SGML 6-K
Sigma Lithium Corp (SGML)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2026
Commission File Number: 001-40786
Sigma
Lithium Corporation
(Translation of registrant's name into English)
181,
Bay Street, Suite 4400
Toronto, Ontario, M5J 2T3, Canada
(Address of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [X]
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Sigma Lithium Corporation | ||
| (Registrant) | ||
| Date: May 15, 2026 | /s/ Ana Cristina Cabral | |
| Ana Cristina Cabral | ||
| Chief Executive Officer | ||
SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) |
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INTRODUCTION & BACKGROUND
This management’s discussion and analysis dated as of May 15, 2026 (this “MD&A”) of the financial condition and results of operations of Sigma Lithium Corporation constitutes management’s review of the key factors that affected the Company’s financial and operating performance for the three-month ended March 31, 2026. Unless inconsistent with the context, references in this MD&A to “Sigma”, “Sigma Lithium” or the “Company” are references to Sigma Lithium Corporation and its subsidiaries.
This MD&A should be read in conjunction with the audited annual financial statements of the Company for the years ended December 31, 2025 and 2024 together with the notes thereto. Results are reported in United States dollars, unless otherwise noted.
The Company’s financial statements and the financial information contained in this MD&A were prepared in accordance with IFRS Accounting Standards (“IFRS Accounting Standards”) as issued by the International Accounting Standards Board (“IASB”) and the IFRS Interpretations Committee (“IFRIC”).
The Company’s office address is 181, Bay Street, Suite 4400, Toronto, Ontario, M5J 2T3, Canada. The Company’s common shares (“Common Shares”) trade under the symbol “SGML” in the United States on Nasdaq and in Canada on the TSX Venture Exchange (“TSXV”). Additionally, Brazilian Depositary Receipts (“BDRs”) trade under the symbol “S2GM34” in Brazil on the B3 exchange.
Further information about the Company and its operations, including the financial statements referred to above and the Company’s annual information form, is available on the Company’s website at www.sigmalithiumcorp.com, at www.sedarplus.ca (SEDAR) and at www.sec.gov (EDGAR).
The information herein should be read in conjunction with the technical report titled “Grota do Cirilo Lithium Project Araçuaí and Itinga Regions, Minas Gerais, Brazil, dated March 31, 2025, with an effective date of January 15, 2025, (the “Technical Report”), for resource and reserve estimates. The Technical Report is compliant with the National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).
The Technical Report includes information about the Company’s wholly-owned Grota do Cirilo lithium operations (the “Operations”) in Brazil, such as: (i) the mineral reserve and resource estimates for the Xuxa deposit (“Phase 1”), the Barreiro deposit (“Phase 2”) and the Nezinho do Chicão deposit (“Phase 3” and together with Phase 2, "Phase 2 & 3”); (ii) the results of the updated feasibility study on Phase 1 (the “Phase 1 FS”); and (iii) the results of the preliminary feasibility study on Phase 2 and 3 (the “Phase 2 and 3 PFS”).
On January 1, 2025, the Company elected to change its presentation currency from Canadian dollars (“CAD”) to United States dollars (“US$”). This change was made to better reflect the Company’s business operations and to enhance the comparability of its financial results with those of other publicly traded companies in the mining industry. The change in presentation currency has been applied retrospectively, and comparative financial information has been restated, such as US$ has always been the Company’s presentation currency, in accordance with IAS 21 and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.
The figures in this MD&A presented in United States dollars are referred herein as “$”, “US$” or “USD” and the figures presented in Brazilian Reais are denoted as "R$".
Readers should refer to, and carefully consider, the sections below titled “Financial Risk Factors”, “Cautionary Note Regarding Forward-Looking Information” and “Cautionary Note Regarding Mineral Reserve and Mineral Resource Estimates”.
OUR BUSINESS
Sigma Lithium is a commercial producer of high purity, environmentally sustainable, lithium oxide concentrate. The Company’s existing operations represent one of the largest hard rock lithium mining and beneficiation complexes in the world. Sigma Lithium´s operations are located in the municipalities of Araçuaí and Itinga, in the Jequitinhonha Valley, in the northeastern part of the state of Minas Gerais, Brazil. The Company owns 100% of assets indirectly through its wholly-owned subsidiary Sigma Mineração S.A. (“Sigma Brazil”), which include operating assets and a leasehold area comprised of 29 mineral rights (which include mining concessions, applications for mining concessions, exploration authorizations and applications for mineral exploration authorizations) spread over 185 km2, located within a broader 19,000-hectare land package held by Sigma Brazil (containing the Grota do Cirilo, Sao José, Genipapo and Santa Clara properties).
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| 1SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Sigma Lithium’s operations are vertically integrated, with the Company’s mine supplying spodumene bearing material to its lithium production and processing plant (the “Greentech Industrial Plant”). The Greentech Industrial Plant is designed and operated to produce a high purity lithium oxide concentrate (“Green Lithium”) in an environmentally friendly way through a fully automated and digital dense medium separation (“DMS”) technology process, engineered to the specifications of the Company’s customers in the rapidly expanding lithium-ion battery supply chain for electric vehicles (“EVs”) and energy storage systems.
Sigma Lithium is taking a phased approach to a planned expansion of its operations. Phase 1 production at its mine and Greentech Industrial Plant commenced in April 2023. At a production capacity of 270,000 tonnes per annum of 5% lithium oxide concentrate, Phase 1 has positioned the Company as a globally relevant, Tier-1 lithium oxide concentrate producer. Sigma Lithium issued a Final Investment Decision (“FID”) on its Phase 2 project on April 1, 2024. Phase 2 would take consolidated capacity to 520,000 tonnes per annum of 5% lithium oxide concentrate. The existing infrastructure built with the Phase 1 mine and Greentech Industrial Plant is expected to support two additional production lines, with each of the two planned phases of expansion designed to follow a similar flowsheet as demonstrated in Phase 1.
The Sigma Lithium Greentech Industrial Plant also produces tailings that consist of a low-grade, high-purity, zero-chemical, hyperfine by-product (“Green By-Products”) with approximately 1.0% lithium oxide (“Li2O”) content. Provided lithium market conditions are favorable, these Green By-Products can be sold either as high purity lithium fines. Alternatively, they can be sold as an input for different industries. In addition, from time to time, the Company may commercialize intermediate lithium oxide concentrate products with lithium oxide content between 1% and 5%. These sales strengthen Sigma’s ESG-centric approach, as they result in a “zero tailings” environmental sustainability strategy, minimizing the environmental footprint of tailings storage with a positive ecosystem impact, while also generating an additional revenue stream for the Company.
Since its inception in 2012, the Sigma Lithium’s mission has emphasized environmental, social, and governance (“ESG”) practices to support sustainable development. The Company is actively engaged in social programs that promote sustainable development and inclusion.
FINANCIAL HIGHLIGHTS
For the three-month period ended on March 31, 2026, the Company notes the following financial highlights:
| § | Net sales revenue of $42.3 million. |
| § | Adjusted EBITDA margin of 39.5%. |
| § | Net income of $11.1 million. Total debt down 20.6% year-over-year. |
OPERATIONAL HIGHLIGHTS
Table 1: Summary of Key Phase 1 Operating Metrics (for the three-month period ended in March 31, 2026):
| Key Operating Metrics | Unit | Mar 26 | Dec 25 | Sep 25 | Jun 25 | Mar 25 | Dec 24 | Sep 24 | Jun 24 |
| Production | |||||||||
| Lithium oxide concentrate production(1) | (kt) | 23.6 | 3.0 | 44.0 | 68.4 | 68.3 | 77.0 | 60.2 | 49.4 |
| Sales | |||||||||
| Lithium oxide concentrate (1) | (kt) | 23.6 | 0.0 | 48.6 | 40.3 | 61.6 | 73.9 | 57.5 | 52.6 |
| Grade of lithium concentrate | (%) | 5.0% | N.A. | 5.2% | 5.2% | 5.0% | 5.2% | 5.2% | 5.5% |
| Net sales revenue | ($ million) | 42.3 | 16.9 | 28.5 | 16.9 | 47.7 | 47.3 | 20.9 | 45.9 |
(1)Figures in 1,000 tonnes. Includes lower grade lithium oxide concentrates reclassified as lithium products. For 1Q26, due to a higher volume of lower grade lithium concentrates, shown as the equivalent volume of high grade lithium oxide concentrate (adjusted for 5% lithium oxide content).
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Mining Operations Update
The three-month period ended March 31, 2026, marked the final phase of a restructuring of mining operations that aimed to increase capacity and improve efficiency by moving to using larger equipment, such as trucks and excavators, and bringing mining operations in-house instead of using a mining contractor. The Company’s primary focus was on the restart and stabilization of mining operations to support and optimize throughput of the Greentech Industrial Plant. This strategic prioritization reflects the need to establish a reliable and executable mining plan, aligned with pit conditions, equipment readiness, and safe operating parameters.
Operational efforts during the period were concentrated on:
| • | Revalidating mine plans to ensure alignment with executable sequencing, access, and working space constraints; |
| • | Coordinating contractor mobilization across drilling, blasting, and load-and-haul activities; |
| • | Establishing operational readiness, including fleet deployment, operator training, and control room systems integration; and |
| • | Strengthening governance, safety protocols, and daily performance monitoring to support a sustainable ramp-up. |
As a result, the Company is progressing a controlled restart of mining activities, with production ramp-up following a phased and operationally disciplined approach.
Greentech Industrial Plant Update
During the three months ended March 31, 2026, the Greentech Industrial Plant successfully transitioned from a maintenance-focused period, positioning the plant for increased throughput in subsequent quarters.
The Company executed a series of critical plant readiness initiatives. All works were completed ahead of schedule and within budget, reinforcing execution discipline and operational preparedness.
As a result of these efforts, the plant achieved its first intake of fresh run-of-mine ore, a key milestone supporting the broader mining restart.
Production for the quarter derived from a combination of fresh ore processing, retreatment of rejects, and ultrafines, demonstrating the plant’s ability to operate flexibly while transitioning feed sources.
The plant is now well-positioned to ramp up production in line with mining activity, with improved reliability, efficiency, and operational confidence following the completion of these readiness programs.
Phase 2 Development Progress
The restart and stabilization of mining operations ensure a strong and reliable foundation for the Phase 2 expansion. The Company continues to target the progression of long lead items with the objective of enabling construction commencement in 2026, subject to final alignment of operational readiness and investment timing.
The Company will continue to actively refine the Phase 2 timeline in line with operational progress, while maintaining readiness to advance critical path activities in accordance with the original development plan.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Table 2: Uses of Cash Analysis for Phase 2 Construction
| Capex (000 USD) | Phase 1 (actual) | Phase 2 (budget) |
| Mine | 7,337 | - |
| Industrial site construction | 16,600 | 16,454 |
| Industrial plant | 64,357 | 62,128 |
| Environmental | 11,775 | 10,961 |
| R&D engineering design | 17,222 | 5,029 |
| Construction management | 9,028 | 6,398 |
| (=) Construction capex (*) | 126,319 | 100,970 |
| Construction addition | - | 6,536 |
| (=) Total construction capex | 126,319 | 107,506 |
| Others | 5,584 | (149) |
| (=) Total capex | 131,903 | 107,357 |
Licensing Updates
On December 21, 2024, Sigma Lithium obtained the Preliminary License, the Installation License, and the Operating License (“LP", “LI” and “LO”, respectively) for Mine 2, which is the Barreiro mine. The approval was unanimous by the State Environmental Policy Council (“COPAM”), the board responsible for voting and awarding environmental licenses in the State of Minas Gerais, including the votes of non-governmental organizations representatives. This milestone enables Sigma Lithium to expand its mineral lithium production capacity to up to 5.5 million tonnes per year.
On January 31, 2024, Sigma Lithium was awarded its LP, LI and LO to install and operate its second Greentech Industrial Plant by the State of Minas Gerais. The Company, once again, received unanimous approval from all board members of the COPAM, including the board members representing the NGOs. The obtainment of the LP, LI and LO for Sigma Lithium’s second Greentech Industrial Plant allows the Company to further expand its industrial beneficiation and processing capacity of lithium minerals to up to a total of 3.7 million tonnes per year.
On February 9, 2026, the National Mining Agency (“ANM”) confirmed that the mining concession application for the Barreiro mine ("Mine 2") was in compliance with all applicable regulatory requirements.
ESG & SUSTAINABILITY HIGHLIGHTS
Sigma Lithium is committed to leading the way in socially and environmentally sustainable lithium. The Company’s approach to sustainability reflects not only the Company´s regulatory obligations, but also the evolving expectations of the Sigma Lithium’s stakeholders, including customers, investors, local communities, employees, and public institutions.
Health & Safety
In the three months to March 31, 2026, the Company recorded a zero total injury frequency rate (TRIFR - or number of injuries, excluding fatalities, requiring medical treatment per million hours worked). As of March 31, 2026, Sigma Lithium completed 968 consecutive days without a Lost Time Injury (LTI).
Environmental Programs
Sigma Lithium’s production process is designed to maximize sustainability and minimize environmental impacts, with the use of 100% renewable electricity, 100% water recycling, zero tailings dams and zero use of hazardous chemicals. The Company runs several environmental programs. Some of the key programs are outlined below.
Land use and biodiversity management:
| § | Conservation of Permanent Preservation Areas (APP) and Legal Reserves |
| § | Flora and Fauna Rescue Program |
| § | Degraded Area Recovery Program |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Control of pollution and waste:
| § | Water Quality Monitoring |
| § | Air Quality Preservation |
| § | Noise and Vibration Control |
Social Programs
Sigma Lithium runs several community outreach programs, which include holding monthly meetings with local communities and other structured initiatives. The Company also runs voluntary social programs, some of which are outlined below.
“Fundo Dona de Mim” Microcredit Program
The Fundo Dona de Mim microcredit program was launched in partnership with Brazil´s most prominent support organization for women, Grupo Mulheres do Brasil, with the aim of promoting female entrepreneurship in Sigma Lithium’s local communities. The program has benefited local women with small businesses in the areas of food, crafts, clothing and services.
Zero Drought Program
Under this program, Sigma Lithium has built small rainwater capture structures in the local municipalities of Araçuaí and Itinga, benefiting small-scale farmers. The reservoirs store water for the irrigation of crops during periods of drought.
Water for All Program
Sigma Lithium provides drinking water to households in the company’s local communities through a partnership with the municipalities of Araçuaí and Itinga. Sigma Lithium donated water tanks and funds water deliveries by truck from the local water utilities, COPANOR and COPASA, supplying the local communities on a regular basis.
Education that Transforms Program
Sigma Lithium has several initiatives dedicated to the education of children, adolescents and adults in the municipalities of Araçuaí and Itinga, where its operations are located. The Company facilitated the renovation and expansion of three municipal public schools and has ongoing educational programs, including a course for post-basic education for adults, classes on environmental awareness and several initiatives in cultural and sports education through partnerships with the local groups Popular Center for Culture and Development (CPCD), the Bruta Flor Sociocultural Institute and the Escrava Feliciana Cultural Center.
Corporate Governance
| § | On January 13, 2026, Mr. Eugenio de Zagottis stepped down from his position on the Board of Directors of Sigma Lithium (the “Board”) for personal reasons and, on the same date, Ms. Katia Abreu joined the Board. |
| § | The current composition of the Company’s internal committees is as follows: |
| - | Audit, Finance and Risk Committee (formerly named Audit Committee): comprised of Junaid Jafar (Chair), Alexandre Rodrigues Cabral and Katia Abreu, so as to be comprised entirely of Independent Directors. |
| - | People & Governance Committee (formerly named Corporate Governance, Nomination and Compensation Committee): comprised of Marcelo Paiva (Chair), Katia Abreu and Junaid Jafar. |
| - | ESG Committee: comprised of Alexandre Rodrigues Cabral (Chair), Ana Cristina Cabral, and Maria José Gazzi Salum. |
| - | Technical Committee: comprised of Alexandre Rodrigues Cabral (Co-Chair), Vicente Lobo (Co-Chair), Ana Cristina Cabral and Marcelo Paiva. |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
SELECTED FINANCIAL INFORMATION
| Quarterly Information | 2026 | 2025 | 20241 | |||||
| (in $ millions) | Mar 26 | Dec 25 | Sep 25 | Jun 25 | Mar 25 | Dec 24 | Sep 24 | Jun 24 |
| Cash and cash equivalents | 3.9 | 6.2 | 6.1 | 15.1 | 31.1 | 45.9 | 65.6 | 75.3 |
| Total assets | 329.0 | 293.7 | 342.8 | 336.2 | 348.3 | 327.1 | 368.9 | 414.1 |
| Property, plant & equipment | 169.8 | 161.4 | 171.4 | 161.6 | 152.5 | 141.0 | 166.5 | 163.1 |
| Loans and export prepayment | 133.9 | 140.5 | 161.9 | 167.0 | 168.7 | 173.6 | 181.2 | 219.5 |
| Net sales revenue | 42.3 | 16.9 | 28.5 | 16.9 | 47.7 | 47.3 | 20.9 | 45.9 |
| Cost of goods sold | (16.8) | (3.4) | (30.1) | (23.5) | (34.2) | (32.0) | (29.2) | (29.8) |
| Expenses | (10.1) | (27.1) | (10.1) | (12.2) | (3.8) | (36.8) | (15.7) | (29.1) |
| Income tax and social contribution | (4.3) | (10.9) | 0.1 | - | (5.0) | 13.0 | (1.1) | 2.2 |
| Net (loss) / income for the period | 11.1 | (24.5) | (11.6) | (18.8) | 4.7 | (8.5) | (25.1) | (10.8) |
(1) On January 1, 2025, the Company started to present its financial statements in United States dollars as mentioned in “Introduction & Background” section.
Q1 2026 Net income of $11.1 million for the three-month period ended March 31, 2026, derived from net revenues of $42.3 million, offset by $16.8 million in cost of goods sold, $10.1 million in expenses and $4.3 million in income tax and social contribution.
