TMC the metals company Inc. (TMC) Earnings

Management highlights

### Permitting and Regulatory Progress - Two TMC USA permit applications are advancing through the NOAA regulatory process under U.S. law. USA-A (65,000 square km, combined exploration license and commercial recovery permit) has passed NOAA compliance reviews and is expected to be imminently published in the Federal Register for public comment, with certification now targeted for October 2026 (delayed by administrative issues, not application-specific problems). A first-quarter 2027 permit grant is no longer expected, but management expects approval well in advance of the Q4 2027 vessel commissioning target, so project timelines are unaffected. - USA-B (122,000 square km) received NOAA application certification in May 2026, and NOAA is expected to soon publish a notice of intent to prepare an environmental impact statement, moving the application into formal environmental review and public scoping. ### Offshore Commercial System Development - The Allseas framework agreement for the first commercial nodule collection system has moved from engineering into the procurement and subcontracting phase. Allseas is funding a large share of pre-production development costs, recoverable through future production revenues, aligning incentives. Basic engineering is complete for long-lead critical systems; fabrication is scheduled to run from Q4 2026 to Q3 2027, with system installation and commissioning targeted for Q4 2027. The initial system will have an annual capacity of 3 million wet tonnes of nodules, including 2 collector vehicles, launch/recovery systems, a riser system, the Hidden Gem production vessel and a transfer vessel. ### Onshore Supply Chain Development (Nodule City, Brownsville Texas) - TMC USA holds an exclusive negotiation right for a 1,466-acre land lease option at the Port of Brownsville, proposed as an integrated domestic processing and refining hub (dubbed Nodule City). Pre-feasibility engineering for a 12 million tonne per annum industrial park is nearly complete, with feasibility engineering for the first smelting stage underway led by partner Mariana Minerals. No final investment decision has been made, and any capital commitment is contingent on U.S. government support. TMC retains an optionality for processing with Japanese partner PAMCO to hedge against project delays. ### Partnerships - A new mutual Master Services Agreement with Eco Minerals (a U.S. exploration firm) exchanges TMC's 15 years of resource definition, EIA and permitting expertise for Eco's vessel charter, AUV and marine survey services at preferential rates. A joint offshore survey campaign is planned for late 2026 to improve resource data for TMC's lease area. - The partnership with Mariana Minerals leverages Mariana's expertise in automated, AI-enabled mineral processing; Mariana has already invested over a year of work and has 250+ staff leading feasibility and pilot test work, with initial costs expected to be in the mid-single-digit millions of dollars over multiple quarters. ### Global Regulatory Developments - The U.S. has reaffirmed its longstanding position that it is not bound by ISA seabed mining rules (as it is not a party to UNCLOS), and prioritizes responsible deep seabed development as a national security priority, reinforcing the legal basis for TMC's U.S. regulatory pathway. The ISA made only incremental progress on its mining code in its July 2026 session, with no completion target, continuing long-running institutional delays. A China/Russia/Greenpeace effort to request an ITLOS advisory opinion targeting non-ISA deep seabed mining failed, receiving broad pushback from ISA member states. The ITLOS Seabed Disputes Chamber recently issued unanimous provisional measures protecting NORI's (TMC subsidiary) due process rights in its dispute with the ISA, and the ISA Council subsequently approved a 5-year extension of NORI's exploration contract by consensus. ### Project Economics - Combined estimated net present value (NPV) of TMC's resources is $23.6 billion, including $5.5 billion from the PFS-defined first project area and $18.1 billion from additional assessed areas. Undiscounted lifetime projected total revenue is ~$369 billion, with undiscounted lifetime EBITDA of over $200 billion. Management believes the company's current market capitalization materially undervalues its resource base relative to peer comparables.

Guidance

- NOAA certification for the USA-A permit application is now expected in October 2026, delayed from prior expectations; a Q1 2027 permit grant is no longer likely, but approval is still expected well in advance of Q4 2027 vessel commissioning, so overall project timelines remain unchanged. - Fabrication of the commercial collection system is scheduled to begin in Q4 2026 and run through Q3 2027, with system installation and commissioning targeted for Q4 2027, in line with prior targets. - Management expects total pre-production development costs for the offshore system to come in below the estimate published in the 2025 pre-feasibility study. - TMC has sufficient cash on hand to meet all working capital and capital expenditure commitments for at least the next 12 months from the date of the call. - TMC will not pursue an extension of the September 2026 expiration date for SPAC warrants, as extending public warrants would require extending dilutive private warrants that are unlikely to generate meaningful incremental cash proceeds.

