Sigma Lithium Corporation (SGML) Q3 2025 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Welcome to Sigma Lithium 2025 Third Quarter Earnings Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions] I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead, Anna.

I'd like to welcome you to our third quarter earnings conference call. Joining me on the call today is Ana Cabral, CEO of Sigma Lithium. Our third quarter 2025 earnings press release, presentation and corresponding documents are available on our website. I will now turn the call over to Ana Cabral.

Good morning, everyone. It's a great pleasure to present Sigma Lithium's Third Quarter 2025 results directly from the Amazon, where COP30, the United Nations Climate Conference is being held. Sigma is here as a member of the Brazilian delegation. We have been engaged in high-level dialogues with other delegations from all over the world, and we are showcasing how we have implemented and executed on every single one of our targets of sustainability set out in 2017 when we made the original investment in the company. Since then, we have managed to build the most sustainable lithium beneficiation plant in the world, digitalized and using algorithms, the employee bots or AI to become more and more efficient in treating the mineralogy of our mines and increasing plant recovery. So our plan is where technology meets metallurgy meets mining and delivers sustainability, doing more with less. Please kindly read the disclaimers. We're going to make quite a number of forward-looking statements and projections and guidances as we go through this presentation. We're very proud of our accomplishments in the third quarter, especially considering the state of the lithium markets throughout the quarter. we have managed to increase the resilience of our business significantly, achieving the following 5 initiatives. First, we substantially increased our net revenues through optimum commercial strategy. We increased revenues by 69% quarter-on-quarter and by 36% if compared to the third quarter of last year. We have generated cash of $31 million, resulting from final price settlements of sales that happened throughout the year. In addition, we expect cash generation from sales of our processing, high-purity, high-grade middlings, which are the result of our sustainable efforts. We have approximately 1 million tons of those dry stacked high-purity materials. We are also in the process of successfully upgrading our mining operations. Our plant has already restarted this week, our mine is expected to resume operations within 2 to 3 weeks, and Sigma will operate the mine with equipment lease directly from the manufacturer. Lastly, we continue to maintain financial discipline, and that's demonstrated by deleveraging on our short-term trade finance debt by 43% this year despite the challenging lithium pricing environment. On this page, we showcased the financial highlights of the third quarter of '25 related to the increased cash margins and the deleveraging of our short-term trade finance debt. Our revenues have increased by 69% if compared to last quarter. More importantly, we increased revenues by 36% versus the third quarter of last year. Our pricing also increased by 33% versus last quarter. So the revenues increase are a result of our efficiency increase. Our margins also increased. The operating margin increased in 42% versus the third quarter, and the net margin increased 67% [Technical Difficulty] quarter of last year. Both margins also increased substantially versus the previous quarter. But by showcasing the increase versus last year, we demonstrate how we increase the resilience and the strength of the business. Our deleveraging is demonstrated by the decrease in trade finance. We managed to pay down export financing, short-term debt in 43% this year. The remaining balance is just $33.8 million as of November 13. Our cash has also increased by 42% versus last quarter, which is a trend very different from our peers, which had burned current cash. Our current cash today is $21 million plus $8 million of incremental trade receivables, all related to sales realized until the third quarter of 2025. On this page, we discuss our stellar record of 0 accidents. We have achieved 787 consecutive days without accidents with lost time injury. It's over 2 years with 0 records. This demonstrates our operational excellence in addition to managing to continuously decrease our costs. So we haven't cut costs at the expense of health and safety. Our TRFIR is 1.79 amongst the lowest in the world. This results in employee engagement and safety processes, a direct connection to the factory floor, which leads us to enhance performance and ideas for cost optimization coming straight from our employees. So it's a self-fulfilling circle where focusing on safety enables us to keep on getting better, both operationally by increasing efficiency, but also cost-wise by gaining ideas directly from employees on how to be lower cost. We're very proud of this. On this page, we're going to start to discuss our financial performance this quarter. On this slide, we demonstrate how Sigma achieved an optimum commercial strategy, which allowed us to price efficiently our material capturing the price cycle despite the price volatility that took over the metals market throughout the period that followed Liberation Day and the tariffs. You can see on this chart in red, the sales on provisional prices and in green, the sales on final prices. And it's visible that we were able to capture a much higher final price as we managed to authorize our clients to resell the products and settle our final prices. These adjustments resulted in incremental cash revenues for this quarter. So a picture is a thousand words. And here is how that translates into cash generation. This commercial success resulted in incremental cash from the final settlement with the trade partners. And you can see that by looking at the initial cash position at the end of the second quarter, the increasing cash from operations on a provisional price basis of $30 million, then the generation of trade receivables booked on sales up until third quarter on provisional prices of $20 million. That got converted into cash as of now, but that refers to sales with a cutoff on the third quarter. In addition to that, we had another incremental increase in trade receivables because of the extra increase in prices that we have been experiencing to date at $1,700 per ton. So that's another $8 million, which means that there were $28 million extra that resulted from our optimum commercial strategy. So when you observe our cash as of today, we have $21 million in the bank plus $8 million of settled trades at current market prices. Now in addition, we