[The Metals Company Q2 2025 Corporate Update](index=1&type=section&id=The%20Metals%20Company%20Q2%202025%20Corporate%20Update) [Executive Summary & Key Developments](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Developments) The company published economic studies showing a combined $23.6 billion NPV and secured $85.2 million in strategic investment Q2 2025 Financial Highlights | Metric | Value (USD) | | :--- | :--- | | Cash at June 30, 2025 | $115.8 million | | Cash Used in Operations | $10.6 million | | Operating Loss | $22.0 million | | Net Loss | $74.3 million | | Net Loss Per Share | $0.20 | - Published two S-K 1300-compliant technical reports with a total combined **Net Present Value (NPV) of $23.6 billion**, demonstrating potential economic viability and scalability of its projects[4](index=4&type=chunk) - The Pre-Feasibility Study (PFS) for the NORI-D area shows an **NPV of $5.5 billion** and marks a world-first declaration of **51 million tonnes of probable mineral reserves** for a polymetallic nodule project[7](index=7&type=chunk) - A new Initial Assessment for the remaining NORI and TOML areas estimates an **NPV of $18.1 billion** with a total recoverable resource of **670 million tonnes**[11](index=11&type=chunk) - Received notice of full compliance from the National Oceanic and Atmospheric Administration (NOAA) for its U.S. exploration applications, targeting a production start in **Q4 2027**[6](index=6&type=chunk)[12](index=12&type=chunk) - Secured a strategic equity investment from Korea Zinc, resulting in gross proceeds of **$85.2 million**[11](index=11&type=chunk)[17](index=17&type=chunk) [Operational Highlights](index=3&type=section&id=Operational%20Highlights) The company advanced its U.S. regulatory strategy, updated sponsorship agreements, and strengthened its board and shareholder base - TMC USA's exploration applications received full compliance notice from NOAA and entered the certification stage, which is expected to take approximately **100 days**[13](index=13&type=chunk) - Signed a revised Sponsorship Agreement with Nauru, ensuring Nauru receives continuity benefits if a TMC subsidiary begins commercial recovery under the **U.S. regulatory regime**[14](index=14&type=chunk) - Announced a revised Sponsorship Agreement with Tonga, providing similar continuity benefits to the Kingdom of Tonga under a potential **U.S. authorization**[15](index=15&type=chunk) - Appointed Michael Hess and Alex Spiro to its Board of Directors to enhance its operational, investment, legal, and capital markets expertise in line with its **U.S. strategy**[16](index=16&type=chunk) - Korea Zinc's strategic investment of **$85.2 million** made it one of TMC's largest shareholders, with approximately **5% ownership** of outstanding common shares[17](index=17&type=chunk) [Industry Update](index=4&type=section&id=Industry%20Update) Regulatory and industry developments favored a U.S. focus, with NOAA proposing streamlined rules while the ISA failed to finalize its Mining Code - NOAA published draft revisions to its deep seabed mining regulations, proposing a **consolidated review process** for simultaneous issuance of exploration licenses and commercial recovery permits[18](index=18&type=chunk) - The Financial Times reported that Lockheed Martin is seeing **renewed interest** in developing its seabed exploration contract areas, citing the Trump administration's focus on critical minerals[19](index=19&type=chunk) - The International Seabed Authority (ISA) concluded its 30th session **without delivering a Mining Code**, missing another deadline[20](index=20&type=chunk) - Leaders from Nauru met with the U.S. National Security Council alongside TMC to discuss partnerships for **critical mineral independence**[21](index=21&type=chunk) - The U.S. State Department announced discussions with the Cook Islands to support research for **responsible seabed exploration and development**[22](index=22&type=chunk) [Financial Performance](index=6&type=section&id=Financial%20Performance) The company reported a higher net loss due to non-recurring charges but ended the quarter with a strong cash position of $115.8 million [Financial Results Overview (Narrative)](index=6&type=section&id=Financial%20Results%20Overview%20(Narrative)) Q2 2025 net loss widened to $74.3 million, driven by non-recurring warrant charges, while the company maintained a sufficient cash balance - As of June 30, 2025, the company held approximately **$115.8 million in cash**, which is believed to be sufficient to meet working capital and capital expenditure needs for at least the next twelve months[23](index=23&type=chunk) Q2 2025 vs Q2 2024 Financial Comparison | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Loss | $22.0 million | $20.3 million | | Net Loss | $74.3 million | $20.2 million | | Net Loss per Share | $0.20 | $0.06 | - The significant increase in net loss was primarily due to a **$33 million non-recurring charge** for warrants issued to Nauru and a **$16.2 million charge** from the increased fair value of warrant liability[26](index=26&type=chunk) - Exploration expenses **decreased from $12.4 million to $10.5 million YoY**, while general and administrative expenses **increased from $7.9 million to $11.5 million YoY**[24](index=24&type=chunk)[25](index=25&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Financial statements reflect a strengthened balance sheet with increased cash and positive equity, despite a quarterly net loss Condensed Balance Sheet (in thousands USD) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$173,694** | **$62,998** | | Cash | $115,759 | $3,480 | | **Total Liabilities** | **$91,834** | **$80,116** | | Warrants liability | $17,582 | $912 | | **Total Equity** | **$81,860** | **($17,118)** | Condensed Statement of Loss (in thousands USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating Loss | $21,975 | $20,295 | | Net Loss | $74,341 | $20,168 | | Net Loss per Share | $0.20 | $0.06 | Condensed Statement of Cash Flows (Six Months Ended June 30, in thousands USD) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($20,009) | ($23,966) | | Net Cash from (Used in) Investing Activities | $226 | ($415) | | Net Cash Provided by Financing Activities | $132,069 | $17,712 | | **Increase (Decrease) in Cash** | **$112,286** | **($6,669)** |