Q4 2025 Net loss of $24.5 million for the three-month period ended December 31, 2025, derived from net revenues of $16.9 million ($14.4 million in final adjustments on previously provisionally priced sales and $2.5 million in shipping service revenues), offset by $3.4 million in cost of goods sold, $27.1 million in expenses and $10.9 million in income tax and social contribution.
Q3 2025 Net loss of $11.6 million for the three-month period ended September 30, 2025, derived from $30.4 million in gross sales revenue and $1.0 million in shipping services, offset by $2.9 million in provisional pricing adjustment, and $30.1 million in cost of goods sold and distribution costs.
Q2 2025 Net loss of $18.8 million for the three-month period ended June 30, 2025, derived from $21.1 million in gross sales revenue and $1.2 million in shipping services, offset by $5.4 million in provisional pricing adjustment, and $23.5 million in cost of goods sold and distribution costs.
Q1 2025 Net income of $4.7 million during the three-month period ended March 31, 2025, consisted of a gross profit of $13.5 million, obtained from $47.7 million in net sales revenue and $34.2 million in cost of goods sold and distribution costs.
Q4 2024 Net loss of $8.5 million during the three-month period ended December 31, 2024, consisted of a gross profit of $15.3 million, obtained from $47.3 million in net sales revenue and $32.1 million in cost of goods sold and distribution costs.
Q3 2024 Net loss of $25.1 million during the three-month period ended September 30, 2024, consisted of net sales revenue $20.9 million as a result of provisional price adjustment due to the decrease in average prices realized during the period and $29.2 million in cost of goods sold and distribution costs.
Q2 2024 Net loss of $10.8 million during the three-month period ended June 30, 2024, consisted of a gross profit of $16.2 million, obtained from $45.9 million in net sales revenue and $29.8 million in cost of goods sold and distribution costs.
Selected consolidated financial information is as follows:
Results of Operations
Three-Month Period Ended March 31, 2026 compared to Three-Month Period Ended March 31, 2025
The following table shows selected financial information for the three-month periods ended March 31, 2026, and March 31, 2025:
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| For the three months ended | ||||
| (in $ 000s) | Mar 26 | Mar 25 | Change | % |
| Net sales revenue | 42,342 | 47,673 | (5,331) | (11.2%) |
| Cost of goods sold | (16,774) | (34,218) | 17,444 | (51.0%) |
| Sales expenses | (307) | (205) | (102) | 49.8% |
| General and administrative expenses | (3,301) | (4,759) | 1,458 | (30.6%) |
| Other operating expenses, net | (8,022) | (896) | (7,126) | (795.3%) |
| Stock-based compensation | (153) | (805) | 652 | (81.0%) |
| Financial expenses, net | 1,632 | 2,938 | (1,306) | (44.5%) |
| Income tax and social contribution | (4,285) | (5,000) | 715 | (14.3%) |
| Net Income for the period | 11,132 | 4,728 | 6,404 | |
The net income for the three-month period ended March 31, 2026, compared to the three-month period ended March 31, 2025, is primarily attributable to:
Net sales revenue
| For the three months ended | ||||
| (in $ 000s) | Mar 26 | Mar 25 | Change | |
| Gross sales revenue – lithium products(1) | 42,191 | 46,070 | (3,879) | |
| Shipping services | - | 3,522 | (3,522) | |
| 42,191 | 49,592 | (7,401) | ||
| Provisional price adjustments | 151 | (1,919) | 2,070 | |
| Net sales revenue | 42,342 | 47,673 | (5,331) | |
(1) Gross sales revenue is reported on a FOB basis.
| § | For the three months ended March 31, 2026, Sigma Lithium reported net sales revenues of $42.3 million due to the sale of lithium products, which included lithium oxide concentrate of various grades or levels of lithium oxide content. |
Expenses by category
The following table summarizes the Company’s expenses by category for the three-month periods ended March 31, 2026, and March 31, 2025.
| (a) | Cost of goods sold |
| For the three months ended | |||
| (in $ 000s) | Mar 26 | Mar 25 | Change |
| Direct Industrial processing and mine cost | (1,513) | (19,826) | 18,313 |
| Transportation | (12,713) | (6,863) | (5,850) |
| Royalties (1) | (1,477) | (1,871) | 394 |
| Other (2) | (484) | (2,467) | 1,983 |
| Depreciation and depletion | (587) | (3,191) | 2,604 |
| Cost of goods sold total | (16,774) | (34,218) | 17,444 |
(1) Applicable Royalties:
i.) 2.0% ‘Compensação Financeira pela Exploração de Recursos Minerais’ (CFEM), a royalty on mineral production levied by the Brazilian government,
payable on the price of minerals extracted from the Lithium Properties.
ii.) A royalty (currently held by LRC LP I, an unrelated party) of 1% of net revenues from sales of minerals extracted from the Lithium Properties.
iii.) Brazilian law requires paying landowner’s royalties equal to 50% of the CFEM, which is described above.
(2) For the period ended March 31, 2026, cost of goods sold includes $66 related to stock-based compensation ($611 for the period ended March 31, 2025).
| § | For the three-month period ended March 31, 2026, the Company reported cost of goods sold of $16.8 million attributable primarily to transportation expenses related to previously sold products and royalties, which are revenue-linked. |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| (b) | Sales and administrative expenses |
| For the three months ended | |||
| (in $ 000s) | Mar 26 | Mar 25 | Change |
| Salaries and benefits | (2,076) | (2,347) | 271 |
| Legal | (528) | (1,377) | 849 |
| Public company expenses | (682) | (892) | 210 |
| Other | (289) | (326) | 37 |
| Depreciation and depletion | (33) | (22) | (11) |
| Sales and administrative expenses total | (3,608) | (4,964) | 1,356 |
| § | Sales and administrative expenses were $3.6 million compared to $5.0 million in the same period of 2025. The decrease was primarily driven by lower service-related expenditures and gains in corporate efficiency. |
Other operating expenses, net
| For the three months ended | |||
| (in $ 000s) | Mar 26 | Mar 25 | Change |
| Idle capacity - industrial plant (1) | (7,652) | - | (7,652) |
| Environmental and social expenses | (748) | (751) | 3 |
| Depreciation | (4) | (7) | 3 |
| Accrual for contingencies | 28 | (72) | 100 |
| Others | 354 | (66) | 420 |
| Other operating expenses, net | (8,022) | (896) | (7,126) |
| § | For the three-month period ended March 31, 2026, net other operating expenses totaled $8.0 million compared to $0.9 million in the same period of 2025, representing an increase of $7.1 million. |
| § | The increase was primarily attributable to the recognition of $7.7 million in expenses related to operational idle capacity at the Company’s Greentech Industrial Plant, which operated below full capacity due to the abovementioned restructuring in mining operations. |
Stock-based compensation
| § | For the three-month period ended March 31, 2026, stock-based compensation expenses included in other operating costs declined to $0.2 million from $0.8 million in the same period in 2025, primarily due to lower grants made during the period and the transfer of stock-based compensation costs for certain operational employees to operating costs. |
Financial expenses, net
| For the three months ended | ||||
| (in $ 000s) | Mar 26 | Mar 25 | Change | |
| Financial income | - | 925 | (925) | |
| Financial expenses | ||||
| Interest accrued on loans and export prepayment | (3,864) | (4,948) | 1,084 | |
| Interest and late payment penalties on taxes | (866) | (1,103) | 237 | |
| Other expenses | (849) | (320) | (529) | |
| Total financial expenses | (5,579) | (6,371) | 792 | |
| Foreign exchange variation on net assets | 7,211 | 8,384 | (1,173) | |
| Financial (expenses) income, net | 1,632 | 2,938 | (1,306) | |
| § | For the three-month period ended March 31, 2026, net financial income totaled $1.6 million compared to $2.9 million in the same period of 2025, representing a negative variance of $1.3 million. |
| § | The reduction was primarily attributable to a decline in foreign exchange gains on net assets at $7.2 million compared with $8.4 million in the prior-year period, reflecting an appreciation of the Brazilian Reais against the U.S. dollar; and lower Interest accrued on loans and export prepayment recognized in the period. |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| § | The Company reported no financial income during the three-month period ended March 31, 2026, compared to financial income of $0.9 million in the prior year period, primarily due to the impact of certain taxes applied to financial income. |
Income tax and social contribution
For the three-month period ended March 31, 2026, income tax and social contribution decreased to $4.4 million from $5.0 million in the same period in 2025 primarily due to a lower impact on deferred taxes originated from unrealized foreign exchange gains.
Non-GAAP Measure
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)
EBITDA is a non-GAAP measure, which is calculated using the net loss for the period and excluding the amounts charged as (i) depreciation and depletion, (ii) financial expenses and (iii) income taxes.
Adjusted EBITDA is meaningful for the stakeholders, since the Company can demonstrate the effective EBITDA, considering the stock-based compensation impact on net loss. Since this item is non-cash, the reconciliation below is necessary and relevant for understanding the Company´s EBITDA measurement, as shown below:
| For the three months ended | ||
| Mar 26 | Mar 25 | |
| Net income for the period | 11,132 | 4,728 |
| (+) Depreciation and depletion | 2,604 | 3,219 |
| (+) Financial expenses, net | (1,632) | (2,938) |
| (+) Income taxes | 4,285 | 5,000 |
| EBITDA | 16,389 | 10,009 |
| (+) Stock-based compensation | 318 | 1,416 |
| Adjusted EBITDA | 16,707 | 11,425 |
| Net income for the period (%)(1) | 26.3% | 9.9% |
| EBITDA (%)(1) | 38.7% | 21.0% |
| Adjusted EBITDA (%)(1) | 39.5% | 24.0% |
(1) Calculated over net revenue of $42,342 for the three-month period ended March 31, 2026, $47,673 for the same period in 2025;
Liquidity and Capital Resources
| Cash Flow Highlights | For the three months ended | |
| (in $000s) | Mar 26 | Mar 25 |
| Cash used in operating activities | (2,737) | (2,186) |
| Cash used in investing activities | (2,910) | (4,793) |
| Cash provided by (used in) financing activities | 2,776 | (10,772) |
| Effect of foreign exchange on cash | 509 | 2,944 |
| Change in cash and cash equivalents | (2,362) | (14,807) |
| Cash & cash equivalents – beginning of period | 6,214 | 45,918 |
| Cash & cash equivalents – end of period | 3,852 | 31,111 |
Liquidity Outlook
| Cash used in operating activities | For the three months ended | |
| (in $000s) | Mar 26 | Mar 25 |
| Cash received from customers | 16,276 | 32,586 |
| Cash used in operating costs | (17,920) | (33,623) |
| Cash used in payment of interest | (1,093) | (1,149) |
| Cash used in operating activities | (2,737) | (2,186) |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
As of March 31, 2026, the Company’s cash and cash equivalents totaled $3.9 million, representing 38.0% decrease from $6.2 million as of December 31, 2025.
Short-term export prepayment trade finance was reduced by $10.0 million to $14.1 million as of March 31, 2026. The total amount of short and long-term debt was $133.9 million as of March 31, 2026.
Operating Activities
For the three-month period ended March 31, 2026, cash used in operating activities was $2.7 million compared to $2.2 million for the same period in 2025. The decline was mainly due to:
| § | An increase in trade accounts receivable of $20.4 million compared with $14.7 million in the same period in 2025; |
| § | Rise in advance to suppliers of $2.9 million compared with a decline of $0.6 million in the same period in 2025, mainly due to the receipt of services and materials paid in advance; and |
| § | Prepayments from customers, which increased by $5.1 million, compared a decrease by $0.3 million in the same period in 2025; |
These were partly offset primarily by the following:
| § | Net income increased to $11.1 million from $4.7 million for the same period in 2025; |
| § | Inventories rose by $6.5 million, compared with $3.4 million in the same period in 2025; |
| § | Suppliers increased by $5.7 million compared with $6.3 million in the same period in 2025, partly due to $2.9 million in exchange rate variation from the appreciation of the Brazilian Real against the US Dollar, which impacted the purchase of materials, equipment, and services in the normal course of business. |
Investing Activities
For the three-month period ended March 31, 2026, the cash used in investing activities was $2.9 million compared to $4.8 million in the same period of 2025, a slight decrease primarily due to $0.8 million in lower additions to geological expenditures and property, plant and equipment, and a drop of $1.0 million in advances for land acquisition.
Financing Activities
For the three-month period ended March 31, 2026, cash provided by financing activities was $2.8 million compared to cash used in financing activities of $10.8 million in the same period of 2025, primarily due to an increase in export prepayment credits of $12.5 million in export prepayment.
Operations and liquidity
These financial statements have been prepared on a going concern basis in accordance with IFRS Accounting Standards. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.'
As of March 31, 2026, Sigma Lithium reported negative working capital of $144,527, which may cast significant doubt on the Company’s ability to continue as a going concern as of that date.
However, based on the Company´s recent operating performance and cash flow generation, management is comfortable with the Company´s ability to continue operating as a going concern as a result of management expectation regarding the realization of the Company´s future cashflows, current strong lithium market conditions, as well as the actions currently being undertaken to successfully execute its business plan, including increasing revenues while managing operating expenses.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
On October 6, 2025, as part of the implementation of the management’s business plan, Sigma Lithium announced a restructuring of its mining operations to increase capacity and improve efficiency by bringing mining operations in-house instead of using a mining contractor and using larger equipment, such as trucks and excavators. With the upgrade, management anticipates being able to markedly improve the Company’s operating margins. During the time the mine was demobilized, the Company’s Greentech Industrial Plant continued to operate, reprocessing tailings.
In December 2025, Sigma Lithium signed an offtake agreement for 70,500 tonnes of high grade lithium oxide concentrate to be supplied during 2026. This agreement provides a working capital revolver of $96 million to be disbursed in fixed monthly installments of $8.0 million. During March 2026, the Company recognized net revenues of $6.8 million in connection with the first delivery of high-grade lithium oxide concentrate under this agreement.
During the first quarter of 2026, the Company recognized net revenue of approximately $35.5 million as a result of the sale of low-grade material (high-purity lithium fines).
In addition, also in the first quarter of 2026, Sigma Lithium signed a three-year long-term offtake agreement for 40,000 tonnes per year of high-grade lithium oxide concentrate to be supplied over a three-year period, totaling 120,000 tonnes, which includes an advance payment of $50 million payable by the end of June 2026.
CURRENT SHARE DATA
Issued and outstanding securities of the Company as at the date of this MD&A were as follows:
| Common shares issued and outstanding | 111,402,979 |
| RSUs | 966,735 |
| Stock options | 128,125 |
| Fully diluted number of common shares | 112,497,839 |
RELATED PARTY TRANSACTIONS
A summary of the related parties to Sigma Lithium is set out below:
| Related Party | Nature of relationship |
| A10 Group |
Comprises entities that paid certain expenses on behalf of Sigma Lithium and were subsequently reimbursed during the period ended March 31, 2026:
(a) A10 Investimentos Ltda is an asset management firm indirectly controlled by Marcelo Paiva, who is a director and Co-Chair of Sigma Lithium and the investment manager of the A10 Investimentos Fundo de Investimento Financeiro em Ações (“A10 Fund”), which is a minority shareholder of the Company; and
(b) A10 Serviços Especializados de Avaliação de Empresas Ltda. (“A10 Advisory”), which is an administrative services firm controlled by Marcelo Paiva, a director and Co-Chair of Sigma Lithium. Sigma Lithium’s Co-Chair and CEO, Ana Cristina Cabral, has a minority interest. |
| Miazga | Miazga Participações S.A is a land administration company in which Ana Cristina Cabral, Sigma Lithium’s Co-Chair and CEO, has an indirect economic interest. |
| Arqueana | Arqueana Empreendimentos e Participações S.A. is a land administration company in which Ana Cristina Cabral, Sigma Lithium’s Co-Chair and CEO, has an indirect economic interest. |
| Tatooine | Tatooine Investimentos S.A. is a land administration company in which Marina Bernardini, an officer of Miazga and Sigma Brazil, has an indirect economic interest. |
| Instituto Lítio Verde (“ILV”) | Instituto Lítio Verde is a non-profit entity which has as directors Lígia Pinto, an officer of Sigma Lithium, and Marina Bernardini, an officer of Sigma Lithium, Miazga and Sigma Brazil. |
| Key management personnel | Includes the Company’s directors and executive management team and the executive management team of Sigma Brazil. |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Transactions with related parties
Reimbursement of company expenses paid by A10 Group: Certain expenses attributable solely to Sigma Lithium during the period were paid by the A10 Group on the Company’s behalf and were later reimbursed to A10 Group at cost by the Company, with no profit element. Such expenses were limited to: (i) the cost of three administrative personnel 100% allocated to Sigma Lithium; and (ii) health insurance expenses of certain individuals formerly related to the A10 Group and who are now exclusively at Sigma Lithium, which continue to be paid by A10 Group. For the avoidance of doubt, these amounts represent a pass-through reimbursement of Sigma Lithium's own expenses and do not constitute revenue, income, or any form of compensation to A10 Group. Marcelo Paiva, who indirectly controls A10 Group and is also Co-Chair and a director of Sigma Lithium, does not receive any compensation or benefits in any way as part of these reimbursements.
Leasing Agreements: The Company has right-of-way lease agreements with Miazga and Arqueana relating to access to Sigma Lithium’s industrial facilities .
Royalties: Pursuant to Brazilian legislation, royalties are payable to landowners whose properties are subject to mineral exploration activities. The amount of these royalties are equivalent to 50% of the value paid as Financial Compensation for the Exploration of Mineral Resources (CFEM) to Brazil’s National Mining Agency (Agencia Nacional de Mineração). As of March 31, 2026, the Company recognized an amount payable to Miazga of $1,629 ($1,325 as of December 31, 2025).