have $33 million of potential sale of lithium middlings, which are high-purity middlings or dry stack material that currently sits both at the port and at our plant at current market prices quoted at Shanghai metal markets of $112 per ton, net of transportation costs to port for part of it and to China for the material sitting at the port. So a significant cash boost coming from materials that have already been produced. But more importantly, a direct result of our investment in dry stacking our tailings and recycling and reprocessing and optimizing our lithium Greentech industrial plant. On this page, we show what that cash position enabled us to do. We managed to pay down our short-term trade finance 60% year-to-date to November. If you cut it off as of October, we paid it down 44%. That's a significant debt reduction, especially considering the down markets and the lithium prices volatility we experienced this year. So we had a cash increase, and we decreased our short-term trade finance expensive debt. That's a significant accomplishment in financial results for a year such as these in lithium markets. On this page, we demonstrate how the debt maturity profile will be lengthened further because all that's left now is essentially $10 million that we already paid down, plus $100 million that will be paid down next year in December, which relates to our shareholder debt, whose generosity has allowed us to get here to commission our Greentech plant and to continue to make improvements to achieve the stellar operational performance the plant has been delivering. So we are in a very comfortable debt position as of November 13. And we demonstrate here on this page all the short-term debt that we have managed to pay down or roll. This page demonstrates our low-cost resilience and the fact that we are a source of responsible lithium production in this industry. We have managed to maintain the highest sustainability and ethical sourcing standards throughout market pricing, meaning our resilience is here to stay. Even with the slight decrease in production, which is shown here in the little green over our regular costs, we're still lower than the lowest cost producer for nonintegrated lithium oxide concentrate in Africa. And this location to the very left of the nonintegrated supply curve is exactly where we plan to remain throughout the foreseeable future. On this page, we demonstrate how the lower production levels in September have not really affected our low-cost position. In other words, the slight increase in cost maintained this on guidance for the all-in sustaining cost, and that's demonstrated by the chart to the right, where we show the 9-month all-in sustaining cost versus the full year guidance we provided at the beginning of the year. This all-in sustaining cost includes interest, CapEx, maintenance, all of it, royalties, SG&A, environmental and social that is voluntary. So we're very much on track. We're issuing guidance of this all-in sustaining cost becoming $560, meaning lowering to $560 for 2026 based solely on production from the first plant. Now the increase in CIF cash costs and plant gate costs are easily corrected once we return to full production in the first quarter '26. So our low-cost position is unmatched and unchanged. On this slide, we basically outline the offtake agreements expected for this year. They're basically enabled by the significant commercial leverage and power we achieved by being an ethical producer and one of the lowest cost producers of lithium concentrate globally. Now what we've done, we tailored different types of offtakes to cater for different specific client needs across geographies. So this year, what we have is 3 different kinds of offtakes being discussed with 3 very different kinds of clients. The first kind is what we call the 3-month rolling offtake. They're done at market prices, and these are prepayment of upcoming production until March. The objective is to provide Sigma with low-cost working capital. The second kind of offtake is a 20,000 tons for 3 years for $25 million. It's a small long-term offtake and the use of proceeds will be to pay for the mining equipment that will help us upgrade our mining operations, meaning the larger-scale trucks and overall excavators and mining equipment. The third category is a conventional offtake or prepayment being negotiated with a global European trading company. So the use of proceeds is to deploy towards our expansion plans remaining on track for our growth strategy next year. We are in contract negotiation stages with them. Now for 2026, we still have another 120,000 tons of product uncommitted to be contracted into offtakes. The objective is to strike conventional offtakes for both amounts. The first amount for 80,000 tons will be assigned to a regular end user. And the objective is to repay the long-term shareholder debt that was generously enough offered to Sigma in December 2022 and enabled us to get here to this very strong operational position. We are in contract negotiations for that one. The second offtake is going to be achieved against an agent, meaning a trading company, which again, is going to be a typical conventional offtake, once again deployed towards building and delivering on our growth strategy, meaning building a second plot. And this offtake is under contract negotiation. So we're expecting to announce 3 offtakes still this year and 2 more next year. This page demonstrates our production and cost guidance for the upcoming years, 2026 and 2027. Our cash flow is poised to increase as our production efficiency increases with the execution of our strategic plan. With Plant 1 alone, we're bound to generate an all-in sustaining cost of $560 per tonne, and that includes everything, including interest expenses. Now at the current price levels of $1,000 per tonne, that represents a cash flow -- free cash flow generation of $132 million. Once we complete Plant 2 by the end of next year, we expect to have 550,000 tonnes of production throughout 2027, which will lower our all-in sustaining cost to $500 approximately that at current price points for lithium is expected to generate a free cash flow of approximately $270 million. So this page really demonstrates how by remaining the lowest cost producer globally, we are bound to benefit with excess returns from this relative increase in lithium prices from $700 per ton at mid-third quarter to $1,000 per ton as of November 13. This page demonstrates how our Greentech Plant upgrade into the 3.0 version concluded and executed in November '24 was not accompanied with [Foreign Language] this page demonstrates how the upgrade in our Greentech Plant into a 3.0 version, which was concluded in November of '24 of last year, 1 year ago, was not followed by