Sigma Lithium Corporation (SGML) Earnings Call Transcript & Summary

So we'll start, Marina, let me know when we're ready for. So as you noted it's an Investor Day, so we have a good part of our audience remotely. But I really want to thank all of you who are here in person and who made the commitment and the time and the effort to join us. We brought our senior leadership to New York and we're making them available to you. So it's fantastic to be here, and I want to thank you again. We're very, very honored to have you as shareholders. I mean yesterday, we closed the bell at the United Nations Climate Week here in NASDAQ. We're 1 of the 10 companies that was invited again to do it. We followed Steve Jobs' widow, who opened Ms. Powell, who opened the market yesterday, which again is a testament of all the execution we've been doing around climate goals around sustainability. And we've done that when it wasn't fashionable and then it became fashionable and then we continue to do it because that's part of the DNA of the company. And that has happened regardless of ensuring that we deliver the returns, the profitability, the cash generation, the low cost, all the metrics that a publicly traded company would be expected to deliver. So we managed to merge these two elements, which is what makes us so unique. We're celebrating this year, one year is a major, major producer. We created a whole region around us. We've been joined by our neighbors and we're marking that by shipping 22,000 tonnes like a clock almost every month. That's just a short year after turning on our plant. This has never happened in the industry is a record. And unfortunately, that happened against very, very volatilely to market and it's gone unnoticed. But what we want to highlight today is how much we push through how immaculate was execution throughout the last year, and highlight the record-breaking commissioning that we went through. We accomplished a lot last year, a lot. We ramped up this plant, we perfected the industrial green technology that's now going to be duplicated. And overall, we also demonstrated how our growth organically is insured for a few decades. We became the fifth now largest industrial producing mineral complex in the world, meaning we are producing force in the industry. We're the only non-Australian on that list, which basically ensures our place in the sun as far as geographic diversification for global battery supply chains. The amount of building -- the lithium we've been delivering now is enough to build 700,000 cars. When we double, you'd be double that, when we triple you'd be triple that, which puts us in the access of building up this globally sustainable, sustainable supply chain and again, ensures our place amongst all the other players. We've been the only company that has delivered that execution like a Trinity, scale, low production costs, and again, traceability, sustainability. And when we talk about it, the bar is really low. When we look at the other low-cost producers today, it's essentially a zero standard, that's another zero. And so even though the bar has been set really low for low cost, we have managed to set the bar very high and adhere to this low cost. Again, this leadership in the global battery supply chain is absolutely consolidated, and that has nothing to do with geographical boundaries because battery sells cross borders throughout the world. You have cells running in cars here that have been built in Asia -- in all of Asia that includes China. And we delivered the lithium material for these batteries that circulate here and circulate around the world where customers do care about what's inside the battery. And again, a testimony to the high standards we're Net Zero carbon neutral, which puts us in the axis of the supply chain. And why is that important? Because this is already headed our way, even though there's no traceability standards. The supply chain is embracing the same purpose of the electric cars. Being zero carbon, zero tailing dam, zero use of drinking water, zero toxic chemicals, zero dirty electricity, zero accidents and adding zeros makes us bulletproof because mathematics doesn't have an opinion. So this is the climate action an answer to the previous very uncomfortable question around the production ethos of the materials inside the battery of those electric cars. We've all been around in 2017. We've all been around what's happened to cobalt. We can't allow this to happen to lithium. So what we're hoping to do is to make obsolete some of those unacceptable show cuts still undertaken by an industry that sometimes really overlooks this questionable practices to achieve low costs. You got, as I said, artisanal mining with an ethical label practices, diesel generators being used in ramp-ups being hailed by the investment community, own coal thermal plants, again, being hailed by the investor community. We know this is short lived. You can build in a multi-decade cycle with these short cuts. It's going to catch up with the industry like it did with cobalt and with lots of minerals before it from tantalum all the way back to diamonds. Again, the zero accidents was important because it was not just -- just not having any fatalities or accidents without injuries for now a year and a quarter, it meant an entire company being geared up to deliver efficiency and at that, we use the Alcoa case and as an example. I think lastly, I want to close that we've done all of that benefiting almost 20% of the economically active population. We have a wide net of direct jobs, indirect jobs, socially include exclusive with massive programs around microcredit and irrigation for family farmers. In short, I think were shown that it's possible to share prosperity and deliver impeccable financial results. In a real example that a business with a purpose can bring to society and communities. And that is our operating license right there. In a world of metals and mining, if you don't have that, this is your business biggest -- it's your biggest business risk. Community can close out like that. And in our case, the community has been embracing us for 4 years. This is our shield. So lifting to people of the entire region, enabling the creation of Lithium Valley, which we've done right here in NASDAQ, celebrated the year just now, and uniting state and federal government in a politically polarized country. Essentially, we have managed to launch this crusade in a country that lifted this formerly impoverish region because now it's growing at 20% a year into one of the world's foremost lithium producing regions. So much so that we're now welcoming great metals and mining companies from all over the world into our neighborhood, including a former competitor cooperator, now which -- it all -- it makes us very proud because we're calling everyone neighbors. And in that neighborhood, we create a strength of a territory. So now where? And that's the purpose of today. I'll close with this. We're going to double capacity, but that's just the beginning. Then we're going to triple capacity. And it's that sense of mission that ability to unite federal and state government and access development bank financing in Brazil, which is extremely powerful is what makes us so relaxed to continue to build with the pace as if the lithium prices were just a side note, why? This is what we call long-term industrial policy. And we are the absolute leaders in our sector, and that has been proven by the kind of financing we gain access to, especially when you consider the peers in the country that have the same kind of financing. So I'll close by saying we've been humbled by all the execution. Accomplishing this has been really hard. I remember when we first rang the bell at NASDAQ 3 years ago, we never thought it was going to be easy, but it's just been brutal. But we made it, and we made it with a smile and we made it bringing people along and we made creating this unique culture, and we made it sharing prosperity, not just with the neighbors and the other people in the region in the society, but also sharing prosperity by welcoming other companies, competitors, everyone, meaning we made it with the sense of abundance because there's lithium for everyone. Lithium is not rare, but where we are is indeed one of the best territories in the world to deliver on that trinity in Brazil, you can do this. And that's what we set out to prove it can be low cost, it can have scale and it can be sustainable. And it can make everyone extremely, extremely happy at it all of the stakeholders. So this is stakeholder capitalism at its best. So, we know, we know that -- and it's with a lot of humility that we went through this, and we know that Sigma stands for something much, much bigger than us. Sigma will be our legacy. We're all in a senior leadership over 40. So we've done quite a lot before we got here. In different companies, different industries, we are at the peak of our professional performances, and this is what I want to show today. And we know the Sigma stands for something much, much bigger that's going to outlast us. So when we look back, we're going to be remembered for doing this as we already are in our region and in our country. This is going to be what we leave in the world. The purpose, why we're here, why is it that we're doing this despite all these hardships that we've seen over the last 3 years, and we know we're going to come our way, and we now we're going to overcome just the way we've always done is because we are trying to rewrite tomorrow. We are trying to show that we can fight climate change, we can lift the people when we can make shareholders and stakeholders extremely, extremely happy. So I'm going to thank you again for your support. And with that, I will commence the presentation. So this is kind of how we're going to run the program today. So I started, Matt is going to join us soon. We're going to have the senior leadership here, and we have a lot of members of the senior leadership that you welcome to mingle and talk to as well. So first, we're going to start with the strategic and commercial update. I'm going to cover for Catarina's part, which at the moment is headed over to China where a massive, massive lifting stimulus was just launched yesterday. Then Rogerio is going to -- it's going to take on the stage to talk about financial flexibility and our ability to pursue growth. Reinaldo is going to talk about mining. He's our General Manager of Mining. He flew from Brazil this morning. He's going to talk about the industrial Greentech plant. And then Maria Jose and Fádwa are going to join forces to talk about the ESG update. Reinaldo is going to be joined by Iran Zan, who's going to talk about how is it possible to grow organically, given the sizable industrial mineral complex we validated this year. And then we're going to close with Q&A and remarks, and then we'll serve lunch. So where are we today? These great pictures. We took this picture exactly at the time stamp of the construction of Plant 1, 2 years ago. When you look at -- it was a construction site. When we look at where we are today, we have this beautiful industrial mineral complex, which is the envy of the world, who's actually joining us, and we're welcoming everyone. And this is our plant. No one thought we're going to make it this fast, this far, this sustainably, this profitably and stay low cost. But here, it is what we build. It's a beauty. The technology of the plant that we've developed is unique in the well because we've done all of it into pole-zero, and I'll be talking more about it. Here's another picture of the plant. What's remarkable, there's just not a drop of water here, not a drop. And this is our legacy to the world. Why? Water has been the much talked about issue in the industry. We don't have that issue. But we made a lot of efforts to be able to counter it and deal with it. And this is the site we proudly show you, not a drop of water, this beautiful industrial complex. So what is it then that's so special? Well, that's what it is. We combine large production scale, the low cost, the highest environmental standards in what we call the akin to pole-zero lithium. So scale, that matters. You need to be relevant to be able to essentially anchor an entire supply chain around principles and around quality and around we call relevance. Then production costs, with our low cost, it's all lost. This is a business after all. And the industry is aiming to deliver electric cars that are at parity with combustion cars. So cost and scale are the basics, and we are delivering on the basics. Any hope that this supply chain would actually be forgiving on high cost or premium pricing to price inefficiencies just doesn't exist, and we all know that well. Then we have the akin to pole-zero, which is our little miracle, but we pulled it over. And how did we do it by attributing mathematical measurements and then getting to zero because, again, zero is unquestionable. It's just not really an opinion. So it is zero carbon, which is something we accomplished a year ahead of time, which puts us in a whole different pedestal in a week like this and at events like [ COP-E ]. I mean when you think about it, our development bank funding came from the climate fund for an industry that would never be associated with such allocation. But why? We are probably one of the very few and I mean inside a hand, industrial facilities in the country and in the world that actually is zero carbon today. And again, that's a number. We don't have tailing dams. This is the reason why we all started here, zero tailing dams. We use zero drinking water. So the water we use is actually reuse sewage water, zero toxic chemicals and zero dirty power. So we're going to talk quite a lot about this, but the combination of these three attributes is what makes us really special. So here it is scale, fifth largest mineral industrial lithium complex in the world, top 10 global lithium producer. The scale of the complex is what ensures our ascension to higher ranking in production. It's essentially just unlocking on that organic mineral reserves that we have there, validated and audited as Reinaldo walk us through today. Low production costs. And again, we've shown that in the previous quarter, we're now around -- we are the third lowest amongst our peers in lithium source from rock. Premium lithium. The premium is not green. The premium is because the product, thanks to the Greentech plant, that Keith has been perfecting over the last 2 year, it's essentially a better product metallurgically, it's particulated. It has efficiencies thrown into the supply chain as it's what we call value in use. So it's bringing savings to customers. So it's a mathematically better product, and we'll talk quite a lot about it today. The CapEx is fully funded. The development bank rate is 3% in dollars, so it's subtreasury, and that allows us to double production. And that is part of a wider development banking, industrial support, which means we'll keep on going back to it with every phase. So this is how cornerstone financing and is going to be available for us in every phase. And that is a key, is a key message that I want to deliver today. After 10 years, we've been hailed as an industrial leader in our sector in the country. Because, clearly, we're one of the leading players in the world, and that makes the country very proud, especially given the way we've been doing leaving the social inclusion legacy, which again transcends politics -- is a national purpose because how can you not before lifting one of the country's most impoverish regions, right? Longevity, so we'll talk quite a lot about it. Organically, we got over 25 years of operating life. So all we need to do is just keep on going back to our mineral reserves. And there we are at the scale we're going to set out to achieve today. Excellence. while excellence with everything because again, is attributing number to operational execution capabilities. Zero accidents for all of you who run industrial operations don't happen like that. They are a result of a series of procedures, processes, policies, good management, KPI that kind of lead to this perfection that it is not to have any incidents with lost time not to have any fatality. So that is an indicator that we chose to demonstrate that we got this. We can actually run this company extremely well, and here is another zero to prove it. Here is one by one, numerically what we've outlined in the previous page. Leading scale, fifth largest industrial mineral complex. So that's the number. Look how far we came and look how far we climbed. These are the producing complexes. As you notice, Greenbushes, Pilgangoora, Mt Holland, Wodgina, all in Australia. This ensures our geographical diversification. Our place in the industry is secured, if anything, because of geographical diversification. A bit like iron ore, one will not buy all of the iron ore from Australia. So here it is a very large scale, low cost, reliable producer from Brazil. Here is what that translates into numbers. In other words, that mineral reserve bench inventory is what allows us to climb into the levels of production we're setting out to achieve here without having to expand inorganically. We just keep adding. We go back to the mineral reserve and then we add a lithium processing unit, funded mostly by development bank industrial programs. In our case, there's the climate fund and there's the innovation fund, both funds that we can readily tap into, which means that our position as industrial mineral complex gets matched by our position as a producer. So we ranked all the producers. We haven't classified them into traceable and nontraceable but quite a few on this ranking are now in the category of nontraceable particularly because of the low-cost environment, which again creates enormous differentiation for us because when you clean up the product from traceable to untraceable, we are in a very unique position, and we have a significant competitive advantage in this market, in fact, together with the Australians and the Canadians. And here it is. That's the state of affairs in lithium today. So when you purge from a cost perspective, traceable from untraceable, social, human labor and all sorts of questionable practices out of the supply chain, you left with very few players. And this is kind of what we call the black swan of the low cost, all of this material from Africa in March. And again, for the record, I have an African son. I moved to Africa to have a child. I love Africa. What we're saying though is just like Brazil, just like our region, we can actually lift the bar as opposed to promote a race to the bottom on the back of the low cost environment there. That's all we're saying. Let's all race to the top as opposed to race to the bottom. And when you look at the high-cost supply, there hasn't been a lot, even though it has done a fantastic job in adequating itself to environmental practices, because you got this drag coming from untraceable materials at the low end. And this dynamic, it's not for the whole industry. The volumes are not that high, but that is just that gap that prevents the prices from sliding up, and we'll talk quite a lot about it. So we managed to do it, low-cost production, ethically source without sacrificing sustainability. And that's on the back of the akin to pole-zero. We don't have tailing dams, no toxic chemicals, no drinking water, no carbon, and no coal power. We've talked about it on and on, especially a climate, we're quite proud of that. So it is possible to do this. This doesn't cost a whole lot of margins. In fact, it's actually a very low cost once we got going. And once we deploy the CapEx to which was prelisting even. We set out the foundation even before we became a public company. So, ultimately, our shareholders do have the benefit of all of that foundation and we just keep on doing it by maintaining the industrial greentech technologies that we set out to build. Here, it is then the fundamental value issue, right? When we look at prices, it's fascinating because in general -- in the beginning of 2021, like essentially, when you look at the periods of time, we had '21, '22, '23 and '24. As I recall way back to the future. We've done all of our -- the lithium prices are where they are, but we are back to the same market cap we've had 3 years ago, which again, is the demonstration that we did not reprice once we became a leading producer. So that is the conundrum that we're trying to break. That's the correlation we're trying to break. Once we became a producer, we got pegged to other producers, but the other producers weren't developers in 2021. We were. So we moved from developer to producer, executed all of it, but we're still exactly where we are back then. And when you think about -- when you think about prices, they haven't really affected us at all because by not being a producer, we never got the benefit of what's happened to lithium prices in full, like the producers did. So this is, again, the correlation we work very hard to break. The fact that we executed against headwinds and we never repriced in full as a producer. In fact, we never repriced at all because we basically have similar market caps as developers in places like Australia and Canada. So here is a video. [Presentation]