Accounts receivable (Tatooine): On April 20, 2023, Sigma Brazil entered into a loan facility agreement with Tatooine, to fund the purchase by Tatooine of several properties located in areas of interest of the Company. The loan facility agreement provides for loans of up to $12,000. On November 14, 2024, this limit was amended to $15,000, bearing a 15% p.a. interest rate. The loan facility agreement is set up so that loan amounts can be made available via requests made by Tatooine to Sigma Brazil, where the amounts for the acquisition of each property and its corresponding expected costs and expenses are specified. Loans granted by Sigma Brazil to Tatooine under this loan facility agreement totaled $20,358 as of March 31, 2026 ($18,542 as of December 31, 2025), of which $13,834 represents loan disbursements and $6,524 ($5,304 as of December 2025) corresponds to capitalized interest.
Intercompany loan agreement (Tatooine): During the year of 2025 Sigma entered into an intercompany loan agreement with Tatooine, bearing an interest rate of 12% p.a. As of March 31, 2026 the balance of loans under this agreement was $7,304 ($5,653 as of December 31, 2025).
Instituto Lítio Verde (“ILV”): Sigma Brazil and ILV are parties in the development of Sigma Lithium’s operations, which have a high degree of positive impact in the communities surrounding the Company’s operations in Vale do Jequitinhonha. ILV’s purpose is to promote the well-being and the development of those communities.
| Description | Mar 26 |
Three Months Ended, Mar 26 |
Dec 25 |
Three Months Ended, Mar 25 | ||||||
| Pre-payments / Receivable | Accounts payable / Debt | (Expenses) / Income | Pre-payments / Receivable | Accounts payable / Debt | (Expenses) / Income | |||||
| A10 Group | ||||||||||
| Reimbursement to A10 Group for expenses incurred on behalf of Sigma Lithium | - | - | (96) | - | - | (93) | ||||
| Miazga | ||||||||||
| Lease agreements | - | 800 | (76) | - | 606 | (25) | ||||
| Royalties | 1,629 | (230) | - | 1,325 | (523) | |||||
| Arqueana | ||||||||||
| Lease agreements | - | 1,727 | (95) | - | 1,381 | (35) | ||||
| Tatooine | ||||||||||
| Suppliers | - | 152 | - | - | 155 | - | ||||
| Loan to related party - Liability | - | 7,304 | (179) | - | 5,653 | - | ||||
| Loan to related party - Asset | 20,358 | - | 805 | 18,542 | - | 822 | ||||
| Instituto Lítio Verde | ||||||||||
| Accounts payable | - | 1,859 | (325) | - | 1,453 | (416) | ||||
| Total | 20,358 | 13,471 | (196) | 18,542 | 10,573 | (270) | ||||
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Key management personnel
| Three months ended | ||
| Mar 26 | Mar 25 | |
| Stock-based compensation, included in operating expenses | 144 | 306 |
| Salaries, benefits and director's fees, included in general and administrative expenses | 234 | 209 |
| Total | 378 | 515 |
Key management includes the directors of the Company, the executive management team and senior management at Sigma Lithium.
FINANCIAL RISK FACTORS
The Company is exposed to a variety of financial risks such as credit risk and liquidity risk, including interest rate risk and foreign currency risk.
The fair values of cash and cash equivalents, accounts payable, export prepayment trade finance and credits from related parties approximate their carrying amounts due to the short-term maturity of these financial instruments.
Credit Risk
Sigma Lithium has a credit risk management policy, which aims to minimize the possibility of not receiving sales made and amounts invested, deposited or guaranteed by financial institutions and counterparties, through analysis, granting and management of credits, using quantitative and qualitative parameters.
The Company manages its credit risk by receiving in advance a substantial portion of its sales or by having receivables guaranteed by letters of credit.
Credit granted to financial institutions is used to accept guarantees and invest cash surpluses.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Sigma Lithium’s approach to managing liquidity is to ensure that the Company will have sufficient liquidity to meet liabilities when due.
Sigma Lithium’s management of cash is focused on funding ongoing capital needs for operating the Greentech Industrial Plant, developing the Company’s growth opportunities (including Phase 2) and for general corporate expenditures. Management intends to use cash generated by its operating activities to meet its obligations.
The Company continuously monitors its cash outflows and seeks opportunities to minimize all costs, to the extent possible, as well as its sales and administrative expenses.
| Contractual obligations | Up to 1 year | 1-3 years | 4-5 years | More than 5 years | Total |
| (in $000s) | |||||
| Suppliers | 59,018 | - | - | - | 59,018 |
| Loans and export prepayment | 129,422 | 9,278 | 6,389 | 100 | 145,189 |
| Lease liabilities | 1,221 | 1,056 | 1,007 | 688 | 3,972 |
As of March 31, 2026, out of the total $59,018 due to suppliers, $29,603 (50.1%) relates to amounts disputed by the Company, primarily in connection with services that were either not provided at all or were not provided in accordance with the applicable contractual terms. These liabilities are under dispute and were assessed as possible, with any potential cash outflow beyond 12 months. However, to ensure compliance with the IFRS Accounting Standards, Sigma Lithium maintained the balance under suppliers, pending the conclusion of any reassessment by the Company’s legal counsel. As of December 31, 2025, out of the total $49,524 due to suppliers, $25,678 (51.8%) related to disputed amounts.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
The Company restructured mining operations to increase efficiency, and this involved a change of some suppliers. The amounts in dispute are partly the result of a mine demobilization made at the start of the restructuring in October 2025, which was followed by a remobilization in January 2026 using a separate set of suppliers.
Interest Rate Risk
This risk can arise from short and long-term financial investments, financing and export prepayment, which may be linked to fixed and floating interest rates, such as rates based on the CDI, SELIC and SOFR, exposing these financial liabilities to interest rate fluctuations, as shown in the sensitivity analysis framework below.
The Company considered the scenario most probable and scenarios 1 and 2 of changes in interest rates volatility.
The interest rates used in the sensitivity analysis in their respective scenarios are shown below together with
the effects on the profit and loss balances for the period ended March 31, 2026:
| Notional | Probable scenario (1) | Scenario 1 | Scenario 2 | ||
| Liabilities | |||||
| Rate | 14.75% p.a. | 14.50% p.a. | 15.95% p.a. | 17.40% p.a. | |
| BDMG | Selic (+10% and +20%) | 17,252 | 32 | (155) | (342) |
| Rate | 3.54% p.a. | 3.54% p.a. | 3.63% p.a. | 3.72% p.a. | |
| Export prepayment agreement | SOFR (+2.5% and +5.0%) | 100,000 | - | (66) | (133) |
(1) Sensitivity analysis of the scenario probable was measured using as reference the rates on February 23, 2026.
Foreign Currency Risk
The exposure arises from the existence of assets and liabilities generated or denominated in US Dollar, since the Company's functional currency is the Brazilian Real. The consolidated exposure as of March 31, 2026 was as follows:
| Description | Mar 26 |
| Canadian dollar | |
| Cash and cash equivalents | 15 |
| Suppliers | (6,595) |
| Other current liabilities | (5) |
| Total | (6,585) |
| United States dollar | |
| Cash and cash equivalents | 3,712 |
| Trade accounts receivable | 21,883 |
| Cash held as collateral | 11,253 |
| Suppliers | (3,884) |
| Prepayment from customer | (12,531) |
| Interest on export prepayment agreement | (3,514) |
| Export prepayment agreement | (113,800) |
| Total | (96,881) |
We present below the sensitivity analysis for foreign exchange risks. The Company considered a probable scenario (1) and scenarios 1 and 2 as 10%, and 20%, respectively, of deterioration for the volatility of the currency, using as reference the exchange rate on March 31, 2026.
The currencies used in the sensitivity analysis and its scenarios are shown below:
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| Mar 26 | ||||
| Currency | Exchange rate | Probable scenario (1) | Scenario 1 (+/-10%) | Scenario 2 (+/-20%) |
| CAD (+) | 3.7407 | 3.6654 | 4.0319 | 4.3985 |
| CAD (-) | 3.7407 | 3.6654 | 3.2989 | 2.9323 |
| USD (+) | 5.2194 | 4.9886 | 5.4875 | 5.9863 |
| USD (-) | 5.2194 | 4.9886 | 4.4897 | 3.9909 |
The effects on profit and loss, considering the probable scenario and scenarios 1 and 2 are shown below:
| Mar 26 | ||||
| Notional | Probable scenario (1) | Scenario 1 | Scenario 2 | |
| Canadian dollar-denominated(+) | (6,585) | 135 | (476) | (985) |
| Canadian dollar-denominated(-) | (6,585) | 135 | 882 | 1,815 |
| U.S. dollar-denominated(+) | (96,881) | 4,482 | (4,733) | (12,412) |
| U.S. dollar-denominated(-) | (96,881) | 4,482 | 15,745 | 29,823 |
(1) Sensitivity analysis of the probable scenario was measured using as reference the exchange rate, published by the Central Bank of Brazil on April 30, 2026.
Changes in Directors and Management
Except for the changes to the Board noted in the Corporate Governance section of this report, there were no other changes in directors or management during the three-month period ended March 31, 2026.
Litigation Updates
On March 18, 2024, the Company received an Initiation Letter of Arbitration by LG Group subsidiary, LG Energy Solution, Ltd. (“LG-ES”) from the International Centre for Dispute Resolution of the American Arbitration Association. LG-ES is alleging that Sigma Lithium is in breach of certain provisions in connection with the term-sheet dated October 5, 2021, relating to offtake arrangements for the purchase of lithium oxide concentrate from the Company. The Term-Sheet was subject to, amongst other things, completion of the negotiation of definitive written agreements between the parties. The Company believes the claims are without merit. The legal counsel of the Company has formally attributed the probability of LG prevailing in this arbitration as possible. The amount involved is currently undetermined.
On October 31, 2025, Fagundes Construção e Mineração S.A., a former mining contractor, initiated an arbitration against Sigma Mineração S.A. The discussion is related to the performance of the parties under the services agreement that has been terminated. The Company believes the claims are without merit. The Company is preparing its defense and counterclaim with the support of its legal counsel. The probability of loss is possible.
As of March 31, 2026, the Company was involved in civil and labor lawsuits totaling $25,347 for which the likelihood of loss has been assessed as possible by Sigma Lithium’s external legal advisors, and $5,369 for cases assessed as probable losses, for which accounting provisions have been recognized.
DISCLOSURE, CONTROLS & PROCEDURES
The CEO and CFO of the Company are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) for the Company as defined under National Instrument 52-109 (NI 52-109) issued by the Canadian Securities Administrators and in Rule 13a-15d - 15(e) under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The purpose of the DC&P is to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation and include controls and procedures designed to ensure that information required to be disclosed by an issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is accumulated and communicated to the Company’s management, including its certifying officers, as appropriate, to allow timely decisions regarding required disclosure. The CEO and CFO of the Company concluded that, as a result of material weaknesses in internal controls over financial reporting, the Company’s disclosure controls and procedures were not fully effective.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
Considering these material weaknesses, management performed additional analyses and other procedures to ensure that the Company’s consolidated financial statements were prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board. Accordingly, management believes that the Company’s consolidated financial statements fairly present, in all material respects, Sigma Lithium’s financial position, results of operations, and cash flows as of and for the periods presented, in accordance with IFRS Accounting Standards.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term defined in NI 52-109 and Rule 13a-, 15d - 15(f) of the Exchange Act. An evaluation of the effectiveness of internal controls over financial reporting was conducted based upon criteria established in Internal Control – Integrated Framework (2013) by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, it was concluded that the Company’s internal controls over financial reporting demonstrated certain material weaknesses, as described below.
A material weakness in internal controls over financial reporting is indicative that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements may not be prevented or detected on a timely basis.
Management has identified the following material weaknesses:
| An ineffective control environment resulting from
not having enough trained personnel with the appropriate skills and knowledge |
| § | An ineffective risk assessment process for identifying risks of material misstatement and evaluating changes that could impact internal control over financial reporting; |
| § | An ineffective internal and external information and communication process to ensure the relevance, timeliness and quality of information used in control activities, including the communication of the Company’s whistleblower policy and the preparation and selection of appropriate methods for communicating external information; |
| § | An ineffective monitoring process to ensure controls are periodically evaluated, results of testing are communicated to senior management and the Board and the control deficiencies are tracked for remediation on a timely basis; and |
| § | An ineffective control activity in place with respect to (i) information technology (ii) the documentation of policies and procedures and (iii) the documentation of control activities to mitigate risks. |
The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis. Therefore, Sigma Lithium concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and that the Company’s internal control over financial reporting was not effective as of December 31, 2025
The Company engaged Grant Thornton Auditores Independentes Ltda. (“Grant Thornton”) to perform an “integrated audit” which encompassed an opinion of the Company’s annual consolidated financial statements as of and for the year ended December 31, 2025, as well as an opinion on the effectiveness of the Company’s Internal Control over Financial Reporting (“ICFR”) as of December 31, 2025. Grant Thornton, the Company’s independent registered public accounting firm, audited the Company's consolidated financial statements and issued an adverse opinion on the effectiveness of ICFR. Grant Thornton‘s attestation report on the Company’s ICFR was incorporated by reference into the Company’s annual report on Form 40-F under the Exchange Act for the year ended December 31, 2025.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
MANAGEMENT’S REMEDIATION PLAN
Sigma Lithium’s efforts to address the material weaknesses mentioned above are ongoing. The Company intends to sustain initiatives aimed at enhancing the internal control environment throughout 2026.
The Company has conducted a comprehensive review of internal control procedures and has been actively pursuing steps to address and remediate the identified material weaknesses, as follows:
| (i) | The use of external consultants to assist in the assessment of internal controls over financial reporting, mapping all existing control deficiencies, defining remediation plans and forming a team responsible for redesigning processes and developing process automation, including those related to accounting and reporting; |
| (ii) | Strengthening the accounting and reporting team by hiring more experienced people and reducing reliance on third parties in accounting, tax and reporting activities; |
| (iii) | Implementing new procedures to enhance accuracy in the interim and annual filings. This includes improving the existing financial statement closing schedule; and |
| (iv) | Enhancing information technology (IT) controls and infrastructure. These efforts include addressing IT general control (ITGC) activities, establishing relevant policies and procedures, and engaging external SAP developers to implement IT system improvements and address gaps in the IT structure. |
Further to the steps to remediate the material weaknesses described above, the Company is pursuing to the following:
| a. | Control environment: The Company is committed to continuously identifying, training, and retaining personnel with the necessary skills and experience in designing, operating, and documenting internal controls over financial reporting. |
| b. | Risk assessment: An enhancement of risk assessment processes, documentation of process understanding, creating flowcharts and identifying process risk points and controls to address them. |
| c. | Information and communication: The Company is enhancing its whistleblower channel to make it more user friendly and stimulate the usage thereof as a tool for important external and internal communication. |
| d. | Monitoring activities: The financial and accounting team is committed to work with external specialists to bring in expertise and expedite the remediation of control deficiencies at the process level during 2026 with a focus on the controls matrix for processes underlying all significant accounts and disclosures. |
| e. | Control activities: The Company is committed to continue to refine control activities to mitigate risks and ensure the achievement of objectives, designing and implementing controls activities and IT general controls over processes to address any identified process risk points. |
Sigma Lithium believes that the Company’s remediation plan will adequately address the identified material weaknesses and bolster internal controls over financial reporting. The Company took steps toward remediation during the 2025 fiscal year and is working towards having its internal controls environment free of material weaknesses by the end of fiscal year 2026.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING AND REMEDIATION
As described above under Remediation Efforts to Address the “Material Weaknesses”, we are taking actions to remediate the material weaknesses in our internal control over financial reporting. Some changes were implemented in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the year ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
CRITICAL ACCOUNTING ESTIMATES
Please refer to the Company’s annual MD&A for the year ended December 31, 2025, for Estimation Uncertainty and Accounting Policy Judgments disclosure. The nature and amount of significant estimates and judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty as well as accounting policies applied during the three months ended March 31, 2026, were substantially the same as those that management applied to the consolidated financial statements as at and for the year ended December 31, 2025.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Standards issued effective in 2026
| § | IFRS 9 – Financial Instruments and IFRS 7 – Financial Instruments: Disclosures |
The amendments to IFRS 9 – Financial Instruments and IFRS 7 – Financial Instruments: Disclosures aim to enhance the clarity of classification, measurement, and disclosure of financial instruments. The updates consist of:
| - | Classification of Financial Instruments: The new guidelines focus on the contractual characteristics of financial instruments, particularly those related to Environmental, Social, and Governance (ESG) factors, which influence their measurement, either at amortized cost or fair value. |
| - | Provision for Expected Losses: IFRS 9 now adopts a model based on expected losses, replacing the previous model that depended on losses incurred. This shift reflects a more proactive approach to risk management. |
| - | Electronic Settlement of Liabilities: The amendments clarify the recognition of financial assets and liabilities when settled through electronic payment systems. A new accounting policy will also allow for early recognition of financial liabilities under specific conditions. |
| - | Disclosure Transparency: More detailed disclosures will be required, particularly for financial instruments with contingent features related to sustainability goals. This aims to increase transparency and allow investors to better understand Company’s investments. |
The Company assessed this standard and concluded that it did not have a material impact on the financial statements.
Standards issued but not yet effective in 2026
| § | Presentation and Disclosure in Financial Statements – IFRS 18 |
The International Accounting Standards Board (IASB) has issued new requirements for the presentation and disclosure of information in general purpose financial statements to ensure they provide relevant and faithful representations of an entity's assets, liabilities, equity, income, and expenses. The objective is to offer financial information that helps users assess the prospects for future net cash inflows and evaluate management’s stewardship of the entity’s economic resources.
