TMC the metal company (US:TMC)2024-05-14 09:37Financial Data and Key Metrics Changes - In Q1 2024, the company reported a net loss of $25.2 million or $0.08 per share, compared to a net loss of $13.7 million or $0.05 per share in Q1 2023 [25] - Exploration and evaluation expenses increased to $18.1 million from $7.2 million in Q1 2023, while general and administrative expenses rose slightly to $6.6 million from $6.2 million [25][26] - Free cash flow for Q1 2024 was negative $12.1 million, an improvement from negative $23.5 million in Q1 2023 [27] Business Line Data and Key Metrics Changes - The company has successfully pivoted to a capital-light model, reducing pre-production capital expenditure requirements [14] - Nickel prices have stabilized and increased by 18% in Q2 2024, which is beneficial for the company's operations [6] - Cobalt and copper prices have also seen significant increases, with copper prices up by 17% and manganese prices up by nearly 30% in Q2 2024 [15] Market Data and Key Metrics Changes - The company highlighted the growing interest in deep seafloor nodules for critical mineral supply chains, particularly in the context of U.S. defense and energy needs [8][17] - The company is positioned to provide alternatives to nickel sources controlled by China and Russia, which is increasingly relevant in the current geopolitical climate [6][8] Company Strategy and Development Direction - The company aims to launch its application for an exploitation contract following the July ISA meeting, focusing on the NORI-D area [53] - The strategy includes securing strategic partnerships and leveraging existing processing infrastructure in regions like Indonesia and Japan [76][89] - The company is committed to addressing environmental concerns through comprehensive data collection and impact assessments [49][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that emerging data will counteract activist-driven speculation regarding environmental impacts [58] - The company is optimistic about the regulatory progress and the potential for the U.S. to enhance its position in the deep-sea mining industry [47][88] - The management noted that the demand for metals derived from polymetallic nodules is expected to grow, particularly in the context of electric vehicle production [44][82] Other Important Information - The company has accumulated the most comprehensive deep-sea dataset ever collected in the Clarion Clipperton Zone, which is being shared with public databases [19] - The company has sufficient liquidity, with $49 million in total liquidity as of March 31, 2024, to meet its working capital and capital expenditure requirements for at least the next 12 months [9][57] Q&A Session Summary Question: What is the timeline for the Chinese entities expected to conduct tests next year versus your timeline? - Management indicated that Chinese contractors expect to be in production by the early 2030s, while the company plans to lodge its application after the July ISA meeting in 2024 [62][80] Question: How does the company view the U.S. Senate's ratification of the UN Convention? - Management stated that if the U.S. does not ratify the UN Convention, it underscores the necessity for the U.S. to partner with contractors like the company to access deep-sea resources [87] Question: What is the company's liquidity status and application demands? - The company confirmed it has sufficient liquidity for the next 12 months, with an incremental $35 million to $45 million needed to launch the application following the July 2024 session [67][68] Question: Can you provide updates on strategic partnerships? - Management highlighted ongoing efforts in Asia, particularly in Indonesia, to leverage existing processing infrastructure for nodules, and emphasized the importance of strategic partnerships in achieving production goals [88][89]