So that's today now tomorrow. So essentially, where we had it, right? We're going to continue to be the leader of sustainable materials. We kept this low cost. So the challenge now is not cost cutting, it's just to stay exactly where we are. There's more margins to gain solely on scale. Scale is our friend. And we have one of the most capital efficient, CapEx-efficient source supply in the well. And again, the geographical diversification is our friend. So what are we doing? We're leveraging on all of that and expanding the Greentech industrial complex to its full potential. We're going to build one, and then we're going to build two. So growing profitably, maintaining the financial and capital discipline, maintaining commercial flexibility. Maximizing productivity. I mean we have a series of productivity projects to extract yield from the plant that Keith is going to talk about the direct cornea discipline operating costs which, again, allows us to do all of that without waiting heavily on cost, sustainability always and then strengthening the bench. So this is kind of where we're headed. We built this foundation for this globally sustainable and traceable supply chain and that essentially will enable this clean EV battery, which it's not just the Western market, is globally produced, cell batteries are made all over the world, and they circulate all over the world. So for cars of the top 5 leaders for top 5 leaders of battery materials. And that includes leaders from all over Asia. That is the only standard, the clean battery. There's no way out. These procurement units join force with their OEM customers, and they do focus on the same things we focus on. So we have almost a captive audience there, and that is actually a global audience. And this is where we are headed. That's where we are going in. So this is kind of how we're going to build block by block in a low risk, low CapEx strategy. We've managed to achieve one of the most efficient CapEx ratios in the world in terms of CapEx by unit produced. And we're going to stay exactly that way. Why? Because the bulk of the industrial mineral complex has been built. So our efficiency initiatives will allow us to get to 37,000 tonnes LCE this year. in a pretty streamlined manner. And that's about extracting yield. That's about doing more with the same amount of mineral ore feed that goes into those plants. And that's what Keith is going to demonstrate here. On phase 2, the goal is to basically achieve the same results initially feed to mine 1 then later feed with mine 2. So in 2025, we complete construction. So we essentially layer out another industrial arm towards as an expansion of the current Greentech bond. Then in 2026, we'll go at it again. So we build a third line. So sequencing 1 after the next, same similar development funding, same sources of funding and essentially supported by the same infrastructure. The infrastructure we have there, the water pipeline, the substation, the sewage treatment water, that infrastructure supports three lines. It's already being built. So it's leverage on existing infrastructure, drawing from the mineral reserve that we have. And then in 2027, we embarked on becoming the access of a global chemical-to-chemical supply chain. And that is the simple part of it. We don't have any aspirations to do what we call complex chemicals or specialty chemicals. The whole concept of it is essentially to bank on our own premium product and build lithium sulfide intermediate chemicals, which is calcination, lithiation, which is an acid watch, is simple as intermediate chemicals. In Brazil it's easy to build that, and we layer on the first line of it. Why? Because of all the reasons we discussed, and we will continue to elaborate on throughout this presentation. So this is the picture. Essentially, we're going to now -- we perfected plant 1, we embark on another construction, and then we lay out another line train. So line train 2, line train 1, line train 2, line train 3 and then move on to build intermediate chemicals in the port, where it's most logical given the access to natural gas. So here it is the industrial mineral drawing from the same mineral reserves that we unlock this year is 100% organic with the longevity of over 20 years. Why chemicals in '27? Because this is where supply demand imbalance turns again in our market. Because of all that's happening today, you have a delay, and we'll talk quite a lot about it, of demand uptake in the West and the supply demand imbalance gets created because there's lack of investment in supply we call traceable supply. So we go back -- again, back to the future in 2027, and this is the consensus. Irrespectively of where prices are headed, what happens in '27 for sure, in our view, is a clear place in the sun for that intermediate chemicals product. And this is why we chose that year to essentially build it. It's a simple facility. CapEx is, in our view, under $150 million. Again, this is Brazil. We have human capital. We have the knowledge, it's a calcinator, it's a kiln and lithiation and an asset wash. We'll talk quite a lot about it today as well. So this is where we had the next. We are sitting at the very best place in the supply chain. That is why we're building 2 more lithium concentrate units. We have a fantastic mineral resource. We're able to build integrating mine and industrial processing facility, the one you saw -- we have an integrated gross margin of 50%. So that's very unique in today's market. So even a $900 pricing, which is probably the price of this month, in our industry, we are able to deliver these margins. Now why then go to chemical? Because it's an extra pickup in margin to achieve if we move there. But only when we have what we call the receivership of it, and the sedimentation of our place in the sun in that market. Before that, we'll continue to do what we're excellent at it, which is lithium concentrate delivering this premium product using sustainable processing technologies. So again, what is the dichotomy here? Well, it's our own premiumization that we're going to pick up. If we don't achieve that or bank roll that in the market. And if anything, we'll stop picking up some of our premiumization. But so -- this is where we sit, the highest value creation portion of the supply chain. And here is the mathematical demonstration of why are we where we are and why not now? Because again, refining has been a low-margin business, and it has had negative margins. Now what is important about this slide, not only to players are lithium concentrate producers. So there is a reason why the Australian companies do have -- do enjoy higher valuations even in this pricing environment. The reason is they sit like us at the very best place in the supply chain. I wouldn't want to be producing chemicals in this industry and competing with this market situation where the drive of that industry because it has been conceptually integrated downstream is to deliver margins as little as possible in China, where 100% of refining is concentrated. Why? Because the drive is to deliver the lowest possible cost battery. And that's a fantastic policy initiative, but we need to be cognizant of it, meaning that block of the supply chain has a purpose within a wider electric vehicle leadership that the industrial policy there is trying to consolidate, and that is absolutely perfect for those objectives. So trying to have a business whose end meaning is to interfere with it or compete with it in today's environment, in our view, isn't a very sound proposition. And again, this is why we sit in concentrate. Hence, our comparable are the Australian peers. Hence, this is why they enjoy higher valuations than the chemical producers. And this is where the axis of our believes in decoupling from some of the U.S. listed companies is based on. We're not a chemical producer. We're not headed into this fierce competitive situation. We're sitting -- supplying into this. And more importantly, with our place in the sun supplying into this. Here is why because we deliver a better product. It is metallurgically better. So essentially, in an environment of zero or negative margins, which is part of a wider industrial mandate, we actually have our place in the sun because we allow downstream enable downstream to have margins by delivering this concentrate at very little premium at low to very little premium. Why is that? Because essentially, when you look at our product, we're in a situation, where metallurgically, we have a 20% to 30% property here that gets passed through the supply chain in the form of higher recoveries and more efficiencies. So this is savings to the customer. And this is the math of savings. Hypothetically, we use hypothetical prices to make it easier. If the chemical was $14,000, the customer, we need to buy just 7 tonnes of that chemical, 7.26 tonnes to be precise to produce 1 tonne of high-purity hydroxide. Now, when you look at the product of the competitors, they would need to buy 9 to 10 tonnes of the same concentrate to produce the same 1 tonne of the chemical. So 1 tonne of the chemical, that's the cost breakdown of 1 tonne of the chemical. Here, it is the cost breakdown of all the materials that get into the chemical. It's essentially concentrate, but our concentrate because of its metallurgical properties delivers that cost saving. And as that the customer just needs 7.26 tonnes of that material. And again, these are numbers, these are not opinions. This is a test. This is tested. This is a process. This is a result. So what does it mean? We're delivering in a hypothetical scenario, 20% to 30%, which could be up to $3,000 of cost savings. So when you think about the bigger picture then back in an environment where chemicals are in negative margin territory we're delivering value in use. Our place in the sun here is assured. So we actually are in the best part of the business with our place in the sun assured. So we are peers to the Australians, not peers to chemical producers. So when one looks at Sigma, our equity, our stock valuation, we're not peers to chemical producers. And that is the decoupling we are basically working so hard to ensure in this industry because being coupled with a chemical producer, especially in the West, where the costs are higher isn't what we do. What we do is just what the Australians do. We sit in this fantastic spot. We have a premium product. So, ultimately, conversion, it's essentially -- it's an ecosystem that was built in China. It's going to be really hard to match that. What we can do and that again ties back to when and if we get into that business, we're going to just -- we do just so as to capture this cost advantage, meaning through calcination, which is where it happens because of the particles and through the asset wash. And why, again, in Brazil? Because it is a low cost environment. We have a chemical industry, the country have industrialized is a pretty straightforward location to do this. So this is where we're going in 2027 is essentially becoming the access of that industry and even supplying to China too. Why? we will save transport. We will be able to enable the zero carbon refined chemical in China. When you look at the carbon footprint, if you get a best-in-class customer there, it's just 2.5 tonnes of carbon. It is actually a beautiful integration into the world's largest refinery park from one perspective. Also, clearly, we have our place in sun in a refining part that's being built throughout the U.S. currently here, there's a plant here in the U.S. being built. There's a plant of hydroxy that was just built in Germany. There are plants in Japan and Korea that we visited. So we, again, have our market position in short here when we build the lithium sulfide plant. So this is where we're going. And with that vision, we want to build enough firepower to supply lithium concentrate in '25, '26 so that when we allocate 20,000 tonnes LCE for this unit, we are not detracting from our main business, which is to deliver this. This high value creation portion of the supply chain. And then we will capture a bit of this, with 20,000 tonnes LCE in our integrated chemical strategy. So as far as strategy, we wanted to articulate that in detail because the elements that enabled us to deliver on that strategy are ready in the industry. Again, we have specialty chemical plants build, build in Japan, Korea and Germany today. There's one in construction in the U.S. So the demand for 20,000 tonnes is LCE of traceable zero carbon product is already there, right? And obviously, to China, we'll deliver a carbon-negative and enable the offsetting of 2.5 tonnes of carbon, which again, creates a captive market. So when we look at future demand for it, well, it's going further, if you add North America and Europe, and when you think about the plans for the following decade, the conversion capacity will just increase. again, the foundation for this material is already laid out. So, with that, we wrap the strategy section. And we're going to enter commercial strategy in lithium markets. What do we see going on in the markets today. And as some of you know, like [ Ares ], we have a very hands-down approach to commercial strategy. We built a real conduit and a real pulse into Asia markets, which allows us to have very good visibility of what is actually happening on the ground. Starting with last night's news, which were phenomenal around the unveiling of a massive stimulus product, the largest since the pandemic, which we believe will provide the fourth quarter with just enough boost on the very end of the supply chain on the discretionary goods, which are electric vehicles in order to propel the entire supply chain in the next 2 quarters. But irrespectively, there's an industrial policy driver in China to essentially decarbonize. And we keep on talking about it. It isn't about climate goals is about survival. It's about livability of the large urban centers. When you take a broader perspective, the entire economic development model of China is about urbanizing people from the rural areas. We've been here before in the United States, in Latin America, in the West. We've done that a few decades ago. Now that has started in the early 2000s, and it still half way through. I mean China still has 350 million people to urbanize, to continue that economic development model. That is the size of the United States. That is why the red isn't going away. Because there's a 5-year industrial policy plan that sets the pace of growth because there's a much bigger goal at stake there, which is to make those A, B and now C is livable to absorb the amount of people equivalent to the whole United States. And how is the easy way to do this, the carbonizing mobility, because mobility is the quick turnaround CapEx is the 3-year churn on CapEx. You change cars over 3 max 5 years. Not the grid, the grid takes 10 years. There are investments in the grid investments in the cars, but ours are the easy low-hanging fruit. So this is here to stay, and this is why we have the numbers on the left. In other words, China grew this year to date, 32%. In the first half alone, essentially, it has grown. So overall TNAV has grown 32%. So essentially, where are we -- we are in a situation where when you look at all these other markets, it essentially shows us that the growth is coming from China. So when you look at demand increment, what we've got here is just between '24 and '25, we're going to have the demand increment of the equivalent of an entire 2019 and 2020 market. So the increment is just significant. So when you think about 32% growth, basically with the locomotive of China and zero growth coming from or very low growth coming from the West, you still have a situation where this year's demand is 1.1 million tonnes of lithium, and next year's demand will be 1.4 million tonnes of lithium. So the delta here between this year and next year is equivalent to more than 200,000 tonnes. So it's the size of SQM. So one would need an SQM coming out of nowhere between now and next year. Some of it is coming from untraceable Africa, but there isn't an SQM there in materials. That is just a gap filler. So the foundation of demand growth between this year and next year has to be delivered by what we call the workhorses of the industry. Now there is supply/demand in balance. Yes, absolutely. And that's what Fastmarkets chart there shows. But the reason why that imbalance gets consumed in '25 and '26 and it turns negative into '27 is that even with the bearish demand forecasts, there isn't really a large low-cost mine appearing in the horizon. So again, we're back to the future. So when you look at '27, this is the picture of when the market turns. So if experience is any indicator, if '27 becomes 2022, we all remember what happened in 2021, which is going to be 2026. So the strategy is about executing throughout '25 to be ready in '26, because this is where we're going to see what we call the preparation of pricing for imbalance because, again, markets will realize that, well, a large, low cost, sustainable mine, the size of SQM hasn't been built. And by then, we'll have been -- we will be needing about two of those, and they aren't here because it isn't fast. So that goes back to, again, battery demand. This is the foundation of the demand numbers from the previous slide. And if you look at even this year, tracking battery demand, you can see the gigawatt capacity increasing. And again, most of it comes from China. So as we've always said, for those of you who've known us for over 5 years, we have always built a strategy and execute a strategy to China because that is the stalwart that is there for the fundamental reasons we've always talked about. If you build capacity, if you plant capacity, intend them with China's industrial policy in a 5-year plan, in this industry, you're always going to do well. Again, what's the catch? You got to be low cost. And here it is what the changes will bring, again, into that market that will just be switching into supply-demand imbalance. We have the lithium supply chain yield better implementation, all these fundamental changes happening in Europe and which, in a way, drive the Western markets because it was the largest growing market outside of China just 2 years ago. So you have a changing landscape in the backdrop of a market that enters supply-demand imbalance. So this is where we stand to benefit from. We will be the access delivering to this market, those materials. This is European gigawatt capacity installed through it out. So you can clearly see that once it picks up in '25, '26, you have the support for the lithium supply-demand imbalance. And where are we? What do we do? This is what we're going to do. So if anything, there's a captive audience. And that's there, right? But this is not all we are. Again, our cornerstone market is the Asian markets, but here's the captive audience because these cells, these cars the cells that go into the batteries of these cars are not necessarily produced in Europe. They produce all over, but these cells will be adhering to what we call differentiated procurement standards. By definition, so this is our captive audience. So when you look at our supply, we can keep building, and that's not enough of our lithium. And again, sold in Asia, in China into those end users to supply the cells that go into the batteries that end up in these cars. So this happens irrespectively of where the cells are built. This happens connected to where the cars are sold. And they can be made by any company. It can be made by a Chinese brand, a Western brand, an European brand, an American brand, it's about where cells are made. So these are the challenges of the Western procurement that we talked quite a lot about it. We map every single one of these challenges. So this is why we're in a legal round and even today. And again, why the low cost became a race to the bottom. And so in the low-cost world, our operation, as you saw, is nothing like this. So again, we are -- we stand alone in supply into the market for the next 2 years, essentially where low-cost matters. It really matters. These are what we call our mining operations, the feed sometimes industrial plants. Sometimes, they just deliver small quantities of concentrate. But the main issue here is that they are feeding ore to industrial plants. So when you trace its source you actually find this as the source of ore, not the beautiful mine, Reinaldo mechanize fantastic mine that Reinaldo runs. And this is the problem. So again, just segueing into the commercial strategy. So what are we doing in the next 2 years in today even to maximize its flexibility and assert value. We have a commercial team that just keeps growing and keeps on getting more capitalized into China, which is the market that matters. Why? Irrespectively to where we sell to what is our accounts receivable, which, in our case, is mostly Japanese, European and Korean, this market for all the reasons we talk about, it plays out in China. And now in the landscape of the largest chemical exchange, which is the Guangzhou. So between the Guangzhou, the refiners, the boots on the ground, we're able to get a pretty good pulse of what is happening in the industry. So the strategy evolves because, again, the refining happens in China, we are diversifying between China and ex China as far as end user and client goes. We're moving from delivering to a trader as a principle to deliver into a trader as an agent where we jointly develop strategies to commercialize material, which allows us to premiumize the material. We strengthened the relationship with shipping companies so that we now commission our own shipping. That is $20 a tonne, which is significant. This consistent ability to ship monthly and regularly within 30 to 35 days ensures our place in the market because we are relied upon to deliver that quantity regularly, and we created that strength with customers. The cheaper financing drives this opportunistic sales approach, meaning we are fully backed up by export financing from some of the largest commercial banks in the country led by Banco do Brasil at just under 6%. That gives us the breathing room to exercise what we call commercial assertiveness, meaning we actually decide when to sell the product together with our trading company partners so that we escape the throughs of the cycle, which wasn't something available to us in the previous cycle, but in this cycle, it is. And that is key. It's key. Because that's an ability our peers in Australian have and Australia have because of the export credit apparatus in the financial markets in Australia. And now as we celebrated a year as a producer, we're also able to match. So when you look at a market like just now in the summer where it was this bar of product and the prices went low to the level of artisanal mining offers, you could clearly see the bifurcation, which players were offering material at which prices. So area focus, build out the commercial teams, build a presence on the ground in China, continue to reach further downstream to clients in the battery and car segments of the supply chain, which tend to be less price sensitive, but more importantly, they want reliability of low-cost traceable supply. Why low cost is important? Because they want to know that as a company, we will be here no matter what happens to prices given that our cost base is very low. So we are consider what we call a stalwart, a workhorse of the industry like our other low-cost peers. And at that, we can explore formal volume commitments to reduce some of that volatility that happens throughout the year with the seasonality of purchasing. There's clear seasonality in the spring and fall. I don't need to get into the details of that with this audience. And so the challenge commercially, and we're meeting it is to manage our offerings throughout the seasonality with our commercial trading partners backed up by export credit, which we've done very successfully this quarter. And as an example, we are today picking up 50 tonnes -- $50 per tonne more of pricing, which is a lot in this environment over, had we decided to sell this product in 10th of August. So by having the ability to hold out literally 40 days, we picked up $50 per ton. If you multiply that by '22, you just think about the magnitude of the swings that happened between in season and off-season in a company like Sigma now joining the Australian concentrate peers stands to benefit from with the breathing room that having export credit gives us. It is significant. So now what do we want to achieve with reaching out to battery makers and car makers for 3/4 or half of our supply committing to 1-year extendable in 2-year agreements, which is -- while we're executing in the fourth quarter. What we're planning to achieve is create that predictability throughout the formal commitments. We can schedule the shipments into perhaps 6 shipments a year, save on shipping, delivered to an OEM that wants to ensure they have access to low-cost traceable material. Again, we're not really getting a premium. We simply obtaining what we call on-season purchasing cycle market prices, which is what we do today already. But then again, half of our supply will be comfortably delivering into a preordained structure. So that allows us to institutionalize capturing what we call in premium pricing, but what it really is, is essentially being able to sell throughout the 3 months of the season, peak season spring being March, April and May, peak season fall being now September, October, November. So that's what we want to do. We want to structure that and institutionalize that. And again, we can do that because we've been delivering like a clock every single month, right? And this picture also shows our different strategies as we evolve as a business. In which way, for the first 6 months of the year, we were hostages of essentially not having export credit available to us. We were just getting started. Export credit is a function of risk management by export banks, which is hinging on performance risk. So when you start the export banks do not have the history of your performance risk in delivering same amount of product month after month, after month. Again, one of the records we broke was to achieve what we call performance risk accomplishment in just 6 months because from September to February, we were able to ship at cadence. That's why we enforced cadence so much because that cadence was our export credit risk, which is performance risk given that the security of the export credit bank is the unit. So if you don't deliver the unit and thee export credit bank gave you the credit, well, it's at a loss. So reaching that cadence was fundamental to achieve what we call commercial assertiveness and commercial independence. And we marked that, meaning evolving from the orange period with the blue period, essentially like Picasso, right? We did a fixed price sale, just to demonstrate that we were conducting price discoveries, and we were exercising commercial assertiveness. That's what the major seasoned producers in Australia do. They do price discoveries, they do auctions, and we were able to host our first auction. So that was the fixed sale in March. And then from there on, we continue to evolve, meaning selling to battery makers like LG, selling to other trading companies like Mitsubishi of Japan. We started to try out various strategies in what we call trader as an agent, either an agent of an end user or an agent of Sigma, but ultimately, developing trading strategies together, which is what allowed us today to essentially celebrate the crystallization of $50 over the price of just 40 days ago, which just shows -- what found is seasonality in a low-cost market. Again, why also we are able to do this. In addition to cadence, why also are we able to do this? It's quality. Quality is key, right? So the high quality here is visible. So when we see quality, it's there. You don't need to be a chemist to see it. It's particulated it's clean. And this is what allows the product to perform better as we explained earlier. So this quality, chemical quality, is what enables the value in use. So in addition to having eliminated performance risk with the cadence of shipments, we have a better product, metallurgically better. Just the green premium doesn't exist. This is metallurgically better. So on scale, which is here, in quality alone, we are able to settlement our competitive position. And again, the procurement bifurcation is just a bonus because it comes with traceability. So what is the bifurcation is what eventually will allow the other element that we deliver, which is traceability, which is essentially the sourcing being responsible, ethically sourcing, to be mapped out. And it's interesting because it's already emerged in China, which is the largest market. When you look at Shanghai Metals Market, which is the leading metals information provider, they bifurcate Brazil, Zimbabwe, Australia, they're bifurcating quotes. And what we love about these quotes is that we're able to sell product at a premium to those quotes which just demonstrates how commercial assertiveness plays out based on quality, based on quality. So we've been able to capture a premium to what you see there based on the quality. And that comes from all the strategies we outlined, the presence on the ground, a conduit into what happens in the, we call Tier 2, Tier 3 refining market in China happening live. And again, why do we believe traceability will become key, because the nontraceable product, even though it has a discount here, it drives lithium chemicals where you don't have differentiation. So the price of lithium chemicals end up in the price formula of just everyone, including Brazil and Australia. So it contaminates the traceable. So traceability, it's not something that one will resolve just quoting this. But again, for us, it doesn't matter. We've been able to sell on our own despite this before high-cost producers. It does matter because this makes their operating environment more challenging. So, for us, it's essentially been in a privileged position where when we talk about this, and this is why I was essentially annoyed to be the spokesperson of the industry about this cause because it doesn't sound like winning. We can beat this. We're fine. However, anyone else that would do it, it will sound like wining. For me, it's more of the same. We got 10 years of sustainability, zero carbon, it's just consistent with what we've been always saying this industry needs to raise standards because the survival of the industry is always a stake, again, look what happened to cobalt, right? So with that, I will close my portion of the presentation. I'm also going to welcome Matt DeYoe, our Executive VP, who has been the foundation of putting this presentation together and putting this Investor Day together. And I'm also going to welcome Rogerio Marchini, our VP, Executive VP of Corporate Finance. Rogerio joined us a little bit over a month. So Matt and Rogerio will deliver the financial presentation together. And Rogerio has also a bit under the weather today. He got very cold. He had fever. So in classic Sigma mode, he's just weathered it and came here. So with that, I'll welcome the two of you.