These financial statements comply with IFRS Accounting Standards, adhering to both general and specific requirements for presenting information in the statement of financial performance, the statement of financial position, and the statement of changes in equity. The requirements include aggregation and disaggregation of information to ensure clarity, a comprehensive statement of profit or loss, and the presentation of totals and subtotals for key financial metrics. This standard, issued in April 2024, is effective for annual periods beginning on or after January 1, 2027, and the Company is assessing the impacts arising from this standard on the presentation and disclosures in the financial statements
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this MD&A, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the financial performance or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
CAPITAL MANAGEMENT
Sigma Lithium’s objective in managing its capital is to ensure that the Company is able to safeguard its ability to continue as a going concern, continue its operations, and has sufficient capital to be able to meet its strategic objectives, including the continued exploration and development of its existing mineral projects and the identification of additional projects. The Company’s primary source of capital is derived from equity issuances. As of March 31, 2026, capital consisted of equity attributable to common shareholders of $72,396 ($56,630 as of December 31, 2025). The Company has no externally imposed capital requirements and manages its capital structure in accordance with its strategic objectives and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue new shares in the form of private placements and/or secondary public offerings. There has been no change in the Company’s approach to capital management since the end of the three-month period ended March 31, 2026.
QUALIFIED PERSON
Please refer to the Company’s National Instrument 43-101 technical report titled “Grota do Cirilo Lithium Project Araçuaí and Itinga Regions, Minas Gerais, Brazil” issued March 31, 2025, which was prepared for Sigma Lithium by Marc-Antoine Laporte, P.Geo, SGS Canada Inc., William van Breugel, P.Eng, SGS Canada Inc., Johnny Canosa, P.Eng, SGS Canada Inc., and Joseph Keane, P. Eng., SGS North America Inc. (the “Technical Report”). The Technical Report is filed on SEDAR+ and is also available on the Company’s website.
The independent qualified person (QP) for the Technical Report’s mineral resource estimates is Marc-Antoine Laporte P.Geo., M.Sc., of SGS Group in Quebec, Canada. Mr. Laporte is a Qualified Person as defined by Canadian National Instrument 43-101.
The qualified person (QP) for the technical information contained herein is Mr. Alexandre Rodrigues Cabral, P. Eng., member of the Ordre des Ingenieurs du Quebec (OIQ, membership number 105796), who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Cabral is not considered an independent QP under NI 43-101 as he is a Sigma Lithium Director and Chair of the Company’s Technical Committee.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain information and statements in this MD&A may constitute “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of U.S. securities legislation (collectively, “Forward-Looking Information”), which involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such Forward-Looking Information. All statements, other than statements of historical fact, may be Forward-Looking Information, including, but not limited to, mineral resource or mineral reserve estimates (which reflect a prediction of the mineralization that would be realized by development). When used in this MD&A, such statements generally use words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate” and other similar terminology. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this MD&A. Forward-Looking Information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and does not necessarily provide accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the Forward-Looking Information, which is based upon what management believes are reasonable assumptions, and there can be no assurance that actual results will be consistent with the Forward-Looking Information.
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
In particular (but without limitation), this MD&A contains Forward Looking Information with respect to the following matters: statements regarding anticipated decision making with respect to the Company; capital expenditure programs; estimates of mineral resources and mineral reserves; development of mineral resources and mineral reserves; government regulation of mining operations and treatment under governmental and taxation regimes; the future price of commodities, including lithium; the realization of mineral resource and mineral reserve estimates, including whether mineral resources will ever be developed into mineral reserves; the timing and amount of future production; currency exchange and interest rates; expected outcome and timing of environmental surveys and permit applications and other environmental matters; potential positive or negative implications of change in government; the Company’s ability to raise capital and obtain project financing; expected expenditures to be made by the Company on its properties; successful operations and the timing, cost, quantity, capacity and quality of production; capital costs, operating costs and sustaining capital requirements, including the cost of construction of the processing plant; and competitive conditions and the ongoing uncertainties and effects in respect of the military and global conflicts.
Forward-Looking Information does not take into account the effect of transactions or other items announced or occurring after the statements are made. Forward-Looking Information is based upon a number of expectations and assumptions and is subject to several risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those disclosed in or implied by such Forward-Looking Information. With respect to the Forward-Looking Information, the Company has made assumptions regarding, among other things:
| § | General economic and political conditions (including but not limited to the impact of the continuance or escalation of the military conflict between Russia and Ukraine, the military conflict in Middle East, and other military and global conflicts, and the multinational economic sanctions in relation to such conflicts); |
| § | Stable and supportive legislative, regulatory and community environment in the jurisdictions where the Company operates; |
| § | Stability and inflation of the Brazilian Real, including any foreign exchange or capital controls which may be enacted in respect thereof, and the effect of current or any additional regulations on the Company’s operations; |
| § | Demand for lithium, including that such demand is supported by growth in the electric batteries market; |
| § | Estimates of, and changes to, the market prices for lithium; |
| § | The impact of increasing competition in the lithium business and the Company’s competitive position in the industry; |
| § | The Company’s market position and financial and operating performance; |
| § | The Company’s estimates of mineral resources and mineral reserves, including whether mineral resources will ever be developed into mineral reserves; |
| § | Anticipated timing and results of exploration, development and construction activities; |
| § | Reliability of technical data; |
| § | The Company’s ability to maintain full capacity commercial production, including that the Company will not experience any materials or equipment shortages, any labor or service provider outages or delays or any technical issues; |
| § | The Company’s ability to obtain financing on satisfactory terms to develop its projects, if required; |
| § | The Company’s ability to obtain and maintain mining, exploration, environmental and other permits, authorizations and approvals; |
| § | The timing and outcome of regulatory and permitting matters; |
| § | The exploration, development, construction and operational costs; |
| § | The accuracy of budget, construction and operations estimates for the Company; |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| § | Successful negotiation of definitive commercial agreements; and |
| § | The Company’s ability to operate in a safe and effective manner. |
Although management believes that the assumptions and expectations reflected in such Forward-Looking Information are reasonable, there can be no assurance that these assumptions and expectations will prove to be correct. Since Forward-Looking Information inherently involves risks and uncertainties, undue reliance should not be placed on such information.
In addition, Forward Looking Information with respect to the potential outlook and future financial results contained in this MD&A is based on assumptions noted above and about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information available as at the date of such information. Readers are cautioned that any such information should not be used for purposes other than for which it is disclosed.
The Company’s actual results could differ materially from those anticipated in any Forward-Looking Information as a result of various known and unknown risk factors, including (but not limited to) the risk factors referred to under the heading “Financial Risk Factors” in this MD&A. Such risks relate to, but are not limited to, the following:
| § | There can be no assurance that market prices for lithium will remain at current levels or that such prices will improve; |
| § | The market for electric batteries remains underpenetrated in several markets. No assurances can be given for the rate at which this market will continue to develop, which could affect the success of the Company and its ability to expand lithium operations; |
| § | Changes in technology or other developments could result in preferences for other products; |
| § | The imbalance in the lithium market due to an excess of supply from new or existing competitors could adversely affect prices; |
| § | The Company’s financial condition, operations and results of operations are subject to political, economic, social, regulatory and geographic risks of doing business in Brazil; |
| § | Inflation in Brazil, along with Brazilian governmental measures to combat inflation, may have a significant negative effect on the Brazilian economy and, as a result, on the Company’s financial condition and results of operations; |
| § | Violations of anti-corruption, anti-bribery, anti-money laundering and economic sanctions laws and regulations could materially adversely affect the Company’s business, reputation, results of operations and financial condition; |
| § | Corruption and fraud in Brazil relating to ownership of real estate could materially adversely affect the Company’s business, reputation, results of operations and financial condition; |
| § | The Company is subject to regulatory frameworks applicable to the Brazilian mining industry which could be subject to further change, as well as government approval and permitting requirements, which may result in limitations on the Company’s business and activities; |
| § | The Company’s operations are subject to numerous environmental laws and regulations and expose the Company to environmental compliance risks, which may result in significant costs and have the potential to reduce the profitability of operations; |
| § | Physical climate change events and the trend toward more stringent regulations aimed at reducing the effects of climate change could have an adverse effect on the Company’s business and operations; |
| § | The Company’s future production estimates are based on existing mine plans and other assumptions which change from time to time. No assurance can be given that such estimates will be achieved; |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| § | The Company’s capital and operating cost estimates may vary from actual costs and revenues for reasons outside of the Company’s control; |
| § | Insurance may not be available to insure against all such risks, or the costs of such insurance may be uneconomic. Losses from uninsured and underinsured losses have the potential to materially affect the Company’s financial position and prospects; |
| § | The Company is subject to risks associated with securing title, property interests and exploration and exploitation rights; |
| § | The Company is subject to strong competition in Brazil and in the global mining industry; |
| § | The Company may become subject to government orders, investigations, inquiries or other proceedings (including civil claims) relating to securities, labor, environmental and health and safety matters, which could result in consequences material to its business and operations; |
| § | The Company’s mineral resource and mineral reserve estimates are estimates only and no assurance can be given that any particular level of recovery of minerals will in fact be realized or that identified mineral resources, or mineral reserves will ever qualify as a commercially mineable (or viable) deposit; |
| § | The Company’s operations and the development of its projects may be adversely affected if it is unable to maintain positive community relations; |
| § | The Company is exposed to risks associated with doing business with counterparties, which may impact the Company’s operations and financial condition; |
| § | The Company may not be able to secure the supply of key raw materials; |
| § | The Company may not be able to meet the quality requirements of its customers; |
| § | Any limitation on the transfer of cash or other assets between the Company and the Company’s subsidiaries, or among such entities, could restrict the Company’s ability to fund its operations efficiently or the ability of its subsidiaries to distribute cash otherwise available for distributions; |
| § | The Company is subject to risks associated with its reliance on consultants and others for mineral exploration and exploitation expertise; |
| § | The Company's operations are subject to the high degree of risk normally incidental to the exploration for, and the development and operation of, mineral properties; |
| § | From time to time, the Company may become involved in litigation, which may have a material adverse effect on its business, financial condition and prospects; |
| § | The current military conflict in Ukraine and the Middle East and the economic or other sanctions imposed in response to such military conflicts and other global conflicts may impact global markets in such a manner as to have a material adverse effect on the Company’s business, operations, financial condition and stock price; |
| § | Operating cash flow may be insufficient for future needs; |
| § | The Company may not be able to obtain sufficient financing in the future on acceptable terms, which could have a material adverse effect on the Company’s business, results of operations and financial condition. In order to obtain additional financing, the Company may conduct additional (and possibly dilutive) equity offerings or debt issuances; |
| § | Actions taken by foreign governments regarding critical minerals may affect the Company’s business; |
| § | The Company’s operations may be adversely affected if its licenses and permits are challenged, revoked, amended, not issued or not renewed; |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| § | The Company may be subject to sudden tax changes, which can have a material adverse effect on profitability; |
| § | The Company may be unable to achieve cash flow from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on the Company’s indebtedness, or maintain its debt covenants; |
| § | The Company has not declared or paid dividends in the past and may not declare or pay dividends in the future; |
| § | The Company has increased costs as a result of being a public company both in Canada listed on the TSXV and in the United States listed on the Nasdaq, and its management is required to devote further substantial time to United States public company compliance efforts; |
| § | If the Company does not maintain sufficiently adequate internal controls over financial reporting as outlined in accordance with NI 52-109 or the Rules and Regulations of the SEC. Accordingly, inappropriately designed or ineffective controls could result in inaccurate financial reporting; |
| § | As a foreign private issuer, the Company is subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to its shareholders; |
| § | Failure to retain key officers, consultants and employees or to attract and retain additional key individuals with necessary skills could have a materially adverse impact upon the Company’s success; |
| § | The Company’s business depends on strong labor and employment relations; |
| § | The Company is subject to currency fluctuation risks; |
| § | The Company is exposed to fluctuation in interest rates; |
| § | The Company could face challenges in accessing global capital markets; |
| § | Failure in the infrastructure that the Company relies upon could have an adverse effect on its operations; |
| § | Certain directors and officers of the Company may be, or may become, associated with other natural resource companies which would give rise to conflicts of interest; |
| § | The market price for the Company’s shares may be volatile and subject to wide fluctuations in response to numerous factors beyond its control, and the Company may be subject to securities litigation as a result; |
| § | If securities analysts, industry analysts or activist short sellers publish research or other reports about the Company’s business, prospects or value, which questions or downgrades the value of the Company, the price of the Common Shares could decline; |
| § | The Company will have broad discretion over the use of the net proceeds from offerings of its securities; |
| § | There is no guarantee that the Common Shares will earn any positive return in the short term or long term; |
| § | The Company has a minority shareholder which owns 42.77% of the outstanding Common Shares and, as such, for as long as such shareholder directly or indirectly maintains a significant interest in the Company, it may be in a position to affect the Company’s governance, operations and the market price of the Common Shares; |
| § | The Company is a Canadian corporation, but many of its directors and officers are not citizens or residents of Canada or the U.S. and it may be difficult or impossible for an investor to enforce judgements against the Company and its directors and officers outside of Canada and the U.S. which may have been obtained in Canadian or U.S. courts or initiate court action outside Canada or the U.S. against the Company and its directors and officers in respect of an alleged breach of securities laws or otherwise. Similarly, it may be difficult for U.S. shareholders to effect service on the Company to realize on judgements obtained in the United States; |
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SIGMA LITHIUM CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2026 (Expressed in thousands of United States dollars, except per share amounts or unless stated otherwise) | |
| § | The Company is governed by the Ontario Business Corporations Act and by the securities laws of the province of Ontario, which in some cases have a different effect on shareholders than U.S. corporate laws and U.S. securities laws; |
| § | The Company is subject to risks associated with its information technology systems and cyber-security; and |
| § | The Company may be a Passive Foreign Investment Company, which may result in adverse U.S. federal income tax consequences for U.S. holders of Common Shares. |
Readers are cautioned that the foregoing lists of assumptions and risks are not exhaustive. The Forward-Looking Information contained in this MD&A is expressly qualified by these cautionary statements. All Forward-Looking Information in this MD&A speaks as of the date of this MD&A. The Company does not undertake any obligation to update or revise any Forward-Looking Information, whether as a result of new information, future events, or otherwise, except as required by applicable securities law. Additional information about these assumptions, risks, and uncertainties is contained in the Company’s filings with securities regulators, including this MD&A and the Annual Information Form, which are available on SEDAR+ at www.sedarplus.ca.
CAUTIONARY NOTE REGARDING MINERAL RESERVE & MINERAL RESOURCE ESTIMATE
Technical disclosure regarding the Company’s properties included in this document has not been prepared in accordance with the requirements of U.S. securities laws. Without limiting the foregoing, such technical disclosure uses terms that comply with reporting standards in Canada and estimates are made in accordance with NI 43-101. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the CIM Definition Standards.
NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. NI 43-101 differs significantly from the disclosure requirements of the SEC generally applicable to U.S. companies. Accordingly, information contained in this MD&A is not comparable to similar information made public by U.S. companies reporting pursuant to SEC disclosure requirements.
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SIGMA LITHIUM CORPORATION
UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2026 AND 2025
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying unaudited condensed interim consolidated financial statements of Sigma Lithium Corporation (the "Company") are the management’s responsibility and have been approved by the Company's Board of Directors (the "Board").
The unaudited condensed interim consolidated financial statements have been prepared by management on a going concern basis in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial statements are not exact, as they include certain amounts based on estimates and judgments. Management has determined such amounts on a reasonable basis to ensure that the financial statements are presented fairly in all material respects.
The Board is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility mainly through its Audit, Finance and Risk Committee.
The Audit, Finance and Risk Committee has been appointed by the Board, and all its members are independent directors. The Audit, Finance and Risk Committee meets on a regular basis with management and external auditors to discuss internal controls over the financial reporting process, auditing matters, and financial reporting issues to satisfy itself that each party is properly discharging its responsibilities. It also reviews the quarterly and annual reports, the unaudited condensed interim consolidated financial statements, and the external auditor’s reports. The Audit, Finance and Risk Committee reports its findings to the Board for consideration when approving the unaudited condensed interim consolidated financial statements for issuance to the shareholders. The Audit, Finance and Risk Committee also considers, for review by the Board and approval by the shareholders, the engagement or reappointment of the external auditors.
"Ana Cristina Cabral"
Chief Executive Officer and Co-Chairperson
"Felipe Resende Peres"
Chief Financial Officer
| 1 |
Notice of Non-Review of Condensed Interim Consolidated Financial Statements
In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed interim consolidated financial statements, they must be accompanied by a notice indicating that these condensed interim consolidated financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.