our mining operations. Here at Sigma, just to recap, we have 2 different operations, which are integrated. We have a mine that delivers raw material to a state-of-the-art industrial lithium beneficiation plant, the Greentech Plant. That is automated, digitalized and run by an algorithm. Throughout the first 9 months of this year, what we could demonstrate is that the plant outperformance was compensating for the mine. You can clearly see that in the chart at the bottom left of the slide, where we had an 11% increase in production in the first 9 months of this year. Now the chart above show and demonstrate the significant upgrade that took place in the Greentech Plant last year when from the beginning of '24 to the end of '24, the production went up 43%. In other words, the plant can produce 300,000 tonnes of lithium concentrate if properly fed with fresh rock, fresh spodumene ore. It processed efficiently because the plant recoveries are 70%. Now that made it clear that a mining upgrade was required. So we reassessed our mining plan and concluded that we needed larger equipment scale to basically ensure higher volumes that would be moved faster. More importantly, that would also ensure that we would maintain our stellar safety and health record at our operations. The chart on the right break down the 2 quarters, the second quarter '25 and the third quarter '25. And it clearly shows that the last month of the third quarter when the mining equipment provider was demobilized was where we had a significant production decrease because they were simply demobilizing and phasing down their efforts in operating and moving material at the expected productivity rates. This page shows what's the way forward. Well, we have mastered dense media separation technology, achieving 70% recovered. Let me go back to the beginning, pause, pause again. This page demonstrates our way forward in our operational plan. Clearly, we have mastered dense media separation technology for lithium processing, achieving 70% recovery rates. That's equivalent to flotation. We have demonstrated also greater efficiency and reliability throughout 2025. And now we're going to match it by upgrading our mining operations. First, our plant. It has already restarted. So it restarted processing high-grade material that's in our current operating site. The target for 2026 is to achieve full plant operational capacity of 300,000 tons of lithium oxide concentrated. We have been recurrently achieving unprecedented recovery levels throughout the year up until the third quarter. So that's where our confidence comes from, from this track record. Now on the feed of the plant. Clearly, a mining upgrade was required and is underway. We reassessed the mining plan and the geometry. So we observed that we have mined about 798,000 tonnes in July and 659,000 tonnes in August. We continue to mine waste and strip in order to optimize geometry, and that is something I talked about during our second quarter '25 announcement. The ore grade has been perfectly aligned with our mine plan with no significant dilutions. So we maintain the cadence of the ore grade fed to the plant. As a result, we're very well positioned to resume our mining operations within 2 to 3 weeks once we're able to mobilize large-scale equipment so that we can increase the volume mined and the operational speed at which we advance the geometry and increase mining volumes. So with those upgrades, we expect to evolve our production capabilities at the plant already in the first quarter '26, reaching 73,000 tonnes of lithium oxide concentrate produced. That's the guidance for the first quarter of '26. This slide demonstrates how by being the low-cost and most sustainable producer at large scale, we have been able to obtain significant support by our clients to execute our -- on our expansion plans. That's financial support and offtake support. We plan to reach 80,000 tons of lithium carbonate equivalent upon completion of our Phase 2 expansion next year. By just adding a third production line, which infrastructure is already on site, we expect it to achieve 120,000 tons of LCE equivalent of production. That is a consequence of Sigma already being a pillar throughout global lithium supply chains. So this underpins the financial support that we receive from our very large clients downstream in the lithium supply chain. So we also conclude by outlining how we're going to continue to deliver on our strategic plan for 2025. First, we're going to conclude our offtake agreements as we have outlined in the presentation. Second, we have achieved financial strength, but we're going to continue to do so by continuing to close final prices on the provisional price sales that we have achieved year-to-date until the third quarter and we'll continue to deliver throughout the fourth quarter. We have deleveraged and we'll continue to delever by basically paying down expensive short-term trade finance debt. We're also going to monetize existing lithium products that are currently sitting in our plant and in a port, taking advantage of the current robust pricing environment where demand for these products become actual. Currently, these products are priced at about $120 per tonne, which could bring the additional revenues of $33 million throughout the fourth quarter. Thirdly, we are going to upgrade our mining operations to increase the Greentech Plant production scale, more feed, more concentrate. So there's another advantage to that, which means we're going to lower the structural costs of this company by lowering the plant gate costs by increasing production volume and by actually decreasing the absolute number of mining costs, which represent 2/3 of our plant gate costs. Four, we're going to continue to partner with our very large clients with very large balance sheets to create commercial strategies that allows us to navigate lithium price seasonality, benefiting from achieving higher prices during the high seasonality. Number five, we're going to continue to increase the scale of our suppliers so that we can obtain working capital support. This is a strategy where we're simply matching or copying with the global leaders in downstream, including battery makers and carmakers receive from their own suppliers in the duration of their account payables. The average of the largest carmakers in the world is from 130 days to 180 days to 210 days. We've been barely doing 30 days of deadlines for suppliers. So we are lengthening that period by leaning on larger suppliers that are as large as us. I want to thank you for the opportunity to present to you our third quarter earnings. And I'm now going to open the floor for the Q&A questions that are going to be submitted to our moderator through the chat function of this Zoom.