We were going to have a short break. We kind of moved through it a little bit. Maybe we can -- after our section, we pause for a few minutes and let people kind of use the facilities that they want. But again, Rogerio welcome. He's only been here for a month. So I figured I'd help them out on stage a little bit and.

So, thank you. Sorry for my performance today because I have an American cold. So, we bring here our -- the key financial priorities. I'm here to add my -- experienced a fantastic team, principal [ Caio and Bruno ] that do an amazing job. So this year, we will focus in disburse the BNDES. It's an amazing line that we received just a month ago. Try to get phase 3 finance with BNDES together, at the same time, try to get a FINEP, facility 2. And we are talking with Asian banks to improve our credit and to refine facilities. With the product cadence now as we are in a position where the banks and the financial markets are believing in us. So it's much easier to talk with them, and they believe that now that we are producing 2,000 every month. We can pay the indebtedness. So we are iterating cash. And together with this, we are preparing a huge liability management, where we will take a short and middle terms in our long-term facility. And of course, because we don't control the price of lithium, we need to control the cost of producing lithium. So talking about BNDES facility. It's a long-term facility with 18 grace period, 18-month grace period, what is -- it's amazing because we can finish the plant before we start the payments of amortization. So give to the company time to build before start the payments. The facility is it's a government incentive rate. The price is below Brazilian Treasury is really cheap. If we consider the swap price today, it's something around USD 2.5, so it's chipping dollar 2. And it's a reimbursement indebtedness, what it means, that they need to expend the money and send to the BNDES, compose the spend and they reimburse the company. But we can ask to them to advance some money -- and after that, we can control -- we can move the expend.

I think the point is well on BNDES, right, as you mentioned earlier, it's an opportunity to build a longer-term relationship with the development banks in Brazil. tailings up cycling facilities, where we can talk more about potential phase 3 lithium intermediates, the BNDES kind of expressed a desire to partner with a lot of these initiatives over time. So, this isn't necessarily a one and done a commitment from them, it's an ability to grow with them. And I'll kind of just take this slide a bit, although Rogerio was Finance Director at Embraer and Embraer being one of the many companies in Brazil to actually benefit from the BNDES debt over time. Look leaders of Brazilian industry have all kind of grown on the back of a lot of this inexpensive BNDES financing. We're happy to join the ranks of them. It's as Rogerio said, heavily subsidized sub treasury debt. And because of the lasting partnership, it's something we can kind of tap continually which gives us more confidence as well in our own growth profile. And obviously spoke a lot about our ability to operate the plant shipping 22,000 tons a month. I think we have the confidence in our team, in place to grow. And now we have the financial engine behind that to really, one, provide the capital, but to lower our cost of capital considerably. So, I don't know if you want to talk about the dispersal cycle.

This is a hypothetical CapEx expense. What we tried to show here is the -- that the BNDES line doesn't need working capital lines, they will give all the money that we need to build the plant even if it's reimbursement type, we don't need a lot of working capital. But we still can ask to BNDES advance some money and is better than this.

Yes. I think Rogerio has a point, this is kind of a little bit of a worst-case scenario, but the point being, even though it's a reimbursement program, there are banks and facilities in BNDES that can actually advance us some of the money to even front the initial distribution and disbursement. But the point being the actual capital outlay from a total dollar spend is somewhat minimal given the disbursement schedule. And then the first disbursement in general being a catch-up such that we can actually claim back to I don't know what's -- how much time do we have to go back to for the catch-up distribution.

1 month.

Yes. So, we can back spend or recover some of the capital already spent. This is kind of just our net cash position as of the end of the quarter, and we wanted to update people a little bit on this. One thing that we had talked about at the end of the quarter and upon BNDES approval was a reduction in our trade line balance. The $100 million in cash on the balance sheet was great. It provided the support to kind of move forward with phase 2. But we've always said it's not an ideal way to backstop a build. With BNDES support coming in behind that, we don't have to carry that same load of trade lines. We've said, and Ana has mentioned, we can see on the next slide, the interest rate on the trade lines has fallen considerably, which is obviously a tailwind to us, but it's still an interest burden we don't want to carry at this point in the cycle. So we've taken down our actual trade line balances at the -- since we reported 3Q earnings, but net cash in excess of the trade lines has improved over that time. cash in excess of trade lines up, overall cash is down. That's just a function of reimbursing some of these trade lines. We don't really need any more. And, I mean, like Rogerio has a lot of experience in export financing and things like that. But I'll let you expand a little bit on just the elaboration and the collaboration with Banco do Brasil, some of the Asian balance sheets. But this is just an articulation of how the profile of some of the short-term debt has improved since we showed the cadence. And since we kind of came up and put product to market every month.

So I don't know a very guy. The hard job was made. So now it's just to talk with the banks, they show the cadence and as cheaper money, it's easy now.

