Sigma Lithium (Nasdaq, TSXV: SGML) rose as the company reported a sharp rise in operating margins and forecast a surge in cash flows from new sales agreements.
For the fourth quarter of 2025, the lithium producer in Brazil said it achieved an operating cash margin of 47%. This resulted in cash generation of $31 million, which it used most of to pay back debt. By the end of the year, its total debt had reduced by 35%, Sigma said in its earnings report on Monday.
“Cash flows were delivered and debt was repaid,” Sigma CEO Ana Cabral, The Northern Miner’s Mining Person of the Year for 2022, said on the earnings call. “Here are the numbers which speak for a thousand words and do not have an opinion. Numbers are numbers.”
In 2026, the company is expecting expected to generate cash inflow of $35 million, mostly from the sale of high-purity lithium oxide fines, for the first quarter, then nearly tripling to $96 million in the second quarter when sales of concentrates kick in.
Shares in Sigma Lithium gained 14% to close at C$16.58 apiece on Monday in Toronto after spiking to a one-month high of C$20.31. It has a market capitalization of C$1.82 billion.
New deals
One deal covers 70,500 tonnes in shipments for this year totalling $96 million, and the other covers 40,000 tonnes annually for three years totalling $50 million.
Prior to the earnings, Sigma’s ability to generate cash had caused concern among investors following a production halt at its Grota do Cirilo operation in Brazil last October.
However, Monday’s results helped to ease those concerns, with the company revealing that its cash position has nearly doubled from $6.2 million at year-end to $12 million as of March 30.
Debt payments
Total debt at year-end 2025 stood at $141 million, including a $100-million loan that Sigma expects to pay down in 2026 using the proceeds of offtake agreements and the anticipated cashflow.
During the fourth and first quarters combined, the company achieved net sales revenues of $67 million from selling about 650,000 tonnes of high-purity lithium fines and approximately 5,000 tonnes of high-grade premium lithium oxide concentrate. The latter marks the restart of sales of Sigma’s main product since the remobilization of its mine operations.
Following the January restart, Sigma expects to continue its expansion plans at Grota do Cirilo, including the construction of a second plant to increase the annual production capacity to 520,000 tonnes of lithium oxide concentrate by 2027.
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