Sigma Lithium's 3Q 25 Results: Increase in Revenues and Cash PositionNovember 14, 2025 8:08 AM EST | Source: Sigma Lithium CorporationHIGHLIGHTSSigma Lithium net revenue increased by 69% QoQ and 36% YoY, as it commercially partnered with its clients and leaned on their balance sheets: efficiently navigated lithium price fluctuations. Generated US$ 24 million from final price settlements of sales concluded by 3Q25, with an additional cash generation of approximately US$ of approximately US$ 4 m ...

当前，Sigma不仅面临电池金属价格走弱的压力，还承受着投资者更严格的审视。截至目前，公司未立 即回应置评请求。 继2024年市值缩水64%后，Sigma今年股价跌幅已超过50%。全球锂市场持续动荡，电动汽车需求增长 不及预期，叠加美国总统特朗普重塑全球最大经济体的清洁能源政策，使行业雪上加霜。 上周一，BMO Capital Markets加入越来越多分析师的悲观阵营，纷纷下调展望。此举源于Sigma上月突 然更换采矿承包商，公司声称此举是为提升巴西旗舰矿场效率而采取的措施。但分析师指出，启用大型 卡车和设备现代化的计划可能导致资本支出增加，并拖累扩建项目进度。 BMO分析师Joel Jackson在给客户的报告中写道："我们尚不确定近期股价波动的具体原因，但已知市场 对采矿承包商更换、资产负债表状况等问题存在诸多疑问，这导致Sigma在本轮锂矿股反弹中表现落 后。" 早在今年8月，美国银行就发出预警，强调供应商账款延期支付可能带来的连锁反应。上月末，该行已 将Sigma股票评级从"买入"下调至"中性"。 昔日锂矿明星股Sigma Lithium Corp.(SGML.US)正深陷困境：市场对其短期产能的信 ...

Core Insights - Sigma Lithium is transitioning from a promise-driven narrative to a fully operational phase, indicating a significant shift in its business model and market positioning [1]. Company Analysis - The company is moving away from speculative growth stories and is now focused on establishing real operational capabilities, which may enhance its credibility and attract long-term investors [1]. Market Context - The analysis reflects a broader macroeconomic perspective, emphasizing the importance of understanding local and global trends in the investment landscape, particularly in dynamic markets like Argentina [1].

Core Insights - Sigma Lithium Corporation has been added to the Morgan Stanley National Security Stock Index, highlighting its role in the lithium supply chain for electric vehicles and energy storage systems [1][2]. Company Overview - Sigma Lithium is a leading global lithium producer focused on sustainable lithium concentrate for batteries [4]. - The company operates one of the largest lithium production sites globally, specifically the Grota do Cirilo Operation in Brazil, which is the fifth-largest industrial-mineral complex for lithium oxide [5]. Production Capacity - Sigma Lithium currently produces 270,000 tonnes of lithium oxide concentrate annually, equivalent to approximately 38,000–40,000 tonnes of lithium carbonate equivalent (LCE) [6]. - The company is constructing a second plant aimed at doubling its production capacity to 520,000 tonnes of lithium oxide concentrate, which translates to approximately 77,000–80,000 tonnes of LCE [6]. Sustainability Commitment - Sigma Lithium emphasizes environmental and social sustainability, producing "Quintuple Zero Green Lithium," which is characterized by zero carbon emissions, zero coal power, zero tailings dams, zero use of potable water, and zero hazardous chemicals [5]. Industry Context - The Morgan Stanley National Security Index includes other prominent U.S.-listed companies involved in strategic materials, such as Albemarle (lithium), Freeport-McMoRan (copper), and Tesla (technology, batteries), indicating a focus on companies that contribute to national security and supply chain resilience [2][3].

Core Viewpoint - Sigma Lithium Corporation (NASDAQ:SGML) is recognized as one of the best small-cap EV stocks to buy, with analysts maintaining a bullish outlook despite recent earnings misses [1][3]. Financial Performance - The company reported a revenue of $16.88 million for Q2 2025, which is a decline of 63.26% and fell short of expectations by $19.74 million [2]. - The earnings per share (EPS) was negative $0.17, missing the consensus by $0.09 [2]. - Despite the disappointing financial results, the stock has appreciated over 24% since the earnings release on August 14, attributed to exceeding lithium oxide concentrate production targets [2]. Production and Strategy - Sigma Lithium achieved a production of 68,368 tons of lithium oxide concentrate in Q2 2025, marking a 38% year-over-year increase and surpassing the target of 67,500 tons [2]. - Management indicated that the revenue decline was a result of a strategic decision to withhold products during periods of market volatility [3]. Analyst Ratings - Rock Hoffman from Bank of America Securities reiterated a Buy rating on Sigma Lithium with a price target of $12 on September 26 [4]. - Joel Jackson from BMO Capital Markets also maintained a Buy rating with the same price target of $12 on August 15 [4].

Core Insights - Sigma Lithium Corporation has been recognized for its sustainability excellence in a key industry report, highlighting its commitment to environmentally and socially responsible lithium production [1][2][3] Sustainability Recognition - The report titled "Climate and Nature Solutions in Brazil" acknowledges Sigma Lithium as a global reference in green lithium production, utilizing 100% renewable energy and achieving 90% water recirculation [2][3] - Sigma Lithium employs a "Quintuple Zero" approach, which aims to produce lithium without the use of dams, chemicals, carbon emissions, fossil energy, and water consumption [3] Mining Operations Upgrade - Sigma Lithium is upgrading its mining operations to enhance efficiency, as mining operations account for over 66% of the company's plant gate costs [4] - The upgrade aims to reduce overall plant gate costs by approximately 20% and improve production capacity at the Greentech industrial plant [5][6] - The company plans to modernize mining equipment and improve mine geometry to support a second Greentech plant scheduled for 2026 [7][8] Engagement in Global Energy Transition - Sigma Lithium actively participates in high-level dialogues during Climate Week NY, focusing on sustainable mineral supply chains and global decarbonization goals [9][10] - The company's leadership team engages in various forums to discuss the intersection of finance, policy, and industry in the context of the energy transition [10][12] Production Capacity - Sigma Lithium currently produces 270,000 tonnes of lithium oxide concentrate annually, with plans to double this capacity to 520,000 tonnes through the construction of a second plant [16]

Core Viewpoint - Sigma Lithium Corporation is set to release its third quarter 2025 earnings results on November 14, 2025, and will hold a conference call to discuss these results shortly after the release [1][2]. Company Overview - Sigma Lithium is a leading global lithium producer focused on providing carbon neutral and sustainable lithium concentrate for electric vehicle batteries [3][4]. - The company operates one of the largest lithium production sites globally, specifically the Grota do Cirilo Operation in Brazil, which is the fifth-largest industrial-mineral complex for lithium oxide [4]. Production Capacity - Sigma Lithium currently produces 270,000 tonnes of lithium oxide concentrate annually, which is approximately 38,000–40,000 tonnes of lithium carbonate equivalent (LCE) [5]. - The company is constructing a second plant aimed at doubling its production capacity to 520,000 tonnes of lithium oxide concentrate, translating to approximately 77,000–80,000 tonnes of LCE [5]. Sustainability Initiatives - Sigma Lithium emphasizes environmental and social sustainability, producing what it terms "Quintuple Zero Green Lithium," which is characterized by net-zero carbon emissions and the absence of dirty power, potable water usage, toxic chemicals, and tailings dams [4].