Yes. And I think that's one of the nice things is you can kind of lower rates get lower rates in some extent. So some of the negotiations, we can go back to the table and that comes to circular reference for other discussions. On the right is just kind of the debt profile of available liquidity for us. We've got the current long-term debt, which we've talked about liability management. We're kind of working on repaying that and also improving some short-term liquidity. But then again, I mean, trade lines and export credit lines are all very attractive to us at this point. I'm going to take over a little bit to talk more on costs. So, Rogerio, again, I've only been here for a couple of weeks. But part of the financial team's responsibilities are monitoring costs on a pretty active basis, monthly reports, subsector builds, trying to kind of provide the insights to the management team, obviously, on where our expenses are coming in. We've taken a pretty draconian view on costs. And a lot of that detailed financial reporting has come in handy as to trying to figure out where we can cut back. We've talked about this on the 3Q call -- or sorry, the 2Q earnings call, we kind of have come in ahead of our targets or I should say we hit our targets a quarter ahead. Cash costs across the board, SG&A, all down about 20% to 24% since we put out the guidance in 4Q. And I remember sitting in a lot of those rooms. There was a lot of skepticism that we could do it. But this can -- I mean, the good thing about this as well is we know production in the first half of the year wasn't as strong as we would have wanted. So we think there's some leverage to keep this cost profile low. And as we've said, scale is our friend, particularly as it relates to doubling capacity. This is kind of just a walk-through on how we stand to benefit from scale. We've talked and Ana had said, don't expect much in the way of on-site savings. We're building a new mine over time, we're building a new plant over time. It's duplicative costs. We don't need necessarily a new Keith or a new Reinaldo, but we need a lot of the additional support beneath that. Mining costs, we've said most variable cost centric business, but here, we gain leverage through noncontracted labor, some of the services and ancillary costs. Reinaldo will also talk about this, but we're exploring initiatives to bring down mining cost site-wide; larger trucks for waste hauling, fine-tuning blasting practices. Some of our contracts come up annually, perhaps there's volume discounts we can attain. Processing costs. This is the fixed cost side of the business, pretty much going to be a doubling of our cost base as we build the second plan. There's going to be minimal savings here as much as the costs will be duplicative outside of the senior leadership. But there is some fixed overhead on site. What is that IT, HR, water, sanitation, geology, a lot of these costs don't need to double. Loosely, we've been talking about $30 a tonne of our cost structure that we could see maybe 30% more of savings on as we double the plan. Not monumental, but as Ana said, don't expect a lot of the leverage to come from on-site. But we do think we have some in the bag. We're just not guiding to it per se. Just we want to see this come through a bit more. That said, SG&A expense is where we're going to see significant leverage, right? We'll add more headline employees, Catarina and who runs commercial ops will be adding people in China and some of these other regions to help build out our strategies. But we don't need to double our SG&A. The SG&A is already basically supporting a bigger franchise in itself. So maybe not full cut in half, but close for our SG&A on a unitary basis and then interest expense. Dollar interest, we're working to move lower as we take our trade lines off, but on a net basis, we'll also be incurring BNDES debt. But as we move our interest rate lower and double capacity, our unitary cost for interest are going to drop considerably. So what does that look like? I mean, it's a little hard to see, and I apologize, well, get the slides out. But you can kind of get the high end of it. This isn't really meant to be an explicit guidance that it kind of shows up as that. Headline price on a 6% basis is just the sell-side average, right? And if you were to leverage the phase build-out, as Ana has kind of suggested and what the capacity could look like based on revenues, our CIF costs. And again, we're not even leveraging that lower. Transportation, which we didn't talk on the other slide, another area where we think we can gain savings based on renting Supramaxs versus hauls of partial hauls, we hope that this is maybe a little bit conservative as it relates to our ability to squeeze more out. Interest is going to be a little bit unknown here because we have a few different levers we can pull, but this kind of gives us an idea of where EBITDA could be on a per tonne basis just given what the franchise could look like based on the prevailing price estimates. Obviously, one thing we do know is price forecasts are going to be wrong. That's for sure they always are. So take it with a grain of salt. But this kind of just to provide additional leverage or different viewpoint as to the earnings potential of the company and the cash flow potential as we scale. And look, this is a little bit of a summary of what you've heard for the most part. We don't really need to hash over this. But again, cash flow building liquidity, cash flow generation with higher scale, greater than 50% cash margins as we move through the cycle. Development Bank financing, as Rogerio had mentioned, for the phase 2 expansion, we have 99% of our budget already covered.

The correct number is 7.53.

Yes. Good call. 7.5. Well, I should have had you earlier on this. And then obviously, we talked about the diversified commercial partnerships to help fund working capital. The Asian balance sheets, trading companies and then kind of the existing relationships with some of the banks in Brazil, whether it's Santander, XP. And we're going to take a quick little break. I don't know, Rogerio, if you have any closing comments.

I'd like to thank you because I'm a little, is low today, and you help a lot.

I wasn't going to leave you behind, right?.

Thank you.

But we're going to take a little break and then we'll move to mining with Reinaldo. So maybe give it like 5 minutes and we'll take it back up. [Break]

So I think we're going to get started again. If everybody kind of comes back and take a seat.

So, yes, I have. So I'm here to introduce Reinaldo, now who is the General Manager for mining. So he will be delivering on our mining strategy and then he'll be followed by Iran, who jointly we can now do deliver on how we're going to expand organically our mining strategy. I'll basically sit here as an audience and support for any interactions that we're going to have throughout the presentation, like Matt did with Rogerio. But essentially, Reinaldo, this is our show. Reinaldo has been with us since the very beginning. He prestripped our mine in '22. So he knows our operations inside out, and he's been growing that team strong to the phenomenal job we've had today, which is manage the 2-pit structure into phase 1 now moving on to plan as we grow into mines 2 and mine 3, which, again, are not necessarily connected to industrial capacity, which Reinaldo is going to show that we have quite a lot of flexibility in our assets. Reinaldo?

Okay. Thank you, Ana. So, as Ana said, I'm responsible for the mine operation. And I believe that if we have a keyword for the mine operation right now is to sustain the stability of the DMS process. So you want to keep the grade and all the variables that they may impact the DMS process stable. This is a picture of the mine. And we are locating in a region having 2 pits that split by this Creek, the [ PO8 ] Creek that -- I mean, the community around takes use of this water. So, initially, I think it's important to highlight the environment met of the operation. It's important to say that in terms of develop the sustainability of the system, including in mine, crushing, DMS and shipment. We are taking advantage of the knowledge of the ore or the different types of ore, so we can additional to the quality, the grade of a lithium oxide. We know exactly what variables will be impact the DMS, so we can blend it to avoid the fluctuations if you guarantee the sustainability and competitiveness of the operation. Inside this system, I believe that's worth to mention the importancy of the blasting. Blast is an operation that guarantees the fragmentation of the rock. And it is related to the liberation of the ore is related to the contamination and loss of the ore, and we're doing that in an excellent level. Developing the best practice in blasting guarantees that we have optimal cost because this impacts the productivity of the equipment. And especially, we want to avoid over fragmentation, generating fines that may be not recovered through the DMS. So inside the mine operation, blasting is a critical activity and we are doing that, I mean, in an excellent level. In terms of remaining a low-cost production, this is, I mean, essential for the competitiveness and the sustainability of our operations. And one of the key factors in terms of our low cost is using right now 40-ton trucks, 40-ton trucks normally road trucks, that's different from what the Australian our peers, they propose there the use off-road trucks but the main aspect of using this, I mean, those small equipment is that we have local suppliers. This equipment is in terms of digital consumption is -- it's very efficiently. And we have the availability of our local workforce. So it's a gain-gain. We use the small trucks we get the community involved in the operation, and we are competitive in terms of diesel and the cost. Okay. So we took this opportunity during the H1 this year to open to even the Xuxa pit, this gives us the opportunity of sustaining the feeding of the next phase with ore from Xuxa, which is or that we know very well, and this gives us the redundancy in terms of waiting for the Barreiro pit to be licensed and opened. The license expect to the next month is not something I mean the process is being developed, but having the capacity of feeding the two plants with ore from Xuxa give us this is most transition between what we know and what's to be developed. So in terms of intermediary stripping, we opened the pit, liberating the ore, giving us capacity of going to the next step to the next phase with security.

And that's, again, not a small undertaking, right? Because it gives us the certainty of the geometallurgy during the commissioning of the next production line. It's again, delivering the material with the consistency that we've been delivering is a result of several variables that need to come together and geometallurgy being a key variable. Xuxa being high purity, slightly straightforward to purify to remove contaminants and being the known mineralogy, geometallurgy makes it a lot easier for us to carry through feeding a dual operation with the mine 1 throughout the first 2 years of commissioning that plant. So we're going to sail through '25, '26 and early '27, which are the periods where the lithium markets will be kind of flattish with this ultra-high-quality known material that gives us, again, the certainty of performance when it comes to the expansion. And that's essentially why Reinaldo, Keith, and I, I undertook the strategy of what's on the next page, which is widening Phase 1 pit, preparing the geometry, the pit shell design for that execution next year.

Do you give us the capacity of feeding the two plants with ore that we know very well. We know the DNA. And as you mentioned, Ana, we are moving from supporting the mining plan based on grade to all the variables that impact the whole process. We want to know how the ore behaves in the drill blasting, load haul homogenization on the stockyard that feed the crushing, how it behaves on the crushing and DMS itself. So we are moving from great control to geometallurgical modeling and planning. And this graph shows the proposal of the intermediate stripping. So in the month of July, we increased the stripping rate to [ 37 ] is actually to open the pit giving us this capacity. So for the next year, we have enough, enough capacity in terms of liberated or to feed those two plants.

And we're back to mine plan, right? So it's essentially an exercise of intermediate stripping that we took swiftly to make it clear that it was a one-off CapEx, and then we're back to the overall strip rates.

And that's something that we want to sustain for the life of the mine. So having more than one pit feeding the plants that are available, give us this redundancy or flexibility if anything is required in terms of mine development, for example, and you need to, for some reason, install, for example, an access to guarantee the development of the mine, you have another pits to -- as a redundancy guarantee the continuity of the operation. So it's something that we are discussing right now and give us the sense of competitiveness and sustainability for the future. Okay. So I started here. We have two pits on the Xuxa, Barreiro, and they are split by this [ Hebron ] Creek, which is a river, a creek that the community uses for -- I mean, throughout the year. The two pits are similar in terms of our quality. Actually, there is some difference in terms of mineralogy, but they are planning to support the life of mine together, and that's what we're doing right now.

And again, this is a reminder of why is it 13:1 to begin with and not 5 given that the mine has been open for going into the third year is because of this. We made that commitment. And this, again, it's everything because this is our operational license right there. This is the reason why the community embraces us. And again, 13:1, given that we got plenty of cushion throughout the industrial operation is something we can perfectly live with.

And this 13:1 is being discussed in terms of geometallurgy as well because part of the order we have availed there was not initially considered in the mine plan. So as we develop the knowledge of the ore, we can recover more of this ore decrease in the stripping rate and impacting dramatically the cost of operation. And this is the type of efforts that we are doing together to increase the competitiveness, sustainability of this project. This is a view of the pit. I mean, during the operation, we have the drills, we have excavator trucks. Those are the 40-ton trucks. The ore body can be seen here as this white strip going to -- I mean, in a deep of 45 degrees. You can tell the ore body from the host rock, which is the schist. In terms of decreasing the cost in the long term, we are proposing to move from those 40-ton trucks to 70-ton trucks, keeping the same width of the roads because the width of the road impact the stripping rate. The larger the truck, the more waste you need to remove to install the roads. And additionally to this change, we are discussing the possibility actually in the plan for the next year, bringing hybrid trucks that is moving based on diesel and electricity, and that impacts the cost as well. So we are keeping the stripping rate as low as possible. We are using the most effective equipment to run the mine. And we are increasing the recovery of the ore. So that gives us the certainty that we are in the right direction in terms of being successful with this project. I mean, in terms of the long term and the short-term geological model, because you have the long-term geological model based in drill in a grid of 50 by 50 and to model to refine the information, we close to 10 by 10. And that give us more detailed information on the types of ore and the quality and the stability that's necessary to keep the productivity and effectiveness of the DMS guaranteeing the supply of ore to be shipped. So bringing from the long term to the short-term metallurgical model, we are understanding better what types of ore we have. And based on that information, we are developing the mine plan, trying to avoid fluctuations and guarantee the maximum stability for the DMS process and so the maximum productivity and cost as well. So this is the plan for the future. As I mentioned, we have the permit for Barreiro on the end of the next month, but we want to evaluate alternative scenarios. And for that, we have, as I mentioned, the intermediate stripping of Xuxa that give us the capacity of supplying the ore for running the two plants. But as we have difference in terms of the KPIs that sustain the life of mine planning, we can decide of going with Xuxa for a certain period, Barreiro or a blend of those two because Barreiro has a high grade, a lower stripping ratio, but Xuxa has the knowledge of the ore and a shortened hauling distance. So this is to be discussed, but we are sure that the best option will be in place for us to start running the next phase. And I think that's it.

That's just operational optimization because, again, mining is a larger cost. So when we think about the overall plant gate costs that we have today of around $370 per ton, mining is over 2/3 of that. So every initiative, why did we give you quite an operational update in mining is because, again, Reinaldo wanted to be granular so that every initiative in mining matters a lot for our resilience as a company in the next 2 years where you in an environment where low cost -- low cost is king, given that the prices will be flattish and won't move that much. So we'll sail through the next 2 years on the back of those initiatives, which, again, it's understanding how granular we go in our obsession with low cost. And then with that, do you want to talk a bit more about mine planning and blasting, what is that we've been doing. To the level of being granular, right?

Exactly. I think I mentioned that, but I mean, I think it's important to repeat it because blasting is a very important activity through the mining operations. It guarantees the productivity of the equipment, guarantees the recovery and loss -- I mean, impact the loss of ore that we want to avoid and give us the productivity necessary for decreasing the cost. So if you are not -- I mean, if you do not achieve the optimal fragmentation, then the excavators, for example, will lose in terms of productivity. So we want to find the sweet spot between cost in terms of explosives and cost in terms of operation. And again, we want to avoid the fines generation that guarantees the maximum recovery through the DMS process. So we are, I mean, doing our best effort in terms of having optimal blasting strategies and operation. On the other side, I think I just mentioned the use of bigger trucks, 70-tons trucks that guarantees the same geometry, no impact in the stripping rate, which is, I mean, another key variable in terms of the plan and the cost. And based on those initiatives, we are on the way of guaranteeing the success of this project, I would say.

So, now, now to be joined by Iran because he is going to highlight how we can expand organically based on the known make that yes, based on the known geology that we've got. So Iran a seat. So, Iran will take the podium. Yes. So you got the mic, right?

Good morning, everyone. Thanks for this opportunity again to talk about the Sigma geology and the exploration works. So I'm here to explain for everyone how we'll be able to keep growing constant our resource during this year and in the next years, in the next months because we got to start going to the south of the project or middle center of the Grota do Cirilo area in the next few months. So call it mining 2 and the name is that we know it's called Barreiro. So we've got to start to grow organically. So we keep constant to bring new resources during...

Okay. There is a fire alarm. That's okay. Okay. Thank you. So what should we do? Should we continue? Okay.

Okay. All right. So sorry, guys. So keep continue. So here, I will present to you Sigma will grow organically. Well, what I mean is we got to keep constant to bring more resources...

Okay. Maybe we can take a short break.

Maybe good, yes. [Break]

So I'm still not sure why the firearm is going off, but I don't think there used to be a problem. We're going to get back going right now. Maybe another announcement. So we apologize if there's another interruption, but I think we are probably going to battle through that in the best chance of keeping this on time. So although Ana, you can kick back off on the mining side.

Yes. So they cleared us to proceed saying that there's no reason for concern with the alarm. So with that, we'll go into expansion. And Iran is going to highlight the integration between the work he's done in 2023 and now in 2024 on geology, how that translates into drawing from those mineral reserves, 77 million tonnes of it, there is a lot of lithium to build up seamlessly all the mines, we will be opening through out to reach the 125,000-tonne LCE objective we set out for the end of 2027 organically, which is basically validated and demonstrated by all the great work that geology did and now integrated into mining through geometallurgy and we have a representative of the geometallurgy department here, Banco, so with you.

Okay. So here, it's important to say that it's -- our work now of the long term, it support the mining team Reinaldo team to expansion in terms of ore inside of the mines. So like I spoke about it, we are coming to open the mining to the next few months ago. So now we are significantly large ore bodies than mining one. What it means is because when you move to the south part of the project, existing there are many branch of does in that region. So when you compare in terms of tons, so that part is specifically in that part, we have 1 million tons of pegmatites in there. So it means, of course, that we know that this ore is existing there. And now when you come to the initial of the mine, we need to combine that information and true with the mining teams with Reinaldo the maximum information of these mines. So exist many pegmatites in parallel in these structures there. So that has a good opportunity to grow the knowledge about this pegmatite in there and bring and creating extension of these bodies, especially in the mining too with a large pit when you go to the large structural mining in there, we can create totaling 45 million tonnes in that specifically part in the mining to call it Barreiro. So that's so important when you come through these numbers, specifically when you have a team that have great capacity to dig out this material with the sustainability responsible in terms of a technical team in Sigma has this team in there. So mining 2, it's me phase 2 and phase 3. And we come through this information and to support the Reinaldo in terms of how to manage it, this material comes through the production in a team of Keith. So when you work with the separate pit, for example, comes through the material in the first pit and when the finalized the ore in that pit comes through the second pit and you can combine this material when you depleting one of those pits, you can receive a material for the others. So, in 2026, we have a focus in creating an extension to the mining 2 with large pit, like I said, and totally up to the 45 million tonnes in there. So of course, that we have another objective. one of those objectives is in 2029. When you have the mining 1 the plat, you can develop mining 3 within geology with the mining 4 in the large pit approximately totally, we expect to come through very close to 60 million tonnes. That's our focus in the next days.