Core Insights - TMC the metals company Inc. reported significant progress in its NORI-D Project, including a world-first declaration of mineral reserves and a combined Net Present Value (NPV) of $23.6 billion from two economic studies [2][5][7] - The company aims to commence commercial production from the NORI-D area in Q4 2027, contingent on receiving necessary permits [6][8] Financial Highlights - As of June 30, 2025, TMC held approximately $115.8 million in cash, with an operating loss of $22 million and a net loss of $74.3 million for the quarter [6][20][19] - The net loss per share for the quarter was $0.20, compared to $0.06 for the same period in 2024 [20][31] - Exploration and evaluation expenses decreased to $10.5 million from $12.4 million year-over-year, while general and administrative expenses increased to $11.5 million from $7.9 million [20][21] Operational Developments - TMC USA received notice of full compliance from NOAA regarding its exploration license applications, confirming priority rights over exploration areas [6][8] - The company has renewed sponsorship agreements with Nauru and Tonga, ensuring continued financial benefits and community programs [9][10] Strategic Investments - A strategic equity investment from Korea Zinc resulted in gross proceeds of $85.2 million, enhancing TMC's financial position and strategic partnerships [12][19] - The investment includes a three-year warrant for additional shares, indicating strong confidence from Korea Zinc in TMC's potential [12] Industry Context - NOAA proposed revisions to regulations under the Deep Seabed Hard Mineral Resources Act, which could streamline the permitting process for seabed mining [13] - The International Seabed Authority has not yet delivered a Mining Code, delaying regulatory clarity for deep-sea mining operations [16] Future Outlook - TMC projects an average annual production rate of 10.8 million tonnes of wet nodules from the NORI-D area, with a life of mine expected to last 18 years [6][7] - The company anticipates a projected after-tax Internal Rate of Return (IRR) of 27% for the NORI-D Project and 36% for the broader resource areas [6][20]

Core Viewpoint - TMC The Metals Company has experienced a significant stock price increase of 378% year to date, but recent trading has seen a pullback due to U.S.-China trade negotiations and profit-taking by investors [1][5]. Group 1: Stock Performance - TMC stock declined by 10% in July, contrasting with a 2.2% rise in the S&P 500 and a 3.7% increase in the Nasdaq Composite [1]. - The stock continued to slide in August, down approximately 10% as investors reduced exposure amid uncertain trade dynamics [5]. - Despite recent sell-offs, TMC's share price remains up roughly 378% year to date [5]. Group 2: Trade Negotiations and Market Dynamics - Developments in U.S.-China trade negotiations, including the lifting of export restrictions on high-end AI chips, have influenced TMC's stock performance [3]. - The Trump administration's concessions in technology exports aim to secure long-term access to China's rare earth mineral supply, which is strategically important for TMC [4]. - The recent pullback in TMC's stock follows a massive valuation run-up earlier in the year, reflecting investor sentiment regarding trade negotiations [2][4]. Group 3: Company Operations and Market Capitalization - TMC currently has a market capitalization of approximately $1.9 billion and remains in a pre-revenue state, needing key regulatory approvals to commence commercial seabed mining operations [6]. - An executive order from President Trump to expedite permitting reviews for seabed mining is seen as a positive development for TMC [7]. - Increased government support for domestic rare earth mining projects is expected to facilitate TMC's operational launch and scaling [6].