Group 1: Sigma Lithium Corporation (SGML) - SGML shares increased by 9.9% to close at $7.2, with notable trading volume compared to typical sessions, following a 2.4% loss over the past four weeks [1] - The company is benefiting from low-cost production, operational excellence, and diversified funding sources [1] - The consensus EPS estimate for the upcoming quarter has been revised 50% lower over the last 30 days, indicating a negative trend in earnings estimate revisions [3] Group 2: Financial Performance Expectations - SGML is expected to report a quarterly loss of $0.03 per share, representing a year-over-year change of +87%, with revenues projected at $64.7 million, up 212.1% from the previous year [2] - Empirical research shows a strong correlation between earnings estimate revisions and near-term stock price movements, highlighting the importance of monitoring these trends [2] Group 3: Industry Context - SGML is part of the Zacks Electronics - Miscellaneous Products industry, which includes Mistras (MG) [3] - Mistras has a consensus EPS estimate of $0.26 for the upcoming report, unchanged over the past month, representing a +30% change from the previous year [4]

Group 1 - Sigma Lithium Corporation's stock closed at $6.06, with a daily increase of 2.02%, outperforming the S&P 500's gain of 0.49% [1] - Over the past month, the stock has decreased by 0.17%, underperforming compared to the Computer and Technology sector's gain of 6.81% and the S&P 500's gain of 2.99% [1] Group 2 - The company is expected to report an EPS of -$0.03, reflecting an 86.96% increase from the same quarter last year, with quarterly revenue forecasted at $64.7 million, up 212.11% year-over-year [2] - For the full year, earnings are projected at -$0.23 per share and revenue at $182.7 million, indicating increases of 50% and 20.12% respectively from the previous year [3] Group 3 - Changes in analyst estimates for Sigma Lithium Corporation are crucial as they reflect the evolving business dynamics, with upward revisions indicating positive sentiment towards the company's operations [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks Sigma Lithium Corporation at 3 (Hold), with the Electronics - Miscellaneous Products industry in the top 39% of all industries [6] Group 4 - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, showing that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

[Management's Responsibility for Financial Reporting](index=3&type=section&id=MANAGEMENT%27S%20RESPONSIBILITY%20FOR%20FINANCIAL%20REPORTING) Management is responsible for preparing unaudited interim consolidated financial statements on a going concern basis, with the Board of Directors overseeing their review and approval - The unaudited condensed interim consolidated financial statements are prepared by management on a **going concern basis** in accordance with **IAS 34**[5](index=5&type=chunk) - The Board of Directors, through its Audit Committee, is responsible for overseeing and approving management's financial reporting responsibilities[6](index=6&type=chunk)[7](index=7&type=chunk) [Unaudited Condensed Interim Consolidated Statements of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) This statement outlines the company's financial position as of June 30, 2025, showing a slight increase in total assets and a decrease in total shareholders' equity since December 31, 2024 | Metric | 6/30/2025 (US$k) | 12/31/2024 (US$k) | 1/1/2024 (US$k) | | :--------------------------------- | :-------- | :--------- | :-------- | | Total current assets | 69,750 | 92,771 | 107,631 | | Total non-current assets | 266,451 | 234,347 | 259,929 | | **Total assets** | **336,201** | **327,118** | **367,560** | | Total current liabilities | 115,339 | 108,771 | 92,316 | | Total non-current liabilities | 128,939 | 126,007 | 113,594 | | Total shareholders' equity | 91,923 | 92,340 | 161,650 | | **Total liabilities and equity** | **336,201** | **327,118** | **367,560** | - Cash and cash equivalents significantly decreased from **$45,918k** at December 31, 2024, to **$15,113k** at June 30, 2025[9](index=9&type=chunk) - Property, plant and equipment increased from **$141,025k** at December 31, 2024, to **$161,617k** at June 30, 2025[9](index=9&type=chunk) [Unaudited Condensed Interim Consolidated Statements of Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Income%20%28Loss%29) For the six months ended June 30, 2025, the company reported a net loss of **$14,131k**, an improvement from the prior year, driven by a positive shift in net financial income despite decreased net sales revenue | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | Change (YoY) | | :------------------------------------------------- | :-------- | :---------------------- | :----------- | | Net sales revenue | 64,560 | 83,122 | (22.33%) | | Cost of goods sold | (57,781) | (58,407) | (1.07%) | | Gross profit (loss) | 6,779 | 24,715 | (72.50%) | | Operating income (loss) before financial results | (13,368) | 5,277 | (353.10%) | | Financial income (expenses), net | 4,237 | (25,683) | 116.49% | | Loss before income tax and social contribution | (9,131) | (20,406) | 55.25% | | Net loss for the period | (14,131) | (17,757) | 20.42% | | Basic and diluted net loss per common share | (0.13) | (0.16) | 18.75% | - Net sales revenue decreased by **22.33%** year-over-year for the six-month period ended June 30, 2025[10](index=10&type=chunk) - Financial income (expenses), net, improved substantially from a **$25,683k loss** in 2024 to a **$4,237k gain** in 2025[10](index=10&type=chunk) [Unaudited Condensed Interim Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) For the six months ended June 30, 2025, the company reported a net comprehensive loss of **$2,055k**, a significant improvement from the prior year, primarily due to a positive foreign currency translation adjustment | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | Change (YoY) | | :------------------------------------------ | :-------- | :---------------------- | :----------- | | Net loss for the period | (14,131) | (17,757) | 20.42% | | Foreign currency translation adjustment | 12,076 | (19,670) | 161.39% | | Net loss and comprehensive loss for the period | (2,055) | (37,427) | 94.51% | - Foreign currency translation adjustment of subsidiary shifted from a **$19,670k loss** in 2024 to a **$12,076k gain** in 2025[11](index=11&type=chunk) [Unaudited Condensed Interim Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company reported a net cash outflow of **$30,805k**, a reversal from the prior year's inflow, driven by decreased financing activities and continued cash usage | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | Change (YoY) | | :------------------------------------------------- | :-------- | :---------------------- | :----------- | | Net cash used in operating activities | (8,205) | (42,710) | 80.79% | | Net cash used in investing activities | (8,066) | (13,895) | 41.95% | | Net cash provided by (used in) financing activities | (17,868) | 92,995 | (119.21%) | | Effect of exchange rate changes on cash | 3,334 | (9,644) | 134.57% | | Increase (decrease) in cash and cash equivalents | (30,805) | 26,746 | (215.29%) | | Cash and cash equivalents, end of period | 15,113 | 75,330 | (79.95%) | - Net cash used in operating activities significantly improved, decreasing from **$42,710k** in 2024 to **$8,205k** in 2025[13](index=13&type=chunk) - Net cash provided by financing activities turned into a net cash used, from **$92,995k** in 2024 to **$(17,868)k** in 