Segment performance

The Metals Company is a pre-production deep-sea polymetallic nodule developer, so it does not have operating revenue from commercial product sales as of Q2 2026. Q2 2026 financial results: net loss of $60.1 million ($0.14 per diluted share), compared to a net loss of $74.3 million ($0.20 per diluted share) in Q2 2025. Exploration and evaluation expenses were $56.1 million (up from $10.5 million in Q2 2025), driven by $37.2 million in charges related to the Allseas development agreement, $34.8 million of which is deferred and only payable upon production commencement. General and administrative expenses were $15.6 million (up from $11.5 million in Q2 2025), primarily due to higher share-based compensation. Non-operating items produced a net gain of $11.6 million, compared to a $52.3 million loss in Q2 2025, driven by an $18.5 million gain from TMCR share issuance. Net cash used in operating activities was $20.1 million (up from $10.7 million in Q2 2025), mostly due to timing of $9 million in tax withholdings; adjusted for this item, operating cash outflow was ~$11 million, aligned with Q2 2025. Total liquidity (cash plus undrawn borrowing capacity) at June 30, 2026 was $143 million, with $44 million available from the undrawn Barron/ERAS credit facility.

Risks & headwinds

- Permitting timelines under NOAA are slower than management initially expected, though the delay is caused by administrative issues rather than problems with TMC's application, and it has not altered overall project plans. - The International Seabed Authority continues to face long-running institutional delays in finalizing its commercial mining code, creating regulatory uncertainty for ISA-aligned development pathways. - Geopolitical opposition from China, Russia and activist groups targets TMC's U.S.-based regulatory pathway, though the recent push for an ITLOS advisory opinion failed and received broad international pushback. - All pre-production and capital investment for Nodule City is contingent on securing U.S. government support, which is still under negotiation with no final agreement in place. - TMC's share price has underperformed year-to-date, and there is no guarantee that equity markets will revalue the company in line with management's assessment of its resource value. - Panama Canal transit (the base case route for nodule shipments to Brownsville) faces risks related to water availability, vessel traffic and draft restrictions, requiring planning for an alternative Cape Horn route.

Analyst Q&A

• Q: What is the current status and expected spending timeline for the Mariana Minerals partnership for Nodule City processing? /

  A: The partnership has been in development for over a year, with all initial investment to date coming from Mariana, which recently raised $310 million and has 250+ staff focused on automated, AI-enabled processing. Mariana will lead pilot testing of new processing flowsheets and serve as a co-operator, eliminating the need for TMC to hire hundreds of additional internal staff. Initial costs for feasibility work are expected to be mid-single-digit millions spread over multiple quarters, a necessary prerequisite for U.S. government funding, and no more specific financial breakdown is available at this time.

• Q: What is the structure of the Metals Royalty Company (TMCR) partnership, and what drives TMC's planned royalty buyback? /

  A: TMCR has been a strong long-term business partner, and TMC remains a large TMCR shareholder supportive of its growing pipeline of metal royalties. The royalty buyback occurs naturally: royalty payments made by TMC go toward the repurchase price, which aligns with the original contractual structure of the arrangement. TMC expects the buyback to proceed gradually over time as production and royalty payments begin.

• Q: What is the scope of the planned 2026 joint survey campaign with Eco Minerals, and what is the purpose of the work? /

  A: The joint campaign will collect survey data in both TMC's USA-A lease area and Eco Minerals' exploration area, if Eco receives regulatory approval for work on its ground. For TMC, the additional survey work will allow the company to upgrade resource classification and expand proven reserve volumes across a larger footprint of its lease area.

• Q: Is TMC's arrangement with Allseas exclusive, and when can Allseas work with other developers? /

  A: The arrangement is currently exclusive to TMC. Allseas only gains the right to develop systems for other companies if TMC declines to move forward with additional systems. Since TMC plans to deploy multiple production systems over time, management expects the exclusivity to remain in place indefinitely.