It's my pleasure to present you with our preview of our third quarter of 2026, which we're happy to leave behind us. The point in this preview is to demonstrate the resilience and the cash generation we've achieved throughout the quarter. Please look at the disclaimers because we're going to make a number of forward-looking statements in this presentation. The disciplined financial and ESG-centric execution steered our company during the third quarter. We resumed operations successfully after each stoppage, state and federal. We also obtained landmark victories for our ESG credentials. They have been scrutinized, tried, and prevailed in court of law, which shows they're bulletproof. More importantly, this is the result of us thinking through executing in an ESG-centric way since well before we had revenues in 2021. Our financial discipline also came through.
We've achieved high gross margins of 32%, low costs, and commercial strength, even this quarter. We also, to wrap all of that, on the back of this delivery, were able to extend our debt maturity into June 2027, gaining significant runway of about seven months to think through how to continue on our deleveraging path. First, let's recap how our production has gone through throughout the last two years. We got to production cadence that we planned carefully once we upgraded our Greentech Industrial Plant in 2024. That cadence culminated in 77,000 tons of production in the fourth quarter of December 2024. That's what we're planning to replicate going forward. We kept on doing it throughout the year of 2025, but mining held us back. With the primarization, we were well on the way to get back to those levels.
Up until the second quarter, we were hitting our every target. In the second quarter, we surpassed the target. We got to 35,000 tons on that quarter, and we were going to get to where we needed, and we are. What happened in the third quarter was simply a result of the two stoppages, a blip, because as we resumed into that trajectory on the third quarter, we got to, in the third quarter, demonstrate through production and inventories that we can get there. When you add all the numbers back up, we are kind of back to the second quarter levels, building quite well to deliver the 240,000 tons we're forecasting for the next 12 months and the 330,000 tons forecasted for 2027. That will be a direct result of our upgraded industrial plant.
Here it is, 68,000 tons a quarter is what we've been doing, even before primarizing mining. The 15,000 extra comes from the reprocessing circuit, which has been tried live and has kept the company going throughout the last year. As we forecast our levels, when we show daily production, we're simply continuing to execute cadence as we were in December 2024. In other words, this plant can do and has already done 920, 950, sometimes even 1,000 tons of high-grade a day. So we're just showing that what we're forecasting is what we did and what we can do with cadence delivered to the ROM pad every day. Here's why. The reprocessing circuit optimized the plant, delivers 100% circularity, and reprocessing finds intermediates, helping us deliver strong cash flow, freeing up capacity for the high-grade circuit so we can do more production with the same amount of material.
More importantly, we are one of the few plants in the world of any metal to be 100% circular. Nothing is lost. Nothing is put to waste. Here are our piles. We are able to take every lithium unit and sell and monetize. Here is the key part in all of that. We have continued to do so in a competitive low-cost delivery. So, any lithium prices enable us to be successful because our CIF costs are just $518. Our plant gate costs are just $424, even this quarter when we had lower volumes. These are actual costs. We can keep doing our operations at low costs and keep becoming what we are, meaning we are the floor. At $518 CIF, under current prices, we still have a vast $700 per ton of cash margin.
When you look at the left, that is the reason why our all-in sustaining cost is basically $670. That is what we posted in the second quarter. So here in the third quarter, CIF just shows us how competitive Sigma is. We are the floor. Our prices are below Africa. This page is what makes us prouder. We have been uniquely combining a low cost with a top global safety record. This quarter, we got to 1,175 days with zero accidents and fatalities. This is a unique track record. It was result of rigorous safety protocols. Our employees go back to their families every day because they are engaged in the strict processes. We have a direct connection to the factory floor. We get enhanced performance from that positive loop created with direct connection with our employees.
More beautifully, we celebrated ecumenically how this safety record is a result of our considerable blessing in being able to maintain this day in, day out. All of our employees were together in an event so overwhelming that it had to be televised live on YouTube. Now, let us talk about the future, our production and capacity, and our 2026, 2027 operational outlook. When we look at the next 12 months, we are putting forth guidance for 240,000 tons. When you think about 2027, we are putting forth guidance for 330,000 tons. Now, on the right, you can see what does that mean in cash flow generation, free cash flow generation under any realized lithium prices. If you take current prices, we have 240,000 tons per year for the next 12 months, but then generating $200 million of free cash flow. That is quite significant.
When we deliver 330,000 tons in 2027, that same prices would enable us to generate $275 million of free cash flow. If lithium goes back to $1,000 or goes up to $2,000, the free cash flow is robust, and that is a position of our low costs, where we are the floor of the industry. When it comes to delivering those volumes, that is enabled by our primarization, which has been a direct result of our commercial partnership with the equipment supplier, SANY China. We have upgraded our mining fleet and capacity increase. We are able to haul more because we now have bigger trucks. With 60-ton trucks, we are hauling 50% more than we did with our previous contractor.
