Full Transcript: Sigma Lithium Q2 2026 Earnings Call

On Friday, Sigma Lithium (NASDAQ: SGML ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

View the webcast at Summary Sigma Lithium reported a record 47% EBITDA margin and $55 million net revenues for Q2 2026, driven by disciplined cost control and increased production volumes. The company achieved a 52% increase in lithium oxide concentrate production, delivering 35,400 tons, and maintained a high gross margin of 60%. Sigma Lithium plans to double production capacity by year-end 2027 and increase it to 830,000 tons by the end of 2028 with the construction of two additional plants. The company has managed to repay 43% of its total debt over the last two years, aiming to execute a significant growth strategy leveraging its low-cost leadership.

Despite a temporary suspension of mining operations due to regulatory issues, the company continues to process and ship lithium middlings and remains optimistic about resolving the suspension soon. Full Transcript OPERATOR Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2026 Second Quarter Earnings Conference Call. I would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation.

A recording of this webcast will be available on the company's website. After the prepared remarks, there will be a question and answer session for participants at this 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 second quarter 2026 earnings conference call. Joining me on the call today is Ana Cabral, Co—Chair and CEO of Sigma Lithium, and Felipe Peres, CFO of Sigma Lithium. I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, updates on mining operations, the timing of our projects, and market conditions, may be considered forward—looking statements.

Please note the cautionary language about forward—looking statements in our presentation and press release, which are available on the Sigma Lithium website. I will now be turning the call to Ana Cabral. Ana Cabral, Co—Chair and CEO Thank you. I'm now going to introduce you to Sigma Lithium's second quarter 2026 earnings presentation.

Without further ado, I'll go into the next slide. During this quarter we continued to deliver on execution excellence, cost control, and operational resilience, driving value creation for our shareholders. Sigma is a large—scale, low—cost, traceable producer of lithium materials. We do not have tailings dams.

We do not use drinking water. We do not use hazardous chemicals. We do not use dirty energy. 100% of our energy is renewable and we have not had an accident in over 1,100 days.

At the bottom there are three pictures that illustrate that. A picture is worth a thousand words. We uphold at Sigma the highest global mining standards. When you look at the left, you see our mining waste rock piles.

We actively regenerate them, planting grass so they are integrated into the environment. That's the highest G7 standards. When you look at other G7 countries with high standards you can see the same waste rock pile next to the environment. And again, this is a high—standard waste rock pile.

We go above and beyond what others do. Some other countries have tailings dams and again very high standard. But we don't have any of that. That's why we believe that we can generate significant efficiency operationally because we can deliver our material and maintain traceability and sustainability.

For example, we have managed to upgrade our mining operations in record time. Moreover, we have managed to achieve record recoveries in our cleantech industrial processing plant. On this slide you can see the images of our waste rock piles, fully rehabilitated and regenerated with vegetation, grass. Once these piles come to their final shape of usage, that's the work we do.

We do artificial germination and they become beautifully integrated into the landscape. One can only see they are waste piles because of the terracing in front of them. There's a beautiful new fleet. Again, a picture is a thousand words.

Now, without further ado, I'm going into the financial highlights of the second quarter of 2026. We had an incredible quarter. The reliable and disciplined execution enabled us to surpass all of our targets. We delivered a very large cash flow, generating $27 million in cash from operations during the first half of the year.

We also were able to generate high margins as a result of disciplined cost control. We maintained our high gross margin at 60% and we delivered a record 47% EBITDA margin, the highest in our history. That's a result of disciplined cost control, lower costs, and increased production volumes. We delivered 35,400 tons of lithium oxide concentrate this quarter, an increase of 52% over the first quarter.

As a result, we also had another record, the highest net revenues in our history at $55 million this quarter. Again, discipline. We remain the low—cost leader, decreasing cost even further: $401 per ton plant gate, $452 per ton CIF, $668 per ton all—in cash costs. That gives us tremendous resilience, an entrenched competitive advantage, and an ability to be a cash machine at current price levels.

We are well into excess—return territory. Due to our commercial flexibility, we were able to realize pretty good net lithium prices for SC5, which demonstrates how our clients are supportive and are fans of our high—purity product: $2,089. This page illustrates further what our low—cost stewardship does for us: delivers strong cash flow and high profitability. It is all about the costs.

We increased production by 52%. Then, as a result of the low costs, we were able to deliver the margins referred to before. More importantly, the revenues of $97 million for the first half of the year. All of it enabled us to continue to repay debt in a very disciplined approach to our balance sheet.

