Sigma Lithium Corp. Q4 FY2024 earnings call

• Green Platform: The mine filed a technical report increasing mineral reserve estimates to 22 years of feed for the Greentech plant and boosted mineral resources to 107 million tons. The Greentech plant reached 70% lithium recovery in the fourth quarter, with its development having three distinct stages. - Operational Excellence: Fourth quarter production of Quintuple Zero Green Lithium was up 28% to over 77,000 tons, sales rose 29% QoQ to 73,900 tons, average CIF China realized price was $900 per ton. Safety progress with over 600 days without a lost time injury, and Plant 2 construction on schedule for Q4 2025. - Financial Performance: Robust financial results in Q4 with significant cost decrease, all-in sustaining cost at $592 per ton, 42% cash gross margin, 26% adjusted EBITDA margin. Healthy liquidity with $46 million in cash, improved working capital efficiency lowering short-term debt costs to $19 per ton. - Production Volumes: Annualizing 270,000 tons of lithium production, guiding 270,000 tons for 2025, expecting 300,000 tons with early Plant 2 commissioning, and 520,000 tons from Phase 2 fully constructed. - Cost Breakdown: Detailed breakdown from plant gate to all-in sustaining costs, showing how economies of scale affect costs over time.

The company has two main operational segments: the mine and the Greentech industrial plant. In the mine, mineral reserve estimates were increased, and mineral resources were significantly boosted to 107 million tons with 1.4% lithium oxide content. The Greentech plant saw the third version reach 70% lithium recovery at the DMS plant level. In terms of financials, production of Quintuple Zero Green Lithium increased 28% in the fourth quarter to over 77,000 tons, sales rose 29% quarter-on-quarter to 73,900 tons. The all-in sustaining cost was $592 per ton, with a 42% cash and operating margin and a 26% adjusted EBITDA margin. Revenue contribution details weren't given in percentage terms but the key operations of mine and Greentech plant are the main segments.

• Production: Guiding 270,000 tons for 2025 from Plant 1, expecting 300,000 tons with early Plant 2 commissioning, and 520,000 tons from Phase 2 fully constructed. - Cost: All-in sustaining cost of $592 per ton in Q4 2024, expecting continued cost reductions with economies of scale in 2025 and 2026. - Liquidity/Debt: Expecting financial cost per ton to align with Q4 2024 levels in 2025, and sharp reduction in financial cost per ton by 2026 once Plant 2 is at full capacity.

• Inventory Impact: Inventories built during the high cycle are being absorbed in the market, which could impact pricing if not managed properly. - BNDES Disbursement: BNDES loan disbursement is on a reimbursement basis, which may take time affecting fund availability timing.

Q: If 2025 production is 240,000 tons instead of 270,000 tons, how do per ton costs look?

A: It would go back to numbers similar to the second quarter, mainly affected by reduction in short-term debt.

Q: Interplay of carbon prices and spodumene prices?

A: Current carbon price levels are due to inventory absorption, demand is robust, and the inflection point where supply and demand drive pricing without inventory interference is key to monitor.

Q: When can we expect first BNDES loan disbursement?

A: Expected around midyear as it is on a reimbursement basis with packages of purchases sent for evaluation.

Q: Breakdown of financial expenses per ton?

A: Short-term debt costs reduced, long-term debt from BNDES will have lower interest rates providing beneficial impact.

Q: Ocean freight trends?

A: Hiring larger vessels like Supramax for cargo shipment (47,000 tons) provides efficiencies with lower cost per ton compared to smaller vessels.