With a new fleet coming in at 75 tons and 100 tons over, we would be hauling twice as much than we did before, clearly increasing productivity, efficiency, and lowering cost per ton. As we upgrade fleet, resulting from the direct relationship with our equipment provider, we become more efficient and crystallize our low costs. The same goes for excavators. We started with 36-ton excavators. We are now at 75 tons, twice as big, more capacity, more efficiency, loading trucks faster. As we move up to 105-ton excavators, we can load the trucks three times faster than before with 36-ton excavators under our previous contractor. It is all about the numbers. Clearly, the crystallized low costs come from the efficiency. Here is how all of that translates into the future.
We have shown the first two quarters in charts, but this is how Sigma is expected to look like once we build a second plant and a third plant. Irrespective of lithium prices, we are looking at very healthy cash flow levels. Let us say, at current prices, half a billion dollars of annual free cash flow with two plants and $730 million of free cash flow with three plants. This is our future in numbers at current lithium prices, which means we are going to continuing to do what we do day in, day out, because we built resilience into our DNA by focusing on being low cost above everything. When we think about our future in our industry, we are enthusiastic. We are AI-enabled in lithium. More importantly, in a way, sadly, we are geoeconomics-enabled.
Rising energy prices creates more demand for clean energy, so lithium is forecasted to get to 2.4 million tons of demand in 2026. This number is significantly higher than 2025, the kind of growth of demand you very rarely see in commodities. Within the next decade, lithium demand is set to double. The key thing is, prices may not follow. This is where Sigma is so well-positioned. We built resilience into our prices. Now, we are presenting the financial highlights of the third quarter 2026. The financial discipline in the third quarter maintained our low-cost leadership during the quarter. First, production inventory. We produced 7,293 tons of high-grade volume. That was coupled with 6,000 tons of intermediate volume and 15,000 tons of high-grade equivalent of low-grade volume.
As we discussed earlier, our processing circuit can turn both of these inventories into cash flow, which is what we have been doing throughout last year. All the while, we are able to maintain low-cost leadership. In the third quarter, we have been able to deliver $424 per ton of cost at plant gate. CIF, that becomes $518 per ton. If one contrasts that to current lithium prices, one can see why Sigma maintains such high gross operating margins and such high, large operational free cash flow. Our gross revenue, despite the paralyzations, was quite healthy. That, together with our low costs, enabled us to sail through the quarter. We were able to deliver $23 million of revenues in the third quarter 2026, despite everything. Now, as we enter the fourth quarter and 2027, we will even strengthen further our position.
As a result of this disciplined financial execution, we were able to negotiate an outstanding outcome for our short-term debt. We extended it to June 2027, giving us considerable runway to think through our balance sheet and conclude the balance sheet turnaround we've been successfully delivering for the last two years. Here is a picture of the turnaround. We've paid down 40% of our total debt, retiring it throughout the last two years, even with the depressed lithium prices and then with the 2025 primarization and upgrade, preparing us for the future. When you look at the short-term debt, the picture of extending it gives us that breathing room, where we actually decreased it by 83% just over the last year, a sizable change. In the short-term debt now, all we have is $13 million, which we plan to roll over.
Those are just trade lines that we typically use in the normal course of our business. Here is what that extension does to our leverage ratio. The net debt to EBITDA, when we look at the cash flow forecasted under any lithium price in the future, is quite healthy. Take, for example, current prices, $1,500 per ton. Our net debt to EBITDA would be just 0.6 times. If you think about lithium going down to $1,000 per ton, our net debt to EBITDA would be a very comfortable 1.6 times, using our total debt as part of that calculation. What we've accomplished over the last two years in terms of financial discipline, despite lithium prices and preparing for a primarization that will lead us to a very resilient future, is our core strength. We're building a business to last. Here is how all of it comes together.
Our gross margins are healthy. In the second quarter, when we beat all of our targets, we posted 60% gross margin. In our third quarter, despite stoppages, we posted 32% gross margin, a fantastic result for a company that has gone through what we've gone through. That's resilience, and it's grounded on operational discipline. This page is how our healthy liquidity pipeline, supported by contracted sales and upcoming offtake prepayments, come together to deliver us cash. We demonstrate here how disciplined we are. Throughout the quarter, we started with $17 million, but we just burned $4 million, so we closed the quarter with $10 million. Now, when we think about what comes ahead of us, we have more sales coming in. They already got into our balance sheet in the fourth quarter.
We closed $10 million in high-grade sales, and we still have $52 million in other sources of short-term liquidity. For example, sales of high-grade equivalent of lithium fines and outstanding installments in our $96 million offtake from last year that was not fully drawn yet. We are in a pretty good position to continue producing, delivering, and executing throughout the fourth quarter because we're so disciplined. Now, this quarter, what was behind all of it? Our ESG credentials. They were tested in the courts of law, and they prevail, delivering us two outstanding victories. On this page, you can see how Sigma Lithium adheres to the highest global mining standards. Our Quintuple Zero Lithium is fully traceable. Here you see pictures. Pictures are a thousand words. Our rock piles with active germination with grass basically look like hills in the landscape of our region.