The Company’s independent auditor has not performed a review of these unaudited condensed interim consolidated financial statements for the three-month period ended March 31, 2026, in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by the entity’s auditor.
| 2 |
Sigma Lithium Corporation
Unaudited Condensed Interim Consolidated Statements of Financial Position As of March 31, 2026 and December 31, 2025 (Expressed in thousands of United States dollars) |
| Notes | 3/31/2026 | 12/31/2025 | ||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 3 | 3,852 | 6,214 | |||
| Trade accounts receivable | 4 | 21,883 | 1,392 | |||
| Inventories | 5 | 16,633 | 20,698 | |||
| Advance to suppliers | 6 | 6,402 | 3,400 | |||
| Cash held as collateral | 8 | 11,253 | 11,253 | |||
| Prepaid expenses and other assets | 4,355 | 608 | ||||
| Recoverable VAT and other taxes | 7 | 4,805 | 5,684 | |||
| Total current assets | 69,183 | 49,249 | ||||
| Non-current assets | ||||||
| Judicial deposits | 27 | 893 | 865 | |||
| Loan and accounts receivable from related parties | 11.a | 20,358 | 18,542 | |||
| Recoverable VAT and other taxes | 7 | 2,906 | 2,658 | |||
| Deferred income tax and social contribution | 17 | 4,344 | 6,168 | |||
| Cash held as collateral | 8 | 27 | 26 | |||
| Property, plant and equipment | 9 | 169,846 | 161,366 | |||
| Deferred exploration and evaluation expenditure | 10 | 57,793 | 54,874 | |||
| Total non-current assets | 256,167 | 244,499 | ||||
| Total assets | 325,350 | 293,748 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Suppliers | 12 | 59,018 | 49,524 | |||
| Loans and export prepayment | 13 | 120,591 | 127,334 | |||
| Lease liability | 14 | 1,155 | 1,214 | |||
| Prepayment from customer | 15 | 12,531 | 5,062 | |||
| Taxes payable | 16 | 8,800 | 7,257 | |||
| Payroll and related charges | 2,857 | 2,288 | ||||
| Accounts payable to related parties | 3,845 | 3,050 | ||||
| Other liabilities | 4,913 | 4,742 | ||||
| Total current liabilities | 213,710 | 200,471 | ||||
| Non-current liabilities | ||||||
| Loans and export prepayment | 13 | 13,288 | 13,199 | |||
| Lease liability | 14 | 1,839 | 1,587 | |||
| Taxes payable | 16 | 3,914 | 3,713 | |||
| Legal contingencies | 27 | 5,369 | 5,420 | |||
| Long term provisions | 3,371 | 3,197 | ||||
| Accounts payable to related parties | 11.a | 7,304 | 5,653 | |||
| Asset retirement obligations | 18 | 4,159 | 3,878 | |||
| Total non-current liabilities | 39,244 | 36,647 | ||||
| Shareholders' equity | ||||||
| Share capital | 20 | 328,620 | 328,620 | |||
| Stock-based compensation reserve | 19,097 | 19,167 | ||||
| Tax incentive reserve | 20.d | 4,231 | 2,671 | |||
| Accumulated other comprehensive income (loss) | (13,517) | (16,661) | ||||
| Accumulated losses | (266,035) | (277,167) | ||||
| Total shareholders' equity | 72,396 | 56,630 | ||||
| Total liabilities and shareholders' equity | 325,350 | 293,748 |
| The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements | ||||||
| 3 |
| Notes | 3/31/2026 | 3/31/2025 | |||||
| Net sales revenue | 22 | 42,342 | 47,673 | ||||
| Cost of goods sold | 23.a | (16,774) | (34,218) | ||||
| Gross profit | 25,568 | 13,455 | |||||
| Sales expenses | 23.b | (307) | (205) | ||||
| General and administrative expenses | 23.b | (3,301) | (4,759) | ||||
| Other operating expenses, net | 24 | (8,022) | (896) | ||||
| Stock-based compensation | 26.b | (153) | (805) | ||||
| Operating expenses | (11,783) | (6,665) | |||||
| Operating income before financial results and income taxes | 13,785 | 6,790 | |||||
| Financial income, net | 25 | 1,632 | 2,938 | ||||
| Income before income tax and social contribution | 15,417 | 9,728 | |||||
| Income tax and social contribution – current | 17 | (2,135) | (353) | ||||
| Income tax and social contribution – deferred | 17 | (2,150) | (4,647) | ||||
| Net income for the period | 11,132 | 4,728 | |||||
| Basic and diluted net income per common share | 21 | 0.10 | 0.04 | ||||
| Weighted average number of common shares outstanding - basic and diluted | 21 | 111,402,979 | 111,271,321 |
| The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements | |||||||
| 4 |
| 3/31/2026 | 3/31/2025 | |||
| Net income for the period | 11,132 | 4,728 | ||
| Items that are or may be reclassified subsequently to income or loss: | ||||
| Foreign currency translation adjustment of subsidiary | 3,144 | 7,264 | ||
| Other comprehensive income for the period | 14,276 | 11,992 |
| The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements | ||||
| 5 |
Sigma Lithium Corporation
Unaudited Condensed Interim Consolidated Statements of Cash Flows For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars) |
| Notes | 3/31/2026 | 3/31/2025 | ||||
| Operating activities | ||||||
| Net income for the period | 11,132 | 4,728 | ||||
| Adjustments for: | ||||||
| Foreign exchange (gain) loss, net | (6,680) | (11,445) | ||||
| Interest in loans with related parties | 11.a | (626) | (823) | |||
| Accretion of present value of assets retirement obligation | 18 | 71 | 57 | |||
| Amortization of transaction costs | 13 | 192 | 173 | |||
| Provision for contingencies | 27 | (28) | 221 | |||
| Social programs provision | 324 | 416 | ||||
| Stock-based compensation | 26.b | 318 | 1,416 | |||
| Depreciation and depletion | 23 / 24 | 2,604 | 3,219 | |||
| Income tax and social contribution - current and deferred | 17 | 4,285 | 5,000 | |||
| Interest in loans and leases | 13 / 14 | 3,957 | 5,012 | |||
| Other | 347 | - | ||||
| (Increase) decrease in operating assets | ||||||
| Trade accounts receivable | (20,417) | (14,700) | ||||
| Inventories | 6,476 | (3,414) | ||||
| Advance to suppliers | (2,696) | 637 | ||||
| Prepaid expenses and other assets | (3,611) | 989 | ||||
| Recoverable VAT and other taxes, net | (136) | (2,691) | ||||
| Other assets | - | (6) | ||||
| Increase (decrease) in operating liabilities | ||||||
| Suppliers | 12 | 5,722 | 6,302 | |||
| Prepayment from customer | 15 | (5,063) | 251 | |||
| Taxes payables | 1,789 | 1,599 | ||||
| Payroll and related charges | 440 | 1,386 | ||||
| Other liabilities | (44) | 636 | ||||
| Interest payment on loans and leases | 13 | (1,093) | (1,149) | |||
| Net cash used in operating activities | (2,737) | (2,186) | ||||
| Investing activities | ||||||
| Purchase of property, plant and equipment | 9 | (2,591) | (3,454) | |||
| Addition to exploration and evaluation assets | 10 | (319) | (296) | |||
| Loans to related parties for surface rights acquisition | - | (1,043) | ||||
| Net cash used in investing activities | (2,910) | (4,793) | ||||
| Financing activities | ||||||
| Repayment of loan | 13 | (10,457) | (30,989) | |||
| Proceeds from loans | 13 | - | 20,796 | |||
| Export prepayment | 12,500 | - | ||||
| Intercompany loan agreement – related parties | 1,160 | - | ||||
| Payment of lease liabilities | 14 | (427) | (579) | |||
| Net cash provided by (used in) financing activities | 2,776 | (10,772) | ||||
| Effect of foreign exchange gain (loss) on cash equivalents | 509 | 2,944 | ||||
| Decrease in cash and cash equivalents in the period | (2,362) | (14,807) | ||||
| Cash and cash equivalents, beginning of period | 6,214 | 45,918 | ||||
| Cash and cash equivalents, end of period | 3,852 | 31,111 | ||||
| Decrease in cash and cash equivalents in the period | (2,362) | (14,807) |
| The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements | ||||||
| 6 |
| Note | Number of common shares | Share capital | Stock-based reserve | Earning reserves |
Accumulated comprehensive income (loss) | Accumulated losses | Total | |||||||||
| Balance as of January 01, 2025 | 111,267,279 | 326,832 | 18,485 | 2,500 | (28,495) | (226,982) | 92,340 | |||||||||
| Exercise of RSUs | 20c & 26a | 11,250 | 132 | (132) | - | - | - | - | ||||||||
| Stock-based compensation | 26b | - | - | 1,574 | - | - | - | 1,574 | ||||||||
| Tax incentive reserve | - | - | - | 187 | - | - | 187 | |||||||||
| Net income for the period | - | - | - | - | - | 4,728 | 4,728 | |||||||||
| Other comprehensive income for the period | - | - | - | - | 7,264 | - | 7,264 | |||||||||
| Balance as of March 31, 2025 | 111,278,529 | 326,964 | 19,927 | 2,687 | (21,231) | (222,254) | 106,093 | |||||||||
| Balance as of January 01, 2026 | 111,402,979 | 328,620 | 19,167 | 2,671 | (16,661) | (277,167) | 56,630 | |||||||||
| Stock-based compensation | 26b | - | - | (70) | - | - | - | (70) | ||||||||
| Tax incentive reserve | - | - | - | 1,560 | - | - | 1,560 | |||||||||
| Net income for the period | - | - | - | - | - | 11,132 | 11,132 | |||||||||
| Other comprehensive income for the period | - | - | - | - | 3,144 | - | 3,144 | |||||||||
| Balance as of March 31, 2026 | 111,402,979 | 328,620 | 19,097 | 4,231 | (13,517) | (266,035) | 72,396 |
|
|
| The accompanying notes are an integral part of the unaudited condensed interim consolidated financial statements |
| 7 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
Sigma Lithium Corporation (the “Company” or “Sigma Lithium” or “Sigma”), together with its direct and indirect subsidiaries, is a commercial producer of lithium concentrate.
These unaudited condensed interim consolidated financial statements include the Company’s wholly owned subsidiary Sigma Lithium Holdings Inc. (“Sigma Holdings”), which is domiciled in Canada and incorporated under the Business Corporations Act (British Columbia), and its indirect wholly-owned subsidiaries incorporated in Brazil, Sigma Mineração S.A. (“Sigma Brazil”) and Sigma Industrial de Lítio S.A (“Sigma Industrial”).
Sigma Brazil holds a 100% interest in four mineral properties: Grota do Cirilo, São José, Santa Clara, and Genipapo, located in the municipalities of Araçuaí and Itinga, in the Vale do Jequitinhonha region (referred to hereinafter as “Jequitinhonha Valley”) in the State of Minas Gerais, Brazil (together, the “Lithium Properties”), where our operating assets are located.
The Company’s common shares commenced trading on the TSX Venture Exchange (the “TSXV”) on May 9, 2018, under the symbol “SGML” (formerly “SGMA”) and on September 13, 2021 on Nasdaq Capital Market (“Nasdaq”), the symbol was unified to “SGML”. On July 24, 2023, Sigma Lithium began trading its unsponsored Brazilian Depositary Receipts (“BDR’s”) on B3, the Brazilian Stock Exchange. Unsponsored BDRs are issued by depository institutions without the participation of the foreign companies that issued the backing securities, being classified only as Level I Unsponsored BDRs.
| 1.1 | Operations and liquidity |
These financial statements have been prepared on a going concern basis in accordance with IFRS Accounting Standards. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
As of March 31, 2026, the Company reported negative working capital of $144,527, which may cast significant doubt on the Company’s ability to continue as a going concern as of that date.
However, based on the Company´s recent operating performance and cash flow generation, management is comfortable with the Company´s ability to continue operating as a going concern as a result of management expectation regarding the realization of the Company´s future cashflows, current strong lithium market conditions, as well as the actions currently being undertaken to successfully execute its business plan, including increasing revenues while managing operating expenses.
On October 6, 2025, as part of the implementation of management’s business plan, the Company announced a restructuring of its mining operations to increase capacity and improve efficiency by bringing mining operations in-house instead of using a mining contractor and using larger equipment, such as trucks and excavators. With the upgrade, management anticipates being able to markedly improve the Company’s operating margins. During the time the mine was demobilized, the Company’s Greentech Industrial Plant continued to operate, reprocessing tailings.
In December 2025, the Company signed an offtake agreement for 70,500 tonnes of high grade lithium oxide concentrate to be supplied during 2026. This agreement provides a working capital revolver of $96 million to be disbursed in fixed monthly installments of $8.0 million. During March 2026, the Company recognized net revenues of $6.8 million in connection with the first delivery of high-grade lithium oxide concentrate under this agreement.
During the first quarter of 2026, the Company recognized net revenue of approximately $35.5 million as a result of the sale of low-grade material (high-purity lithium fines).
| 8 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
In addition, also in the first quarter of 2026, Sigma Lithium signed a three-year long-term offtake agreement for 40,000 tonnes per year of high-grade lithium oxide concentrate to be supplied over a three-year period, totaling 120,000 tonnes, which includes an advance payment of $50 million payable by the end of June 2026.
The unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with IFRS Accounting Standards applicable to the preparation of interim financial statements, under International Accounting Standard 34, Interim Financial Reporting. Accordingly, certain disclosures included in the Company’s annual consolidated financial statements prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) have been condensed or omitted. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2025, ("2025 Annual Financial Statements").
These unaudited condensed interim consolidated financial statements have been prepared under the historical cost method, except for certain financial instruments measured at fair value.
All the amounts presented in United States Dollars (“US$”) have been translated from the Company's functional currency and may contain immaterial rounding.
As a result, the following explanatory notes are not repeated in this interim financial information either due to redundancy or materiality in relation to those previously presented in the annual financial statements:
| • | Note 2.4 – Accounting policies |
| • | Note 3 – Use of judgments and estimates |
| • | Note 4 – New accounting standards and interpretations |
| • | Note 11.g – Property, plant and equipment - Impairment of non-financial assets |
| • | Note 28.b – Stock-based compensation - Stock option |
| • | Note 29 – Commitments |
| • | Note 31 – Segments |
The unaudited condensed interim consolidated financial statements were approved by the Board on May 15, 2026.
2.1. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated.
2.2. Functional currency
The Company's functional currency is the currency of the primary economic environment in which it operates and that best reflects its business and operations. The Company’s operations are held by the Brazilian subsidiary, Sigma Mineração S.A., which provides the entirety of the inflows and outflows of the Company, including any dividends to be remitted. The Parent Company in Canada is a pure holding company with no operations and depends on the Brazilian subsidiary to provide its cash flow. The prices of the lithium commodity are globally referenced in U.S. dollars to provide reference for market players located in different countries and different currencies. Consequently, the Company’s revenues are translated into the Brazilian Real, which is the currency that most of the costs for supplying products or services are incurred and which the costs are normally expressed and settled. Accordingly, the Company’s functional currency is the Brazilian Real ("R$").
| 9 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
As of March 31, 2026 the main exchange rates used by the Company to convert the financial information with a currency different from functional currency were US$1.00 was equivalent to R$5.2194 (R$5.5024 on December 31, 2025) and CAD$1.00 was equivalent to R$3.7407 (R$4.0219 on December 31, 2025), according to the rates obtained from Central Bank of Brazil website.
Cash and cash equivalents include the following:
| 3/31/2026 | 12/31/2025 | ||
| Cash | 3,852 | 6,214 | |
| 3,852 | 6,214 |
| 3/31/2026 | 12/31/2025 | ||
| Accounts receivable from customers | 21,576 | 1,392 | |
| Provisional price adjustment | 307 | - | |
| 21,883 | 1,392 |
The Company's trade accounts receivable include sales where the final selling price is established after initial revenue recognition and product delivery.
The trade accounts receivable may therefore be subject to significant market price fluctuations until the final selling price is settled. The Company refers to the futures market for lithium to estimate the prices for the close of the quotational periods of the contracts. As a result, accounts receivable as of March 31, 2026, have been estimated and adjusted based on relevant forward market prices (see Note 22).
| 3/31/2026 | 12/31/2025 | ||
| Lithium oxide concentrate | 7,074 | 13,898 | |
| High purity lithium fines | 246 | 7,690 | |
| Provision for expected inventory losses (1) | - | (7,945) | |
| Total finished goods | 7,320 | 13,643 | |
| Consumable | 770 | 607 | |
| 8,090 | 14,250 | ||
| Spare parts (2) | 8,543 | 6,448 | |
| Total | 16,633 | 20,698 |
(1) For the year ended December 31, 2025, the Company conducted a review of the recoverability of its inventories. As a result, a provision was made for expected inventory losses on Lithium oxide concentrate, totaling $7,945. The Company continuously monitors the factors that may affect the net realizable value of its inventories and provisions are made or adjusted as necessary.
(2) Spare parts refers to components and equipment used in the short-term maintenance of machinery and equipment. As of March 31, 2026, the Company has not identified any need to recognize losses on slow-moving inventory.
On March 31, 2026, the Company had outstanding balances for advances with domestic and foreign suppliers in the amount of $6,402 ($3,400 on December 31, 2025), for the acquisition of operating consumables and maritime freight.
| 10 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
7. Recoverable VAT and other taxes
| 3/31/2026 | 12/31/2025 | ||
| ICMS (State VAT) | 2,906 | 2,658 | |
| Federal tax credits (PIS / COFINS) | 3,653 | 4,036 | |
| Other recoverable taxes (1) | 1,152 | 1,648 | |
| 7,711 | 8,342 | ||
| Current | 4,805 | 5,684 | |
| Non-Current | 2,906 | 2,658 |
(1) Income tax withheld on financial investments
The Company expects the recovery of the recoverable ICMS (state VAT) to occur in about two years and the recovery of recoverable federal taxes within the next 24 months, based on analyses and budget projections approved by management.
As of March 31, 2026 and December 31, 2025, the Company had $11,253 in cash held as collateral, classified as current assets, which was advanced as collateral related to an obligation to make interest payments under an export prepayment agreement (Note 13). The amount was determined based on the interest paid on the export prepayment loans made under this agreement in the previous twelve months, as established by the agreement. The actual interest payment due at maturity of the agreement will be deducted from the cash collateral balance. As a result, the company may either have a net amount to receive or a net amount to pay.