[Operator Instructions] Our first question comes from [ Bavida ] from Bloomberg. Thanks for the granularity on the cash balance. Based on Page 9, is current cash balance at USD 29 million plus USD 33 million or only USD 29 million.

No. The current cash balance is $29 million. The $33 million are basically bids we received on the current lithium material we already have, and we were mentioning that exists in the port and at the plant.

Our next question comes from [ Leanne Crozier ]. What is the region of lithium middlings from the process circuits? What is their LI 20 grade even as a range?

Yes. These are typical materials that are processed through the DMS circuit. They are more valuable because the chemical structure of the particle hasn't been broken. In other words, it's a very different manner of processing lithium ore than the flotation plant. So the lithium grade goes from 1% to 1.3%. There's an official quote for these products at Shanghai Metals Market, which can be validated daily. So in current market environment, where it's actually a search for physical materials to close open positions in Guangzhou, we've been getting bids for these materials, 100,000 of which are at the port already, which makes their cost simply shipping to China, which is $40 a tonne. And then we have another 850,000 tonnes of these materials at the plant, which makes their costs approximately $85. So when we bank on $33 million, it's just pure profit, given that there are costs incurred in transportation. So the number is net of transportation. The current quote for these materials at Shanghai Metals Market is $120 per tonne. They are roughly 11-ish percent of current lithium oxide concentrate prices as of today, which is about $1,070 to $1,080 per tonne.

