TMC the metal company (US:TMC)2025-11-13 21:02Exploration and Resource Development - The company has submitted applications for exploration licenses covering 187,017 square kilometers and a commercial recovery permit for 25,160 square kilometers, estimated to hold approximately 1.639 billion wet tonnes of mineral resources, including 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese [121]. - The company is in the evaluation stage following the release of the S-K 1300 NORI Area D Technical Report, declaring mining reserves for a seafloor polymetallic nodule project [118]. - The company is focused on developing a commercial offshore nodule collection system and onshore technology to process collected polymetallic nodules into various metal products [125]. - The company aims to build a "metal commons" for sustainable recovery and reuse of metals to meet rising demand [117]. - The company is working to assess the environmental and social impacts of offshore nodule collection as part of its commercial production strategy [125]. - The pre-feasibility study for NORI Area D indicates that development is technically and economically viable, but further project planning is required before a development decision can be made [230]. - Approximately 97% of the NORI Area D resource is categorized as measured or indicated, while only about 6% of the resources in NORI (Areas A to C) and TOML Properties are similarly categorized [233]. - The initial assessment of the NORI and TOML Properties suggests potential viability of mineral resources, but economic viability has not yet been demonstrated [230]. - The company cautions that mineral resources do not have demonstrated economic value and that significant exploration is needed to upgrade inferred resources [233]. Financial Performance - The company reported a net loss of $184.4 million for Q3 2025, compared to a net loss of $20.5 million in Q3 2024, representing a 799% increase [149][163]. - The net loss before tax for the first nine months of 2025 was $279.3 million, compared to a net loss of $65.9 million in the same period of 2024, indicating a significant increase in losses [172]. - General and administrative expenses surged by 461% to $45.7 million in Q3 2025, driven by a $35 million increase in share-based compensation [161][166]. - General and administrative expenses rose to $65.7 million in the first nine months of 2025, up from $22.6 million in the same period of 2024, reflecting an increase of $43.1 million [174]. - The fair value of the royalty liability increased by $131 million in Q3 2025, totaling $145 million for NORI Areas A to D [161][169]. - The fair value of the royalty liability increased to $145 million as of September 30, 2025, an increase of $131 million in the first nine months of 2025 [178]. - The company has an accumulated deficit of approximately $910.9 million from inception through September 30, 2025 [149]. - The company has not generated any revenue to date and expects to do so only after receiving a commercial recovery permit [151]. - The company is currently a pre-revenue entity and does not anticipate earning revenues until it receives an exploitation contract or commercial recovery permit [147]. Financing and Capital Management - The company plans to seek additional financing to support ongoing operations, which may include public or private equity, debt financings, or other sources [184]. - The company entered into a 2024 Credit Facility allowing borrowing up to $20 million, later increased to $44 million, with a maturity date extended to June 30, 2026 [192][193][196]. - The company raised gross proceeds of $14.9 million from a registered direct offering of 17.5 million common shares at $1.00 per share, with net proceeds of $14.2 million after expenses [196]. - A subsequent offering in May 2025 raised gross proceeds of $37 million from the sale of 12.33 million common shares at $3.00 per share [197]. - The company received $85.2 million from Korea Zinc for the issuance of 19.62 million common shares and accompanying warrants, with a purchase price of $4.34 per share [198]. - As of September 30, 2025, the company had cash on hand of $115.6 million, which is expected to be sufficient to meet obligations for the next twelve months [182]. - For the nine months ended September 30, 2025, net cash used in operating activities was $31.5 million, primarily due to payroll costs and environmental work [201]. - Net cash provided by financing activities for the same period was $143.5 million, driven by proceeds from various offerings and loans [204]. - The company recorded a net cash generated from investing activities of $0.2 million for the nine months ended September 30, 2025 [203]. Regulatory and Compliance - The company maintains two ISA exploration contracts in the CCZ while pursuing commercial production through the U.S. regulatory pathway under DSHMRA [123]. - The company received notice of full compliance from NOAA on its exploration applications, confirming priority rights over both exploration areas [129]. - The certification process for exploration licenses and commercial recovery permits is ongoing, with no assurance of favorable outcomes or timely issuance [241]. - The timing of NOAA's review and decision on the company's applications remains uncertain and is outside the company's control [147]. - The company is currently analyzing the complex regulatory system under DSHMRA to determine its impact on development plans and potential commercial operations [242]. Strategic Partnerships and Collaborations - The company has established key strategic partnerships with Allseas, PAMCO, Korea Zinc, and Glencore to advance its commercial production strategy [124]. - A strategic alliance with Allseas was established on March 29, 2019, for the collection and transportation of 200 million metric tonnes of polymetallic nodules on a cost-plus 50% profit basis [211]. - The pilot nodule collection system trials in NORI Area D were successfully completed in November 2022, leading to further development of the commercial system [212]. - The company entered into a Working Capital Loan Agreement with Allseas Investments for $5 million on September 10, 2024, which was later increased to $7.5 million [220]. - As of September 30, 2025, the company made payments to Allseas totaling $10 million in cash and 10.85 million Common Shares valued at $1.00 per share [213][215]. Market and Risk Factors - The company expects to face increased credit risk once commercial production begins due to a larger customer base [240]. - The company is exposed to various market risks, including interest rate changes, inflation, and foreign currency translation [237]. - The current investment strategy involves placing excess cash in secure, highly liquid interest-bearing investments, with a focus on maintaining availability for operational needs [239].