Additionally, the Company had $27 in cash held as collateral classified as non-current assets as a guarantee deposit under lease agreements
| 11 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
9. Property, plant and equipment
| Assets Under Construction | Buildings | Machinery and equipment |
Right-of-use assets | Mining rights | Other assets | Total | ||||||||
| Cost | 2,277 | 45,039 | 76,285 | 6,082 | 29,306 | 606 | 159,595 | |||||||
| Accumulated depreciation and depletion | - | (3,318) | (6,763) | (3,026) | (5,299) | (164) |
(18,570) | |||||||
| Balance as of January 1, 2024 | 2,277 | 41,721 | 69,522 | 3,056 | 24,007 | 442 | 141,025 | |||||||
| Additions | 5,068 | 1,983 | 5,794 | 2,673 | 2,929 | 9 | 18,456 | |||||||
| Disposal | - | - | (2,252) | (1,532) | - | - | (3,784) | |||||||
| Depreciation and depletion | - | (2,257) | (5,330) | (1,970) | (2,455) | (120) | (12,132) | |||||||
| Foreign currency translation adjustment of subsidiaries | 458 | 5,149 | 8,790 | 473 | 2,877 | 54 | 17,801 | |||||||
| Balance as of December 31, 2025 | 7,803 | 46,596 | 76,524 | 2,700 | 27,358 | 385 | 161,366 | |||||||
| Cost | 7,803 | 52,612 | 89,305 | 4,864 | 35,861 | 691 | 191,136 | |||||||
| Accumulated depreciation and depletion | - | (6,016) | (12,781) | (2,164) | (8,503) | (306) |
(29,770) | |||||||
| Balance as of December 31, 2025 | 7,803 | 46,596 | 76,524 | 2,700 | 27,358 | 385 | 161,366 | |||||||
| Additions | 134 | 2 | 251 | 368 | 3,043 | 15 | 3,813 | |||||||
| Depreciation and depletion | - | (419) | (1,321) | (352) | (22) | (33) | (2,147) | |||||||
| Transfers between property, plant and equipment classes | (68) | - | 32 | - | - | 36 | - | |||||||
| Disposal | - | - | (1,892) | - | - | - | (1,892) | |||||||
| Foreign currency translation adjustment of subsidiaries | 424 | 2,523 | 4,097 | 152 | 1,489 | 21 | 8,706 | |||||||
| Balance as of March 31, 2026 | 8,293 | 48,702 | 77,691 | 2,868 | 31,868 | 424 | 169,846 | |||||||
| Cost | 8,293 | 55,466 | 92,495 | 5,504 | 40,853 | 780 | 203,391 | |||||||
| Accumulated depreciation and depletion | - | (6,764) | (14,804) | (2,636) | (8,985) | (356) |
(33,545) | |||||||
| Balance as of March 31, 2026 | 8,293 | 48,702 | 77,691 | 2,868 | 31,868 | 424 | 169,846 |
| 12 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| a) | The average estimated useful lives are as follows (in years): |
| Description | 3/31/2026 | 12/31/2025 | |
| Buildings | 25 | 26 | |
| Machinery and equipment | 19 | 19 | |
| Right of use assets | 3 | 3 | |
| Mining rights | 8 | 8 | |
| Other assets | 6 | 6 |
| b) | Right-of-use assets |
Right-of-use assets include land, machinery, and equipment provided exclusively for the Company’s use on-site. The Company considers as right-of-use those contracts longer than 12 months in which assets have individual amounts greater than $5.
| c) | Depreciation and depletion |
The allocation of depreciation costs incurred as of March 31, 2026 and December 31, 2025, is shown below:
| Reconciliation of depreciation and depletion for the period | 3/31/2026 | 12/31/2025 | |
| Operating expenses | 2,138 | 11,933 | |
| Deferred exploration and evaluation expenditure | 9 | 199 | |
| Depreciation accumulated for the period | 2,147 | 12,132 |
10. Deferred exploration and evaluation expenditure
A summary of exploration costs is set out below:
| 3/31/2026 | 12/31/2025 | ||
| Opening balance | 54,874 | 47,141 | |
| Exploration and feasibility investments | 328 | 1,194 | |
| Share based compensation of exploration and feasibility personnel | (388) | 530 | |
| (Reduction) / additions | (60) | 1,724 | |
| Asset retirement cost | - | 67 | |
| Foreign currency translation adjustment of subsidiaries | 2,979 | 5,942 | |
| Closing balance | 57,793 | 54,874 |
11. Related parties’ transactions
A summary of the related parties to Sigma Lithium is set out below:
| Related Party | Nature of relationship |
| A10 Group |
Comprises entities that paid certain expenses on behalf of Sigma Lithium and were subsequently reimbursed during the period ended March 31, 2026:
(a) (a) A10 Investimentos Ltda is an asset management firm indirectly controlled by Marcelo Paiva, who is a director and Co-Chair of Sigma Lithium and the investment manager of the A10 Investimentos Fundo de Investimento Financeiro em Ações (“A10 Fund”), which is a minority shareholder of the Company; and
((b) A10 Serviços Especializados de Avaliação de Empresas Ltda. (“A10 Advisory”), which is an administrative services firm controlled by Marcelo Paiva, a director and Co-Chair of Sigma Lithium. Sigma Lithium’s Co-Chair and CEO, Ana Cristina Cabral, has a minority interest. |
| Miazga | Miazga Participações S.A is a land administration company in which Ana Cristina Cabral, Sigma Lithium’s Co-Chair and CEO, has an indirect economic interest. |
| 13 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| Arqueana | Arqueana Empreendimentos e Participações S.A. is a land administration company in which Ana Cristina Cabral, Sigma Lithium’s Co-Chair and CEO, has an indirect economic interest. |
| Tatooine | Tatooine Investimentos S.A. is a land administration company in which Marina Bernardini, an officer of Miazga and Sigma Brazil, has an indirect economic interest. |
| Instituto Lítio Verde (“ILV”) | Instituto Lítio Verde is a non-profit entity which has as directors Lígia Pinto, an officer of Sigma Lithium, and Marina Bernardini, an officer of Sigma Lithium, Miazga and Sigma Brazil. |
| Key management personnel | Includes the Company’s directors and executive management team and the executive management team of Sigma Brazil. |
| a) | Transactions with related parties |
Reimbursement of company expenses paid by A10 Group: Certain expenses attributable solely to Sigma Lithium during the period were paid by the A10 Group on the Company’s behalf and were later reimbursed to A10 Group at cost by the Company, with no profit element. Such expenses were limited to: (i) the cost of three administrative personnel 100% allocated to Sigma Lithium; and (ii) health insurance expenses of certain individuals formerly related to the A10 Group and who are now exclusively at Sigma Lithium, which continue to be paid by A10 Group. For the avoidance of doubt, these amounts represent a pass-through reimbursement of Sigma Lithium's own expenses and do not constitute revenue, income, or any form of compensation to A10 Group. Marcelo Paiva, who indirectly controls A10 Group and is also Co-Chair and a director of Sigma Lithium, does not receive any compensation or benefits in any way as part of these reimbursements.
Leasing Agreements: The Company has right-of-way lease agreements with Miazga and Arqueana relating to access to Sigma Lithium’s industrial facilities (See note 14).
Royalties: Pursuant to Brazilian legislation, royalties are payable to landowners whose properties are subject to mineral exploration activities. The amount of these royalties are equivalent to 50% of the value paid as Financial Compensation for the Exploration of Mineral Resources (CFEM) to Brazil’s National Mining Agency (Agencia Nacional de Mineração). As of March 31, 2026, the Company recognized an amount payable to Miazga of $1,629 ($1,325 as of December 31, 2025).
Accounts receivable (Tatooine): On April 20, 2023, Sigma Brazil entered into a loan facility agreement with Tatooine, to fund the purchase by Tatooine of several properties located in areas of interest of the Company. The loan facility agreement provides for loans of up to $12,000. On November 14, 2024, this limit was amended to $15,000, bearing a 15% p.a. interest rate. The loan facility agreement is set up so that loan amounts can be made available via requests made by Tatooine to Sigma Brazil, where the amounts for the acquisition of each property and its corresponding expected costs and expenses are specified. Loan granted by Sigma Brazil to Tatooine under this loan facility agreement totaled $20,358 as of March 31, 2026 ($18,542 as of December 31, 2025), of which $13,834 represents loan disbursements and $6,524 ($5,304 as of December 2025) corresponds to capitalized interest.
Intercompany loan agreement (Tatooine): During the year of 2025 Sigma entered into an intercompany loan agreement with Tatooine, bearing an interest rate of 12% p.a. As of March 31, 2026 the balance of loans under this agreement was $7,304 ($5,653 as of December 31, 2025).
Instituto Lítio Verde (“ILV”): Sigma Brazil and ILV are parties in the development of Sigma Lithium’s operations, which have a high degree of positive impact in the communities surrounding the Company’s operations in Vale do Jequitinhonha. ILV’s purpose is to promote the well-being and the development of those communities.
| 14 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
Transactions with related parties
| 3/31/2026 | 3/31/2026 | 12/31/2025 | 3/31/2025 | |||||
| Description | Pre-payments / Receivable | Accounts payable / Debt | (Expenses) / Income | Pre-payments / Receivable | Accounts payable / Debt | (Expenses) / Income | ||
| A10 Group | ||||||||
| Reimbursement to A10 Group for expenses incurred on behalf of Sigma Lithium | - | - | (96) | - | - | (93) | ||
| Miazga | ||||||||
| Lease agreements | - | 800 | (76) | - | 606 | (25) | ||
| Royalties | - | 1,629 | (230) | - | 1,325 | (523) | ||
| Arqueana | ||||||||
| Lease agreements | - | 1,727 | (95) | - | 1,381 | (35) | ||
| Tatooine | ||||||||
| Accounts payable | - | 152 | - | - | 155 | - | ||
| Loan to related party - Liability | - | 7,304 | (179) | - | 5,653 | - | ||
| Loan to related party - Asset | 20,358 | - | 805 | 18,542 | - | 822 | ||
| Instituto Lítio verde | ||||||||
| Accounts payable | - | 1,859 | (325) | - | 1,453 | (416) | ||
| Total | 20,358 | 13,471 | (196) | 18,542 | 10,573 | (270) | ||
| b) | Key management personnel |
The compensation paid or payable to key management for employee services is shown below:
| 3/31/2026 | 3/31/2025 | ||
| Stock-based compensation, included in operating expenses | 144 | 306 | |
| Salaries, benefits and director's fees, included in general and administrative expenses | 234 | 209 | |
| 378 | 515 |
Key management includes the directors of the Company, the executive management team and senior management at Sigma Brazil.
| 3/31/2026 | 12/31/2025 | ||
| Brazilian-based suppliers | 54,063 | 44,766 | |
| Non-Brazilian-based suppliers | 4,955 | 4,758 | |
| Total suppliers | 59,018 | 49,524 |
As of March 31, 2026, out of the total $59,018 due to suppliers, $29,603 (50.1%) relates to amounts disputed by the Company, primarily in connection with services that were either not provided at all or were not provided in accordance with the applicable contractual terms. These liabilities are under dispute and were assessed as possible, with any potential cash outflow beyond 12 months. However, to ensure compliance with the IFRS Accounting Standards, Sigma Lithium maintained the balance under suppliers, pending the conclusion of any reassessment by the Company’s legal counsel. As of December 31, 2025, out of the total $49,524 due to suppliers, $25,678 (51.8%) related to disputed amounts.
The Company restructured mining operations to increase efficiency, and this involved a change of some suppliers. The amount in dispute is partly the result of a mine demobilization made at the start of the restructuring in October 2025, which was followed by a remobilization in January 2026 using a separate set of suppliers.
| 15 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
13. Loans and export prepayment
| Current liabilities | Non-current liabilities | |||||||
| 3/31/2026 | 12/31/2025 | 3/31/2026 | 12/31/2025 | |||||
| Loans and export prepayment agreements | ||||||||
| U.S dollar denominated | ||||||||
| Export prepayment trade finance | 14,116 | 24,140 | - | - | ||||
| Export prepayment agreement - Synergy | 103,198 | 100,617 | - | - | ||||
| 117,314 | 124,757 | - | - | |||||
| Reais denominated | ||||||||
| Finame – BDMG | 3,840 | 3,289 | 13,412 | 13,322 | ||||
| Total loans and export prepayment | 121,154 | 128,046 | 13,412 | 13,322 | ||||
| Transactions costs | (563) | (712) | (124) | (123) | ||||
| Total loans and export prepayment + Transactions costs | 120,591 | 127,334 | 13,288 | 13,199 | ||||
The balances of loans and export prepayments are recognized at the amortized cost and are detailed as follows:
As of March 31, 2026, the principal amount of short-term and long-term loans and export prepayments of the Company by maturity year, adjusted for interest and exchange variation and before transaction costs, are as follows:
| In US$ | Reais denominated | U.S dollar denominated | Total | |||
| 2026 | 2,903 | 117,314 | 120,217 | |||
| 2027 | 3,751 | - | 3,751 | |||
| 2028 | 3,751 | - | 3,751 | |||
| 2029 | 3,681 | - | 3,681 | |||
| 2030 | 2,771 | - | 2,771 | |||
| After 2030 | 395 | - | 395 | |||
| 17,252 | 117,314 | 134,566 |
The table below shows the changes in the Company’s loans and export prepayments during the years:
| 3/31/2026 | 12/31/2025 | ||
| Opening balances | 140,533 | 173,599 | |
| Additions | - | 57,745 | |
| Interest expense (1) | 3,864 | 20,204 | |
| Payment of interest (2) | (1,093) | (19,132) | |
| Principal amortization (3) | (10,457) | (94,390) | |
| Foreign exchange (4) | (6,656) | (18,715) | |
| Transaction costs amortization | 192 | 725 | |
| Foreign currency translation adjustment of subsidiary | 7,496 | 20,497 | |
| Loans and export prepayment agreements | 133,879 | 140,533 |
(1) Interest expenses incurred in the period ended March 31, 2026 - see note 25;
(2) Interest payments made during the period ended March 31, 2026, totaled $1,093 including: (i) $569 for export prepayment agreements; (ii) $523 for financing agreements with BDMG;
(3) Refers to the repayment of principal of $9,987 related to the export prepayment trade finance and $470 related to the financing agreement with BDMG;
(4) The Brazilian real appreciated by 5.14% against the U.S. dollar in the three months ended March 31, 2026. This variation primarily affected provisions and did not significantly impact cash flow.
Export Prepayment Trade Finance
For the year ended December 31, 2025, the Company entered into export prepayment agreements with financial institutions totaling $57,745 with maturities ranging from 30 to 180 days and bearing interest rates ranging from 9.0% p.a. to 10.7% p.a. Additionally, the Company repaid $93,693 in export prepayment agreements that matured during the year.
For the period ended March 31, 2026, the Company repaid $9,987 in export prepayment agreements that matured during the period.
| 16 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
Export Prepayment Agreement – Synergy
On December 13, 2022, the Company, through Sigma Brazil, entered into an export prepayment agreement in the amount of $100,000, with annual interest payments based on the 12-month Bloomberg short-term bank yield index (“BSBY”) plus 6.95% per annum and maturing on December 13, 2026. On December 13, 2022, Sigma Brazil drew down $60,000. The balance of $40,000 was disbursed in two subsequent drawdowns of $20,000 each, on February 28, 2023, and on March 16, 2023.
At the inception of the agreement the Company paid $11,253 (Note 8) as collateral, based on an amount equal to twelve months of interest accrual for the first interest period, and an upfront fee of $2,964. Under the terms of the agreement, principal repayments are due 48 days after the end of the Company’s first and third quarters ending March 31 and September 30, respectively, each year, being the first measurement date, the third quarter ended September 30, 2023. Repayments are determined based on an amount equivalent to 50% of the Company’s net cash generated from operating activities plus 50% of the net cash generated from investing activities for the prior six-month period ending March 31 and September 30.
The loan contains an embedded prepayment feature, whereby the Company must pay an early prepayment premium of 4% during the first year of the loan, reducing proportionately from 4% to 1% after the first anniversary, finishing at 1% at the end of the fourth year. The fair value of this embedded derivative has been estimated and does not differ significantly from the nominal amount and, accordingly, no adjustments were made, since it is closely related to the primary indexation of the loan.
The loan is guaranteed by the Company's assets, rights, licenses, receivables, contracts (with flexibility to enter/terminate/amend offtake agreements) and a pledge of 100% of Sigma Lithium Holdings Inc’s share interest in Sigma Brazil. Security will rank first in respect to all existing and future indebtedness of the Company, except in relation to permitted indebtedness of up to $100,000 and R$100,000.
As of November 15, 2024, the Bloomberg Short-Term Bank Yield Index (BSBY) was discontinued. In response to this change, the Company transitioned to using the 12-month Secured Overnight Financing Rate (SOFR) as the benchmark rate. For interest payments after December 2024, the applicable rate applied is SOFR + 6.95%.
For the period ended March 31, 2026, the Company recognized interest expense on this contract in the amount of $2,581 ($2,752 as of March 31, 2025).
Banco de Desenvolvimento de Minas Gerais - BDMG
During 2023, the Company entered into two financing agreements with the Banco de Desenvolvimento de Minas Gerais (BDMG), in the amounts of $3,852 and $9,449. The applicable interest rates are based on SELIC plus 3.75% per annum and SELIC plus 3.88% per annum, respectively.
The agreements provide for quarterly interest payments, a 24-month grace period for principal amortization, and repayment of principal in 60 monthly installments. The first agreement began principal amortization in December 2024 and the second in December 2025.
Additionally, on May 9, 2024, the Company entered into another financing agreement with BDMG for $6,605. Like the previous agreement, this financing involves quarterly interest payments and a 24-month grace period for principal amortization. Principal repayment is scheduled for over 60 monthly installments, with the first installment due on May 30, 2026. The interest on this loan is SELIC+3.93% per annum.
For the period ended March 31, 2026, the Company recognized an interest expense on this contract in the amount of $736 ($586 as of March 31, 2025).
Banco Nacional de Desenvolvimento Econômico e Social - BNDES
On October 10, 2024, Sigma Lithium signed a final agreement securing a R$486,800 development loan from the National Brazilian Bank for Economic and Social Development (“BNDES”) to fund the construction of a second Greentech Industrial Plant for producing lithium oxide concentrate at the Company’s operations in Vale do Jequitinhonha in Brazil. The Company is required to provide a letter of credit (“bank guarantee”) issued by a BNDES-registered financial institution in advance of first drawdown. Sigma Lithium has obtained such a letter, as announced on April 2, 2026. As of March 31, 2026 the Company had not recorded any drawdowns from this loan from the BNDES.
| 17 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
The lease liabilities are primarily related to the land leases owned by Miazga Participações S.A. (“Miazga”) and Arqueana, a related party (note 11), while the remaining lease contracts relate to land, apartments and houses, commercial spaces, operational equipment, and vehicle leases with third parties.
The lease agreements have terms between 1 year to 12 years and the liability was measured at the present value of the lease payments discounted using interest rates, with a weighted average rate of 10.72% which was determined to be the Company’s incremental borrowing rate.
