Report Industry Investment Rating - No information provided Core View of the Report - On September 10, the main contract of lithium carbonate futures fluctuated at a low level. The spot market had active low - price point pricing, and the basis premium expanded. Considering factors such as cost, supply, demand, and inventory, with short - term supply and demand both strong and the weakening expectation of supply contraction due to the active resumption of lithium mines, the price of lithium carbonate is expected to decline with fluctuations. It is recommended to go short on rallies [1]. Summary by Related Catalogs Futures Market - On September 10, the closing prices of near - month, consecutive - one, consecutive - two, and consecutive - three contracts of lithium carbonate futures decreased compared to the previous day, with the near - month contract closing at 70,300 yuan/ton, down 2,520 yuan. The trading volume was 751,480 lots (+159,805), and the open interest was 340,814 lots (-10,526) [1]. Spot Market - The average prices of various lithium - related products such as lithium carbonate, lithium hydroxide, and ternary precursors showed different degrees of change on September 10. For example, the average price of battery - grade lithium carbonate (99.5%/domestic) was 73,450 yuan/ton, down 1,150 yuan [1]. Inventory - The registered warehouse receipts were 38,101 tons. The social inventory decreased, the smelter inventory decreased, while the downstream and other inventories increased. The total SMM lithium carbonate inventory decreased by 1,044 tons compared to the previous week [1]. Industry News - Australia's Galan Lithium company's Hombre Muerto West (HMW) project in Argentina made significant progress in the first - phase construction, with the design of the 4th pond completed. The project has a phased development plan, aiming for an annual production of 21,000 tons of LCE in 2026, 40,000 tons in 2028, and potentially 60,000 tons in 2030 [1]. - In August, Brazilian lithium spodumene exports decreased by more than one - third year - on - year and nearly 43% month - on - month. The suspension of shipments by the largest producer, Sigma Lithium, was a major factor [1].

Core Viewpoint - Global lithium producers experienced significant declines following CATL's announcement to resume operations at its Jianxiawo mine earlier than anticipated, adding supply pressure to an already saturated market [1][3]. Group 1: Market Impact - CATL's Jianxiawo mine, one of China's largest lithium sources, produces over 46,000 metric tons of lithium carbonate equivalent annually, accounting for approximately 3% of the projected global supply in 2025 [2]. - Following the announcement, Albemarle's stock fell by 11.5%, Sigma Lithium dropped 6.9%, and Liontown Resources saw an 18.4% decline in Australia [4]. - Lithium carbonate futures in Shanghai decreased by more than 7%, reaching a one-month low [4]. Group 2: Price Trends - The lithium market has faced sustained pressure for over a year, with prices significantly declining from pandemic-era highs [5]. - Spot lithium carbonate prices in China peaked above 600,000 yuan ($84,000) per ton in late 2022 but are now trading below 73,000 yuan ($10,250) [5]. Group 3: Strategic Developments - Despite the current slump, the lithium sector continues to attract strategic deals, indicating long-term optimism regarding lithium's role in the energy transition [6]. - In Chile, Codelco and SQM are nearing a partnership for the Atacama salt flats, which will give Codelco majority control while extending SQM's operating rights to 2060 [7]. - Jindalee Lithium is advancing plans to create a new U.S.-listed lithium company through a merger of its McDermitt project with a special-purpose acquisition vehicle [8].