2025[13](index=13&type=chunk) [Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Total shareholders' equity decreased from **$92,340k** at December 31, 2024, to **$91,923k** at June 30, 2025, primarily due to net loss, partially offset by other comprehensive income | Metric | Balance as of Jan 01, 2024 (US$k) | Balance at June 30, 2024 (US$k) | Balance at Dec 31, 2024 (US$k) | Balance at June 30, 2025 (US$k) | | :--------------------------------- | :----------------------- | :----------------------- | :---------------------- | :----------------------- | | Share capital | 291,215 | 314,169 | 326,832 | 327,006 | | Stock-based compensation reserve | 44,488 | 27,181 | 18,485 | 19,762 | | Tax incentive reserve | - | - | 2,500 | 2,687 | | Accumulated other comprehensive income (loss) | 1,533 | (18,137) | (28,495) | (16,419) | | Accumulated losses | (175,586) | (193,343) | (226,982) | (241,113) | | **Total shareholders' equity** | **161,650** | **129,870** | **92,340** | **91,923** | - Net loss for the six months ended June 30, 2025, was **$(14,131)k**[14](index=14&type=chunk) - Other comprehensive income for the period was **$12,076k**, partially offsetting the net loss[14](index=14&type=chunk) [Notes to the Unaudited Condensed Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Interim%20Consolidated%20Financial%20Statements) [1. Corporate Information](index=9&type=section&id=Note%201%20Corporate%20information) Sigma Lithium Corporation is a commercial producer of lithium oxide concentrate with operating assets in Brazil, and its shares trade on TSXV, Nasdaq, and B3 - Sigma Lithium Corporation is a commercial producer of **lithium oxide concentrate**[15](index=15&type=chunk) - The company's operating assets are located in the **Jequitinhonha Valley, Minas Gerais, Brazil**, held by its indirect wholly-owned Brazilian subsidiaries[16](index=16&type=chunk)[17](index=17&type=chunk) - Sigma Lithium's common shares trade on the **TSX Venture Exchange (TSXV)**, **Nasdaq Capital Market (Nasdaq)**, and its unsponsored Brazilian Depositary Receipts (BDRs) trade on **B3**[18](index=18&type=chunk) [2. Basis of Preparation](index=9&type=section&id=Note%202%20Basis%20of%20preparation) The financial statements are prepared under **IAS 34** and the historical cost method, with a retrospective change in presentation currency to **US Dollars** from January 1, 2025, and are presented on a **going concern basis** - The unaudited condensed interim consolidated financial statements are prepared in accordance with **IFRS Accounting Standards** applicable to interim financial statements (**IAS 34**)[19](index=19&type=chunk) - The statements are prepared under the **historical cost method**, with certain financial instruments measured at **fair value**[20](index=20&type=chunk) [2.1. Transactions Eliminated on Consolidation](index=10&type=section&id=2.1.%20Transactions%20eliminated%20on%20consolidation) Intra-group balances, transactions, and unrealized income/expenses are eliminated on consolidation - Intra-group balances, transactions, and unrealized income/expenses from intra-group transactions are **eliminated on consolidation**[23](index=23&type=chunk) [2.2. Functional Currency](index=10&type=section&id=2.2.%20Functional%20currency) The company's functional currency is the Brazilian Real, as its operations are primarily held by the Brazilian subsidiary - The Company's functional currency is the **Brazilian Real (R$)**, as its operations are primarily held by the Brazilian subsidiary[24](index=24&type=chunk) [2.3. Presentation Currency of the Financial Statements](index=10&type=section&id=2.3.%20Presentation%20currency%20of%20the%20financial%20statements) The presentation currency was retrospectively changed from Canadian Dollars to United States Dollars on January 1, 2025, for better comparability - On **January 1, 2025**, the Company retrospectively changed its presentation currency from **Canadian Dollars (CAD)** to **United States Dollars (US$)** for better comparability[25](index=25&type=chunk) - Comparative financial information has been restated as though **US$** had always been the Company's presentation currency, in accordance with **IAS 21** and **IAS 8**[25](index=25&type=chunk) - As of June 30, 2025, the main exchange rate for conversion was **US$1.00 equivalent to R$5.4571** (R$6.1923 on December 31, 2024)[28](index=28&type=chunk) [2.4. Going Concern](index=10&type=section&id=2.4.%20Going%20concern) The interim financial statements are prepared on a going concern basis, as management believes the company has adequate resources - The unaudited condensed interim financial statements for the six-month periods ended June 30, 2025, are prepared on a **going concern basis**, as management believes it has adequate resources to continue operations[29](index=29&type=chunk) [3. Cash and Cash Equivalents](index=11&type=section&id=Note%203%20Cash%20and%20cash%20equivalents) Cash and cash equivalents significantly decreased from **$45,918k** at December 31, 2024, to **$15,113k** at June 30, 2025, primarily due to the termination of short-term investments | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------- | :-------- | :----------------------- | | Cash | 15,113 | 24,860 | | Short-term investments | - | 21,058 | | **Total** | **15,113** | **45,918** | - The Company terminated its **short-term financial investment positions** as of June 30, 2025, in line with evolving liquidity and strategic priorities[31](index=31&type=chunk) [4. Trade Accounts Receivable](index=11&type=section&id=Note%204%20Trade%20accounts%20receivable) Trade accounts receivable increased from **$11,584k** at December 31, 2024, to **$16,765k** at June 30, 2025, largely due to a positive provisional price adjustment | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------- | :-------- | :----------------------- | | Accounts receivable from customers | 12,756 | 18,013 | | Provisional price adjustment | 4,009 | (6,429) | | **Total** | **16,765** | **11,584** | - The provisional price adjustment shifted from a negative **$6,429k** at December 31, 2024, to a positive **$4,009k** at June 30, 2025[32](index=32&type=chunk) - Trade accounts receivable are subject to significant **market price fluctuations** until final settlement, with adjustments based on forward market prices[33](index=33&type=chunk) [5. Inventories](index=11&type=section&id=Note%205%20Inventories) Total inventories increased from **$16,140k** at December 31, 2024, to **$24,566k** at June 30, 2025, including a **$7,989k provision** for expected losses on green by-products | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Lithium oxide concentrate | 14,412 | 2,653 | | Green By-Products | 7,989 | 6,499 | | Provision for expected inventory losses | (7,989) | - | | Total finished goods | 14,412 | 9,152 | | Consumable | 556 | 391 | | Spare parts | 9,598 | 6,597 | | **Total** | **24,566** | **16,140** | - A provision for expected inventory losses on green by-products, totaling **$7,989k**, was recognized and recorded under other operating expenses for the period ended June 30, 2025[34](index=34&type=chunk) [6. Advance to Suppliers](index=12&type=section&id=Note%206%20Advance%20to%20suppliers) Advances to suppliers decreased from **$9,727k** at December 31, 2024, to **$5,864k** at June 30, 2025, for operating consumables - Outstanding balances for advances with domestic and foreign suppliers decreased to **$5,864k** as of June 30, 2025, from **$9,727k** on December 31, 2024[36](index=36&type=chunk) [7. Recoverable VAT and