. So there's another advantage to that, which means we're going to lower the structural costs of this company by lowering the plant gate costs. by increasing production volume volume in by actually decreasing the absolute number of mining costs, which represent two-thirds of our plant gate costs. Fourth, we're going to continue to partner with our very large clients with very large balance sheets to create commercial strategies that allows us to navigate lithium price seasonality. benefiting from achieving higher prices during the high seasonality. Number five, we're going to continue to increase the scale of our suppliers so that we can obtain working capital support. This is a strategy where we're simply matching or copying what the global leaders in downstream, including battery makers and car makers, receive from their own suppliers in the duration of their account payables. The average of the largest car makers in the world is from 130 days to 180 days to 210 days. We've been barely doing 30 days of deadlines for suppliers, so we're lengthening that period by leaning on larger suppliers. There are as large as us. I want to thank you for the opportunity to present you our third quarter earnings, and I'm now going to open the floor for the Q&A questions that are going to be submitted to our moderator through the chat function of this Zoom.

Thank you very much for the presentation. We will now begin the Q&A section. To ask questions, just kill the question on the Q&A button. Please be aware that your company name should be visible for a question to be taken. Our first question comes from Bovita from Bloomberg. Hi, thanks for the granularity on the cash balance. Based on page 9, is current cash balance at 29 million US dollars plus 33 million US dollars or only 29 US dollars, million US dollars? Thank you.

No, the current cash balance is 29 million. The 33 are basically bids we received on the current leachate material we already have and we were mentioning that exists in the port and at the plant.

Our next question comes from Lian Crozier. What is the origin of lithium mid-links from the process circuits? What is their Li20 grade, even as a range?

Yes, these are typical materials that are processed through the GMS circuit. They're more valuable because the chemical structure of the particle hasn't been broken. In other words, it's a very different manner of processing lithium ore than the flotation plant. So the lithium grade goes from 1 to 1.3%. There's an official quote for these products at Shanghai Metals Market, which can be validated daily. So, in current market environments, where there's actually a search for physical materials to close open positions in Guangzhou, we've been getting bids for these materials, 100,000 of which are at the port already, which makes their cost simply shipping to China, which is $40 a tonne. And then we have another 850,000 tons of these materials at the plant, which makes their costs approximately $85. So when we banked on $33 million, it's just pure profit. given that their costs incurred in transportation. So the number is net of transportation. The current quote for these materials at Shanghai Metals Market is $120 per ton. They're roughly 11-ish percent of current lithium oxide concentrate prices as of today, which is about $1,070 to $1,080 per ton.

Our next question comes from Armando Wolfrid. Could you please provide some more info on the 100 million shareholders credit and the status of your BNDS loan disbursement for Phase 2? Thank you.

Absolutely. Well, we're going to lean on our suppliers, on our credit clients, the same way we have been leaning on them for a number of advancements we've been doing here, including mining upgrades. There are a number of ways to basically disburse the BMDS loan. However, as we discussed earlier, we were awaiting for a quarter of lithium price stability given the highly volatile pricing environment we experienced this year. I mean, we were one of the few companies to actually generate cash this year. Our peers were mainly cash burning. So, our board decided to wait for a quarter of stability so that we could basically green light purchasing equipment. Once we do so, it could happen as early as January or late January. given current price environment being very robust. So we're going to utilize the same structures we've been utilizing, which are large customer balance sheet support, to basically disperse. What are we doing about expansion is ensuring

Mrs. Anna, your connection just dropped in the middle of the answer. If you can repeat that part, please.

Okay. Yes. So, regarding the structure for this bus in BNDES, our board was awaiting for at least a quarter of price stability. given the volatility in lithium prices the market experienced this year. So what we are planning to do, if the lithium prices environment continues to be as robust as it is now, is probably green light equipment purchasing as early as January, late January of 26. But more importantly, We have already disbursed a certain amount and filed that with the NDS. So it's all basically ready to be deployed once we continue on equipment purchases, which is the blunt portion of Phase 2. Now, the key element in ensuring the timeliness of a potential 2026 commissioning of the plant was adjusting mine geometry so that we could feed the plant with the same geometallurgy that we are feeding our current plant one. So feeding plant one and plant two with the same geometallurgy would ensure a shorter time ramping up period, given that we would have more chemical certainty of the ramp-up. In other words, any ramp-up issues could be only narrowed to processing, which are relatively easy to fix. So the work on mine geometry would continue the same way we carried on geometry work throughout the second quarter, despite the lithium prices volatility.

Our next question comes from Hobho. Will production be fast-tracked if the lithium market tightens and the market price of lithium increases happily? Thank you.