The changes in lease liabilities are shown in the following table:
| 3/31/2026 | 12/31/2025 | ||
| Opening balances | 2,801 | 3,188 | |
| Additions | - | 319 | |
| Remeasurement | 368 | 2,354 | |
| Interest expense | 93 | 404 | |
| Disposal | - | (1,640) | |
| Payments | (427) | (2,318) | |
| Others | - | - | |
| Foreign currency translation adjustment of subsidiary | 159 | 494 | |
| Lease liability total | 2,994 | 2,801 | |
| Current | 1,155 | 1,214 | |
| Non-current | 1,839 | 1,587 |
Maturity analysis - contractual discounted cash flows
| As of March 31, 2026 | |
| Less than one year | 1,155 |
| Year 2 | 451 |
| Year 3 | 388 |
| Year 4 | 344 |
| Year 5 | 295 |
| More than 5 years | 361 |
| Total contractual discounted cash flows | 2,994 |
As of March 31, 2026, the Company received $12,531 ($5,062 as of December 31, 2025) in customer advances related to export contracts for the future delivery of products. These amounts are recorded as contract liabilities until the goods are delivered, at which time the related revenue is recognized in profit or loss, as applicable.
| 3/31/2026 | 12/31/2025 | ||
| Municipal taxes | 1,071 | 1,089 | |
| State taxes | 2,466 | 2,330 | |
| Federal taxes | 9,177 | 7,551 | |
| 12,714 | 10,970 | ||
| Current | 8,800 | 7,257 | |
| Non-Current | 3,914 | 3,713 |
| 18 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
On October 4, 2024, the Northeast Development Authority – “SUDENE” approved for Sigma Brazil the tax benefit of a 75% reduction in income tax, also known as Profit from Exploration, and issued the Constitutive Report. This tax benefit allows the Company to reduce its current tax payments by approximately 75%, starting in 2024 and for ten years. The amount saved must be transferred to a reserve account for tax incentives within the equity accounts and cannot be distributed to the shareholders. For the period ended March 31, 2026, the Company recognized a reserve for tax incentives in the amount of $1,560 ($187 for the period ended March 31, 2025) - see note 20.d.
17. Income tax and social contribution
| a) | Income tax and social contribution recognized in profit or loss |
The income tax and social contribution recognized in profit or loss for the year is as follows:
| 3/31/2026 | 3/31/2025 | |||
| Current | (2,135) | (353) | ||
| Deferred | (2,150) | (4,647) | ||
| (4,285) | (5,000) | |||
The reconciliation of Company income tax and social contribution expenses and the result from applying the effective rate to profit before income tax and social contribution is shown below. The Company operates in the following tax jurisdictions: Brazil, where the corporate tax rate is 34% and Canada, where the federal corporate tax rate is 15% with varying provincial tax rates, such as British Columbia’s 12% tax rate, which totals 27% income tax rate applicable to Sigma in Canada:
| 3/31/2026 | 3/31/2025 | |||
|
Income before income tax and social contribution |
15,417 | 9,728 | ||
| Statutory tax rate | 27% | 27% | ||
| Tax credit at statutory rate | (4,163) | (2,627) | ||
| Reconciling items | ||||
| Impact of foreign income tax rate differential | (1,058) | (967) | ||
| Exclusion of Canadian tax credits | (150) | (1,103) | ||
| Unrecognized tax loss carryforwards | 1,086 | (314) | ||
| Others | - | 11 | ||
| Current and deferred income tax and social contribution | (4,285) | (5,000) | ||
| Effective tax rate | 27.8% | 51.4% | ||
The amount of $13,693 as of March 31, 2026 ($14,030 as of December 31, 2025) of tax loss carryforward generated in Canada by the Company has not been recognized since we do not expect to have taxable income to offset it. This tax loss carryforward expires between 2039 and 2044.
| b) | Deferred income tax and social contribution: |
Deferred income tax and social contribution are calculated on tax loss carryforwards and the temporary differences between the tax bases of assets and liabilities and their carrying amounts.
| 12/31/2025 | Income | Equity | 3/31/2026 | |||||
| Temporary differences: | ||||||||
| Pre-operational expenses | 1,761 | (192) | - | 1,569 | ||||
| Unrealized foreign currency fluctuation | 2,145 | (2,024) | - | 121 | ||||
| Leasing | (40) | 2 | - | (38) | ||||
| Taxes installments program | 1,749 | 40 | - | 1,789 | ||||
| Commission provision | 53 | - | - | 53 | ||||
| Reversal of present value adjustment (ARO) | 82 | 24 | - | 106 | ||||
| Others | 113 | - | - | 113 | ||||
| Foreign currency translation adjustment of subsidiaries | 305 | - | 326 | 631 | ||||
| Total deferred tax assets | 6,168 | (2,150) | 326 | 4,344 |
| 19 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
18. Asset retirement obligations (“ARO”)
The balance of provisions for assets retirement obligations is as follows:
| 3/31/2026 | 12/31/2025 | ||
| Xuxa Mine (1) | 3,137 | 2,924 | |
| Barreiro Mine (2) | 1,022 | 954 | |
| Total | 4,159 | 3,878 |
1 - Related to Phase I classified within property, plant and equipment.
2 - Related to Phase II classified within Deferred exploration and evaluation expenditure.
The changes in asset retirement obligations are shown in the following table:
| 3/31/2026 | 12/31/2025 | ||
| Opening balances | 3,878 | 2,903 | |
| Accretion of asset retirement obligation | 71 | 239 | |
| Addition of fixed assets | - | 305 | |
| Addition (reversal) of exploration assets | - | 67 | |
| Foreign currency translation adjustment of subsidiary | 210 | 364 | |
| Asset retirement obligation total | 4,159 | 3,878 |
| a) | Identification and measurement of financial instruments |
The Company enters into transactions involving various financial instruments, mainly cash and cash equivalents, including short-term investments, accounts receivable, accounts payable to suppliers and related parties, and loans and export prepayment, which may contain embedded derivatives.
The amounts recorded in current assets and current liabilities have immediate liquidity or short-term maturity. Considering the maturities and features of such instruments, their carrying amounts approximate their fair values.
| · | Classification of financial instruments |
| 3/31/2026 | 12/31/2025 | ||||||||
| Description | Note | Measured at amortized cost | Fair value through profit and loss (1) | Measured at amortized cost | Fair value through profit and loss (1) | ||||
| Assets | |||||||||
| Current | |||||||||
| Cash and cash equivalents | 3 | 3,852 | - | 6,214 | - | ||||
| Trade accounts receivable | 4 | - | 21,883 | - | 1,392 | ||||
| Cash held as collateral | 8 | 11,253 | - | 11,253 | - | ||||
| Non-current | |||||||||
| Loan and accounts receivable from related parties | 13 | 20,358 | - | 18,542 | - | ||||
| 35,463 | 21,883 | 36,009 | 1,392 | ||||||
| Liabilities | |||||||||
| Current | - | ||||||||
| Loans and export prepayment | 13 | 120,591 | - | 127,334 | - | ||||
| Suppliers | 12 | 59,018 | - | 49,524 | - | ||||
| Accounts payable related parties | 3,845 | - | 3,050 | ||||||
| Non-current | - | ||||||||
| Loans and export prepayment | 13 | 13,288 | - | 13,199 | - | ||||
| Accounts payable related parties | 11 | 7,304 | - | 5,653 | - | ||||
| 204,046 | - | 198,760 | - | ||||||
(1) The Company measures certain financial assets and liabilities using Level 2 inputs, which are observable but not quoted in active markets.
| 20 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| b) | Financial risk management: |
The Company uses risk management strategies in which the nature and general position of financial risks are regularly monitored and managed to assess results and the financial impact on cash flow.
The Company is exposed to exchange rates, interest rates, credit risk and liquidity risks.
· Foreign Exchange rate risk
The exposure arises from the existence of assets and liabilities generated in U.S and Canadian dollars, since the Company's functional currency is the Brazilian Real.
The consolidated exposure as of March 31, 2026 is as follows:
| Description | 3/31/2026 |
| Canadian dollars | |
| Cash and cash equivalents | 15 |
| Suppliers | (6,595) |
| Other current liabilities | (5) |
| (6,585) | |
| United States dollar | |
| Cash and cash equivalents | 3,712 |
| Trade accounts receivable | 21,883 |
| Cash held as collateral | 11,253 |
| Suppliers | (3,884) |
| Prepayment from customer | (12,531) |
| Interest on export prepayment agreement | (3,514) |
| Export prepayment agreement | (113,800) |
| (96,881) |
· Sensitivity analysis
We present below the sensitivity analysis for foreign exchange risks. The Company considered probable scenario(1), scenarios 1 and 2 as 10%, and 20%, respectively, of deterioration for volatility of the currency, using as reference the exchange rate on March 31, 2026.
The currencies used in the sensitivity analysis and its scenarios are shown below:
| 3/31/2026 | |||||||
| Currency | Exchange rate | Probable scenario (1) | Scenario 1 (+/-10%) |
Scenario 2 (+/-20%) | |||
| CAD (+) | 3.7407 | 3.6654 | 4.0319 | 4.3985 | |||
| CAD (-) | 3.7407 | 3.6654 | 3.2989 | 2.9323 | |||
| USD (+) | 5.2194 | 4.9886 | 5.4875 | 5.9863 | |||
| USD (-) | 5.2194 | 4.9886 | 4.4897 | 3.9909 | |||
The effects on profit and loss, considering scenarios 1 and 2, are shown below:
| 3/31/2026 | |||||||
| Notional | Probable scenario (1) | Scenario 1 | Scenario 2 | ||||
| Canadian dollar-denominated (+) | (6,585) | 135 | (476) | (985) | |||
| Canadian dollar-denominated (-) | (6,585) | 135 | 882 | 1,815 | |||
| U.S dollar-denominated (+) | (96,881) | 4,482 | (4,733) | (12,412) | |||
| U.S dollar-denominated (-) | (96,881) | 4,482 | 15,745 | 29,823 | |||
(1) Sensitivity analysis of the scenario probable was measured using as reference the exchange rate, published by the Central Bank of Brazil, on April 30, 2026.
· Interest rate risk
This risk arises from short and long-term financial investments, financing and export prepayment linked to fixed and floating interest rates of the CDI, SELIC and SOFR, exposing these financial assets and liabilities to interest rate fluctuations as shown in the sensitivity analysis framework.
| 21 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
· Sensitivity analysis of interest rate variations
The Company considered the probable scenario and scenarios 1 and 2 of changes in interest rates volatility as of March 31, 2026.
The interest rates used in the sensitivity analysis in their respective scenarios are shown below together with the effects on the profit and loss balances for the period ended March 31, 2026:
| Notional | Probable scenario (1) | Scenario 1 | Scenario 2 | ||||||
| Liabilities | |||||||||
| Rate | 14.75% | 14.50% | 15.95% | 17.40% | |||||
| BDMG | SELIC (+10% and +20%) | 17,252 | 32 | (155) | (342) | ||||
| Rate | 3.54% | 3.54% | 3.63% | 3.72% | |||||
| Export prepayment agreement | SOFR (+2.5% and +5.0%) | 100,000 | - | (66) | (133) |
(1) Sensitivity analysis of the probable scenario was measured using as reference the rates on April 29, 2026.
· Credit risk
The credit risk management policy aims to minimize the possibility of not receiving sales made and amounts invested, deposited or guaranteed by financial institutions and counterparties, through analysis, granting and management of credits, using quantitative and qualitative parameters.
The Company manages its credit risk by receiving in advance a substantial portion of its sales or by being guaranteed by letters of credit.
Credit granted to financial institutions is used to accept guarantees and invest cash surpluses.
· Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure it will have sufficient liquidity to meet liabilities when due.
The Company’s management of cash is focused on funding ongoing capital needs for operating the Greentech Plant, developing the Company’s growth opportunities (including Phase 2) and for general corporate expenditures, Management intends to use cash generated by its operating activities to meet its obligations.
The Company continuously monitors its cash outflows and seeks opportunities to minimize all costs, to the extent possible, as well as its general and administrative expenses.
The following table shows the contractual maturities of financial liabilities, including accrued interest.
| Contractual obligations | Up to 1 year | 1-3 years | 4-5 years | More than 5 years | Total | ||||
| Suppliers | 59,018 | - | - | - | 59,018 | ||||
| Loans and export prepayment | 121,154 | 7,502 | 5,810 | 100 | 134,566 | ||||
| Lease liabilities | 1,155 | 839 | 639 | 361 | 2,994 |
| c) | Capital Management |
Sigma Lithium’s objective in managing its capital is to ensure that the Company is able to safeguard its ability to continue as a going concern, continue its operations, and has sufficient capital to be able to meet its strategic objectives, including the continued exploration and development of its existing mineral projects and the identification of additional projects. The Company’s primary source of capital is derived from equity issuances. As of March 31, 2026, capital consisted of equity attributable to common shareholders of $72,396 ($56,630 as of December 31, 2025). The Company has no externally imposed capital requirements and manages its capital structure in accordance with its strategic objectives and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue new shares in the form of private placements and/or secondary public offerings. There has been no change in the Company’s approach to capital management since the end of the three month period ended March 31, 2026.
| 22 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| d) | Fair values of assets and liabilities as compared to their carrying amounts. |
Financial assets and liabilities at fair value through profit or loss are recognized in current and non-current assets and liabilities, while any gains and losses are recognized as financial income or financial costs, respectively.
The amounts are recognized in these financial statements at their carrying amounts, which are substantially similar to those that would be obtained if they were traded in the market. The fair values of other long-term assets and liabilities do not differ significantly from their carrying amounts, including the export prepayment agreement and BDMG loan, since both are based on floating interest rates such as SOFR and SELIC, respectively. Given the very specific condition of the export prepayment loan, the Company was not able to quantify an equivalent loan with similar condition for the same borrower that could be considered to measure the fair value for this facility.
| a) | Ownership structure |
On both March 31, 2026 and December 31, 2025 the Company had 111,402,979 common shares outstanding. On March 31, 2026, based on information available to the Company and to the best of the Company’s knowledge, minority shareholder A10 Investimentos Fundo de Investimento Financeiro em Ações (“A10 Fund”) held 42.77% of the common shares and 57.23% were held by other shareholders.
b) Authorized share capital
The authorized share capital consists of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
c) Common shares issued by the Company for the three-month period ended March 31, 2026, and 2025:
| Number of common shares | Amount ($) | |
| Balance, January 1, 2025 | 111,267,279 | 326,832 |
| Exercise of RSUs | 11,250 | 132 |
| Balance, March 31, 2025 | 111,278,529 | 326,964 |
| Balance, January 1, 2026 and March 31, 2026 | 111,402,979 | 328,620 |
During the period ended March 31, 2026, the Company did not issue any new common shares.
d) Tax incentive reserve
On October 4, 2024, the Northeast Development Authority – “SUDENE” approved Sigma Brazil for the tax benefit of a 75% reduction in income tax (a federal tax), also known as Profit from Exploration, and issued the Constitutive Report. This tax benefit allows the Company to reduce its current income tax expenses by approximately 75%, starting in 2024, for ten years. The tax incentive received by Sigma Brazil can be granted to new ventures located in the SUDENE area, which includes the state of Espírito Santo, and towns in north of the state of Minas Gerais (such as Araçuaí and Itinga) and applies to projects for implementation, modernization, expansion, or diversification of these companies. The amount saved cannot be distributed to the shareholders and must be added to a reserve account for tax incentives within the equity accounts. For the period ended March 31, 2026, the Company recognized a reserve for tax incentives in the amount of $1,560, totaling $4,231 ($2,671 as of December 31, 2025).
| 23 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| 3/31/2026 | 3/31/2025 | |||
| Net income for the period | 11,132 | 4,728 | ||
| Weighted average number of common shares | 111,402,979 | 111,271,321 | ||
| Basic and diluted net income per common shares | 0.10 | 0.04 |
Net revenues presented in the income statement are comprised as follows:
| 3/31/2026 | 3/31/2025 | |||
| Gross sales revenue – lithium products | 42,191 | 46,070 | ||
| Shipping services | - | 3,522 | ||
| 42,191 | 49,592 | |||
| Provisional price adjustment | 151 | (1,919) | ||
| Total net sales revenue | 42,342 | 47,673 |
The following table summarizes the Company’s expenses by category for the period ended March 31, 2026, and 2025.
| a) | Cost of goods sold |
| 3/31/2026 | 3/31/2025 | |||
| Direct industrial processing and mine cost | (1,513) | (19,826) | ||
| Transportation | (12,713) | (6,863) | ||
| Royalties (1) | (1,477) | (1,871) | ||
| Other(2) | (484) | (2,467) | ||
| Depreciation and depletion | (587) | (3,191) | ||
| Total cost of goods sold | (16,774) | (34,218) |
(1) Applicable Royalties:
i.) 2.0% ‘Compensação Financeira pela Exploração de Recursos Minerais’ (CFEM), a royalty on mineral production levied by the Brazilian government, payable on the price of minerals extracted from the Lithium Properties.
ii.) A royalty (currently held by LRC LP I, an unrelated party) of 1% of Net Revenues from sales of minerals extracted from the Lithium Properties.
iii.) Brazilian law requires paying landowner’s royalties equal to 50% of the Financial Compensation for the Exploration of Mineral Resources (CFEM).