Report Summary 1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - The fundamentals of lithium carbonate may be in a situation of both supply and demand increasing, but the inventory is still at a relatively high level. The option market sentiment has turned bullish, with a slight increase in implied volatility. Technically, the 60 - minute MACD shows the double - line above the 0 - axis and the green column converging. The operation suggestion is to conduct short - selling transactions at high prices with a light position and pay attention to controlling risks in trading rhythm [2] 3. Summary by Relevant Catalogs 3.1 Futures Market - The closing price of the main contract is 82,760 yuan/ton, up 1,780 yuan; the net position of the top 20 is - 142,510 lots, down 3,052 lots; the position of the main contract is 390,069 lots, down 5,033 lots; the spread between near and far - month contracts is 820 yuan/ton, up 660 yuan; the Guangzhou Futures Exchange warehouse receipt is 24,045 lots, up 430 lots [2] 3.2 Spot Market - The average price of battery - grade lithium carbonate is 85,200 yuan/ton, down 500 yuan; the average price of industrial - grade lithium carbonate is 82,900 yuan/ton, down 500 yuan; the basis of the Li₂CO₃ main contract is 2,440 yuan/ton, down 2,280 yuan [2] 3.3 Upstream Situation - The average price of spodumene concentrate (6% CIF China) is 980 US dollars/ton, unchanged; the average price of amblygonite is 8,275 yuan/ton, down 250 yuan; the price of lepidolite (2 - 2.5%) is 2,645 yuan/ton, unchanged [2] 3.4 Industry Situation - The monthly output of lithium carbonate is 44,600 tons, up 500 tons; the monthly import volume is 13,845.31 tons, down 3,852.31 tons; the monthly export volume is 366.35 tons, down 63.31 tons; the monthly operating rate of lithium carbonate enterprises is 48%, down 4 percentage points; the monthly output of power batteries is 133,800 MWh, up 4,600 MWh [2] 3.5 Downstream and Application Situation - The price of ternary material (523 single - crystal type) in China is 131,000 yuan/ton, up 1,000 yuan; the monthly operating rate of ternary cathode materials is 52%, up 1 percentage point; the price of lithium iron phosphate is 34,300 yuan/ton, unchanged; the monthly operating rate of lithium iron phosphate cathodes is 51%, down 1 percentage point [2] - The monthly production of new - energy vehicles is 1,243,000 units, down 25,000 units; the monthly sales volume is 1,262,000 units, down 67,000 units; the cumulative sales penetration rate is 44.99%, up 0.68 percentage points; the cumulative sales volume is 8,220,000 units, up 2,286,000 units; the monthly export volume is 225,000 units, up 20,000 units; the cumulative export volume is 1.308 million units, up 600,000 units [2] 3.6 Option Situation - The total call position is 159,626 contracts, up 14,286 contracts; the total put position is 146,399 contracts, down 1,225 contracts; the put - call ratio of total positions is 91.71%, down 9.8577 percentage points; the at - the - money IV implied volatility is 0.44%, up 0.0080 percentage points [2] 3.7 Industry News - From August 1 - 17, the retail sales of the national passenger car market were 866,000 units, a year - on - year increase of 2% compared with the same period in August last year and an 8% increase compared with the same period last month. The cumulative retail sales this year were 13.611 million units, a year - on - year increase of 10%. The retail sales of the national passenger car new - energy market were 502,000 units, a year - on - year increase of 9% compared with the same period in August last year and a 12% increase compared with the same period last month. The retail penetration rate of the national passenger car new - energy market was 58.0%. The cumulative retail sales this year were 6.958 million units, a year - on - year increase of 28% [2] - From January - July 2025, the top ten SUV manufacturers in terms of sales sold a total of 5.599 million vehicles, accounting for 67.2% of the total SUV sales. Among these ten enterprises, the sales of Tesla and GAC Toyota decreased to varying degrees compared with the same period last year, while the sales of other enterprises increased to varying degrees [2] - Premier African Minerals announced that its Zulu lithium project has made a major breakthrough, and the plant has moved from the commissioning phase to the refining optimization phase [2] - Sigma Lithium's lithium concentrate production in the second quarter reached 68,368 tons, a year - on - year increase of 38%, exceeding the quarterly target of 67,500 tons; the full - sustaining cost dropped to 594 US dollars/ton, lower than the target value of 660 US dollars [2]

Group 1 - The lithium supply and demand dynamics are showing signs of balance due to recent production closures at key companies like CATL, leading to a rise in the prices of lithium concentrate and lithium carbonate equivalent (LCE) from previously depressed levels [1] - The article highlights the importance of understanding various industries and macroeconomic factors, emphasizing the value of experience in analyzing diverse sectors such as airlines, oil, retail, mining, fintech, and e-commerce [1] Group 2 - The article does not provide any specific financial data or performance metrics related to the companies mentioned [2][3] - There are no investment recommendations or advice given regarding the suitability of investments in the companies discussed [2][3]