Our next question comes from [ Armando Wolfrid ]. Could you please provide some more info on the 100 million shareholders credit and the status of your BNDES loan disbursement for Phase 2?

Absolutely. Well, we're going to lean on our suppliers -- on our credit clients the same way we have been leaning on them for a number of advancements we've been doing here, including mining upgrade. There are a number of ways to basically disburse the BNDES loan. However, as we discussed earlier, we were awaiting for a quarter of lithium price stability given the highly volatile pricing environment we experienced this year. I mean we were one of the few companies to actually generate cash this year. Our peers were mainly cash burning. So our Board decided to wait for a quarter of stability so that we could basically green light purchasing equipment. Once we do so, it could happen as early as January or late January, given current price environment being very robust. So we're going to utilize the same structures we've been utilizing, which are large customer balance sheet support to basically disburse [Technical Difficulty] what are we doing about expansion is ensure [Technical Difficulty].

Ms. Ana, your connection just dropped in the middle of the answer, if you can repeat that part, please.

Okay. Yes, so regarding the structure for this bus in BNDES, our Board was waiting for at least 1/4 of price stability given the volatility in lithium prices, the market experienced this year. So what we are planning to do if the lithium prices environment continue to be as robust as it is now is probably green light equipment purchasing as early as January, late January of '26. But more importantly, we have already disbursed a certain amount and file that with BNDES. So it's all basically ready to be deployed once we continue on equipment purchases, which is the plant portion of Phase 2. Now the key element in ensuring the timeliness of a potential 2026 commissioning of the plant was adjusting mine geometry so that we could feed the plant with the same geometallurgy that we are feeding our current Plant 1. So feeding Plant 1 and Plant 2 with the same geometallurgy would ensure a shorter ramping up period given that we would have more chemical certainty of the ramp-up. In other words, any ramp-up issues could be only narrowed to processing, which are relatively easy to fix. So the work on mine geometry would continue the same way we carried on geometry work throughout the second quarter despite the lithium prices volatility.

Our next question comes from [ Habbou ]. Will production be fast-tracked if the lithium market tightness and the market price of lithium increase happily?

Yes. That's exactly why we're carrying through the mining upgrade. You were spot on, meaning we know what the plant can't do. I mean we have a state-of-the-art Greentech lithium plant that can't do 300,000 tons of lithium oxide concentrate on its own. What we needed to do was to match mine to plant. And this is exactly what we're doing, taking advantage of the relatively muted lithium price environment that we observed on the third [Technical Difficulty] production a year.

Ms. Ana, your connection dropped again. If you can repeat...

Okay. So resuming, what we are doing is basically spot on. In other words, we are basically matching -- the reason to decide on the upgrade of the mine was exactly what you asked us. In other words, we know what the plant can do. The plant can deliver 300,000 tonnes of lithium oxide concentrate per year. If properly fed with fresh rock. So by upgrading the plant, by revisiting the mine plan and moving more material, what we're doing is making more product available for the robust lithium price environment that we were expecting in 2026. We took advantage of the muted price environment still in the third quarter to make that decision, and it was the accurate timing to do so because as we enter '26, we will already enter with an upgraded quarterly production, as we indicated, to 73,000 tonnes.

Our next question comes from [ Benson Chen ]. What's your estimated CapEx for bringing Phase 2 and 3 online, respectively? And what could be the risk of further delays. Could you not utilize some credit lines to speed up the expansion and avoid delays?

Well, we have a credit signed with BNDES, which is the best possible credit we can get. But to your point, the offtakes, as I outlined on the discussion that we had about them, and it was quite detailed, are meant for that. In other words, we have the conventional offtakes when we declare the use of proceeds is to fund the growth, what they will be doing is essentially closing that gap. As offtakes get closed this year, what we will do is redirect those proceeds for the plant Phase 2, given that the mining upgrade has been fully covered by our current clients.

