Sigma Lithium Corporation (NASDAQ: SGML) announced it is filing a legal appeal against a decision issued May 17 by a local judge in Aracuai, Vale do Jequitinhonha, Brazil.

The court ruling includes potential legal collateral of $10 million, which the company states would only be due if charges result in a final negative ruling after completion of Brazil's full legal process, including appeals in state and federal courts. The company said legal jurisprudence for similar cases indicates a timeline of multiple years before enforcement, with no payments currently due or required.

The ruling followed a visit by legal authorities to Sigma Lithium's operations, where the company's conformity with Brazilian environmental rules was verified. The visit occurred on the same day as a public hearing attended by more than 200 people from neighboring communities who demonstrated support for the company's operations.

Sigma Lithium reported that a negative online media campaign was launched against the company prior to the official issuance of the legal decision. The campaign occurred on a Sunday following the company's record earnings announcement for the first quarter of 2026 on Friday. The company's share price fell 15% following the developments.

The company stated it remains in contact with appropriate authorities regarding the issue, including FINRA. Sigma Lithium described this as part of a pattern first reported on January 23, 2026.

Sigma Lithium operates what it describes as the fifth-largest industrial-mineral complex for lithium oxide concentrate at its Grota do Cirilo operation in Brazil, with current nameplate capacity to produce 270,000 tonnes of lithium oxide concentrate annually. The company has initiated a Phase 2 expansion designed to increase production capacity to 520,000 tonnes.