We managed to repay 25% of our debt over the last year. Over the last two years, we deleveraged the balance sheet in half. We repaid 43% of our total debt. We're now at probably the lowest levels of debt ever in our history.

This enables us to continue to execute on our significant near—term growth strategy. By year—end 2027, without building a second plant, we will be able to increase production capacity by almost two times. Once we build two plants, we will be able to increase production capacity by two and a half times from 2027 to 830,000 tons. That capacity will be installed by the end of 2028.

That's the result of two additional plants. We decided to embark on this growth strategy to take full advantage of our efficiency and the very favorable Li2O markets. This slide illustrates further our cost leadership. This is the result of the financial discipline and precision in growth strategy and capex.

Again, a page with numbers. They are a thousand words. We delivered a decrease of double digits across the board. Plant gate and CIF costs decreased over 30%.

Now all—in sustaining costs are back to normal, which were third quarter of 2025, which means that we still can decrease them a bit further as we increase volumes and normalize production. Our all—in sustaining cost was $668 per ton in the second quarter. Again, that puts us well into excess—return territory at current lithium prices. Here is an additional illustration of that.

If we compare net prices, meaning price adjusted to 5% grade, we are delivering against CIF Asia approximately $1,400 per ton of cash profit. Now when you compare that with our competitors, you can see that we're almost neutral to lithium prices, almost as if we are the floor. That cost discipline, which enabled us to execute our strategy so successfully, has been now reflected into our cost guidance. We're now adjusting our updated guidance and lowering it to reflect the executed, delivered all—in sustaining cash costs in the second quarter.

So that comes down to $668 a ton for the year of 2026. Therefore, we are on track to deliver on the year of 2027 guidance of $620 all—in cash cost, total cash cost per ton, as we continue to increase production volumes. This page illustrates how we have been able to deliver on some of the lowest costs in our industry while at the same time maintaining one of the world's best safety records for employees. Over 1,100 days have gone by and our employees go back home to their families safely.

This is a result of our own employee engagement and our strict safety processes. Everyone feels that they are responsible for their safety and their colleagues' safety. Our TRIFR is zero. That's another zero, again demonstrating our execution excellence.

This next page illustrates how we've been able to achieve operational efficiency and maintain our high margins across the board. Gross margins stayed at 60%. EBITDA margins were an all—time record of 47%. Operating margins remained at 32% and we maintained profitability with a positive net margin.

Therefore, here it is an illustration of our debt reduction enabled by financial discipline. We repaid 25% of total debt in the last year, 43% of our total debt over the last two years. That's significant deleverage. When it all comes together, one can see how our strong performance translates into cash and fully converts, making our operation self—sustaining and resilient.

We sell everything. Not only the high grade but also our tailings, which are dry stacked. That adds quite a lot to our cash generation. As you can see on this page, we actually had, on June 30, end of second quarter, a cash position that was enhanced by a sale of lithium materials, our high grade.

So in addition to it, we're also being able to sell current inventory of lithium materials of varying grades, mostly high grade. In other words, we are going to be 100% circular very soon and just sell everything that our plant generates, from high grade to low grade. We have a very wide spectrum of high—purity products that just increase our resilience and help us be fully sustainable. Without further ado, I'm going to start on our operational highlights and our production and capacity outlook, especially in light of the recent events.

We have surpassed our high—grade lithium oxide production and we're demonstrating significant operational efficiency. Our mining ramp—up surpassed guidance and we delivered 35,000 tonnes in the second quarter of 2026. That was an increase of 6% over guidance. We are on track to deliver on our previous guidance.

We just pushed it forward by three months. We are in a very good position to negotiate an agreement with the state of Minas Gerais and we have cleared most of our main points. As a result, we're going to execute as planned our additional fleet upgrade and deploy 75—ton trucks and 98—ton excavators to our site in order to increase haulage capacity. That's how confident we are that we're going to be able to successfully advance into primarizing our mining operation and continuing to ramp up our production.

So when you look at it as a whole, a year later, the conclusion is that the increase in safety, the increase in operational efficiency fully validated the decision to primarize our mine. We have all of our operations under full control and we are deploying haulage and ability to basculate through the excavators. That significantly increased our productivity and our capabilities to increase geometry of the mine. As we will discuss further into this section, here is a detailed discussion of our continued execution of the fleet upgrade that is going to take place in 3Q26.