[Operator Instructions] Our next question comes from Joe Jackson from BMO Capital Markets. Please confirm as of today, how much production Sigma had at the mine in Q4 due far? And how much spodumene inventory there is as of today.

Yes. What we are planning to do, Joe, is to issue guidance for fourth and first quarter together. We issued the first quarter guidance, and we're going to issue fourth quarter guidance soon when we show a remobilization plan. What we have, though, is the full cost to upgrade mining operations, which is $25 million, which has been fully covered by our clients. So what we need to do now is to just wrap up what we call the mobilization curve for large tonnage equipment, which is either twice the tonnage of what we got or probably 2.5x the tonnage of what we got. Depending on the mobilization curve, which will be announced promptly, we will be able to perhaps have a surprise for the fourth quarter. And we've given the first quarter guidance and the fourth quarter guidance will be given as soon as we wrap up the mobilization curve for the very large tonnage equipment that's been made available to us by the manufacturer directly. By the way, one more point that's very important. The $25 million are not going to be paid at once. They're going to be paid in very nice soft installments throughout 2 to 3 years at very low rates, SOFR plus under 1% or 1%, again, facilitated by our very supportive clients given that we are the pillars of global downstream supply chains. So you'll be like -- it'll be an offtake like any other.

Our next question comes from [ Ricardo Fernandes ]. Are your volume contracts based on spot price or negotiated? How much of lag is there between spot and realized at prices?

Well, it's spot essentially. We closed provisional prices at spot. Today, fortunately, there's a very liquid market for both chemicals and spodumene or we call lithium oxide concentrate. Shanghai Metals Market, Guangzhou, I mean, they're literally moving with significant volumes. I mean, just for example, last night, Guangzhou negotiated over 600,000 tonnes of LCE of open interest contracts. That's a term of global lithium demand. So there's [Technical Difficulty] quite precise pricing. Last night, prices hovered around $1,070 a tonne. So that level of liquidity allows for spot to be quite precise, meaning clients bid and hedge immediately into chemicals. So we believe pricing is becoming more and more efficient, which helps producers like us, given that there's less opacity, more transparency. And again, what we do though is depending on the season, we close at final, or we close at provisional. And what we've done this year, given volatility, we basically closed the provisional pricing. And now we're benefiting from having the clients to lean on and realizing final pricing. Hence, the cash boost we received from sales of the third quarter at the moment, as we explained in detail in our cash from operations section of this presentation.

Our next question comes from Shiva Kumar. Are you getting any premium at all of the green lithium compared to the market price?

No, unfortunately not. I'm here at COP30. That's been one of the frustrations. What the advantage is, though, is commercial power, meaning given that global supply chains are being rearranged, what we have is similar battery makers supplying carmakers globally in the West, in the East, all over. So there's a huge focus on traceability, on sustainability, on health and safety. And what we have is essentially a brand that safeguards us from any questions. I mean it's very easy to ascertain the Quintuple Zero advantage. And that's what we have, a commercial advantage, which translates into what we showcased so far. Our ability to negotiate provisionals when we believe it's reasonable to negotiate provisionals, our ability to lean on our clients' balance sheets for support for mining upgrades and so on and so forth. But unfortunately, there is no green premium. And we do not believe there will be a green premium. If -- hopefully, that could be, but it's years ahead. What there is, is a green [Technical Difficulty] commercial advantage.

Our next question comes from David Feng. Ana, this is David from CICC Research, and thanks for the presentation. We can see that there is still over 30 kt of spodumene concentrate inventory by comparing year production and shipments. Just wondering how we expect all these inventories to be sold in 4Q '25? And what would your inventory management strategy if lithium price continues to rise.

Yes. Thank you, David. We'll sell it all down. I mean at current prices, the plan is to basically monetize everything we have, including the -- what we call in China middlings, right? And we have high-purity middlings with an intact we call intact spodumene chemical structure because it comes from DMS, and it hasn't been affected chemically by the flotation nor by organic contaminants nor by the chemicals utilized in flotations. Hence, we can get a straight quotation for $120 even for middlings, which is -- which just shows that the current strategy is to monetize all the lithium we currently have.