Core Viewpoint - TMC The Metals Company has experienced a significant stock price increase of approximately 368% year to date, despite being considered a risky investment [1][2][6] Group 1: Company Performance - TMC's stock has surged due to expectations of regulatory changes and political dynamics that may accelerate its operational deployment and growth [2][4] - The company is currently in a pre-revenue state, indicating high investment risk, but there are favorable dynamics that could lead to substantial price increases [4][6] Group 2: Regulatory Environment - An executive order signed by President Trump aims to expedite permitting for seabed mining operations, which TMC has responded to by submitting several regulatory applications [5] - The potential for seabed mining is seen as crucial for enhancing the U.S. ability to source rare earth minerals domestically [5] Group 3: Market Capitalization and Speculation - TMC has a market capitalization of approximately $1.9 billion, categorizing it as a relatively small and speculative investment [6] - Despite the high level of risk, there is a belief that TMC's valuation could significantly exceed current levels, driven by geopolitical factors and the importance of rare earth mineral sourcing [6]

Virtual webcast with slides: Register Here The virtual webcast will be available for replay in the 'Investors' tab of the Company's website under 'Investors' > 'Media' > 'Events and Presentations', approximately two hours after the event. The Metals Company is a developer of lower-impact critical metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for energy, defense, manufacturing and infrastructure with net positive impacts compared to conventional production routes and (2) tra ...

Core Viewpoint - The recent geopolitical developments, particularly regarding U.S.-China trade relations, have led to significant volatility in TMC stock, which experienced a 24.8% decline last week [1][2]. Group 1: Stock Performance - TMC stock faced substantial sell-offs due to the U.S. lifting technology export restrictions on high-performance semiconductors and chip manufacturing equipment to China [2][4]. - Despite the recent pullback, TMC stock remains up 424% for the year 2025, driven by the U.S. administration's focus on enhancing mineral sourcing capabilities [5]. Group 2: Trade Relations Impact - The lifting of export restrictions is part of efforts to negotiate a trade agreement with China, which could have mixed implications for TMC's growth outlook [4][5]. - A trade agreement may reduce the urgency for TMC and other seabed mining companies to scale operations, but domestic mineral sourcing capabilities are likely to remain a national priority [6][7].

Core Insights - TMC the metals company Inc. has released a Technical Report Summary (TRS) for its Pre-Feasibility Study (PFS) on the NORI-D Polymetallic Nodule Project, marking a world-first declaration of Probable Mineral Reserves for deep-sea polymetallic nodules [1][5][7] - The PFS indicates a projected After-tax Net Present Value (NPV) of $5.5 billion and an After-tax Internal Rate of Return (IRR) of 27% for the NORI-D Project, with a mine life of 18 years [5][41] - An Initial Assessment (IA) for the remaining resources in the NORI and TOML blocks shows a measured and indicated mineral resource of 73 million tonnes (Mt) and an inferred resource of 1,206 Mt, supporting an After-tax NPV of $18.1 billion and an After-tax IRR of 35.6% [2][41] Project Overview - The NORI-D Project is expected to commence commercial production in Q4 2027, targeting an average annual production rate of 10.8 million tonnes of wet nodules [5][7] - The project is designed to leverage existing offshore and onshore infrastructure, adopting a capital-light approach to minimize upfront costs [13][18] - Initial processing will utilize rotary kiln electric furnace (RKEF) technology in Japan and Indonesia, with plans for future refining facilities in the U.S. [15][21] Economic Potential - The combined project value of the NORI-D Project and the remaining resources is estimated at $23.6 billion, highlighting significant economic viability and scalability [5][7] - The PFS outlines a phased development plan, with an expected steady-state production rate of 97 kilotonnes per annum (ktpa) nickel, 2,389 ktpa manganese, 70 ktpa copper, and 7.4 ktpa cobalt [5][41] - The IA indicates a total estimated resource Net Project Value of $18.1 billion, with a steady-state average EBITDA margin of 57% [41][52] Resource Details - The PFS identifies 51 million tonnes of probable mineral reserves, with an additional 113 million tonnes of recoverable nodules expected from detailed survey and mine planning [5][26][30] - The total mineral resource estimate for NORI-D, excluding reserves, is approximately 274 million tonnes of wet nodules, classified into measured, indicated, and inferred categories [27][30] - The IA outlines the potential for collecting approximately 670 million tonnes of wet polymetallic nodules across the NORI and TOML contract areas [41][46] Environmental and Operational Strategy - The project emphasizes responsible production with a focus on minimizing environmental impact through advanced modeling and seafloor mapping [34][36] - TMC plans to employ proven technologies for processing, aiming for high metallurgical recoveries and low solid waste generation [37][40] - The operational strategy includes real-time environmental monitoring and adaptive management practices to ensure sustainable growth [31][34]