We delivered on our first—half targets, increasing the scale, the haulage capacity, by 40%. So we're continuing on the upgrade by now bringing the excavators of 98 tons, replacing some of the 75—ton excavators, and bringing in the 75—ton trucks to add to the fleet of 60—ton trucks. Now that geometry is wider, we actually have more flexibility at the waste removal areas. So this is the second stage of deployment of large equipment.

Larger machinery means more productivity. So it enables us to maintain our low cash cost operating position. Therefore, it increases our resilience as a company and helps us navigate throughout the cycles. This slide illustrates visually how the work we've been conducting for the last couple of months of reassessing the geometry has paid off.

We designed a new pit shell, a new mining pit shell that enabled the company to access a large amount of high—grade spodumene ore. We constructed ramps, brought in larger trucks. So we are able to unlock this larger block of material that will feed our industrial plant. The results are on the page quantified.

The size of the block is 83% larger than the block we were able to access with the old design. 1 million tons of fresh ore, we can produce 200,000 tons of lithium oxide concentrate. So all in, an 83% increase in raw material delivers almost 100% increase in oxide concentrate production. 4% of fresh rock.

This is how we are able to operate throughout the remaining months in full capacity, meaning using the main circuit and the reprocessing circuit, because of the amount of high—grade fresh ore being delivered to the plant. This slide is basically to outline how our production expansion plans remain on track. Our forecasts were pushed forward by just three months. So the production forecast with only Plant 1 for the 12 months forward remains at 240,000 tons of high—grade lithium concentrate per year by the end of 2027, including all circuits that the first plant has, and that includes the recirculation circuit.

Our production forecast is at 330,000 tons per year. That's a result of the plant recovery of 70% in the main circuit and a fully working reprocessing circuit for the other material. As it comes to construction, we plan to have an installed capacity at the end of 2027, once we complete the construction of the second plant, of 580,000 tons of high—grade lithium concentrate per year that incorporates the first plant and its reprocessing circuit capacity. Therefore, we plan to just green—light Plant 2 at the beginning of January.

We have flexibility on how to execute our construction plans. There is a scenario where we could green—light both plants, Plant 2 and Plant 3, at the same time at the beginning of 2027 in January. But if we don't, we would build them sequentially. So by the end of 2028, we expect to have 830,000 tons of installed capacity for production.

With that kind of capacity and with our current plant, the cash flow forecasts—and again, we're just estimating Plant 1, which is already built—they vary just according to current price ranges estimated by Wall Street research analysts. So at the low end of the range, at $1,500 per ton, we could be generating cash flows that would go from $166 million if you take into account 12 months forward, or $360 million once we contemplate production during 2027. If the prices go to $2,500 per ton, we would be looking at cash flows that would be $235 million if we just stay on the production for 12 months forward.

But once we deliver the 2027 production, which again can be done with just one plant, we reach half a billion dollars in cash flow. This is a direct result of our low—cost position, high margins, and efficiency. In other words, we do not need a lot of volume to generate quite a substantial amount of cash. We're now going to make our final remarks in the conclusion of our second quarter 2026 earnings presentation.

Sigma Lithium plans to deliver substantial returns to shareholders this year in 2026. Thus, because of our significant growth profile of production within the next 12 months, we plan also to significantly increase incremental industrial capacity. We're going to resume construction of Plant 2 and potentially build Plant 3 at the same time. Given that we are in a very robust lithium market environment, as we're going to discuss later, this is the time to build and to build in scale.

More importantly, we have proven execution capabilities and a very experienced team. We have built our first plant in record time and commissioned it even faster. Just recently, we primarized and automated our entire mining operations, upgrading the fleet once and now we're upgrading it again to increase haulage capacity. All of that done while maintaining the world record in employee safety with over 1,100 days without accidents.

Our operational resilience is based on these two pillars: this financial discipline regarding when to deploy capex for growth—and timing is now—but more importantly on relying on and monetizing our structural low—cost advantages to convert that into cash flow, which basically sustains the company throughout all lithium markets. Our sector is going through a unique moment in growth. We are enabled by AI instead of disrupted by AI. The demand growth from battery storage is in fact driving lithium global demand growth.

AI data centers and energy security require battery storage. Battery storage requires lithium and therefore lithium demand is set for a decades—long growth period. The bar charts below demonstrate that if you compare 2025 year—end demand with 2026 expected lithium demand in lithium carbonate equivalent, we have a growth of 900,000 tons of LCE. If that is translated into our product, lithium oxide, you multiply by eight.

So that is approximately 7 million tons of lithium oxide concentrate to supply this year's demand projections. If we forward that almost another decade to 2035, global demand is expected to be 5 million tons of LCE.