Yes, that's exactly why we're carrying through the mining upgrade. You were spot on, meaning we know what the plant can't do. I mean, we have a state-of-the-art green tech lithium plant that can't do 300,000 tons of lithium oxide concentrate on its own. What we needed to do was to match mine to plant, and this is exactly what we're doing, taking advantage of the relatively muted lithium price environment that we observed on the third quarter. times production a year.

Mrs. Sena, you can actually draw it again.

Okay. So, resuming. What we are doing is basically spot on. In other words, we are basically matching The reason to decide on the upgrade of the mine was exactly what you asked us. In other words, we know what the plant can do. The plant can deliver 300,000 tons of lithium oxide concentrate per year. It properly fed with fresh rock. So by upgrading the plant, by revisiting the mine plan and moving more material, what we're doing is making more product available for the robust lithium price environment that we were expecting in 2026. We took advantage of the muted price environment still in the third quarter to make that decision. And it was the accurate timing to do so. Because as we enter 26, we will already enter with an upgraded quarterly production, as we indicated, to 73,000 tons.

Our next question comes from Benson Chan. What's your estimated capex for bringing phase 2 and 3 online respectively and what could be the risk of further delays? Could you not utilize some correct lines to speed up the expansion and avoid delays? Thank you.

Well, we have a credit signed to BNDES, which is the best possible credit we can get. But to your point, the offtakes, as I outlined on the discussion that we had about them, and it was quite detailed, are meant for that. In other words, we have the conventional offtakes. When we declare that user proceeds is to fund the growth, what they will be doing is essentially closing that gap. As off-takes get closed this year, what we will do is redirect those proceeds for the plant, Phase 2, given that the mining upgrade has been fully covered by our current clients.

Just as a reminder, if you wish to ask a question, please use the raise hand button. Wait while pool for questions. Our next question comes from Joe Jackson from BMO Capital Markets. Please confirm as of today how much production Sigma had at the mine in Q4 due far and how much Sputumene inventory there is as of today. Thank you.

Yes, what we are planning to do, Joe, is to issue guidance for fourth and first quarter together. We issued the first quarter guidance, and we're going to issue fourth quarter guidance soon when we show a remobilization plan. What we have, though, is the full cost to upgrade mining operations, which is $25 million, which has been fully covered by our clients. So, what we need to do now is to just wrap up what we call the mobilization curve for large tonnage equipment, which is either twice the tonnage of what we got or probably two and a half times the tonnage of what we got. Depending on the mobilization curve, which will be announced promptly, we will be able to perhaps have a surprise for the fourth quarter. And we're given the first quarter guidance, and the fourth quarter guidance will be given as soon as we wrap up the mobilization curve for the very large ton of equipment that's been made available to us by the manufacturer directly. By the way, one more point that's very important. The $25 million are not going to be paid at once. They're going to be paid in very nice, soft installments throughout two to three years at very low rates, so for plus under one or 1%. Again, facilitated by our very supportive clients, given that we are the pillars of global downstream supply chains. So it will be an offtake like any other.

Our next question comes from Ricardo Fernandes. Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized prices?

Well, it's spot, essentially. We close provisional prices at spot. Today, fortunately, there's a very liquid market for both chemicals and spodumene, or what we call lithium oxide concentrate. Shanghai metals market, Guangzhou, I mean, they're literally moving with significant volumes. I mean, just for example, last night, Guangzhou negotiated over 600,000 tons of LCE, of open interest contracts. That's a third of global lithium demand. So there's quite precise pricing. Last night, prices hovered around $1,070 a ton. So that level of liquidity allows for spots to be quite precise, meaning clients bid and hedge immediately into chemicals. So we believe pricing is becoming more and more efficient, which helps producers like us, given that there's less opacity, more transparency. And again, what we do, though, is depending on the season, we close at final or we close at provisional. And what we've done this year, given volatility, we basically close the provisional pricing. And now we're benefiting from having the clients to lean on. and realizing final pricing. Hence, the cash boost we received from sales up to a quarter at the moment as we explained in detail in our cash from operations section of this presentation.

Our next question comes from Siva Kumar. Are you getting any premium at all of the green lithium compared to the market price? Thank you.

No, unfortunately not. I'm here at COP 30. That's been one of the frustrations. What the advantage is, though, is commercial power, meaning given that global supply chains are being rearranged, what we have is similar battery makers supplying car makers globally in the West, in the East, all over. So there's a huge focus on traceability, on sustainability, on health and safety. And what we have is essentially a brand that safeguards us from any questions. I mean, it's very easy to ascertain the quintuple zero advantage. And that's what we have, a commercial advantage, which translates into what we showcase so far, our ability to negotiate provisionals when we believe in them. It's reasonable to negotiate provisionals. Our ability to lean on our clients' balance sheets for support for mining upgrades and so on and so forth. But unfortunately, there is no green premium. And we do not believe there will be a green premium. Hopefully, there could be, but it's years ahead. What there is is a green commercial advantage.