Core Points - The Kingdom of Tonga and TMC's subsidiary, Tonga Offshore Mining Ltd (TOML), signed a revised Sponsorship Agreement, updating the terms of their 2021 agreement [1][9] - The updated agreement ensures that Tonga will continue to receive financial benefits, training, and community programs while securing continuity benefits upon the commencement of commercial production [2][8] - Tonga has played a leading role in the development of the seafloor minerals industry and is committed to responsible mining practices [4][5] Company and Industry Summary - TMC is a leading developer of critical metals essential for energy, defense, manufacturing, and infrastructure, focusing on lower-impact extraction from seafloor polymetallic nodules [1][10] - The agreement highlights Tonga's commitment to transparency, fairness, and environmental care in seabed mineral activities, aligning with its long-term development goals [4][6] - The International Seabed Authority (ISA) has faced delays in adopting Exploitation Regulations, impacting TOML's ability to proceed with commercial exploitation activities [9]

Company Overview - The Metals Company (TMC) is focused on harvesting polymetallic nodules from the Clarion Clipperton Zone (CCZ) in the Pacific Ocean, which contain essential metals for electric vehicle batteries and solar panels [4][5] - TMC aims to provide a more environmentally friendly alternative to traditional land-based mining by extracting these nodules from the seabed [5] Market Potential - The CCZ is estimated to hold around 21 billion metric tons of nodules, potentially containing more nickel, cobalt, and other rare earth metals than all land-based reserves combined [6] - The demand for battery metals is expected to reach multitrillion-dollar levels over the next few decades, positioning TMC as a potential key player if it can successfully enter the market [12] Financial Performance - TMC reported zero revenue in Q1 2025, with a net loss of approximately $20.6 million, an increase from $16.1 million in the previous quarter [8] - The company is currently not generating income and is facing significant financial challenges as it builds its underwater mining infrastructure [8] Regulatory Environment - TMC does not yet have permission to mine commercially in the CCZ, as the regulatory framework from the International Seabed Authority (ISA) is still being finalized [9] - The U.S. has not ratified the treaty that established the ISA, which could allow TMC to pursue mining under U.S. jurisdiction if its permit application is approved [10][11] Strategic Moves - In April 2025, TMC filed a permit application under U.S. law following an executive order aimed at renewing interest in offshore critical minerals [11] - If successful, this could enable TMC to operate in areas that are currently restricted to other nations, potentially giving it a competitive advantage [11] Investment Considerations - TMC represents a high-risk, high-reward investment opportunity, with significant potential upside if it secures the necessary permits and scales its technology [12] - The current market cap of $2.65 billion may appear small compared to the anticipated demand for battery metals, but the company faces numerous uncertainties that could impact its future [12][13]

Group 1 - TMC's stock is experiencing significant sell-offs, down 8.2% amid a broader market decline [1][2] - The pressure on TMC's stock is linked to the U.S. facilitating a trade deal with China, which may weaken TMC's expansion outlook [2][5] - The Trump administration's recent lifting of export licensing requirements for advanced semiconductors to China is aimed at advancing trade talks, potentially impacting TMC's access to rare earth minerals [3][5] Group 2 - TMC has seen substantial gains this year, with a rise of over 500%, as investors anticipate its seabed mining capabilities to play a crucial role in U.S. mineral sourcing [4][6] - The future of TMC's stock valuation may be influenced by the inclusion of mineral access in a U.S.-China trade deal, which could create valuation pressures [5][6] - Despite the recent developments, the U.S. is likely to prioritize domestic mineral sourcing, suggesting that TMC's growth prospects are not entirely compromised [6]