This is adhering to the highest possible standards. Other G7 countries with very high standard have rock piles and tailing dams. These are high standards, but our standards are actually equivalent to the best of the best. Much ado about nothing. Our Quintuple Zero Lithium is easily ascertainable. Five zero tailing dams, zero use of drinking water, zero hazardous chemicals, 100% renewable electricity, zero accidents. It is just a matter of counting. When we think about Sigma fuel jobs, the shared prosperity business model prevailed in the courts of law. Sigma was declared Too Big To Stop because of the outsized economic impact in the state of Minas Gerais a stoppage could cause to Sigma. That provides almost a shield against future stoppages. After all, there are 19,000 jobs with 80,000 family members that rely on us in the state.
Minas Gerais is the second wealthiest state of Brazil and of core importance. The landmark victories demonstrated the impeccable ESG credentials of the company. Essentially, we were able to demonstrate the institutional stability of Brazil. Our rule of law has been upheld. We were able to maintain our licenses and operations in the state and in federal challenges. Rule of law and democracy showed we had the right to defense, and as we defended ourselves, we showcased our ESG credentials, which prevailed because they are clear, immaculate, and unique like no other. We also got swift resolutions and protection. We were awarded a TAC by state government, which is the overarching shield around state litigation. We also were awarded a classification of Too Big To Stop, which means we have sizable economic impact in the state. The 19,000 jobs and their 80,000 family members prevail over bogus claims.
We safeguarded our operating licenses and our operational status that way. With very limited financial exposure, the TAC just costs us $1 million to be spent throughout next year to do the active regeneration of the piles we showed earlier. We are going to go grass the rock piles throughout our operations. No additional royalties can be levied in Brazil without Congress. Again, all of it was much ado about nothing. But it showed also that we are a good citizen company. We had positive engagement with our state government and with federal appeal courts. We created awareness of the amount of jobs that are connected to our operations and how 17 towns have people who rely on us through our network of direct employees, our network of local suppliers, and our social productive jobs. Sigma directed a positive spotlight towards our Quintuple Zero environmental stellar track record.
We believe there was a silver lining in the quarter, where now there is a big light shining on who we are and how we prevail environmentally and socially. Brazil is a mining jurisdiction with rule of law and democracy. All of the large global mining companies are investing. On top, these are the companies investing in our state, and at the bottom are companies investing in other parts of the state. Our governor said that in Minas Gerais, government wants to make life easier for those who work, creating an environment that makes investment immune to political interference, instilling trust in investors that here in Minas Gerais, can do business and rewarded with swift application of rule of law. We are very happy with this because again, we shone a spotlight into our operations. Brazil is also ranked very high in the Fraser Institute Mining Investment Attractiveness.
We sit just below Western Australia, but above other jurisdictions that would, at first glance, be perceived to sit below Brazil. We are in quite a good place here. The TAC in Minas Gerais is simply this. These are our grassed waste piles, rock piles. They look like hills. We are going to do it throughout the other areas where we have rock piles, so they will blend into the landscape. How do we do it? This way. First, we start with polymers, then we plant grass. The grass grows, as you can see here, and they get to this here. It is another picture of an actual rock pile with grass, fully regenerated within 18 months throughout the rainy season. We also built access roads for two houses and eight people, which was part of the causes of the state stoppage. We built gravel roads for those two houses.
Fantastic access where there was none. Those families were just walking in, and they did not have the gravel roads because they were not even in our licensed area. They were sitting outside of our environmentally licensed area. We went there, and we did what we were told, and we created access, like all the other 180 km of roads like this we did for communities within our environmentally licensed areas. Here is another important picture that is a thousand words. You can see the water we preserved for the community. It is a seasonal creek. Here is the north pit, which has been the object of speculation. This pit has been deactivated since 2024.
We are mining the south pit, so we keep going strong, our operations continuing into the next 12 months, where we plan to deliver 240,000 tons of material and on the way to deliver 330,000 tons of material for 2027. This is another picture of the river and our resilience bridge. We made a point in preserving the water for the community. Concluding, here is just a summary of what we have gone through, but more importantly, we are operating normally with a Too Big To Stop recent federal court ruling because we got 19,000 jobs and 80,000 family members relying on us. This material is available for you on our website. What is the takeaway? Rule of law and institutional protection, both in the state and in federal. A TAC signed on a no fault with a very favorable ruling for Sigma. That was state.
In federal, we were awarded Too Big To Stop when the entire state of Minas Gerais saw our outsized economic effect in the state, more importantly, in the region that was formerly destitute and now grows significantly because of Sigma. Our priority now is to execute and achieve the re-rating, showing the significant growth profile of production, showing our proven execution capabilities that will be delivered with our experienced team, and showing the operational resilience, financial discipline, and structurally low cost advantage. Here is the re-rating we plan to achieve in the markets. We are negotiating at basically half of a peer with the same production capabilities as we do. We generate quite a lot of cash flow, so as we continue to execute, the re-rating will actually materialize normally. Thank you so much.