Our next question comes from [ John Christian ]. Can you quantify in U.S. dollars, how much working capital will be required to restart the mine in the first quarter 2026? And can you bridge the $6 million on third Q ending cash balance to $21 million today, considering your slide show $20 million debt paid down in the 4Q so far. Where did that approximately $35 million came from in the past 6 weeks?

Well, no, we discussed that. I mean if you look at lithium price behavior, it came from the final price settlements. I mean the lithium prices have rallied considerably, RMB contracts for LCE and Guangzhou were close to $88,000, $87,000. So we were able to receive the final price settlement adjustment from the sales of product that took place up until the cutoff date of September 30, 2025. So that's where the adjustment comes from, from actual cash from these settlements. And more importantly, there's extra adjustments from the settlements that haven't been closed yet. We started to close settlements at $875, and we kept going until the latest ones, which were $1,035 just last week. But again, these were shipments material in boats in the water. We were literally shipping everything and selling everything. The other question you asked was about the $33 million. That's essentially middlings which are monetized their bids out. We are waiting to work out on logistics. The profit varies significantly on logistics because we have $100,000 at the port. That is simply $40 to China. $120 minus $40, that's net profit, pure profit, no cost associated with it. Then we have 850,000 tonnes of those middlings' high purity with chemical structure intact at the plant. The logistic costs there are different because we need to truck it to port. So what we're working on is to thinking through berthing the biggest ships we can obtain and therefore, lower the shipping cost to perhaps $25, $30, so that $120 minus $70 of logistics back-to-back plant to China. So essentially 2 different costs of logistics. These products are 0 cost to produce because they are middlings or what we call dry stacked high-grade lithium tailings. And that's the sustainability advantage. We are able to monetize it to a net of USD 33 million, which is a considerable sum. It's equivalent to a boat or a bit more actually, pure profit.

[Operator Instructions] Our next question comes from [ Olin Chen ]. Could you please clarify the expected lithium concentrate production volume for the 4Q 2025 based on your current operational plans and the ramp-up schedule.

Yes, we're not there yet. I answered a similar question. We issued guidance for the first quarter '26. And as soon as we wrap up the -- what we call the mobilization curve in terms of the scale of the large equipment being made available to us, it could vary from 60-tonne trucks to up to 95-tonne trucks, which is a significant increase from the small [Technical Difficulty] trucks we were [Technical Difficulty] 75-ton truck can move twice much material than a 40-tonne truck, a 60-tonne truck could move 50% more material. A 95 to 120-tonne truck, same access size can move 3x more material. Cost, not that dissimilar because it's diesel, one driver instead of -- I mean, it's 4 drivers per equipment. So we are decreasing the number of men involved, consumption of diesel, not that dissimilar. So overall, structurally lowering the cost of this operation. And this is the guidance that we plan to provide in detail as soon as we wrap up mobilization schedule for the equipment, which is currently taking place. I was in China for 2 weeks, just go back 1.5 days ago. And we're making progress in strides on that front. And we're delighted with the support we received from manufacturers, clients because we're pillars of 3 global supply chains actually, Europe, Asia and China.

Thank you. This does conclude the Q&A section. I'll now return the floor to our CEO, Ana Cabral, for her final remarks. Please, go ahead, Ana.

Well, we're very optimistic about 2026. It's been a year where volatility dominated the conversation. It's consensus now where lithium is headed. Now what's important to highlight is lithium is a commodity like any other, meaning prices will be where they are. We're not talking about price spikes. We're talking about prices being at $1,000, $1,100, which for low-cost producers such as Sigma with current plant gate costs of around $350 normalized is a fantastic operating environment. And so the key is to continue to be a low-cost producer. Hence, our efforts in upgrading our mining operations to match the exceptional industrial operations we have achieved throughout this year. So thank you all for listening. Thank you all for being with us on our journey, and we're going to be open for welcoming you all through my colleague, Anna Hartley, who is heading Investor Relations, and we'll be visiting some of you through conference calls in the next couple of days throughout the world.

Thank you. This does conclude the third quarter of 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website at www.sigmalithiumresources.com. You can disconnect from now on and have a wonderful day.