(2) For the period ended March 31, 2026, cost of goods sold includes $66 related to stock-based compensation ($611 for the period ended March 31, 2025).
| b) | Sales and administrative expenses |
| 3/31/2026 | 3/31/2025 | |||
| Salaries and benefits | (2,076) | (2,347) | ||
| Legal | (528) | (1,377) | ||
| Public company expenses | (682) | (892) | ||
| Other | (289) | (326) | ||
| Depreciation and depletion | (33) | (22) | ||
| Total sales and administrative expenses | (3,608) | (4,964) |
24. Other operating expenses, net
| 3/31/2026 | 3/31/2025 | |||
| Idle capacity - industrial plant(1) | (7,652) | - | ||
| Environmental and social expenses | (748) | (751) | ||
| Reversal / (addition) accrual for contingencies | 28 | (72) | ||
| Depreciation | (4) | (7) | ||
| Others | 354 | (66) | ||
| Total operating expenses, net | (8,022) | (896) |
| (1) | The Company implemented restructuring of its mine operations to enhance operational efficiency, started during the fourth quarter of 2025. In mine operations, this amount includes $1,980 in depreciation and depletion of assets. |
| 24 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
| 3/31/2026 | 3/31/2025 | |||
| Financial income | - | 925 | ||
| Financial expenses | ||||
| Interest accrued on loans and export prepayment expenses (1) | (3,864) | (4,948) | ||
| Foreign exchange on tax/fees | (866) | (1,103) | ||
| Interest and late payment penalties on taxes | (127) | (126) | ||
| Accretion of leases and asset retirement obligation | (164) | (131) | ||
| Other expenses | (558) | (63) | ||
| (5,579) | (6,371) | |||
| Foreign exchange variation on net assets (2) | 7,211 | 8,384 | ||
| Total financial income, net | 1,632 | 2,938 |
(1) In the period ended March 31, 2026 interest accrued on loans and export prepayment expenses comprised $545 related to export prepayment agreements other than the agreement with Synergy, $2,582 related to the export prepayment agreement with Synergy and $737 related to financing agreements with BDMG.
(2) The Brazilian Real appreciated by 5.1% against the US Dollar in the period ended March 31, 2026. This variation primarily affected provisions and accruals.
(a) Restricted share units (RSU)
The Company’s Board has adopted an Equity Incentive Plan. The Equity Incentive Plan received majority shareholder approval, in accordance with the policies of the TSXV, at the annual and special meetings of the Company’s shareholders held on June 28, 2019, and was last amended by a majority of votes in a shareholders’ meeting held on June 30, 2023. The Equity Incentive Plan is available to (i) the directors of the Company, (ii) the officers and employees of the Company and its subsidiaries and (iii) designated service providers who spend a significant amount of time and attention on the affairs and business of the Company or a subsidiary thereof (each, a “Participant”), all as selected by the Company’s Board or a committee appointed by the Company’s Board to administer the Equity Incentive Plan (the “Plan Administrators”).
Under the approved Equity Incentive Plan, a total of 18,120,878 RSUs and/or Options could be granted and converted into shares, out of which 15,202,296 equity units have already been granted or issued. A total of 2,918,582 equity units remain available for new grants. The exercise of RSUs is typically either milestones-driven or has calendar-weighted vesting schedules.
The accounting of RSUs granted to awardees is undertaken in accordance with the status of the grant, as follows:
a) Upon Board approval of the awardee’s grants: the Company commences accrual of unvested RSUs expenses throughout the vesting period. RSU expenses are calculated based on the stock price on the date of the Board approval.
b) Upon vesting of RSUs: end of accrual period. Once the awardees exercise the RSUs, shares are issued to the awardees.
There are no unvested RSUs eligible for Monte Carlo valuation based on company policies.
| Number of RSUs | |
| Balance, December 31, 2024 | 383,852 |
| Exercised (1) | (135,700) |
| Granted (2) | 34,000 |
| Forfeited (3) | (315,834) |
| Other (4)/(5) | 1,021,667 |
| Balance, December 31, 2025 | 987,985 |
| Granted (6) | 25,000 |
| Forfeited | (46,250) |
| Balance, March 31, 2026 | 966,735 |
| 25 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
(1) Out of the total amount of RSUs exercised in the year ended December 31, 2025, 70,000 RSUs are related to packages granted to current directors related to their 2024/2025 year mandate.
(2) The amount relates to RSUs granted to a member of the Board, related to their 2024/2025-year mandate.
(3) The amount includes 15,000 RSUs previously granted to a former director, for their 2024/2025-year mandate, which was forfeited since the director resigned his position in the Board. The amount also includes 60,000 RSUs granted to current and former directors, related to the conclusion of a “Change in Control” (as defined in the Equity Incentive Plan) during their 2024/2025-year mandate, which did not happen. The remaining amount relates to packages granted to employees or consultants who left the Company before their RSUs vested.
(4) This amount includes 21,667 RSUs previously forfeited on an outdated proportional basis, which were updated to reflect the terms of the Equity Incentive Plan.
(5) This amount includes 1,000,000 RSUs related to the Net Zero Plan, which were previously removed from the balance in 2023 and subsequently reincluded.
(6) The amount relates to RSUs granted to a member of the Board, with respect to their 2025/2026-year mandate.
The Company has provisioned 128,125 stock options, which are subject of an ongoing confidential arbitration, which are included in legal contingencies (Note 27).
(b) Measurement of stock-based compensation
The total stock-based compensation is a non-cash item in the year. It is accounted in the Consolidated Statements of Loss as per the accounts below (non-cash item). It is also accounted in the shareholder´s equity as a provision. Upon vesting of RSUs the provision is transferred to the Company´s share capital.
| 3/31/2026 | 3/31/2025 | |||
| Stock-based compensation expense | 153 | 805 | ||
| Cost of goods sold | 66 | 611 | ||
| Property, plant and equipment | - | 14 | ||
| Deferred exploration and evaluation expenditure | (388) | 144 | ||
| Other operating expenses | 99 | - | ||
| (70) | 1,574 |
The Company is subject to certain claims, classified by legal advisors as probable losses, detailed below:
| Nature | 3/31/2026 | 12/31/2025 | ||
| Civil (1) | 3,692 | 3,717 | ||
| Labor | 1,677 | 1,703 | ||
| total | 5,369 | 5,420 |
As of March 31, 2026, the Company, under court order, held judicial deposits to guarantee certain civil lawsuits in the amount of $893 ($865 as of December, 2025).
The changes in legal claim contingency are shown in the following table:
| Nature | 12/31/2025 | Net utilization of reversal | Exchange Variation |
Foreign currency translation adjustment of subsidiary | 3/31/2026 | |||||
| Civil (1) | 3,717 | (28) | (195) | 198 | 3,692 | |||||
| Labor | 1,703 | - | (117) | 91 | 1,677 | |||||
| Total | 5,420 | (28) | (312) | 289 | 5,369 |
(1) Sigma is a party to certain lawsuits and arbitrations, and a portion of the amount involved is recognized in the Company's statement.
| 26 |
Sigma Lithium Corporation Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three-Month Periods ended March 31 2026 and 2025 (Expressed in thousands of United States dollars, unless otherwise stated) |
Additionally, the Company is a party to other proceedings classified by legal advisors as possible losses, therefore representing present obligations where cash outflow is not probable. Thus, no provision was made for any liabilities in these unaudited condensed interim consolidated financial statements. The amounts are detailed below:
| Nature | 3/31/2026 | 12/31/2025 | ||
| Civil | 22,205 | 19,125 | ||
| Regulatory | 160 | 149 | ||
| Labor | 2,982 | 2,495 | ||
| Possible loss, net | 25,347 | 21,769 |
On March 18, 2024, the Company received an Initiation Letter of Arbitration by LG Group subsidiary, LG Energy Solution, Ltd. (“LG-ES“) from the International Centre for Dispute Resolution of the American Arbitration Association. LG-ES is alleging that Sigma Lithium is in breach of certain provisions in connection with the Term-Sheet dated October 5, 2021, relating to offtake arrangements for the purchase of lithium oxide from the Company. The Term-Sheet was subject to, amongst other things, completion of the negotiation of definitive written agreements between the parties. The Company believes the claims are without merit. The legal counsel of the Company has formally attributed the probability of LG prevailing in this arbitration as possible. The amount involved is currently undetermined.
On October 31, 2025, Fagundes Construção e Mineração S.A., a former mining contractor, initiated an arbitration against Sigma Mineração S.A. The discussion is related to the performance of the parties under the services agreement that has been terminated. The Company believes the claims are without merit. The Company is preparing its defense and counterclaim with the support of its legal counsel. The probability of loss is possible.
28. Additional information on the cash flow statement
Non-cash effects are presented below:
| 3/31/2026 | 3/31/2025 | |||
| Addition to property, plant, and equipment in exchange for: | ||||
| Lease | 368 | 199 | ||
| Suppliers | 854 | - | ||
| 1,222 | 199 | |||
| Addition to exploration and evaluation assets in exchange for: | ||||
| Stock-based compensation | (388) | - | ||
| Depreciation and depletion of assets | 9 | - | ||
| (379) | - | |||
| Non-cash effects | 844 | 199 |
During the second quarter of 2025, the Company entered into export prepayment trade finance agreements with financial institutions for a total amount of $13,800 and liquidity $8,800 into export prepayment trade finance agreement.
| 27 |
SIGMA LITHIUM ANNOUNCES RECORD RESULTS FOR 1Q26: 39% EBITDA MARGIN; 26% PROFITABILITY; 21% OF TOTAL DEBT REPAID
HIGHLIGHTS
| · | Sigma Lithium achieved the highest profitability in its history: |
| ○ | 61% gross margin. |
| ○ | 39% EBITDA margin. |
| ○ | 26% net margin. |
| · | Generated US$42M in revenues from the sale of 23,000t of lithium oxide concentrate equivalent: |
| o | Realized price of $1,790 (SC5). |
| · | Significantly deleveraged, decreasing total debt: |
| ○ | By 21% over the last year |
| ○ | By 33% over the last 2 years. |
| · | Cash position of US$28M as of May 15, 2026, the highest since year end 2024. |
| · | On track to achieve 240,000t of annualized production, with the successful completion of mining operations ramp-up following a successful restructuring: |
| ○ | Fleet upgrade, capacity increase and modernization. |
Conference Call Information
The Company will hold a conference call to discuss its financial results for the first quarter of 2026 at 8:30a.m. ET on Friday, May 15, 2026. Register for the call at https://ir.sigmalithiumcorp.com/events
São Paulo, May 15, 2026 – Sigma Lithium Corporation (NASDAQ: SGML, TSX-V:SGML BVMF: S2GM34) (“Sigma Lithium” or the “Company”), the largest producer of lithium oxide concentrate in the Americas¹ and dedicated to industrializing socially and environmentally sustainable lithium materials to supply global producers of batteries for energy security, announces the Company’s results for the three months ended March 31, 2026 and provides an update on recent developments.
POSTED RECORD MARGINS
In 1Q26, Sigma Lithium achieved the highest profitability in the Company’s history, posting record margins, with gross margin of 61%, EBITDA margin of 39% and net margin of 26%. The Company delivered solid sales volumes, maintained its low cost position and benefited from higher lithium prices. Sales volume in 1Q26 was 23,000 tonnes of both low grade and high grade lithium oxide concentrate, calculated on an equivalent basis for 5% Li2O content. The realized price for high-grade lithium oxide in 1Q26 was US$1,790 per tonne SC5 (US$2,150 SC6), which compares with 3Q25, the last quarter before the Company’s restructuring of mining operations, with US$630 per tonne SC5 (US$756 SC6).
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STRONG REVENUE GENERATION
In 1Q26, Sigma Lithium generated solid revenues of US$42 million, up 150% from 4Q25, when sales were impacted by the above mentioned mining restructuring, and represent the highest quarterly revenues achieved by the Company since 1Q25 (US$48 million). Revenue generation in 1Q26 was achieved almost exclusively through the sales of lithium oxide concentrate of different grades, with only a small about of shipping service revenues. This compares with 4Q25, when revenue was made up primarily of positive adjustments on provisionally priced sales and a substantial amount in shipping service revenue.
CONTINUED TO DELEVERAGE
In 1Q26, Sigma Lithium continued to reduce debt. Total debt at the end of 1Q26 stood at US$134 million, having declined by 21% in one year and by 33% in two years. The reduction was achieved despite lithium market volatility and via a strategy of progressively paying down higher cost short term export financing lines, which fell from a two-year high at the end of 2Q24 at US$102 million to US$13 million at the end of 1Q26.
SIGNIFICANT INCREASE IN CASH POSITION
Today, May 15, 2026, Sigma Lithium’s position in cash and equivalents is US$28 million, which is the largest amount the Company has recorded since year end 2024. Sigma Lithium ended 1Q26 with US$4 million in cash and equivalents, but the strong sales in the quarter resulted in an accounts receivable balance of US$22 million, which has since been mostly translated into the Company’s cash balances. The Company also continued to receive advanced payments for sales of high-grade lithium oxide concentrate, including from the previously announced US$96 million working capital offtake agreement, as well as from the sales of high purity low grade materials.
ON TRACK TO DELIVER PRODUCTION OF 240,000t
Sigma Lithium successfully concluded a full ramp up of mining operations following the restructuring started in October 2025 and is on track to achieve the production guidance provided at the end of 1Q26 of an annualized 240,000 tonnes per year of high-grade lithium oxide concentrate.
Sigma Lithium remains committed to deliver high near-term growth and now expects the next two phases of the Company’s development to be concluded by year end 2027. These are the expansions Phase 2, designed to take nominal annual capacity from the current 270,000 tonnes of high-grade lithium oxide concentrate to 520,000 tonnes, and Phase 3, designed to lift annual capacity further to 770,000 tonnes.
Sigma Lithium adjusted the guidance previously provided for costs per tonne to reflect higher diesel prices and an appreciation of the Brazilian Real against the U.S. Dollar, which are shown in the table below. The forecasts do not incorporate savings from higher efficiency in mine operations following the recent restructuring, but the Company continues to expect these to be achieved over time.
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| Production Volumes and Costs per Tonne (US$/t) | Estimated 12 Month Period (Phase 1) |
Estimated Phases 1 & 2 |
Estimated Phases 1, 2 & 3 |
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| Production Volumes | 240,000 | 520,000 | 770,000 | ||
| CIF China Cash Cost | ($624) | ($571) | ($571) | ||
| Maintenance Capex | ($6) | ($6) | ($6) | ||
| Sales and Administrative Expenses | ($80) | ($43) | ($33) | ||
| All-In Sustaining Cost* | ($710) | ($620) | ($610) | ||
| Cash Flow Forecasts at Various Realized Lithium Prices (US$ M)* | |||||
| Cash Flow @ US$1,500 /t | $130 | $327 | $493 | ||
| Cash Flow @ US$ 2,000/t | $230 | $544 | $814 | ||
| Cash Flow @ US$2,500/t | $330 | $761 | $1,135 | ||
| * Excludes environmental, social and financial expenses. | |||||
| **Prices shown for concentrate with 6% Li2O content (SC6) adjusted for Sigma Lithium’s average of 5%. | |||||
ABOUT SIGMA LITHIUM
Sigma Lithium Corporation (NASDAQ: SGML, TSXV: SGML, BVMF: S2GM34), (“Sigma Lithium” or “the Company”) is the largest producer of lithium oxide concentrate in the Americas¹ and dedicated to industrializing socially and environmentally sustainable lithium materials to supply global producers of batteries for energy security.
The Company runs one of the world’s largest lithium production sites—the fifth-largest industrial-mineral complex for lithium oxide concentrate—at its Grota do Cirilo operation in Brazil. Sigma Lithium is at the forefront of environmental and social sustainability in the electric battery materials supply chain. The Company’s Greentech Industrial Plant combines the reuse of 100% of water, zero use of toxic chemicals, zero tailings and the use of 100% renewable electricity. For more than two years Sigma Lithium has not experienced an accident with lost time.
Sigma Lithium currently has a nameplate capacity to produce 270,000 tonnes of lithium oxide concentrate on an annualized basis (approximately 38,000–40,000 tonnes of LCE) at its mine and state-of-the-art Greentech Industrial Plant. The Company has initiated a Phase 2 expansion designed to close to double production capacity to 520,000 tonnes. For more information about Sigma Lithium, visit our website
| (1) | USGS. |
FOR ADDITIONAL INFORMATION PLEASE CONTACT
Anna Hartley, Vice President of Global Banking and Investor Relations
+44 7866 458 093
Mariana Bengtson, Investor Relations Manager
+55 11 9 2144 2750
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Sigma Lithium
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Sigma Lithium |
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@sigmalithium |
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@SigmaLithium
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FORWARD-LOOKING STATEMENTS
This news release includes certain “forward-looking information” under applicable Canadian and U.S. securities legislation, including but not limited to statements relating to timing and costs related to the general business and operational outlook of the Company, the environmental footprint of tailings and positive ecosystem impact relating thereto, donation and upcycling of tailings, timing and quantities relating to tailings and Green Lithium, achievements and projections relating to the Zero Tailings strategy, achievement of ramp-up volumes, production estimates and the operational status of the Grota do Cirilo Project, and other forward-looking information. All statements that address future plans, activities, events, estimates, expectations, or developments that the Company believes, expects, or anticipates will or may occur is forward-looking information, including statements regarding the potential development of mineral resources and mineral reserves which may or may not occur. Forward-looking information contained herein is based on certain assumptions regarding, among other things: general economic and political conditions; the stable and supportive legislative, regulatory and community environment in Brazil; demand for lithium, including that such demand is supported by growth in the electric vehicle market; the Company’s market position and future financial and operating performance; the Company’s estimates of mineral resources and mineral reserves, including whether mineral resources will ever be developed into mineral reserves; and the Company’s ability to operate its mineral projects including that the Company will not experience any materials or equipment shortages, any labor or service provider outages or delays or any technical issues. Although management believes that the assumptions and expectations reflected in the forward-looking information are reasonable, there can be no assurance that these assumptions and expectations will prove to be correct. Forward-looking information inherently involves and is subject to risks and uncertainties, including but not limited to that the market prices for lithium may not remain at current levels; and the market for electric vehicles and other large format batteries currently has limited market share and no assurances can be given for the rate at which this market will develop, if at all, which could affect the success of the Company and its ability to develop lithium operations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether because of new information, future events or otherwise, except as required by law. For more information on the risks, uncertainties and assumptions that could cause our actual results to differ from current expectations, please refer to the current annual information form of the Company and other public filings available under the Company’s profile at www.sedarplus.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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