Investment Rating - The industry rating is "Recommended" indicating a positive outlook for the sector with expectations of outperforming the benchmark index by 10% or more in the upcoming period [6]. Core Insights - In Q2 2025, the production of lithium concentrate reached 68,368 tons, a year-on-year increase of 38%, while sales volume decreased by 23% to 40,350 tons due to a strategic decision to halt supply during price volatility [1][2]. - The company's cash operating cost was reported at $442 per ton, a decrease of 14% year-on-year, maintaining the lowest cost in the industry [2]. - The financial performance showed a significant decline, with revenue dropping 62% year-on-year to $2.115 million, and a net loss of $1.886 million [3][4]. Summary by Sections Production and Sales - Q2 2025 lithium concentrate production was 68,368 tons, exceeding the target of 67,500 tons, with a 38% year-on-year growth [1]. - Sales volume for Q2 2025 was 40,350 tons, reflecting a 23% year-on-year decline and a 34% quarter-on-quarter decline due to a cautious supply strategy [1]. Cost Structure - The unit sales cost was $584 per ton, up 3% year-on-year and 5% quarter-on-quarter [1]. - The cash operating cost was $442 per ton, down 14% year-on-year and 3% quarter-on-quarter, remaining below the target of $500 per ton for 2025 [2]. - The all-in sustaining cost (AISC) was $594 per ton, a 24% decrease year-on-year and 4% decrease quarter-on-quarter, also below the annual target of $660 per ton [2]. Financial Performance - Revenue for Q2 2025 was $2.115 million, down 62% year-on-year and 56% quarter-on-quarter [3]. - EBITDA for Q2 2025 was -$1.688 million, indicating a loss compared to previous periods [4]. - The company reported a net loss of $1.886 million, widening year-on-year and turning negative quarter-on-quarter [4]. Operational Updates - The company is advancing its Phase II expansion project, which is expected to add 250,000 tons per year of lithium capacity, bringing total annual capacity to 520,000 tons by 2026 [8].

[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)

Financial Data and Key Metrics Changes - The company achieved production of approximately 270,000 tons of lithium oxide concentrate, equivalent to about 40,000 tons of LCE, maintaining guidance for 2025 [6][13] - Short-term debt decreased by 16% compared to the previous quarter and by 40% year-over-year, indicating improved financial health [8][9] - Operating costs were reduced, with all-in sustaining costs dropping by 24% to $594 per ton, showcasing cost leadership in the industry [12][19] Business Line Data and Key Metrics Changes - Production increased by 40% year-over-year, with sales generating gross revenues of $21 million from approximately 40,350 tons sold [14][16] - The company maintained a disciplined approach to inventory management, temporarily warehousing 28,000 tons to preserve pricing power [15][44] Market Data and Key Metrics Changes - The average provisional price for sales in the second quarter was $637 for SC6, with adjustments leading to higher realized prices in subsequent quarters [14][21] - The company expects to see a positive adjustment in pricing due to recent market recoveries, with sales anticipated to be closer to production levels in the third quarter [46][60] Company Strategy and Development Direction - The company is focused on operational resilience and cost efficiency, with plans to expand production capacity to 120,000 tons of LCE equivalent by 2027 [33][34] - A disciplined approach to capital expenditure has been adopted, prioritizing immediate returns on investments related to expansion [29][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market normalization and robust demand for lithium, particularly driven by EV growth, which has seen a year-on-year increase of around 27% [69] - The company is well-positioned to benefit from any recoveries in lithium prices due to its low-cost production and diversified client base [19][32] Other Important Information - The company celebrated two years without accidents or fatalities, highlighting its commitment to safety and operational excellence [10][11] - The company has secured $100 million in subsidized government debt to support its expansion projects [9] Q&A Session Summary Question: Will inventories normalize by the end of Q3? - Management confirmed that inventories are expected to normalize, with sales in Q3 anticipated to be closer to production levels [44][46] Question: Why haven't prepayment and offtake agreements been signed yet? - Management stated that negotiations are ongoing, and definitive documents will be announced once completed, emphasizing a cautious approach to announcements [48][50] Question: What are the expected consequences of US tariffs on the business? - Management noted a diversified customer base and a wait-and-see approach regarding refining, as the refining business currently has negative margins [54][55] Question: How many tons are still open to provisional pricing? - Management confirmed that provisional pricing has become a permanent feature of the business, with expectations for positive adjustments in the upcoming quarters [57][60] Question: Comments on recent price action and market developments? - Management highlighted a sharp recovery in lithium prices driven by market sentiment and noted that the market is susceptible to news, with expectations for stability in pricing moving forward [65][67]

