TMC the metal company (TMC) - 2024 Q3 - Quarterly Report

Production and Exploration - The company successfully produced approximately 500 tonnes of calcine from a 2,000-tonne sample of deep-seafloor polymetallic nodules at PAMCO's facility in September 2024[92]. - The company holds exclusive exploration rights to 74,830 square kilometers in the Clarion Clipperton Zone, with significant resource definition and environmental work completed in the NORI Area D[103]. - A binding Memorandum of Understanding with PAMCO includes a feasibility study for toll treating 1.3 million tonnes of wet polymetallic nodules per year, expected to be completed in the first half of 2025[88]. - The company is focused on defining resource and project economics, developing a commercial offshore nodule collection system, and assessing environmental impacts[90]. - The company has not yet declared mineral reserves and lacks the necessary environmental permits for commercial-scale processing[91]. - Approximately 97% of the NORI Area D resource is categorized as measured or indicated, indicating a significant level of resource quality[180]. - The initial assessment of the NORI Area D indicates potential technical and economic viability, but economic viability has not yet been demonstrated[178]. - The company plans to continue estimating resources in the NORI and TOML Areas and developing project economics[178]. Financial Performance - The company reported a net loss of approximately $20.5 million for the three months ended September 30, 2024, compared to a net loss of$12.5 million in the same period of 2023, representing a 65% increase in net loss[122]. - The company reported a net loss of $65.9 million for the nine months ended September 30, 2024, compared to a net loss of$40.3 million in the same period of 2023, reflecting a 63% increase[128]. - Exploration and evaluation expenses for the three months ended September 30, 2024 were $11.8 million, an increase of 49$7.9 million in the same period of 2023[123]. - Exploration and evaluation expenses for the nine months ended September 30, 2024 were $42.3 million, an 83$23.2 million in the same period of 2023[129]. - General and administrative expenses for the three months ended September 30, 2024 were $8.1 million, up 77$4.6 million in the same period of 2023[125]. - General and administrative expenses for the nine months ended September 30, 2024 were $22.6 million, a 42$16.0 million in the same period of 2023[130]. - The company has not generated any revenue to date and does not anticipate earning revenues until an exploitation contract is received from the ISA[112]. Funding and Capital Management - The company entered into a securities purchase agreement for a registered direct offering, raising gross proceeds of $17.5 million from the sale of 17,500,000 common shares[95]. - The company has increased its credit facility limit to$38 million, extending the maturity to December 31, 2025[97]. - The company has adopted a "capital-light" strategy to manage funding deficits, focusing on necessary expenditures for the exploitation contract application[134]. - The company sold 1,617,000 Common Shares at an average price of $1.45, resulting in net proceeds of$2.3 million in Q3 2024[139]. - The company raised approximately $24.9 million from a Registered Direct Offering, netting$23.6 million after fees[141]. - A Working Capital Loan of $5 million was provided by Allseas Investments, with a repayment date set for April 1, 2025[144]. - The company reported net cash provided by financing activities of$23.3 million for the nine months ended September 30, 2024[154]. - The company filed a registration statement to sell up to an additional $100 million of securities, effective December 8, 2023[138]. - The company has the potential to receive up to approximately$281.8 million from cash exercises of Public and Private Warrants, although current trading prices do not support this expectation[149]. - The company amended its Sales Agreement to remove Stifel as a sales agent, continuing to allow the issuance of Common Shares up to $30 million[139]. - The Company has entered into a$25 million 2023 Credit Facility with Allseas, which was increased to $27.5 million on August 16, 2024, and remains undrawn as of September 30, 2024[169]. - A short-term loan of$2 million was borrowed on May 30, 2024, and fully repaid on September 10, 2024[170]. - The Company entered into a working capital loan agreement for $5 million on September 10, 2024, with a total drawn amount of$7.5 million after an amendment[171]. - The 2024 Credit Facility was amended to increase the borrowing limit to $38 million and extend its maturity to December 31, 2025[172]. Regulatory and Environmental Considerations - The ISA is expected to consider the company's application for a plan of work for exploitation in March 2025, with a submission date anticipated for June 27, 2025[89]. - The ISA has scheduled two meetings in March and July 2025 to progress the Mining Code for the exploitation of seafloor resources[100]. - The company faces risks related to the finalization of ISA regulations and the approval of its exploitation contract application[106]. - The company expects to incur significant expenses and operating losses as it advances towards its application to the ISA for an exploitation contract and potential commercialization[136]. Market and Credit Risks - The company is exposed to various market risks, including interest rate changes, inflation, and foreign currency translation risks[182]. - Credit risk is considered low due to receivables primarily consisting of general sales tax due from the Federal Government of Canada[185]. - The company expects to face increased credit risk once commercial production commences due to a larger customer base[185]. - The company is cautioned that mineral resources do not have demonstrated economic value and may not be converted into mineral reserves[180]. - The company is exposed to commodity risks if and when it commences commercial production[186].