And that goes back to the bigger picture. What's the bigger picture? We always have two areas, and there's a decoupling between industrial and mining each way, we just outlined before in on this presentation. We have mine 1, which will feed two industrial lines. And then that goals all the way through '26 to '27. And then as I was outlining in '26, we then open mine 2 and then move road with those. And that's why? Because those are the known geometallurgy. So we will have certainty performance as we launch the new -- each new mine. And we run that way. So when mine 1 depletes because that's got the shortest mine life is 8 to 9 years, then we will open we move on to open mine 3 and 4, which are an integrated mine. And that's kind of what we're going to outline here, meaning mines are not connected to industrial plants. In fact, running with a mine for longer in an industrial facility is actually what we want because it's the known geometallurgy. We will have perfected the processes, perfected the technological flow sheet for that geometallurgy. So, and again, what Iran will show you is on the back of the work -- the great work his team has done, we actually have the organic mineral reserves identified and ready to be drawn from as we grow. And hey, now that we will be managing all these mines, we'll talk a bit more about why we chose that strategy to go about our development. It's less impact, is seamless, less risk straightforward. Again, simplicity, the elegance is in the simplicity of our strategy.

Yes. I mean when you take into perspective the level of maturity of each one of the pits, this is something that we can improve when we have a multi-pit mine planning because you may split the life of the pit in 3 phase. The initial phase when you have a lower stripping ratio, the medium term when you have the highest stripping ratio and the final phase of the pit when you have a lower stripping rate, but a lower productivity. So, if you have the chance of compensating the loss of productivity of the end of life that pit with a new one, it gives us stability necessary to keep the production flowing steadily. And I mean, in terms of stability of the quality as well is something that you can plan on the long term as we have lower grades during some phase of the mine, especially during the beginning of the operation because the upper part of the reserve, you have this process that we call weathering the rain -- I mean, through the geological areas, the rain washes the lithium. And then you have a concentration of harder rock, a fresher rock with a higher content of lead. So you can manage those fluctuations to avoid that the DMS fill it. So in the end of the day, you have stability, you have a productivity and lower cost. So we do believe that having this multi-pit mining planning will sustain us in terms of the long term.

That's our -- there's an announcement for the webcast on the fire alarm. So we got full clearance to proceed. And that's a good thing because it's a good element to proceed with our organic growth and expansion. So on the next page, we will now illustrate how that plays out throughout first, the next one, which is mine 2. And then at the bottom picture, you see the swarm and then will show is that mine 2 actually grows Northwest and -- and based on the work that we've done is we used to be called phase 5, and we got this whole target area, which allows us mine 2 grow north west.

Yes, exactly. So it's all this conception, it's -- it's being real, it's because we have a bunch of pegmatites in that area. So that's the important information. So you can see in that figure here below, it's multiple dies in parallel. It's called swarm dyes in parallel. So we did some exercise on some holes in that area that we support that theory that we can expand for the north of the pit, the Barreiro, and we increase that phase 2 that mining and a big pit that we can provide more material to support the mining team and the process team. So that's extensions. It our drill targets that we can provide more material. And of course, that Reinaldo and the team can explain the wall of the pit in that direction. And so that direction in other directions that we can provide more information in terms of pegmatites in that region. So here, it's some highlights of our drill campaign that finalized in the initial of the year. So we intercept good grades like 1.7, 1.8, 1.49, 1.8. So it's a region that has quite good material that we can give an input inside of the DMS and produce good quality of concentration during our long life of mine. So, and the next one. So it's the next phases of next mining, call mining 3 and mining 4's the same [ excavator ], the same type of pegmatite, the same mineralogy, the same grades when you saw the block models. So guys, we talk about 3.2 kilometers. It's huge pegmatites. So when you come through the Xuxa, for example, that we cover it small pegmatites across the rivers, it's 400 meters initial and finalized exploration in 1.4 kilometers, 1.7 kilometers now. So here, it's a double. It's a huge pegmatite that we can. And why, exactly. So, and see, between this structural, it exists that we can provide more information. So that's a really good reason to keep to make exploration program. And for the mining team, it's easy to manage that pit to support the Keith and the production inside of our DMS. So mining 3 and mining 4 combined a mine development of approximately 60 million tonnes. So it's a huge number of material. And what we say and repeat again, it's because it happened multiple pegmatites in parallel structure that we can provide more and more information and it bring to the mining team that information to clear and the grades are the same and consistent and the team are resilient to understand better in the better and better in this region. So those information, it's exactly the next -- the last slide that I did, but it's -- the number is important. It's 3.2 kilometers long by 1.3 kilometer wide. And the true thickness range is between 5 and 50 meters. It's a huge number. It's like average here, it's like 20, 25 meters of average wide and provides 6 million tonnes of combined reserves at the same grade, consistent and resilient grade, 1.3%, 1.4% of oxide alone. So, it's great, great for the production, great for the Keith team to receive material between 1.3, 1.4. It means that we will get, of course, definitely up to 6% of concentrate at the end of the line of the [ DMES ]. And Murial, it's phase 5 mining 4 call it here. So, Murial, it's a pegmatites, beautiful pegmatite. It's provided us 16.1 million tonnes at to 1.2% of oxide of lithium. So again, we need to keep in our mind that we are in the middle and the center of our clients and the principal part of the project that exists a bench of pegmatites in there, provide reserves and reserves are there. We just can combine and share this information with the mining team and consistent team inside of the DMES production team that we are ready to get this material for the DMES process and provide a comfortable position to longevity production at Sigma during up to 25 years.

That's great because essentially in the next slide, what we're showing here is, again, just these are all of our pits. There's a 40 million to 45 million tonne pit between phase 2, which is in itself 30-ish plus its extension, which adds between 50 million tonnes, again, classic extension, so a very wide favorable area in phase 2. And then you have this other 60 million tons combining phase 3 and 4. So pretty straightforward organic expansions, which again, just demonstrate how large this company is the scale of the mineral reserve that kind of backs up. And then as we've shown numbers that are around the mineral resource. So, 77 million tonnes of reserve and now you see where it is. That's why we get so relaxed about laying out 125,000 tonnes LCE in 2027. There's plenty of lithium here to draw from. And again, the most important thing, it's consistent material grade and concentration resilience stood out. And that's what these charts illustrate right around.

Yes, yes. And see, the material that we support for the production and Reinaldo works with that directly, it's a good geometallurgy material. So in terms of size of the crystals and size of grades and the percentage of these crystals in material of the rock such as the percentage of the spodumene in that rock, it's so huge. It's up to the -- in some parts, up to the 75% of spodumene in the metrics of the rock. So that's the information comes through that how Sigma can be constant and create a resilience of these materials. So, here, it's some points that validate Sigma's climbs of the consistent grade and the course of the spodumene crystal quality throughout resource section, exactly what I said here in this presentation. So at our cutoff in zero cutoff grades, the cumulative resource total, it's 110 million tonnes up to 1.3% of Li2O. At the high-grade cutoff grade, it's 1% and cumulative reserves totaling 92 million tonnes up to 1.5% of Li2O. So in this graph, we can show exactly our consistent. So in different cutoffs, we can maintain 110 million tonnes during a long, long space when you can compare cutoff grades. For example, 0.5% in terms of cutoff grades, you can keep 2 million tons of material. What I say is, again, so longevity and consistent material that we can put in our -- in front of our ring pad for the Keith to work with them through the DMES plant. So below, it's our consistent grade that you can see it's keeping 1.5% and middle, it's average with 1.37% in terms of grade. So, it's 5 different resources here in front of you so that we can support constant our production during our. Thanks. Thanks, Ana, and thanks, Sigma for the opportunity to talk with you again.

So the next one, without further ado, we're going into the industrial. And I welcome here Keith Prentice, who is our General Manager for Industry. He's got hands full as he will outline to you. And I'll be joining him just like I've joined Reinaldo and Iran. He's going to be talking about our Greentech industrial lithium processing. He's in the middle of a construction. And Keith, you take the podium.

Good afternoon, everybody. Thanks, Ana. Just to start with, my presentation today is going to outline the -- where we are in terms of current production. It will touch on phase 2 and also ongoing improvements in optimization of flow sheets. So -- so if we have a look at phase 2, where we are at the moment, we are busy doing the push clearing for the preparation of the civil works, and that should start within the next month. Obviously, that's going to be followed by phase 2 construction, which will be completed next year. And then in terms of improving processing and flow sheet, as far as phase 2 goes, what is important to understand is that there's no change to the current flow sheet. It was a deliberate decision taken. We've got a flow sheet that's been proved. We've got equipment that's been proved by a couple of small instances where we're going to put in slightly bigger machines, same suppliers. But as far as flow sheet goes, we will not be making any changes. Inventory management, just to touch on it, optimizing stores. One of the great advantages going for the same flow sheet for phase 2 is that it doesn't impact our inventory. Just the last point is the upgrading of the ultrafines, oh sorry, hypofines. So I'll deal with it in the actual presentation. The production of hypofines is -- runs at a grade of 1%, and we are looking at methods of upgrading it. Obviously, in the buoyant market, there's a market for it, we sell it. As things tighten up, that market falls away. And so we are busy looking at some novel ideas, novel technologies to upgrade that.

So again, when you go back to the priorities, they run the gamut from detailed engineering, Earthworks and then construction, which is one block of what Keith's hands full. Then we have continuous improvement of the current flow sheets, and then Keith will talk about how extracting yield by just doing projects that are like what we call minor CapEx projects like the purification circuit, increasing the DMS capacity, the screens, basically optimizing the current installed capacity we have and then enhancing the flow sheet of the existing crusher. Again, these are productivity initiatives that can lead us to very positive surprises that could go up to perhaps what we call low double-digit growth, just doing what we do today. So that's another block of things. And then as part of that, there's the element of inventory management and spares so that we're constantly welded oiled into essentially delivering productivity without missing a beat. And then lastly, there's a third block of initiatives, which go back to upcycling, right? Essentially, what can we do to basically get even more productivity around the dry stack tailings that we produce. And in addition to the fines, which get easily reprocessed through these CapEx initiatives to increase yields, which are inexpensive, paid for, deployed coming into fruition in the fourth quarter, we got the other material, the material that's at 1%. And we produce around 200,000 tonnes of that every year. So that's another opportunity for further yield growth. So that's why we're so optimistic because the current flow sheet without doing anything can actually lead us to low double-digit yield enhancement just even without building phase 2, right?

Right.

And that's -- so that's where we headed though. But what about imagine that plus building phase 2?

Yes. So this slide is aerial view of the current operation. In the foreground, it's all the auxiliary services infrastructure. Starting on the right-hand side there is obviously the power distribution coming from [indiscernible]. The big storage tank, water tank is raw water storage. Next to that is the water treatment plant. The white building is a laboratory analytical lab for all our assays. And then these two buildings on the left are the warehouse and the engineering workshop. The area outlined in yellow, that's the current plant with the crusher circuit being up at the top right-hand corner and the DMS plants being in the middle and then the water treatment dry stacking plants on the left. The area in the red dotted line is the area that phase 2 expansion will be constructed. Just an update, as I said, they're busy bush clearing now in preparation for the start of the earthworks.

So now I think as we explain the product -- so we talked about expansions, very straightforward, again, building next door to it, leveraging existing infrastructure. We've been talking quite a lot about it. What we want to highlight here, though, is that we can actually put 2 lines over there. And this is the reason why we selected that location because we can do line 2, line 3, there's plenty of areas there, again, leveraging on existing infrastructure to deliver on our, we call construction, which is going to take us from here all the way through the end of phase 3, right?

If you go back to the aerial shot, so the water -- the power, obviously, coming from the distribution yard and the water supply. There won't be any increase in the size of that. That will be taken straight off the existing infrastructure that has been designed like that. So phase 2 will not require anything to increase. And much the same with the laboratory, there will be incremental increases, obviously, a number of samples increase. So that will be stores, as I said previously, phase 2 is an identical copy of phase 1, and we're specifically not going to change suppliers. We've had good results from them. So the stores inventory shouldn't grow. might be slight adjustments, but it shouldn't really grow. And then the workshop will cover both phase 1 and 2.

Yes. So then now we talk about doing more, increasing yields, extracting efficiency from the current plant. But I think before we even begin, we want to show how the elegance in the plant is in the simplicity. So again, we want to outline to you the plant and its 3 modules.

So as I said earlier, the -- up in the top right there is your crusher module. So that prefer -- that creek the feed to the DMS plant, and I'll go into more detail a bit later on. And then in the center are the DMS plant, that's where the separation takes part. In essence, there are three plants there. There's a fines, coarse, course and then an ultrafines plant. And then the third module is a dry stacking, which combines the water recovery. We use roughly 98% recycled water. And included is that the dry stacking, where you can see the [ ADT ] getting loaded next to that little stockpile. So the dry stacking, as Ana alluded to earlier, that prevents us having any slamdam. So this operation doesn't have any form of slamdam.

And then now we go into the heart of the plant, which is module 2. And this is where the productivity initiatives kind of play out. And again, this is essentially enhancing productivity with the existing footprint, which will be replicated carbon copy into plant 2 in pant 3, meaning extension and then the third one. First, why zero chemicals? What is it that this technology does, right?

So, yes, we use zero chemicals in the process because it's DMS, dense media separation. So the media is made up of ferrosilicon inert compound of iron and silica. It does -- if it does get out of the plant, it does break down naturally in any case. In any event, if you have a look where the plant is situated, we've got both those elements in natural form in any case. So, there's no chemical process in the plant. It's a pure physical separation based on density.

But it goes back to the elegance being in the simplicity. It's not about crushing rock. It's about detaching that lithium crystal away from the host rock, which is schist which is extremely complex when you think about the way it was done through flotation and uses several chemicals and 70 steps and [ asset ] and what have you. We boil it down to the elegance is in the simplicity, which is what makes it derisked. Now we're going to do more about it. We're going to get better at it.

Great. So improving SCADA systems, bringing in artificial intelligence, especially in the operator side of things. You've got to appreciate, we situated in an area that hasn't had a lot of industrialization. So when we started Phase 1, our operator base basically was nonexistent. Most of our operators were recruited, in fact, probably 90% of them from local area. None of them having any form of mining experience or production experience before. But in order to enhance it, obviously, that's got a major benefit for us going into Phase 2 at the same plant. But in order to enhance that with the number of metallurgists and we've got a significant number of metallurgists that all got experience in spodumene and lithium extraction, we will be putting together artificial intelligence where it would help the operator in complex situations, solve issues on the process front.