Financial Performance - The company's plant gate cost decreased by 4% from $364/t in 2Q24 to $348/t in 2Q25[28] - CIF cash cost with royalties decreased by 14% from $515/t in 2Q24 to $442/t in 2Q25[28] - All-in sustaining costs decreased by 24% from $779/t in 2Q24 to $594/t in 2Q25[28] - Short-term trade finance debt decreased by 57% from $101 million in 2Q24 to $43 million in 2Q25[29] - Gross sales revenue was $211 million in 2Q25[32] Production and Sales - Production volume increased by 40% from 49,389t in 2Q24 to 68,368t in 2Q25[28] - The company is on track to deliver 270kt annualized production in FY25E, a 13% increase from 240kt in FY24[28] - Sales volumes were 40,350t in 2Q25[32] - The average provisional price for 2Q25 was $637/t, with a net price of $507/t after adjustments[32] Expansion and Strategy - Phase 2 expansion is underway, leveraging existing infrastructure from Plant 1[34] - The company is pursuing a geographically diversified offtake strategy targeting 240,000t per year with potential prepayment value of $300 million[51] - Sales in August achieved final prices of $966/t (SC6)[18]

Group 1 - 44 A-share companies plan to distribute over 72 billion yuan in cash dividends [1] - The commercial factoring industry, valued at 3 trillion yuan, is expected to undergo significant regulatory changes, prohibiting "grey area" consumer loan activities [1] - Multiple bond funds have resumed large-scale subscriptions for institutional investors, with 19 funds making similar announcements since July [1] Group 2 - The issuance of technology innovation bonds has expanded significantly, with 684 bonds issued and a total scale of 880.6 billion yuan since May 7, 2025 [2] - Nearly 400 A-share companies have disclosed share buyback progress since July, involving over 60 billion yuan, but 17 companies have announced extensions of their buyback periods [2] - The semiconductor industry in China saw an investment of approximately 455 billion yuan in the first half of 2025, with a year-on-year decline of 9.8%, a significant improvement from a 41.6% decline last year [3] Group 3 - China continues to lead the world in industrial robot production and installation, with humanoid robot development gaining international attention [4] - A new type of solid oxide fuel cell (SOFC) has been developed to operate efficiently at 300°C, potentially accelerating commercialization [5] - Satellite Chemical reported a net profit of 2.744 billion yuan for the first half of 2025, a year-on-year increase of 33.44% [8]

Group 1: Market Overview - The U.S. stock market opened with narrow fluctuations, with the three major indices showing mixed results, while cryptocurrency-related stocks surged significantly, with BitMine Immersion rising over 35% [1][3] - The lithium mining sector also saw strong performance, with Sigma Lithium up over 16% and Lithium Americas up over 8% [3] Group 2: Cryptocurrency Market Dynamics - The rise in cryptocurrencies like Bitcoin is attributed to multiple favorable factors, including continuous institutional inflows into Bitcoin and Ethereum spot ETFs, and increasing expectations for Federal Reserve interest rate cuts [1][4] - Analysts expect Bitcoin to potentially break its historical high this month due to a positive macroeconomic outlook supporting risk assets [1] Group 3: Institutional Interest and Investment Trends - Large investors are increasingly interested in cryptocurrencies, with nine Ethereum spot ETFs in the U.S. attracting over $6.7 billion in net inflows this year [6] - Companies focusing on accumulating cryptocurrencies have also contributed to the price increases of Bitcoin and Ethereum, with digital asset financial companies holding approximately $113 billion in Bitcoin reserves and around $13 billion in Ethereum [6] Group 4: Future Projections and Sentiment - Analysts predict that Ethereum may reach new historical highs more easily than Bitcoin, especially if the weekly closing price exceeds $4,100 [5] - The sentiment in the options market reflects bullish expectations for Ethereum, with a put-call ratio of 0.39 and significant concentration of call options at a $6,000 strike price [6] Group 5: Notable Institutional Moves - Harvard Management Company has made substantial investments in Bitcoin ETFs, acquiring 1.9 million shares of BlackRock's iShares Bitcoin ETF valued at $116.7 million [7] - The Trump family is also exploring cryptocurrency investments, with discussions around a company that would hold WLFI tokens [7]