Sigma Lithium (NASDAQ:SGML) said it produced 7,293 tons of lithium concentrate in the third quarter of 2026 after operations were stopped for about 65% of the period, but maintained a 32% net revenue margin and generated $24 million in operating cash flow.
Co-Chair and CEO Ana Cabral said the company resumed operations twice during the quarter, requiring it to demobilize and remobilize 1,700 people and equipment on each occasion. Sigma is now focused on increasing mining volumes and removing overburden to support production growth in 2027.
The company is targeting production of 240,000 tons over the next 12 months and 330,000 tons for full-year 2027. Cabral said those targets can be met with existing installed capacity.
Costs and cash flow
Sigma reported a plant-gate cost of $424 per ton, a cost including freight and insurance to Asia of $518 per ton, and an all-in sustaining cost of $642 per ton. Cabral compared the latter with a lithium price of about $1,200 per ton cited during the call.
Asked how unit costs remained low despite the production decline, Cabral said shutdown-related costs were neither capitalized nor excluded from the financial statements. Instead, $13.376 million of idle-capacity costs were recorded as an expense alongside other operating expenses, she said.
Gross revenue for the first nine months of 2026 was $150 million, up 20% from the same period a year earlier, according to Cabral. Operating cash flow for the nine months was $51 million, and the company ended the third quarter with $10 million in cash.
At the lithium prices cited on the call, Sigma forecasts approximately $128 million in cash flow at production of 240,000 tons and approximately $191 million at its 2027 target of 330,000 tons. Those estimates depend on production and pricing assumptions.
Debt refinancing and expansion
Cabral said a five-year, $125 million convertible note refinancing would reduce near-term debt and support future growth. She said proceeds would primarily repay debt due in December, shifting the maturity to November 2031.
During the question-and-answer session, Cabral said Sigma planned to repay its Synergy debt immediately after the convertible issuance closes, which she described as imminent. She said the company could subsequently seek longer-term, lower-cost financing for expansion.
Investors can begin converting the notes after 12 months, Cabral said. The company has a call option in year three, while investors have a put option at that point. Cabral said Sigma’s intention is to let the notes convert, which would reduce debt but dilute existing shareholders.
For its next growth phase, Sigma plans to begin opening a second mine as early as the fourth quarter of 2026 or in the first quarter of 2027. It also plans to resume work on a second processing plant, which Cabral said would take total capacity to 580,000 tons. Approximately $80 million of plant equipment remains to be ordered, with procurement most likely to begin in early 2027, she said.
Sales strategy and market conditions
Cabral said Sigma had produced an additional 11,000 tons of high-grade material entering the fourth quarter and was upgrading its mining fleet to help recover ground lost during the stoppages. She said the company’s reprocessing circuit can produce approximately 15,000 tons of high-grade material by upgrading fines.
Asked about sales of lower-grade tailings, Cabral said the material could be sold, with ex-works prices generally around $30 to $50 per ton depending on lithium content. She said Sigma typically avoids selling tailings when lithium prices are falling and would wait further into contract season before deciding.
Sigma is also discussing potential offtake arrangements with several partners. Cabral said the company is considering a multiyear agreement for 2027 but can continue selling material under shorter-term arrangements. She said its flexibility has helped it achieve favorable realized prices without relying on a fixed offtake pricing formula.
About Sigma Lithium (NASDAQ:SGML)
Sigma Lithium is a Canadian mining company focused on developing and producing lithium for the electric-vehicle and energy-storage industries. Its principal asset is the Grota do Cirilo hard-rock lithium project in Minas Gerais, Brazil. The company produces lithium concentrate from spodumene ore at its Brazilian operations, supplying material used in the lithium-ion battery supply chain. Sigma began commercial production at Grota do Cirilo in 2023. Sigma Lithium has emphasized more sustainable production practices at the project, including processing methods designed to reduce water use and avoid conventional tailings dams.