So again, that enhances the yield. And then again, when you look at the plant, it's the simplicity of it that makes it elegant. And again, optimizing that simplicity, right?

So what -- a couple of things that are really important is raw water consumption. 35 cubes an hour, that's all the plant uses. As I said, 98% of the water is recirculated. So the process in itself actually is water positive. In other words, we have to -- we have to get rid of water, which is -- that is actually the 35 cubes. As we get rid of it, that is sent to the mine for dust supression. And that's due to a number of things, mainly water-cooled pump glands. The reagents, consumables, typical crusher plant, DMS plants, pumps, screens, wear liners. I touched on the ferrosilicon. Our consumption rate, 530 years as well within industry norm. And we're in the process of putting in bigger magnetic separators. It was one of the things we discovered during commissioning. So we will put in bigger magnetic separators to reduce that. And then flocculant, also standard polymer for water clarification.

So the message is very simple, elegant process, but incredibly efficient, which is getting more efficient because of increased automation, implementation of AI in the SCADA system. Here, a bit more, what is the remarkable thing about this in addition to being simple and elegant is the water. I mean it might have picked up, it's water positive, meaning we actually are extremely water-efficient. So you look at these sites, there's not a drop of water. But more importantly, what water is that, as they now show the drinking water preserved, this is sewage water. So one of the things we have is this inbound sewage treatment station to clear up this sewage water that we get, right?

So the water is pumped directly out of the river and then pumped into a water treatment plant. So all our processed water is clean before it actually goes into the process. And that would be talking now about the 35 cubes an hour. Because, obviously, the remainder being that we need for the process is being recycled through the thickener. That is the thickness circuit recycling the water. At the bottom right there, you've got your processed water reservoir that feeds all processes, sub processes in the plant. The area in the dotted red line, that is the product of the belt filter, the hypofines that is stacked. So the thickener underflow coming out of the thickener here on the left-hand side, that is pumped to the vacuum belt filter, and then that is dewatered to roughly 18% moisture and then quite easy stackable. Currently, that is just getting stockpiled for when the market turns, we would start selling it. And with the work that we're doing in the likely event of us getting a suitable process for upgrading it, those stockpiles will be retreated to bring them up to a salable grade.

And there will be anything around 4%. So if you can take 1% and make it 4%, there's a pretty decent market for it. It's kind of the grade of some of our peers in Australia. And there you have it. We got another whole load out of what was then -- would have been tailings, but it becomes dry stacked material, reusable.

And then obviously, it's got a major impact on transportation to the port.

And it goes back to water re-usage simplicity. So going back to module 1, crusher, simple, straightforward. This is almost like anywhere, any place you got to crush, our mobile crusher is the easy part of what we do. We've got a large crusher. It can be complemented by mobile crushers or not, what have you. So it's a simple part of this plant. This is not where the magic happens.

Right. Yes, it's a straightforward crushing circuit common in many minerals, common in quarries. Nothing too fantastic about it. What's not shown here clearly is the jaw crusher. Jaw crusher is majorly over designed for a specific reason. Reinaldo touched on the problem of fines, ultrafines or hypofines due to blasting. The crusher circuit's primary function is to reduce the material to minus 9.5 millimeters. And that is the optimum liberation size of our feed. That has been tested in the plant as well. We've actually tested it on a full scale, and we've proved that, that is the maximum that we go up to. But at the same time, the other critical thing in the crusher plant is that we don't generate hypofines. Hypofines go to the belt filter, report directly done through any DMS plant. So they would be lost. I mean if we had excessive hypofines going through the plant, that would be lost. So the crushing circuit as well as making sure everything is under 9.5 millimeter just to make sure that we don't generate these hypofines.

And now the improvements in the crusher circuit that we're working through is to change, go to [ Vibro-Mac ] and change the design of it, right?

Correct. So with some of the problems that we've had, specifically on the crusher screens, we've resized and gone back to suppliers, and we have found our current screening is probably limited. Not by much, but it is. And so we will be increasing the size of those screens, improving screening efficiency and reducing the generation of fines. So most of the fines is generated in the tertiary crushing circuit that's in closed circuit. So if you don't get rid of the material at that screening point, it goes into close circuit and gets crushed again. And that's within the generation of excessive fines occurs.

And again, improving efficiency, very simple process to be made whole complemented by mobile set of crushers. This is not where the magic happens. Here's where the magic happens, right? This is where we separate the crystal from the host rock.

So as I've said earlier, 3 DMS plants. And they each treat different size fractions. So you've got your fines in coarse fraction are screened out. So it's plus 1.7 millimeter to 9.5 millimeter. And then that fraction is actually split. It can be split at 6.3 millimeter, it can be split at 4 millimeter with intention of getting 50% into each of those DMS circuits. Both of these circuits are double stage, first stage and second stage. And then you got your ultrafines circuits. So your minus 1.7 millimeter is screened again at 0.5 millimeter. And that goes into also a 2-stage DMS plant. At the end of the process, we've got magnetic separators just to increase the grade of the final concentrate. Reflux classifiers at the start of the fines and ultrafine circuits are there for the removal of Mica. Our ore body, to date, we haven't had a micro problem. So we don't use -- there's no need to use a reflux classifier at this point.

And then again, why are we showing this? Because it's important so that you would understand how can we possibly extract productivity from an existing circuit, is essentially optimizing the material that gets fed into the DMS. The capacity constraint goes here, capacity of 228 tonnes per hour. That's fixed. Now the better the quality, meaning the more purified, devoid of impurity, screened, prepared material we have feeding into it, as you explained to us, the better the yields. So by preparing, we have productivity enhancement, which is a segue to what is it that we're doing now in this quarter.

So it gets back to the hypofines generated in the crusher circuit. If you've got excessive hypofines getting generated by your crushers, you're actually displacing recoverable material. So if you've got a fixed tonnage of 228, you could add 30% or 40% hypofines. You're actually displacing material that could be reporting to DMS. And that's what it's about. The other thing that we are looking at or not looking at, we are in the process of upgrading a final concentrate screens are not a bottleneck at 228 tonnes, but they are a bottleneck going higher than that. So we've actually run this plant. This plant is run at 250 tonnes an hour for 24 hours without any problems, except for the final product screens.

Let me pause you there. That means 800 and?

Probably 900 tonnes of concentrate per day.

900 tonnes of concentrate per day. So 900 tonnes of concentrate per day, we've done that by preparing the material that goes into the plant. So 900 tonnes a day times number of users days, 28 days. This is what it can do. If we accelerate, that's where it goes. Now how do we prepare this, right? That's the point.

So these projects have been going on for probably the best part of 4 months, obviously, to get the screens built, they come out of South Africa. So they're not off the shelf. I mean they, I suppose, are built for our operation. So those 2 screens are really on site. So that project will be completed within the next month. And then on the ultrafine circuit, there's a similar project being tackled the screen is unique.

So again, what does it do? So this is why at 900 tonnes a day, 800 tonnes becomes norm, which means 22,000 tonnes a month is essentially the cadence. That's why we're so relaxed about that number and give out that number so regularly because there's confident that that's absolutely regularity steady state. Can it be better? Yes, but we're not even guiding for it. Going back to how is essentially pre-purifying, preparing, delivering better material into constrained capacity. Now what is the bonus? Well, we've got a pile of fines sitting there from the commissioning period at 1.5%, which we talk about here later on. So that can be reprocessed. More importantly, to Keith's point, what happens to it on an ongoing basis? Walk us through it. How can...

So the ultrafines is -- ultrafines DMS was the last piece of plant to be commissioned for various reasons. Obviously, our money spinner is the fines in the coarse and that one took precedence. So we've got roughly 100,000 tonnes of ultrafine feed available. So part of the upgrading of the screen is the installation of a recovery circuit, conveyor hopper system that we will treat that ultrafines and produce ultrafines concentrate. One of the things we had to look at when the market was still buoyant is actually selling that stockpile. And at that time, there was considerable interest from all over the world for it because it runs at a grade of 1%. Ideally suited for flotation feed. So that is the plan with ultrafines.

And then again, what we're doing next is working ourselves to treat that, which is part of the technological partnership with BNDES that we're working on. But then again, back to inside the circuit, inside this Greentech plant. So what is it So we got DMS slash -- go ahead.

Yes. DMS cyclones, those are separation cyclones. I'm not exactly sure which stage -- they look like secondary cyclones. Screening. So one of the key things in the DMS is to recover the ferrosilicon. Ferrosilicon is -- it's expensive and it's important. So it's critical that we maximize our recovery. Magnetic separators and I think it's just the feedbox to the cyclone feed pumps. Again, just more further graphs of the DMS. Product screens that are going to be upgraded. Both of these product screens will be upgraded.

And again, we basically continue the productivity initiatives and maintain the concept of optimize the DMS so that we can push recoveries, push the yields to levels never ever before achieved by a process that doesn't involve flotation. So we're achieving this superb recoveries, superb plant recoveries. We don't even give out plant recoveries. We give global finer recoveries in the DMS, which is the first time in the industry ever when this has been achieved. But again, it's not 1 magic bullet. It's this combination of initiatives.

Correct. And just on the recoveries, if we are able to upgrade the ultrafines to a salable or near concentrate grade and we include that into our recoveries, we're going to -- it's going to be, I think, unheard of recoveries on the DMS circuit.

Yes. We'll talk a bit more about that later. And again, the fact that we've gone through all of this, right, enables us to deliver what it is, basically the world's best and most efficient concentrate, prechemical lithium in the world is what we call -- the Australians call it chemical grade because it tees up for high-purity refined lithium hydroxide and lithium concentrate is the best material in the world. It's green, meaning it's granulated, it's high purity, low mica, low iron, low alkaline. And the quality is quite visible, and you can see that with naked eye. So essentially, it's a very big difference from the sloshy material with iron oxide. And that is the work that we're trying to pick up from the industrial team into the commercial team and translate that into a premium. And so now that we talked about the Greentech plant, we're going to talk about the optimization. It will be easier for all of you to understand where all these initiatives kind of come together for this increased potential yields that we believe can be as high as the low double digits, right?

Yes. So the first graph on the left -- top left. It's -- that is a utilization of the DMS plant. The horizontal line is actually the target at 85%. As you can see, we run that plant typically 90% to 93% utilization. So running at way over target. But the interesting thing and probably the most important thing is the ramp-up. So we started commissioning in May '23. And we went up. And basically, as you can see, took 2 months to get to target and since then, it's been on target constantly. Below that is our recovery grade curve. And we've proved through plant performance, full sale performance. We follow the curve. The curve was developed by SGS during the feasibility phase of the project, and the plant performance follows that curve very accurately. So what does it mean? So as the grade decreases, we find a decrease in recovery. It is typical for spodumene plants. We've touched on the screens. And the last point, they're testing the plant to find out the ceiling. So that's how -- so we ran the plant at -- the DMS plant at 250 tonnes an hour to identify where is the ceiling, where is the bottleneck. And the screens of the bottleneck, we will again, once those new screens go in, we'll again ramp it up to find out where we can run it comfortably, obviously, not overloaded. But [ SGS ] we don't believe there is anything that will bottleneck at it -- at 250 tonnes an hour.

Exactly, which is the 900 tonnes a day, which is a number that, as you can calculate to significantly increase our yield. So this is just what we can do with existing capacity, which, again, subsidize our comfort, right? So again, it's doing more with what we have, and these are targets for when all these initiatives will be completed.

Okay. So the reprocessing circuit, that's on the hypofines, I touched on that. The screen capacity on the hypofines was undersized. We had a number of instances in the plant where equipment itself has been -- I wouldn't say insignificantly sound, but it is on -- it's borderline, where it can just handle or just can't handle the feed. So that screen, that trip screen will be increased to process the tailings and as well to treat 100% of the current ultrafine production coming out of the screening circuit. The last point is the permanent fix on the crusher screens. Again, from suppliers, we were advised that our current screens were undersized. And that is due first quarter of '25. Those screens are being manufactured at the moment, and they will be shipped to Brazil probably in January next year, full installation in Q1. What I've got to say as well that all of these improvements that we've detected and we've found on Phase 1, all of them have been incorporated into the Phase 2 design. One of the changes, not to the flow sheet, but one of the changes that we will be implementing. On the aerial photograph, you might have seen we've got an ore bin with a conveyor -- draw out conveyor underneath it. And we found -- it has limitations in terms of capacity, and it has got to load our facility, but it's far better to go do a stockpile. Yes. You can see it up there on the right-hand side, that long tubular.

Yes, the silo, right?

Yes, silo...

Exactly. The silo like structure, the ore bin.

Yes. So that will be replaced by a stockpile.

Yes. Right there. Yes.

Stockpile being bigger capacity is easier to control. And when you got excess material, it's a case of just using a small bulldozer to push it out.

So then going back to the numbers. So today, we kind of run on average 750 tonnes a day pretty straightforwardly, given that some of these productivity measures have been implemented. And again, what we want to emphasize that there's not one magic bullet. It's a whole system approach, which is what allows us to go comfortably from what we're guiding in the third quarter, which is going to be around 20,000 tonnes in the third quarter, easily into what we aim to do which is the 22,000 tonnes a month. That will probably, again, if you think about the 900 tonnes a day as we reach first quarter, it means we can even go and extract more productivity out of the plant, which just shows how we have full domain of DMS at this point and how straightforward it will be, Phase 2 and Phase 3. And on that...

So the other thing is the obvious thing as well. As I said, we started at a very low skilled space on the operators -- on the operations. And as we month-on-month, our operators are getting more and more and better skilled in the operating of the circuits.

So that's the -- so now we're going to go into -- sorry, we go into the dry stacking, which kind of leads segue into the conversation about the initiatives in addition to what we talked about for -- well, there's material here. This material, when the prices were in the upcycle of lithium in '22-'23, they had a market, but now they sit here. We learned at that stage what customers did with it, which was throw into flotation plants and concentrated to 4%. Well, we can do that. Again, without a flotation plant. That's the challenge. So we're going to do it, but the Sigma way, without dealing dams. So as we enter the dry stacking module, we'll talk a bit more about why do we believe that's possible.

So correct. So as Ana said, the grade of the dry stacking product in the stockpile runs at 1%. Ideal, as I said before, ideally suited for flotation, but we're not going to go flotation rate. We will -- well, we have already engaged with laboratories overseas to investigate ways of separating it with a view of upgrading it to as close as we can get to a concentrate grade. I did mention that any upgrade has got significant impact on transport. If you can upgrade it to 2% or 3%. I mean, it's 2/3 of your transport costs reduced.

So any upgrade where he's giving an example to 3% because whatever it is that we do with it, we save. And so the material is currently sitting there in piles. The cost of the material to go from our side to China is $120, but it's the only cost he has because it is a byproduct of the plant. So other than this, the objective is to make it valuable up to above that level by concentrating to any level, and the goal is 4%. But as Keith was saying, 2% to 3% is great, and we can extract another product to bolt out of this. And let's talk about connecting this to what [ Jose ] and Matt were talking about regarding development bank financing. One of these plants will run inside $25 million. So that's fully funded with development bank financing. In this case, grants because this is pure innovation. Again, we're moving away from flotation into DMS. So we want to leave this here because we haven't guided to this. We haven't projected this. This is not in the numbers we gave, but it just shows that there is yield to be extracted from the current circuit, from the current facilities. And we are working on that now, which is Keith's favorite project is actually to deliver it.

