TMC the metal company (US:TMC)2021-11-12 01:04Financial Data and Key Metrics Changes - The company reported a net loss of $36.7 million or $0.18 per share for Q3 2021, compared to a net loss of $6.8 million or $0.04 per share for Q3 2020, primarily due to increased milestone payments and offshore campaign expenses [55] - For the nine months ended September 30, 2021, the net loss was $121.5 million, up from $39.5 million in the prior year period, with exploration expenses increasing from $35.7 million to $80.2 million [58][60] - General and Administrative expenses rose from $3.8 million to $41 million during the first nine months of 2021, driven by higher stock-based compensation and overall costs associated with being a public company [58][59] Business Line Data and Key Metrics Changes - Exploration expenses for Q3 2021 were $23.8 million, significantly higher than $4.6 million for Q3 2020, attributed to milestone payments and increased offshore activity [56] - Free cash flow for Q3 2021 was negative $9.8 million, compared to negative $3.8 million in Q3 2020, indicating increased cash outflows [57] Market Data and Key Metrics Changes - The company highlighted the need for a fivefold increase in base metal supply to meet global energy transition goals, requiring an investment of $2 trillion [7] - The International Energy Agency indicated that achieving Net Zero by 2050 would require six times more mineral inputs than today [6] Company Strategy and Development Direction - The company aims to secure funding to commence production in 2024, focusing on strategic partnerships with car manufacturers and other stakeholders [50] - The development of polymetallic nodules in the Clarion-Clipperton Zone is seen as a critical opportunity to supply battery metals while minimizing environmental impact [12][16] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in conversations with strategic partners, emphasizing the importance of controlling supply chains and sustainability in the electric vehicle transition [71] - The company is optimistic about completing its pilot mining trial and securing necessary funding by Q1 2023 to support production [87] Other Important Information - The business combination with Sustainable Opportunities Acquisition Corp was completed on September 9, 2021, with the company receiving approximately $137 million in cash [26] - The company has secured exclusive exploration rights to three areas sponsored by Pacific island nations, with plans to submit an application for an exploitation contract by Q3 2023 [19][27] Q&A Session Summary Question: Changes in conversations with strategic partners - Management noted a discernible change in discussions with automakers, highlighting the need for control over supply, availability, and sustainability [71] Question: Top priorities for 2022 - Key priorities include completing the pilot mining trial and releasing more environmental data [72][75] Question: Adjustments due to PIPE funding shortfall - Management expressed disappointment over raising less money than anticipated but confirmed sufficient capital to continue value-adding activities [81] Question: Public comments on the pilot test - Feedback from stakeholders has been complimentary regarding the environmental impact study, with no significant concerns raised [90] Question: ISA decision timeline - The ISA's decision process is outlined to take 315 days, which is considered reliable by management [95] Question: China's involvement in deep-sea mining - Management acknowledged China's active role in the sector but remains confident in being the first to production [103]