Other Taxes](index=12&type=section&id=Note%207%20Recoverable%20VAT%20and%20other%20taxes) Total recoverable VAT and other taxes increased from **$7,680k** at December 31, 2024, to **$8,427k** at June 30, 2025, with federal tax credits expected within 24 months | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------- | :-------- | :----------------------- | | ICMS (State VAT) | 2,412 | 1,312 | | Federal tax credits (PIS / COFINS) | 4,562 | 5,224 | | Other recoverable taxes | 1,453 | 1,144 | | **Total** | **8,427** | **7,680** | | Current | 6,015 | 6,368 | | Non-Current | 2,412 | 1,312 | - The Company expects to recover outstanding federal taxes within the next **24 months** and recoverable **ICMS (state VAT)** in about **two years**[37](index=37&type=chunk) [8. Cash Held as Collateral](index=12&type=section&id=Note%208%20Cash%20held%20as%20collateral) The company held **$12,686k** as collateral at June 30, 2025, unchanged from December 31, 2024, related to interest obligations on export prepayment contract loans - The Company had **$12,686k** advanced as collateral related to the obligation to pay interest on export prepayment contract loans for industrial plant development as of June 30, 2025, and December 31, 2024[38](index=38&type=chunk) [9. Property, Plant and Equipment](index=13&type=section&id=Note%209%20Property%2C%20plant%20and%20equipment) The net book value of property, plant and equipment increased from **$141,025k** at December 31, 2024, to **$161,617k** at June 30, 2025, driven by additions and foreign currency translation adjustments | Metric | Balance as of Jan 1, 2024 (US$k) | Balance as of Dec 31, 2024 (US$k) | Balance as of June 30, 2025 (US$k) | | :--------------------------------- | :------------------------ | :------------------------- | :-------------------------- | | Total | 180,857 | 141,025 | 161,617 | | Additions | 14,754 | 8,512 | | | Depreciation and depletion | (13,407) | (7,023) | | | Foreign currency translation adjustment | (39,894) | 19,119 | | - Additions to property, plant and equipment for the six months ended June 30, 2025, totaled **$8,512k**[39](index=39&type=chunk) - Depreciation and depletion for the six months ended June 30, 2025, amounted to **$7,023k**[39](index=39&type=chunk) [a) Average Estimated Useful Lives](index=14&type=section&id=9.a%29%20The%20average%20estimated%20useful%20lives%20are%20as%20follows%20%28in%20years%29%3A) This section details the average estimated useful lives in years for various asset categories | Description | 6/30/2025 (Years) | 12/31/2024 (As restated) (Years) | | :-------------------- | :-------- | :----------------------- | | Buildings | 26 | 26 | | Machinery and equipment | 19 | 20 | | Right of use assets | 3 | 3 | | Mining rights | 8 | 8 | | Other assets | 6 | 5 | [b) Assets Under Construction](index=14&type=section&id=9.b%29%20Assets%20under%20construction) The company continued investments in Phase 2 capacity expansion and Phase 1 operational infrastructure, classified as construction in progress - The Company continued investments related to **Phase 2 capacity expansion** and **Phase 1 operational infrastructure**, with expenditures initially classified as construction in progress[41](index=41&type=chunk) [c) Right-of-Use Assets](index=14&type=section&id=9.c%29%20Right-of-use%20assets) Right-of-use assets include land, machinery, and equipment provided exclusively for the company's use on-site under long-term contracts - Right-of-use assets include land, machinery, and equipment provided exclusively for the Company's use on-site, for contracts longer than **12 months** with individual amounts greater than **$5k**[42](index=42&type=chunk) [d) Depreciation and Depletion](index=14&type=section&id=9.d%29%20Depreciation%20and%20depletion) This section reconciles depreciation and depletion for the period, including amounts recognized in operating expenses and deferred exploration | Reconciliation of depreciation and depletion for the period | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------------------------------------- | :-------- | :----------------------- | | Operating expenses | 6,910 | 13,367 | | Deferred exploration and evaluation expenditure | 113 | 40 | | **Depreciation accumulated for the period** | **7,023** | **13,407** | [10. Deferred Exploration and Evaluation Expenditure](index=14&type=section&id=Note%2010%20Deferred%20exploration%20and%20evaluation%20expenditure) Deferred exploration and evaluation expenditure increased from **$47,141k** at December 31, 2024, to **$54,498k** at June 30, 2025, mainly due to foreign currency translation adjustment and additions | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :---------------------------------------- | :-------- | :----------------------- | | Opening balance | 47,141 | 56,016 | | Exploration and feasibility investments | 658 | 3,186 | | Share based compensation | 296 | 1,267 | | Additions | 954 | 4,453 | | Foreign currency translation adjustment | 6,403 | (12,886) | | **Closing balance** | **54,498** | **47,141** | [11. Related Parties' Transactions](index=15&type=section&id=Note%2011%20Related%20parties%27%20transactions) The company engages in various transactions with related parties, including cost sharing, leasing, royalties, and a significant loan facility to Tatooine for property acquisitions [a) Transactions with Related Parties](index=15&type=section&id=11.a%29%20Transactions%20with%20related%20parties) This section details various transactions with related parties, including receivables, debts, expenses, and income | Description | 6/30/2025 (Receivable / Debt) (US$k) | 6/30/2025 (Expenses) (US$k) | 6/30/2024 (Receivable / Debt) (US$k) | 6/30/2024 (Expenses) (US$k) | | :-------------------- | :---------------------------- | :------------------- | :---------------------------- | :------------------- | | A10 Advisory (CSA) | 16 (payable) | (158) | - | (129) | | Miazga (Lease) | 570 (payable) | (104) | 5 (payable) | (2) | | Miazga (Royalties) | 1,090 (payable) | (575) | 671 (payable) | - | | Arqueana (Lease) | 1,436 (payable) | (121) | 123 (payable) | (9) | | Tatooine (Loan) | 17,376 (receivable) | 1,449 (income) | 12,953 (receivable) | 585 (income) | | Instituto Lítio Verde | 1,053 (payable) | (518) | 563 (payable) | (495) | - A loan granted by Sigma Brazil to Tatooine for property acquisitions totaled **$17,373k** as of June 30, 2025, an increase from **$12,952k** at December 31, 2024[49](index=49&type=chunk) - Royalties payable to Miazga increased to **$1.5 million** as of June 30, 2025, with **$0.54 million** settled in the first half of 2025[48](index=48&type=chunk) [b) Key Management Personnel](index=16&type=section&id=11.b%29%20Key%20management%20personnel) This section details compensation for key management personnel, including stock-based compensation, salaries, benefits, and director's fees | Metric | Three months ended, 6/30/2025 (US$k) | Three months ended, 6/30/2024 (As restated) (US$k) | | :-------------------------------------------------------- | :---------------------------- | :------------------------------------------ | | Stock-based compensation, included in operating expenses | 844 | 913 | | Salaries, benefits and director's fees, included in general and administrative expenses | 422 | 423 | | **Total** | **1,266** | **1,336** | [12. Suppliers](index=16&type=section&id=Note%2012%20Suppliers) Total suppliers increased from **$32,627k** at December 31, 2024, to **$44,325k** at June 30, 2025, with **$7,997k** related to an ongoing arbitration | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------- | :-------- | :----------------------- | | Brazilian-based suppliers | 39,932 | 26,190 | | Non-Brazilian-based suppliers | 4,393 | 6,437 | | **Total suppliers** | **44,325** | **32,627** | - Out of the total suppliers amount, **$7,997k** as of June 30, 2025, is related to an ongoing arbitration to which Sigma Brazil is a party[53](index=53&type=chunk) [13. Loans and Export Prepayment](index=17&type=section&id=Note%2013%20Loans%20and%20export%20prepayment) Total loans and export prepayments decreased slightly from **$173,599k** at December 31, 2024, to **$166,955k** at June 30, 2025, with new agreements totaling **$39,015k** and repayments of **$55,657k** | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :------------------------------------------------ | :-------- | :----------------------- | | Total loans and export prepayment (current) | 53,655 | 61,596 | | Total loans and export prepayment (non-current) | 113,300 | 112,003 | | **Total (including transaction costs)** | **166,955** | **173,599** | - The Brazilian real appreciated by **11.9%** against the U.S. dollar in the first half of 2025, primarily affecting provisions and not significantly impacting cash flow[58](index=58&type=chunk) [Export Prepayment Trade Finance](index=18&type=section&id=13.1.%20Export%20Prepayment%20Trade%20Finance) The company entered into new export prepayment agreements totaling **$39,015k** and repaid **$55,657k** during the six-month period ended June 30, 2025 - For the six months ended June 30, 2025, the Company entered into export prepayment agreements totaling **$39,015k** with maturities from **30 to 180 days** and interest rates between **9.0% p.a.** and **10.7% p.a.**[61](index=61&type=chunk) - The Company repaid **$55,657k** related to export prepayment agreements that matured during the six-month period ended June 30, 2025[61](index=61&type=chunk) [Export Prepayment Agreement – Synergy](index=18&type=section&id=13.2.%20Export%20Prepayment%20Agreement%20%E2%80%93%20Synergy) The **$100 million** export prepayment agreement with Synergy transitioned its benchmark interest rate from BSBY to **SOFR + 6.95% p.a.** after BSBY's discontinuation - The **$100 million** export prepayment agreement with Synergy, maturing December 13, 2026, transitioned its benchmark interest rate from **BSBY** to **12-month SOFR + 6.95% per annum** after BSBY's discontinuation[62](index=62&type=chunk)[66](index=66&type=chunk) - In the six-month period ended June 30, 2025, the Company recognized interest expense on this contract in the amount of **$5,551k**[66](index=66&type=chunk) [a) Banco de Desenvolvimento de Minas Gerais - BDMG](index=18&type=section&id=13.a%29%20Banco%20de%20Desenvolvimento%20de%20Minas%20Gerais%20-%20BDMG) The company has multiple financing agreements with BDMG, with varying interest rates and principal repayment schedules, and recognized **$1,247k** in interest expense - The Company has multiple financing agreements with BDMG, with interest rates ranging from **SELIC+3.75%** to **SELIC+3.93% per annum**, and grace periods for principal amortization[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - Principal repayment schedules vary, with installments due in **December 2024**, **December 2025**, and **May 2026**[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - Interest expense on BDMG contracts for the six-month period ended June 30, 2025, was **$1,247k**[71](index=71&type=chunk) [b) Banco Nacional de Desenvolvimento Econômico e Social - BNDES](index=19&type=section&id=13.b%29%20Banco%20Nacional%20de%20Desenvolvimento%20Econ%C3%B4mico%20e%20Social%20-%20BNDES) Sigma Lithium signed a **R$486.8 million** development loan agreement with BNDES in October 2024 for a second industrial plant, with no drawdowns yet - Sigma Lithium signed a final agreement for a **R$486.8 million** development loan from BNDES in October 2024 to fund a second Greentech industrial plant[72](index=72&type=chunk) - As of June 30, 2025, no drawdowns have been recorded from BNDES, pending a required letter of credit[72](index=72&type=chunk) - The Company is in compliance with all **debt covenants** as of June 30, 2025[73](index=73&type=chunk) [14. Lease Liability](index=19&type=section&id=Note%2014%20Lease%20liability) Lease liabilities, primarily for land leases with related parties, totaled **$4,742k** at June 30, 2025, an increase from **$3,188k** at December 31, 2024, with a weighted average discount rate of **9.69%** | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------- | :-------- | :----------------------- | | Opening balances | 3,188 | 4,321 | | Remeasurement | 2,094 | 2,232 | | Interest expense | 207 | 369 | | Payments | (1,226) | (2,392) | | **Lease Liability total** | **4,742** | **3,188** | | Current | 2,327 | 1,753 | | Non-Current | 2,415 | 1,435 | - The weighted average discount rate used for lease liabilities is **9.69%**, determined as the Company's incremental borrowing rate[75](index=75&type=chunk) [15. Prepayment from Customer](index=20&type=section&id=Note%2015%20Prepayment%20from%20customer) Prepayment from customers decreased significantly from **$1,514k** at December 31, 2024, to **$225k** at June 30, 2025, representing payments made in excess due to provisional pricing - The outstanding balance of prepayment from customer was **$225k** as of June 30, 2025, down from **$1,514k** at December 31, 2024[77](index=77&type=chunk) - Prepayments refer to payments made in excess due to **provisional pricing**, with the final amount subject to adjustments based on sales contract terms[77](index=77&type=chunk) [16. Taxes Payable](index=20&type=section&id=Note%2016%20Taxes%20payable) Total taxes payable increased from **$7,097k** at December 31, 2024, to **$8,064k** at June 30, 2025, benefiting from a **75% income tax reduction** approved by SUDENE | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :---------------- | :-------- | :----------------------- | | Municipal taxes | 842 | 422 | | State taxes | 248 | 297 | | Federal taxes | 6,974 | 6,378 | | **Total** | **8,064** | **7,097** | | Current | 5,428 | 3,923 | | Non-Current | 2,636 | 3,174 | - The Northeast Development Authority (**SUDENE**) approved Sigma Brazil for a **75% reduction in income tax** (Profit from Exploration), effective from **2024 for ten years**[78](index=78&type=chunk) - For the six months ended June 30, 2025, the Company recognized a reserve for tax incentives in the amount of **$187k**[78](index=78&type=chunk) [17. Income Tax and Social Contributions](index=20&type=section&id=Note%2017%20Income%20tax%20and%20social%20contributions) For the six months ended June 30, 2025, the company recognized a total income tax and social contribution expense of **$5,000k**, a shift from a **$2,649k income** in the same period of 2024, with an effective tax rate of **(54.7%)** [a) Current Income Tax and Social Contribution Recognized in Profit or Loss](index=21&type=section&id=17.a%29%20Current%20Income%20tax%20and%20social%20contributions%20recognized%20in%20profit%20or%20loss) This section details the current and deferred income tax and social contribution recognized in profit or loss, along with the effective tax rate | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :------------------------------------------------ | :-------- | :----------------------- | | Current | (353) | (5,042) | | Deferred | (4,647) | 7,691 | | **Total** | **(5,000)** | **2,649** | | Effective tax rate | (54.7%) | 13.0% | - The Company operates in **Brazil (corporate tax