TMC the metal company (TMC) - 2025 Q2 - Quarterly Results

The Metals Company Q2 2025 Corporate Update Executive Summary & Key Developments 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] - 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] - 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] - 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][12] - Secured a strategic equity investment from Korea Zinc, resulting in gross proceeds of $85.2 million[11][17] Operational Highlights 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] - 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] - Announced a revised Sponsorship Agreement with Tonga, providing similar continuity benefits to the Kingdom of Tonga under a potential U.S. authorization[15] - 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] - 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] Industry Update 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] - 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] - The International Seabed Authority (ISA) concluded its 30th session without delivering a Mining Code, missing another deadline[20] - Leaders from Nauru met with the U.S. National Security Council alongside TMC to discuss partnerships for critical mineral independence[21] - The U.S. State Department announced discussions with the Cook Islands to support research for responsible seabed exploration and development[22] Financial Performance 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) 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] 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] - 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][25] Condensed Consolidated Financial Statements 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) |