Our next question comes from David Fang. Hi Anna, this is David from CICC Research and thanks for the presentation. We can see that there is still over 30 QT of spodumene concentrate inventory by comparing your production and shipments. Just wondering, shall we expect all these inventories to be sold in 4Q25? And what would you inventory management strategy if lithium price continues to rise? Thank you.

Yeah, thank you, David. We'll sell it all down. I mean, at current prices, the plan is to basically monetize everything we have, including what we call in China middlings, right? And we have high purity middlings with an intact spodumene chemical structure because it comes from DMS and it hasn't been affected chemically by the flotation process. nor by organic contaminants, nor by the chemicals utilized in flotations. Hence, we can get a straight quotation for $120 even for midlands, which just shows that the current strategy is to monetize all the lithium we currently have.

Our next question comes from John Christian. Can you quantify in U.S. dollars how much working capital will be required to restart the mine in the first quarter of 2026? And can you bridge the $6 million on 30Q ending cash balance to $21 million today considering your slideshow $20 million debt paid down in the 4Q so far? Where did that approximately $35 million come from in the past 6 weeks? Thank you.

Well, no, we discussed that. I mean, if you look at lithium price behavior, it came from the final price settlements. I mean, the lithium prices have rallied considerably. RMB contracts for LCE in Guangzhou were close to $88,000, $87,000. So we were able to receive the final price settlement adjustment from the sales of product that took place up until the cutoff date of September 30th, 2025. So that's where the adjustment comes from, from actual cash from these settlements. And more importantly, there's extra adjustments from the settlements that haven't been closed yet. We started to close settlements at 875, and we kept going until the latest ones, which were 1,035 just last week. But again, these were shipments... material in boats, in the water. We were literally shipping everything and selling everything. The other question you asked was about the 33 million. That's essentially midlands, which are monetized. They're bid out. We are waiting to work out on logistics. The profit varies significantly on logistics because we have 100,000 at the port. That is simply $40 to China. $120 minus $40, that's net profit, pure profit, no cost associated with it. Then we have 850,000 tons of those middlings, high purity, with chemical structure intact at the plot. the logistic costs there are different because we need to truck it to port. So what we're working on is thinking through berthing the biggest ships we can obtain and therefore lower the shipping cost to perhaps $25, $30, so that $120 minus $70 of logistics back to back, plant to China. So essentially two different costs of logistics. These products are zero cost to produce because they are middlings or what we call dry stacked high-grade lithium tailings. And that's the sustainability advantage. We are able to monetize it to a net of 33 million U.S. dollars, which is a considerable sum. It's equivalent to a boat or a bit more, actually. Pure profit advantage.

So, just as a reminder, if you wish to ask a question, please use the Q&A button. Our next question comes from Aoleen Chan. Could you please clarify the expected lithium concentrate production volume for the 4Q 2025 based on your current operational plans and the ramp-up schedule? Thank you.

Yeah, we're not there yet. I answered a similar question. We issued guidance for the first quarter of 26, and as soon as we wrap up what we call the mobilization curve in terms of the scale of the large equipment being made available to us, it could vary from 60-ton trucks to up to 95-ton trucks, which is a significant increase from the small 40-ton trucks we were using. A 75-ton truck can move twice as much material than a 40-ton truck. A 60-ton truck can move 50% more material. A 95- to 120-ton truck, same exercise, can move three times more material. Cost, not that dissimilar because it's diesel, one driver. I mean, it's four drivers per equipment, so we are decreasing the number of men involved, consumption of diesel not that dissimilar, so overall structurally lowering the cost of this operation. And this is the guidance that we plan to provide in detail as soon as we wrap up mobilization schedule for the equipment, which is currently taking place. I was in China for two weeks, just got back a day and a half ago, and we are making progress in strides on that front. And we're delighted with the support we received from manufacturers, clients, because we're pillars of three global supply chains, actually, Europe, Asia, and China.

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

Well, we're very optimistic about 2026. It's been a year where volatility dominated the conversation. It's consensus now where lithium is headed. Now, what's important to highlight is lithium is a commodity like any other, meaning that Prices will be where they are. We're not talking about price spikes. We're talking about prices being at $1,000, $1,100, which for low-cost producers, such as Sigma, with current plant gate costs of around $3.50 normalized, is a fantastic operating environment. And so the key is to continue to be a low-cost producer. Hence... our efforts in upgrading our mining operations to match the exceptional industrial operations we have achieved throughout this year. So thank you all for listening. Thank you all for being with us on our journey. And we're going to be open for welcoming you all through my colleague, Anna Hartley, who is heading investor relations. And we'll be visiting some of you through conference calls in the next couple of days throughout the world.

Thank you. This does conclude the third quarter of 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website at www.sigmalithiumresource.com. You can connect from now on and have a wonderful day.