And as I said earlier, it's got a major impact because as soon as we make a product out of this, we will add that to our recovery, and that has a major impact.

So the dry stacking, which was where -- what delayed us from April to July 2023 is now been running beautifully. And in fact, it's one of the biggest prides of the company because it takes just a right amount of moisture to produce what we call the cake. And you can see it in the picture, is the 12% cake that has to come out, right?

That's stacking cake coming off the vacuum filter.

We use the same dry stacker for Phase 2. So again, we've been through the things. I mean, because it's important to highlight, no one has this, right? So this is the 1 circuit that no one has ever done before.

And again, getting back to the space. you've got significant space and like vacuum pumps and had very expensive space for this dry stacking circuit. So when we move on to Phase 2, none of that will be required.

So all the delays in commissioning from April 2023 to July, we won't experience again because now we've got -- the perfect drawing of the circuit install design.

so if we have a look while we had so many problems, part of the issue, the test, the filtration test work done by SGS was based on core samples. It wasn't typically a representative of our mine feed, our run-of-mine feed. Hence, it was far, far more coarser, far less ultrafines in it or hypofines. So their test work showed that at dewatered and filtered a lot faster than it actually does. So it took a lot of test work on the mine itself with different reagents to get it into a phase where it is now where we can run it without problem.

And this is one of the biggest prides we had because this is kind of making what's really hard looks simple. I mean -- it's been a year since we've been running this to perfection. That is the circuit that no one has.

There, it sits at the bottom, the bottom left.

Yes, exactly. So Keith completely redesigned this and rethought it, and it was a multiple disciplined approach to getting this right, but we've been delivering this for a year. So it's something that makes us very proud.

I think this product could have been one of the earlier photos, just to give the color of the water. And then if you have a look at all the water after the dry stack as it's probably during commissioning.

Yes. See there's water in the back there. We haven't gotten the percentage correct on the cake at that stage exactly. Now there's not a drop of water. Which goes back to all of these were year-long lessons that we learned. We basically kept the plane flying and they're going to be seamlessly deployed into Phase 2, which comes out with the full benefit of a perfected flow sheet. That's the cake. 12%. You think that's around these soils, right? One point that's important on the cost. Why are we so efficient on processing costs. It's important to remind the tailing dams are not just an environmental issue. They are cost issue. I mean, maintaining a tailings down to high operational standards and safety costs. And it costs forever because it doesn't go anywhere as the company finalizes operations. So when the mine closes, which is what we've been highlighting here, the tailing dam leaves the permanent contingencies last liability/permanent operating cost, which is kind of how we approach it when we started to design this Greentech plant back in the first feasibility. So what happens to it, well, that is the big question of our industry. Who knows what happens 100 years from now? So what we're trying to do is to show that there's actually a way to address it and tackle it, and in fact, extract productivity out of it by upcycling the material. And at -- and maintaining the lowest processing cost in the world, that's what we have today at Sigma.

Yes. And it also prevents any future costs of dismantling a tailings dam, decommissioning it.

Exactly.

Considerable.

Exactly. And then here is the segue into what we're talking about, right? We're taking the Chinese approach, which is efficiency. Nothing goes to waste. And we learned with our customers in China, meaning up-cycling even the material that has zero lithium, right?

Yes. So this is a reject fraction. So that's the float fraction coming out of the DMS. That is being used to make pavers for the local community.

So that's paving roads and building paving blocks. So even the zero goes to being used towards our social license, we talk about it in the next block, the reprocess what we just discussed. So everything gets reused, recycled, repurposed, which is the Chinese approach. Nothing goes to waste, which is a very big valuable lesson as we enter into our expansion plans 3 years from now doing lithium chemicals. And I think to wrap, Keith has been breaking records now, we're basically the second in ICMM on the zero accidents target.

It's an incredible achievement considering the -- as again, the skills base that we came off where we had operators never seen a conveyor, never worked with a conveyor. That's remarkable. And that's just the performance of the production team that got us here and together with the [ EHS ].

And a testament to your leadership. So this is not a small accomplishment. There's only 1 company in the entire universe of metals and mining companies, and that includes just about everyone that's ranked better than Sigma. Considering that we are a new producer, we've been running this for a little bit over a year, it's something to be very proud of. And we're going past the year now. We're going a year and a quarter. So 390 days. So it's something we're very proud of because it is not just about this, sending the worker safe home again. It's this culmination and coordination of procedures and processes and safety, considering that we started with a relatively low human capital base because marrying this, coupling this, we have an 85% local workforce is actually this small miracle we operated, right?

And again, for Phase 2, that is going to be the massive advantage we've got. No, we're not starting from the zero base. Now, we're starting with skilled operators as a core at least with a plant that they're familiar with, equipment they're familiar with, work cycles that they're familiar with and operating procedures that's basically all in place.

And again, this is a demonstration that we can do this. We can actually run this, operate this with the global's higher, higher standards even in a region that we actually set out to develop from scratch using local workers. So this is actually showing that it is possible, which goes back to the point I made earlier for low-cost producing regions. If we deliver this in our region, any region, in places like Africa and all over the world can do this. So it's more like I bring it up with a can-do attitude, why not raise the bar of the industry like we did, right? And these are the exercises in daily health and safety dialogue. So it's a daily practice, it's a daily effort. Every day, the commitment that we -- that we embraced with our workers is they will go in and they'll come home safe. They'll come home unscathed. These are the facilities we set out to support these goals. So there's an ambulance there which sits unused, which is fantastic.

With paramedics.

Exactly with paramedics and the full clinic but our goal is to keep this ambulance right there. So with that, we will start with ESG. We -- lunch is served. So it's a working lunch. So we can do a 5-minute pause, get lunch and continue on. And we'll go in with ESG.

Thank you. [Break]

So we'll continue with the wrap, which -- we left the best for last. So we're going to go with the ESG section of our presentation. And again, this is being Climate Week is a nice way to wrap and go about our Climate Week event. So for that, I will invite Maria -- Fádwa Andrade who is our Director of Social Initiatives and Social Projects. And then Maria Salum, who is our sustainability guru. She's been the Co-Chair of our ESG Committee to the Board adviser, senior adviser to the Board since 2019. She steered this journey with us. So Fádwa and Maria will continue on this with a talk show format, and I will present [indiscernible] just to give a space. And with that, we will start with a video. Just do the setup, so just take one of the chair. Yes. We'll start with a video. [Presentation]

So that just shows it, right? We're very proud of what we did. And without further ado, we will start with our key ESG priorities. So what are the 4 key initiatives that we got. First is, again, the regular environmental set of activities. And we want to highlight that we're missing our Director of Environmental, Alex, who stayed behind in Brazil because he's gone through kidney surgery, and he's doing extremely well. He's back on site, back to normal but he wasn't cleared to travel. So he's the third chair missing over there. We're keeping the chair open for him. So the licensing, that's the regular process. We call the permitting, it's gone very well. Our state is incredibly expeditious. And again, it's important to highlight that we typically take the long road in permitting, our permit stake on average, 2.5 years. So it's essentially a planning purpose, a planning project of applying for permitting well before we need to license any area, anything what have you. We have 9 permits today, which means it goes very well. We've never had a permitting issue. So -- but it's work that needs to be done. So again, there's that focus. There's a whole team focused on that, preparing impact studies, preparing studies, preparing filings. So is a pretty seamless process for us. And this is why we plan ahead because we never have any bottlenecking even though it does take long, it takes 2.5 years or sometimes 3 years. But it doesn't matter because you plan ahead. The next thing that we need to -- we focus on is always is -- another ongoing task is to reduce the environmental footprint of mining, and we're really innovating here. We have a plan to do complete regeneration of waste piles, basically implementing organic polymers. And then we have another strategy around minimization of blasting effect, dust management. The third initiative, it's continuous social support plan for communities as we advance in advance. In other words, as you saw from Reinaldo's presentation, as we're moving to potentially -- to opening a mine in the Southern complex, as you heard from Reinaldo earlier in 2026, we already finished the school, and we opened the school, and we're going to have a big opening ceremony 2 weeks from now, meaning 2 years ahead. That's how we build our social license. It's planning in advance with everything, working in advance and building the relationship with the community when we're just neighbors. So that 2 years from now, when we have to open that mine that's our operating license because we'll be interacting with that community. This is how we've done all these years. So we also have a childcare center. Both constructions are being completed, opening now. But again, we're just going to become neighbors, neighbors 2, 2.5 years from now. So -- but we plan ahead, move ahead, initiate relationships ahead. And then lastly is -- basically Fadwa's main focus now is the various, what we call, projects of social initiatives because it's more than the ongoing. It's essentially what we call legacy massive impact is the productive inclusion initiatives. And we'll talk about here how do they tie up with the job and wealth creation of the mines to avoid the dichotomy of having the haves versus the have-nots. So we have the Microcredit, which has 2,000 micro business consolidated. We have the Water for All program, which again increases the reach in the community to almost 100%. We're moving into the very last community that has 768 families. And then we have the irrigation for small-scale agriculture, which has 1,400 farmers. So these are very massive numbers for our region. And hence, the percentages of over 50% of the economically active population, which is sizable are benefiting from all that we're doing. So 4 fronts, 2 fronts ongoing, which is called ongoing improvement and then 2 fronts, what we call social relationship building. So environmental focus is on the 2 fronts ongoing and then social relationship building is where social and environmental merged in, what we call, social dialogue, which is a combination of special products and impact programs and the ongoing dialogue with the neighboring communities at that stage, communities that -- our neighbors will become neighbors and then what we call productive inclusion, which is -- has a life of its own, and that's what Fadwa spends most of her time these days. So without further ado. I'll go into why do we do it that way? Look at our region, right? It's essentially a region that looks more like Bangladesh. And essentially, if you look at the slide, it's basically a Bangladesh setup there. versus the state of Minas Gerais. So it's the poor's region in the state, but not just that, it's a poor's region in the country. So when you operate in a region like that, the social license that earned becomes the operating license. And this is the result of quite a lot of purpose because it's not about ESG is on fashion, is out of fashion. It's about the reason why we're building this with a solid foundation. So now we've garnered federal support, funding development bank support through BNDES. We've had the state support through the processes of typically committing to ensure to flow of our permits. Again, we had 9 permits, which is seamless, we've never been -- we're one of the fastest build. So we've never been stopped by any of the permits required, meaning we plan well and the state is there, the state-state, federal there with development banking. So it's an alliance, it's what we call a cause. It's an alliance between state and federal to develop this region that kind of translated into this initiative called Lithium Valley, and we are the locomotive of that valley. It's the commitment of our largest reference shareholder A10 Fund represented by Marcelo, which has been weathering up being here since 2017 when the fund was initiated -- when the fund was created. It takes that level of purpose. You need an impact fund, a group of shareholders that's committed to this. This -- we were joined by other very large and very relevant shareholders, namely [ BlackRock], [indiscernible] all of the group -- the group of shareholders that has this coalition built the brought resilience to what we're doing. I mean, synergy again now the list is endless. The list of shareholders is pretty stable because we are all -- we're here to solve for the long term. And at the long term, there is -- there has been a sizable amount of value created, and we're just at the beginning of it, as we've shown. So is that sort of coalition that is required, the partnership with the goals to deliver what we're delivering. And this is what we've done. This is there. This already happened. So 1,500 direct jobs, 13,000 indirect jobs, 21,000 job openings through the social inclusion program, 18,000 people with access to drinking water. Again, it's 100% adherence, right? 85% regional workforce, 50% of the economically active population benefited, 3 million meals a year is a stark reminder of where we are. We still feed people. We never -- we were never able to remove the protective net that we set out during the pandemic. So it's still there, 270,000 meals a month, 3 million meals a year. But the region is evolving away from it. We're showing a 20% GDP growth in this region, which is basically a miracle, right? Enhance the unanimity that the Lithium Valley became. And now we're joined by prominent neighbors. And again, we raised the bar so high that the entire modus operandi of successful companies in that region will basically reach the high bar. And now -- especially now that we're joined by the great, the great companies in the world in our sector, in metals and mining are investing in the region. Now what was the key to create shared prosperity? It's again, this effort, the purpose of raising the bar, combining the initiatives of social inclusion with industrial jobs and income generation. So essentially, this is what we call the wheel of prosperity. And this is economic development theory. This is not something we created. We went to the World Bank, to the biggest development institutions globally, and we look for best practices. And this is one of the key practices of how they operate in places like Southeast Asia, poor regions and Africa, meaning you go in with resources, industrial jobs, and you create a group of direct and indirect people benefiting from it. This is the group of the haves, the wealth. And then you move into the group of have-nots. If you leave them behind, there's going to be conflict. It's inevitable. Now how do you win a regional support? How do you create this wheel of prosperity. You create social inclusion. And the programs for social inclusion are quite basic because there's no time for essentially skilling or reskilling. You need to work with the skills they have, hence, Microcredit, which we borrowed again from best practices in Southeast Asia in Bangladesh and small-scale agriculture irrigation, which is an example that exists in Africa and Maria and our team borrowed from Brazil. So essentially, this includes 2 groups of vulnerable people, women and small-scale farmers that were -- that have not. They were left behind. So they -- once they're included, they create the offering of products and services that are actually consumed by the wealth created with direct and indirect jobs. So there's a transfer of wealth from the salaries and the wealth created in metals and mining towards the individuals benefiting from social inclusion, and hence the positive and inequivocable support we receive from the community. I'll give you a few numbers. The community has about -- both cities of about 57,000 people. In Brazil, you would need only 50 signatures to create a public hearing. We've been there for 12 years. We never had a public hearing, meaning one cannot garner 50 signatures on a page against us. This is the scale of our support. You would think 50 people, hasn't happened because the community is here with us. So why? Here is why. And that doesn't cost a lot of money. And again, the fact we're amongst second, third lowest cost in the world demonstrate that. It is possible. So with that, I'll go straight into Net Zero with Maria. So here is what happens in our neighborhood, in our sector, right, typically, lithium coming from rock mining, we generate 24 tons of carbon or 13 tonnes of carbon per tonne of material. Lithium generated from brines would generate about 9 tons of carbon per tonne of material. We generate 0.26, here it is. It's a fraction -- look, a fraction of brine and that's a result of all that we've shown you technologically in what we call the Greentech Plant. This is why it's the Greentech Plant. Here is a number, 0.26 tonnes of carbon per tonne is what the climate community here now gathered in New York for Climate Week Calls under one. And that's what allows us to upset this 0.26 tonnes balance with carbon credits. So very straightforward calculation. And again, most of it comes from mining hence see now this point about these initiatives, we're constantly looking at biofuels, hybrid to decrease that diesel, right? When we've done the study, we also learned blasting was -- if you look there is another source of that carbon. So again, it's transport, diesel in transport, mining, diesel in mining. So that's kind of where it is like you look, diesel trucking, [ M4 ] which is nitrates explosions and then diesel in mining. So it's all about the diesel, but still 0.27 tonnes or kilograms per kilograms or 0.27 tonnes per tonne under one in a hard-to-abate industry. This is kind of a name, hard to abate. It has never happened and we've shown that it can happen. So that puts us in a special position of being able to drive an entire chain to be low carbon, meaning 100% of refining is in China today, but the best-in-class just generate 2.5 tonnes. So they're fantastic over there. So with 2.5 tonnes of carbon added to the kind of lithium through the refining, meaning best-in-class are what? Those that use natural gas and clean power. So we can actually deliver a carbon minus product to end up with a zero carbon chemical, even in China, which is, wow, but why? Because the best-in-class are actually that good. That's why the industry doesn't leave there because it's zero waste, 2.5 tonnes of carbon. It is that good. So that ties back to the strategy we talked about earlier about why would we sell lithium sulfates to China. It isn't just a Western targeted supply, is a China target supply too because we can sell under we call carbon minus lithium sulfate. And we have a sizable market there for this because it makes complete sense economically, obviously, but also from an overall enabling our sustainability purpose. So and here's how the chemicals with materials sourced from the different sources would end up in terms of carbon, which shows that being zero carbon makes us the access of delivering what we call zero carbon chemicals, which is the holy grail of our industry, and we can do it. This is it. It could happen as early as tomorrow, right? If there's a client interested in carbon minus. So very straightforward. The grid enables decarbonization and a key to be low carbon is the grid. The grid is clean, is renewable. We buy 100% renewable power at a fixed 5-year contract at $0.02 a kilowatt hour. So it's one of the cheapest sources of renewable power in the world, it just loses to Saudi Arabia, which is [ $0.01 ]. So again, that is an important element because we do not have to clean carbon from coal-based grid, from fossil fuels based grid. We don't need to run on diesel generators or some of these new operations in Africa are running. So we really have this luxury. But we've done our homework. This is what we call Scope 2. We've done the homework on Scope 1, which means we've worked on our industrial operations. So we've done the homework and that's kind of how we ended up so well. And that's how we ended up zeroing out the carbon at 0.26 tonnes inside one, we were able to achieve carbon neutrality but basically zeroing out the 0.26 tonnes, which is nothing. Being inside one is a luxury. And at that, we are hailing the importance of carbon credits because it's the bottom-up effort to stop deforestation given that one is to put food on the table of the Amazon man in order to keep the force up, keep the force standing. You need regulation to prevent for illegal deforestation, but also working top down, but also work bottom up, meaning that man, we call the guardian of the forest needs to eat. They live in houses like this. This comes from an actual project. That person there is my son, and when you look at these trees, these trees are worth [ BRL 30 million ] which is about $6 million each, and they guard it. And they receive essentially the equivalent of max $1,000 a month on guarding the forest. But if they receive something, they will guard a $6 million tree with their lives. If they don't, the $6 million tree will go because it's basic economics, right? We do reforestation program, which just support the carbon initiatives, but the big things are in the hard to abate. So now we move to a second important initiative, which is reducing the environmental footprint of the mining, which is what we call regeneration. So Maria.