rate 34%)** and **Canada (federal corporate tax rate 15% plus provincial rates, totaling 27%)**[79](index=79&type=chunk) - A tax loss carryforward of **$14,710k** generated in Canada has not been recognized due to no expected taxable income to offset it[80](index=80&type=chunk) [b) Deferred Income Tax and Social Contribution](index=21&type=section&id=17.b%29%20Deferred%20income%20tax%20and%20social%20contribution%3A) This section details the components of deferred tax assets, including pre-operational expenses, tax loss carryforward, and provisions | Metric | 12/31/2024 (As restated) (US$k) | 6/30/2025 (US$k) | | :-------------------------------- | :----------------------- | :-------- | | Pre-operational expenses | 2,490 | 2,136 | | Tax loss carry forward | 8,165 | 8,008 | | Unrealized foreign currency fluctuation | 8,364 | 1,818 | | Provision for expected inventory losses | - | 2,619 | | **Total deferred tax assets** | **19,230** | **17,003** | - A new provision for expected inventory losses contributed **$2,619k** to deferred tax assets as of June 30, 2025[82](index=82&type=chunk) - The Company expects to realize the deferred tax assets within **two years**[82](index=82&type=chunk) [18. Asset Retirement Obligations ("ARO")](index=21&type=section&id=Note%2018%20Asset%20retirement%20obligations%20%28%22ARO%22%29) Total asset retirement obligations increased from **$2,903k** at December 31, 2024, to **$3,416k** at June 30, 2025, mainly due to accretion and foreign currency translation adjustment | Metric | 6/30/2025 (US$k) | 12/31/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Xuxa Mine | 2,552 | 2,169 | | Barreiro Mine | 864 | 734 | | **Total** | **3,416** | **2,903** | - The increase in ARO is attributed to accretion of asset retirement obligation (**$116k**) and foreign currency translation adjustment of subsidiary (**$397k**) for the six months ended June 30, 2025[84](index=84&type=chunk) [19. Financial Instruments](index=22&type=section&id=Note%2019%20Financial%20instruments) The company's financial instruments include cash, receivables, payables, and loans, with most approximating fair value, and it manages various financial risks including exchange rates, interest rates, market price, credit, and liquidity [a) Identification and Measurement of Financial Instruments](index=22&type=section&id=19.a%29%20Identification%20and%20measurement%20of%20financial%20instruments) This section identifies and measures financial instruments, categorizing them by amortized cost or fair value through profit or loss | Description | 6/30/2025 (Amortized Cost) (US$k) | 6/30/2025 (Fair Value through P&L) (US$k) | 12/31/2024 (Amortized Cost) (US$k) | 12/31/2024 (Fair Value through P&L) (US$k) | | :--------------------------------------- | :------------------------- | :--------------------------------- | :------------------------- | :--------------------------------- | | Cash and cash equivalents | 15,113 | - | 45,918 | - | | Trade accounts receivable | - | 16,765 | - | 11,584 | | Loan and accounts receivable from related parties | 17,376 | - | 12,953 | - | | Cash held as collateral | 12,686 | - | 12,686 | - | | Suppliers | 44,325 | - | 32,627 | - | | Loans and export prepayment (current) | 53,655 | - | 61,596 | - | | Prepayment from customer | - | 225 | - | 2,154 | | Loans and export prepayment (non-current) | 113,300 | - | 112,003 | - | - The Company measures certain financial assets and liabilities using **Level 2 inputs**, which are observable but not quoted in active markets[87](index=87&type=chunk) [b) Financial Risk Management](index=22&type=section&id=19.b%29%20Financial%20risk%20management%3A) The company employs risk management strategies to regularly monitor and manage financial risks, including exchange rates, interest rates, market price, credit, and liquidity - The Company uses risk management strategies to regularly monitor and manage financial risks, including **exchange rates**, **interest rates**, **market price**, **credit risk**, and **liquidity risks**[88](index=88&type=chunk) [Foreign Exchange Rate Risk](index=22&type=section&id=19.b.1.%20Foreign%20Exchange%20rate%20risk) The company's exposure to foreign exchange rate risk arises from assets and liabilities denominated in U.S. dollars, given its Brazilian Real functional currency - The Company's exposure to foreign exchange rate risk arises from assets and liabilities denominated in **U.S. dollars**, given that its functional currency is the **Brazilian Real**[89](index=89&type=chunk) | Description | 6/30/2025 (US$k) | | :-------------------- | :-------- | | Canadian dollars | (4,395) | | United States dollar | (108,954) | [Sensitivity Analysis (Foreign Exchange)](index=23&type=section&id=19.b.2.%20Sensitivity%20analysis%20%28FX%29) This section presents a sensitivity analysis of foreign exchange rate variations on the company's financial position | Currency | Notional (US$k) | Probable scenario (US$k) | Scenario 1 (+/-10%) (US$k) | Scenario 2 (+/-20%) (US$k) | | :-------------------------- | :------- | :---------------- | :------------------ | :------------------ | | Canadian dollar-denominated (+) | (4,395) | 89 | (319) | (658) | | Canadian dollar-denominated (-) | (4,395) | 89 | 587 | 1,210 | | U.S dollar-denominated (+) | (108,954) | 1,046 | (8,954) | (17,287) | | U.S dollar-denominated (-) | (108,954) | 1,046 | 13,268 | 28,546 | [Interest Rate Risk](index=23&type=section&id=19.b.3.%20Interest%20rate%20risk) The company is exposed to interest rate risk from financial investments, financing, and export prepayments linked to CDI, SELIC, and SOFR rates - The Company is exposed to interest rate risk from financial investments, financing, and export prepayments linked to fixed and floating interest rates of **CDI**, **SELIC**, and **SOFR**[92](index=92&type=chunk) [Sensitivity Analysis of Interest Rate Variations](index=23&type=section&id=19.b.4.%20Sensitivity%20analysis%20of%20interest%20rate%20variations) This section provides a sensitivity analysis of interest rate variations on the company's liabilities, including BDMG loans and export prepayments | Liabilities | Rate (Probable) | Rate (Scenario 1) | Rate (Scenario 2) | Probable scenario (US$k) | Scenario 1 (US$k) | Scenario 2 (US$k) | | :------------------------ | :-------------- | :---------------- | :---------------- | :---------------- | :--------- | :--------- | | BDMG (SELIC +10%/+20%) | 15.00% | 16.50% | 18.00% | (1,194) | (1,313) | (1,433) | | Export prepayment (SOFR +2.5%/+5.0%) | 4.12% | 4.22% | 4.33% | (2,040) | (2,091) | (2,195) | - During 2024, the Company entered into a **swap operation** to exchange the interest exposure of an advance on foreign exchange contract calculated in US$ to DI plus an interest rate calculated on the notional amount in R$[95](index=95&type=chunk) [Market Price Risk](index=24&type=section&id=19.b.5.%20Market%20price%20risk) The company's products are provisionally priced at revenue recognition, exposing it to market price risk until final selling prices are settled - The Company's products may be **provisionally priced** at revenue recognition, with final selling prices based on forward market prices, exposing it to market price risk[97](index=97&type=chunk) | Scenario | Volume (kt) | Shipment average price | Variation | Effect on Sales Revenue (US$k) | | :-------------------------------- | :---------- | :--------------------- | :-------- | :---------------------- | | Lithium oxide concentrate (Probable) | 113,570 | 846 | 11 | 1,234 | | Lithium oxide concentrate (+20%) | 113,570 | 924 | 54 | 6,136 | | Lithium oxide concentrate (-20%) | 113,570 | 616 | (54) | (6,136) | [Credit Risk](index=24&type=section&id=19.b.6.