Yes. Good afternoon. And I would like to point out something about our LCE. That number that is really small. It was obtained with our engineering project. So when we received the report we act of our lot of things that we can really move, we can really change to make our number smaller, and it happened. For example, about explosives, we bought some very special software that can regulate the -- how much explosives we need to use to reduce our CO2 emission, and we did that. So our number -- now a days with the operation is smaller than 0.27. So -- and about what we are doing to recover the areas that we are mining, it's very important because this is really to be ESG. We are, for example, thinking that everything that really a Board something like that the community is not only social things is environmental. The environmental impacts, it really is boring the communities. For example, we have this application of polymers in all of our pilots to recover to really don't give to the community dust. dust is a problem. It's an environmental problem, but it's our social problem. So it's what we have using the polymers in the areas that we mine it. The other one.

And that's how it looks like after 1.5 years right, like...

Yes, it's unbelievable what -- yes, what it happens and it -- you can see that in the 6 months, what happened with the polymers used and it supplied also not only in the piles, but always the roads, community roads and inside our site roads.

And that's where you see the waste piles over there. It looks like a hill, like look at that one, it's the oldest waste pile of 18 months, which is kind of dates back when we we're opening that mine. It looks like a hill. So there's visual impact, dust impact, it's regeneration as we mine, which is a completely different concept than waiting for it to close and just doing regeneration. Regenerate the pile. The same pile to go back to cover the hole, right? And that's an important point because it's interesting because even walking through this with the stakeholders. The waste pile needs to sit next to the pit because otherwise, we can't do mine closure fine. So but as the way piles sits next to the pit, and we apply polymers, it actually looks more and more like part of the scenery. It looks like a hill. If you look there, you can see the [indiscernible] with the fully grown vegetation.

Yes. We know that they have -- we will not be the same after mine, we know that. But we need -- we have the responsibility to make this area how best as we can, what's the technology offers to us to recover mining areas, okay? And we are doing really, we are doing this. Another ongoing, okay, next slide please. So as I told before, social and environmental actions comes together in Sigma. So we -- when we think about to monitor vibration, that sound, dust and [ extra ] dust, another thing that is vibration, dust and noise. Everybody -- all this impact are measured by environmental area that together social area and together mining area. So we work together, together is really an ESG team, social and environmental area and technical areas. What includes mining and mineral processing areas. So it's why we can have really good results in ESG. Why do you have -- we have the support of the communities because we work as a team. okay? So for example, we measure every day dust, noise and vibration. And we have a legal limit, but we don't work with the legal limit. We work always given what the community is saying. Sometimes we have our for example dust below the legal demand, but it's not enough for us. We go to the community, and we measure with them what's happened. No. It's not good. There are some dust, okay, Reinaldo, please, what we need to do to work with dust, with vibration or noise during our blasting. So it's what we are doing, you are really having a lot of success. Improving for example, blasting it is happening and I think that this is really ESG. Okay. So hard work. At least, I would like to say that we really have a kind of [ existential ] programs. Yes. We have it but we have much more than this. We are building a sustainable community. It's what is important for us.

And with that, I'll start with a video of one of our greatest pride and joy. [Presentation]

Okay. So I will start -- I'd like to start just reinforcing what Ana said before. All of this that we are presenting started before the operation. Yes, our commitment came before the operation. Yes, before we start producing in the implementation phase. So it's important to reinforce this. And another point is that everything that we do based on technical studies on a -- with a robust institutional agenda, in partnership with local governments and listening to the community. It's a participatory way of doing things. So nothing that I'm going to present here right now was decided only by Sigma, we decided it together, yes. Maria said something very important. Maria, thank you for reminding me. It's about our internal team. So I'm responsible for the social; Alexandre who's not here now, but he's responsible all today of community relations and also for environmental, Reinaldo for the mining, Keith for the plant. So we discuss everything together before the decisions. And if I have anything related to the communities, complaints or something like that, I go to Reinaldo and also to Keith and we can discuss together and find solutions together before going to the community. And we go together to the community. And another point that I would like to say is that everything that we are doing we have KPIs to monitor all the implementation of these social programs because we are neighbor, we are part of the territory development. So we need to understand very well if what we are doing, we will bring the results that we are all together looking for. Ana has already introduced the Microcredit program, I guess. This is my -- how can I say my flag now, yes. And I'm very happy because of it. So just to give an idea about the region, Itinga has 49.7% of women. And Aracuai has 51%. So they are born with the need of support their families. And they need to strengthen their skills to do that, very strong woman. But the major doesn't go to the college, doesn't have the opportunity to go to the college, even to complete the basic education. That's why we came with this program. So we can support these woman with a Microcredit, but not only with Microcredit. We are also strengthening their capability. As we have the -- we are lucky because we have a local culture that is one of the most richest culture in Brazil, Jequitinhonha's valley. And passing from generation to generation, they have basic skills. They just need the opportunity to improve it. So that's why, like I said before, everything we do looking to the fragilities and also the opportunities of the territory. And this is, in my point of view -- in our point of view, we have much more opportunities than fragility with the local culture, with these woman and also in partnership with the local government. We have just the last numbers, we have already 2,000 women with us in the [indiscernible] program, this Microcredit program, but we have the opportunity to increase it and to reach 10,000 women in the territory. This is another social program. They are a small water basins, yes. It's to support the farmer, -- the small farmers in the region and also to -- for the agriculture process and also for the animals. Just to give you an idea, I brought some -- I brought a few numbers here. The small basins of water, we had already implemented 1,400 and we are going to implement another 700 yes? Would you like to say something Maria please?

Yes, because this kind of structure talks with social program and environmental program, too. Because this kind of structure can contribute to the aquifer. So both, environmental and social sustainable agriculture.

Exactly. And it goes back to the number of people impacted because each structure has -- they can't work the structure, either with we call animal base, meaning cattling and goat raising and what have you or agricultural. Each structure basically needs to be worked by the small-scale farmer, the subsistence agricultural individual with help. So we believe that each structure needs 5 people working on it for full benefits. So this 7,000 people benefited benefiting from it today already. This just shows how positively -- how much benefit does this create, right?

Exactly. Thank you, Ana. We, on the other hand, we have implemented -- we have distributed our LET, not only distributed but implemented together with -- in a partnership with the local government, we have already implemented 1,000 water tanks. They have already been delivered. And they are -- we bring potable water for these families every month. Yes, we are responsible for this distribution in partnership with the local government. Just to be -- one point that is very important. It's about -- it's helping people to avoid disease. The numbers that we have from the Ministry of Health in 2023, showed that 20% of death in Itinga was related to infections and parasitic disease. And in Aracuai, 25.28%. So we are supporting them to have a better situation in terms of health and less death. Like Ana said before, so we never ended to distribute food baskets, we started it in the pandemic time. And now we continue distributing. It's very important because it goes to the schools. It goes to elderly people and it supports like more than 36,000 people. Every month, we distribute food baskets for the communities, not only our neighbors but also in the city of Itinga and Aracuai. Homecoming program. So we have 85% of our workforce. They are local, yes, and 98% of our employees live in Aracuai and Itinga which helps improve income and job generation, yes, and at the same time to improve the local economy. So we created more than 1,500 jobs. But I would like just to -- we have one person here [ Cassiani ], she's our manager and she was working outside Aracuai. She is from Aracuai and she was working outside of Aracuai because she didn't have any opportunity -- any job opportunity in her city. After Sigma, she could come back, yes, and now she's living near her parents and also friends, and she is contributing to her place yes, to her region. Yes, [indiscernible]? This is another pillar of our social investment strategy, invest in education. We have already near 300 children being supported by this project. The education project. This is just one picture from Nuno Murta Education Complex. We have -- we also are bringing to them extra classes, such as patrimonial education, environmental education, culture, local culture, dancing, theater, photography. So they go to the school, they should stay there in the afternoon. But in the morning, we stay with them together with the local government, yes, of course, we are supported by them. We are supporting them to improve. So in the morning time, we stay with these children so they -- their parents can work. Most of them are our employees, yes and from our neighbors communities also. And we have already 3 schools. No, we are going to have the event in 2 weeks, yes, in 2 weeks yes, to inaugurate.

Another 2 schools. One in Itinga and the another one in Aracuai.

Here, just some examples about what Ana and Keith said, yes, about paving the roads with the stones that they presented with, that they showed here before. Everything that we are doing in terms of improving the roads that goes to the communities yes, because before of it, it couldn't rain in Aracuai and Itinga because they -- and now we are facilitating their access to social equipments such as medical -- hospitals, schools, so they take less time to go to the hospital, to schools because they have better roads. Talking about -- like I said before, so anything we do, we do together, listen to the communities and together with them. So we have permanent meetings with the communities, some of them every week, some of them between every 15 days and some of them monthly. So we decided together how it was going to be, yes, not only who is going to be invited but also the periodicity, the kind of dialogue channels we were going to use with them, and we mapped together all the TAMs that are important for them and also important for Sigma, of course. So we discussed together everything, and we bring solutions and we find solutions together. Okay. Just showing few pictures about our social dialogue meetings. And I can you just -- the previous slide and there, you can see why we were commemorating because we decided they approved the kind of proposal for the school, and that's why we have these pictures here. Another one, please. We are discussing, I was there. We are discussing about the extra classes, what they wanted us to bring and what their children would like to do together with us and together with the municipality. Same -- here, this picture is very important because you see there Marcelo, our Operational Director.

[indiscernible] Marcelo.

Yes. And beside him, you can see Paulo. Paulo is our Senior Manager -- Environmental Senior Manager. So every meeting that we have with community. We come together, we bring them together. So any complaint, any manifestation, they will be there to explain or to try to find any solutions together. Also, we call this program coffee and conversation because we have a team, a special team, yes, a specialist in social dialogue, community relations and human rights and they visit the communities, individually. They visit the communities every day. Sometimes to drink coffee together and sometimes to talk about what they are thinking, which are the expectations and also to engage with them. We have another 2 activities to dialogue with communities. This one here, we invite the teenagers from the communities, and we discussed together about dreams, they can dream. They can be anything they want to be, yes, and they love it. They love it. Every month, we do this kind of activity. And the other one, yes, it's the same. Yes.

And that's kind of the wrap, right [indiscernible] which shows that as we highlighted here, we can go on and on, all afternoon. We got a whole session on the ESG. And what we want to say is that we started this in 2019 when we had just finished feasibility, and we were selected by what was going a very obscure gathering called Climate Conference [ COP ]. I had to justify the people where I was going because people didn't know what [ COP ] was. Again, this is 2019, where we were selected as an example, as a case study, on mitigating the impact of resource extraction, and we show leadership in responsible mining. We had a pilot plant running. We had all these circuits we talked about with keeping commercial scale already running in the pilot plant. It was December 2019, I took time off to go to Madrid. A lot of people thought I was going on vacation, shopping, what have you. So I literally have to take time off to sip a coffee for 3 days. I just went on the weekend to the World Climate Summit, where I'm actually keynoting now 5 years later, which makes me very proud to talk about our first initiative. This was done every year thereafter. The following year was a pandemic, then there was a skip, Glasgow in '21, Egypt '22, then last year in Dubai. And now in Azerbaijan. We've been featured at every COP as a case study. And again, we're always bringing initiatives that seem ambitious at the time, but we constantly deliver. For example, in Glasgow, we talked about recycling everything, that there will be zero waste. And people looked at us like really well because what we said, well, is we've done dry stacking. We're now going to take this waste and we're going to remove it. right? So when we did that for a while. In fact, there was a market for the waste. And as the markets went down, we didn't give up. So we're now going to recycle the waste, we process it, we use so that we're zero waste.

Just 3 years before.

Just 3 years before. So we're just kind of constantly pushing the envelope on delivering this, which makes us very, very proud because this work that we always do. In other words, we became now a thought leader. That was actually my waste presentation Beyond Reduce, Reuse and Recycle. And here we are, right, with it. And we've done this since the pilot plant. So we're very proud because this is what we work for so hard. I mean, again, Marcelo, A10 we're an impact fund. This is why we invested in this industry years ago in order to demonstrate that all of these achievements were possible marrying profitability, returns to shareholders and delivering a benefit basically lifting the community and leaving a legacy behind. So with that I close.

Now we are a member of the global...

And yes, we are a member of the Global United Nations Pact for the global well-being, rights? So pact for humanity. We're proud members. So again, with that, I close, and I want to thank you for listening. It's been a very eventful day. We shared quite a lot with you and we are very grateful to count on your trust and to count in you as shareholders. So thank you and I look forward to another year of execution, right.