%20Credit%20risk) The company manages credit risk by requiring substantial advance payments or guarantees via letters of credit for its sales - The Company manages credit risk by receiving substantial **advance payments or guarantees** via letters of credit for its sales[101](index=101&type=chunk) [Liquidity Risk](index=25&type=section&id=19.b.7.%20Liquidity%20risk) The company manages liquidity to ensure sufficient cash for financial obligations, operations, growth, and corporate expenditures, considering additional funding if needed - The Company's liquidity management focuses on ensuring sufficient cash to meet financial obligations, fund operations, **growth opportunities (Phase 2)**, and general corporate expenditures[103](index=103&type=chunk)[104](index=104&type=chunk) - Management intends to use cash generated by operating activities but will consider securing additional **equity or debt funding** if necessary[104](index=104&type=chunk) | Contractual obligations | Up to 1 year (US$k) | 1-3 years (US$k) | 4-5 years (US$k) | More than 5 years (US$k) | Total (US$k) | | :------------------------ | :----------- | :-------- | :-------- | :---------------- | :---- | | Suppliers | 44,325 | - | - | - | 44,325 | | Loans and export prepayment | 53,652 | 106,686 | 6,266 | 1,564 | 168,168 | | Lease liabilities | 2,327 | 1,245 | 641 | 529 | 4,742 | [a) Capital Management](index=25&type=section&id=19.a%29%20Capital%20Management) The company's capital management aims to safeguard its going concern ability, fund operations and development, with equity issuances as the primary source - The Company's capital management objective is to safeguard its ability to continue as a **going concern**, continue operations, and meet strategic objectives, including mineral project development[108](index=108&type=chunk) - The primary source of capital is derived from **equity issuances**, and the Company has no externally imposed capital requirements[108](index=108&type=chunk) - As of June 30, 2025, capital consisted of equity attributable to common shareholders of **$91,923k**, compared to **$92,340k** as of December 31, 2024[108](index=108&type=chunk) [b) Fair Values of Assets and Liabilities](index=25&type=section&id=19.b%29%20Fair%20values%20of%20assets%20and%20liabilities%20as%20compared%20to%20their%20carrying%20amounts.) Financial assets and liabilities at fair value through profit or loss are recognized in current and non-current accounts, with carrying amounts substantially similar to fair values - Financial assets and liabilities at **fair value through profit or loss** are recognized in current and non-current assets and liabilities, with gains and losses recognized as financial income or costs[109](index=109&type=chunk) - The carrying amounts of most financial instruments are substantially similar to their fair values, particularly for long-term assets and liabilities with **floating interest rates (SOFR and SELIC)**[110](index=110&type=chunk) [20. Share Capital](index=26&type=section&id=Note%2020%20Share%20capital) As of June 30, 2025, the company had **111,281,979 common shares** outstanding, with A10 Investimentos Ltda. holding **42.85%** of voting capital, and share capital increased due to RSU exercises [a) Ownership Structure](index=26&type=section&id=20.a%29%20Ownership%20structure) This section details the company's ownership structure, including major shareholders and their respective percentages of voting capital | Shareholder | Number of Common Shares | % of Voting Capital | | :-------------------------------- | :---------------------- | :------------------ | | A10 Investimentos Ltda. | 47,686,968 | 42.85% | | Fitpart Fund Administration Services Limited | 8,238,230 | 7.40% | | Appian Way Asset Management LP | 4,963,006 | 4.46% | | Others | 50,393,775 | 45.29% | | **Total** | **111,281,979** | **100.00%** | [b) Authorized Share Capital](index=26&type=section&id=20.b%29%20Authorized%20share%20capital) The authorized share capital consists of an unlimited number of fully paid common shares with no par value - The authorized share capital consists of an **unlimited number of common shares** with no par value, all fully paid[112](index=112&type=chunk) [c) Common Shares Issued](index=26&type=section&id=20.c%29%20Common%20shares%20issued%20by%20the%20Company%20for%20the%20period%20ended%20June%2030%2C%202025%2C%20and%202024%3A) This section details the common shares issued by the company for the period ended June 30, 2025, including shares from RSU exercises | Metric | Number of common shares | Amount (US$) | | :-------------------------------- | :---------------------- | :--------- | | Balance, January 1, 2025 | 111,267,279 | 326,832 | | Exercise of RSUs | 14,700 | 174 | | **Balance, June 30, 2025** | **111,281,979** | **327,006** | [d) Reserve for Tax Incentives](index=26&type=section&id=20.d%29%20Reserve%20for%20tax%20incentives) For the six-month period ended June 30, 2025, the company recognized a **$187k reserve** for tax incentives from a **75% income tax reduction** approved by SUDENE - For the six-month period ended June 30, 2025, the Company recognized a reserve for tax incentives in the amount of **$187k**, stemming from a **75% income tax reduction** approved by **SUDENE**[114](index=114&type=chunk) - This tax benefit, applicable for **ten years starting in 2024**, allows the Company to reduce its current income tax payment, but the saved amount cannot be distributed to shareholders[114](index=114&type=chunk) [21. Loss Per Share](index=26&type=section&id=Note%2021%20Loss%20per%20share) The basic and diluted net loss per common share for the six months ended June 30, 2025, was **$(0.13)**, an improvement from **$(0.16)** in the same period of 2024, despite a net loss of **$14,131k** | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :------------------------------------------------ | :-------- | :----------------------- | | Net loss for the period | (14,131) | (17,757) | | Weighted average number of common shares | 111,275,927 | 110,568,147 | | **Basic and diluted net loss per common shares** | **(0.13)** | **(0.16)** | [22. Net Sales Revenue](index=27&type=section&id=Note%2022%20Net%20sales%20revenue) Net sales revenue for the six months ended June 30, 2025, decreased to **$64,560k** from **$83,122k** in the same period of 2024, including a negative provisional price adjustment of **$6,874k** | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Gross sales revenue – lithium concentrate | 68,803 | 96,488 | | Provisional price adjustment | (6,874) | (15,665) | | Shipping services | 2,631 | 2,299 | | **Total net sales revenue** | **64,560** | **83,122** | - Shipment contracts are subject to adjustments based on **lithium oxide concentrate market prices** and grade confirmation, with provisional pricing adjustments recognized as revenue[117](index=117&type=chunk) [23. Costs and Expenses by Nature](index=27&type=section&id=Note%2023%20Costs%20and%20expenses%20by%20nature) Total costs and expenses by nature for the six months ended June 30, 2025, were **$(57,781)k**, a slight decrease from **$(58,407)k** in the same period of 2024, detailing cost of goods sold and general and administrative expenses [a) Cost of Goods Sold](index=27&type=section&id=23.a%29%20Cost%20of%20goods%20sold) This section details the components of cost of goods sold, including mining services, blasting, salaries, freight, and depreciation | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Mining service providers | (9,377) | (16,021) | | Blasting and fuels | (9,725) | (8,115) | | Salaries and benefits | (6,024) | (5,826) | | Freight Maritime | (5,875) | (2,365) | | Depreciation | (4,252) | (3,898) | | Mobile Crushing | (2,959) | - | | Royalties | (2,207) | (2,437) | | **Total** | **(57,781)** | **(58,407)** | - Mobile Crushing costs of **$(2,959)k** were a non-recurring expense in H1 2025, aimed at maintaining production during primary crusher maintenance[118](index=118&type=chunk) - Starting in 2025, **stock-based compensation** for certain operational personnel is directly allocated to operating costs[121](index=121&type=chunk) [b) General and Administrative Expenses](index=28&type=section&id=23.b%29%20General%20and%20administrative%20expenses) This section details general and administrative expenses, including legal, salaries, insurance, travel, and public company costs | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Legal | (2,366) | (1,273) | | Salaries and benefits (Staff) | (2,186) | (1,960) | | Insurance (D&O) | (1,043) | (1,173) | | Travel | (791) | (978) | | Public company costs | (283) | (855) | | **Total** | **(9,095)** | **(8,966)** | [24. Other Operating Expenses](index=28&type=section&id=Note%2024%20Other%20operating%20expenses) Other operating expenses for the six months ended June 30, 2025, significantly increased to **$(9,387)k** from **$(5,026)k** in the same period of 2024, primarily due to a **$7,859k provision** for expected inventory losses | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Provision for expected inventory losses | (7,859) | - | | Environmental and social expenses | (1,211) | (1,568) | | Accrual for contingencies | (86) | (1,910) | | Taxes and fees | - | (984) | | **Total** | **(9,387)** | **(5,026)** | - A **$7,859k provision** for expected inventory losses was recognized in H1 2025 due to current market conditions and updated estimates of future selling prices[123](index=123&type=chunk) [25. Financial Expenses](index=28&type=section&id=Note%2025%20Financial%20expenses) Financial expenses for the six months ended June 30, 2025, resulted in a net income of **$4,237k**, a significant improvement from a net expense of **$(25,683)k** in 2024, largely driven by a positive foreign exchange variation | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Financial income | 1,610 | 2,949 | | Interest accrued on loans and export prepayment | (9,858) | (9,956) | | Foreign exchange on tax/fees | (1,720) | (538) | | Foreign exchange variation on net assets | 14,881 | (17,506) | | **Total** | **4,237** | **(25,683)** | - Foreign exchange variation on net assets shifted from a **$(17,506)k loss** in H1 2024 to a **$14,881k gain** in H1 2025[124](index=124&type=chunk) - The Brazilian real appreciated by **11.9%** against the US$ in the six-month period ended June 30, 2025, primarily affecting non-cash provisions and accruals[125](index=125&type=chunk) [26. Stock-Based Compensation](index=29&type=section&id=Note%2026%20Stock-based%20compensation) Total stock-based compensation expense for the six months ended June 30, 2025, was **$1,277k**, a decrease from **$4,209k** in 2024, accounted for as a non-cash item in the income statement and shareholder's equity [a) Restricted Share Units (RSU)](index=29&type=section&id=26.%28a%29%20Restricted%20share%20units%20%28RSU%29) As of June 30, 2025, **183,277 RSUs** remained outstanding, with **2,868,040 equity units** available for new grants under the Equity Incentive Plan | Metric | Balance, January 1, 2024 | Balance, December 31, 2024 | Balance, June 30, 2025 | | :---------------- | :----------------------- | :------------------------- | :--------------------- | | Balance | 1,363,660 | 383,852 | 183,277 | | Exercised | (1,207,808) | (14,700) | | | Forfeited | (207,000) | (185,875) | | | Granted | 435,000 | - | | - As of June 30, 2025, **183,277 RSUs** remained outstanding, with **2,868,040 equity units** available for new grants under the Equity Incentive Plan[128](index=128&type=chunk)[131](index=131&type=chunk) [b) Stock Options](index=30&type=section&id=26.%28b%29%20Stock%20options) All **100,000 stock options** granted on April 12, 2022, expired on April 25, 2025, without being exercised - All **100,000 stock options** granted on April 12, 2022, expired on April 25, 2025, without being exercised, and are no longer outstanding[136](index=136&type=chunk) [c) Measurement of Stock-Based Compensation](index=30&type=section&id=26.%28c%29%20Measurement%20of%20stock-based%20compensation) Stock-based compensation is a non-cash item accounted for in the income statement and as a provision in shareholder's equity, transferred to share capital upon RSU vesting - Stock-based compensation is a **non-cash item**, accounted for in the Income Statement and as a provision in shareholder's equity[138](index=138&type=chunk) - Upon vesting of RSUs, the provision is transferred to the Company's **share capital**[138](index=138&type=chunk) | Metric | 6/30/2025 (US$k) | 6/30/2024 (As restated) (US$k) | | :-------------------------------- | :-------- | :----------------------- | | Stock-based compensation expense | 1,277 | 4,209 | | Cost of goods sold (adjustments) | (61) | - | | Property, plant and equipment | (61) | 407 | | Deferred exploration and evaluation expenditure | 296 | 857 | | **Total** | **1,451** | **5,647** | [27. Legal Claim Contingency](index=31&type=section&id=Note%2027%20Legal%20claim%20contingency) The company has probable legal losses totaling **$2,046k** and possible losses totaling **$8,397k**, including a significant civil claim and an arbitration by LG-ES which the company believes is without merit | Nature | Current (US$k) | Non-current (US$k) | Probable loss, net (US$k) | | :----- | :------ | :---------- | :----------------- | | Civil | 534 | 1,840 | 432 | | Labor | - | 1,614 | 1,614 | | **Total** | **534** | **3,454** | **2,046** | - As of June 30, 2025, the Company holds judicial deposits of **$859k** to guarantee certain civil lawsuits[140](index=140&type=chunk) | Nature | Contingency Possible loss, net (US$k) | (-) Suppliers (US$k) | Possible loss, net (US$k) | | :----- | :----------------------------- | :------------ | :----------------- | | Civil | 15,470 | -7,997 | 7,473 | | Regulatory | 149 | - | 149 | | Labor | 775 | - | 775 | | **Total** | **16,394** | **-7,997** | **8,397** | - **LG Energy Solution, Ltd.** initiated arbitration alleging breach of offtake arrangements, which the Company believes are without merit[143](index=143&type=chunk) [28. Additional Information on the Cash Flow Statement](index=32&type=section&id=Note%2028%20Additional%20information%20on%20the%20cash%20flow%20statement) Non-cash effects on the cash flow statement for the six months ended June 30, 2025, included **$2,094k** in additions to property, plant, and equipment in exchange for leases | Metric | 6/30/2025 (US$k) | | :------------------------------------------ | :-------- | | Addition to property, plant, and equipment in exchange for: | | | Lease | 2,094 | | Suppliers | - | | **Non-cash effects** | **2,094** | [29. Subsequent Events](index=32&type=section&id=Note%2029%20Subsequent%20Events) In July 2025, the company entered into a new export prepayment trade finance agreement with a financial institution for **$5.0 million** - In **July 2025**, the Company entered into an export prepayment trade finance agreement with a financial institution for a total amount of **$5.0 million**[146](index=146&type=chunk)