TMC the metals co., Inc. Q3 FY2024 earnings call

• Value Proposition: Emphasized the undervalued high-grade resource and focus on unlocking value now rather than waiting for first production.
• Recent Events: U.S. election outcome positive for TMC, plan to submit NORI's exploitation contract application on June 27, 2025, and a registered direct offering for financial resiliency.
• New Services Business: Developing services for seafloor resource development, including exploration, environmental impact assessments, etc., with ongoing discussions with parties.
• Cost-Cutting: Targeting operating expenses < $5 million per quarter and delaying production capital spending until final regulations are adopted.
• Regulatory Updates: Progress on ISA mining code, U.S. government interactions (Pentagon report, NDAA expectations), and PFS completion for a capital-light strategy.

In the third quarter of 2024, The Metals Company reported a net loss of approximately $20.5 million or $0.06 per share, compared to a net loss of $12.5 million or $0.04 per share in the same period of 2023. Exploration and evaluation expenses in Q3 2024 were $11.8 million, up from $7.9 million in 2023, primarily due to increased share-based comp, mining/technology development, and personnel costs. General and administrative expenses were $8.2 million in Q3 2024, compared to $4.6 million in 2023, driven by increased share-based comp, legal/consulting costs, and personnel costs. Net cash used in operating activities was $5.7 million in Q3 2024, down from $12.5 million in 2023, due to changes in working capital. Free cash flow for Q3 2024 was negative $5.8 million, compared to negative $12.6 million in 2023. The company's cash on hand, funds from a registered direct offering, and undrawn credit capacity are sufficient to meet requirements for at least 12 months.

• Confidence in cash position, funds from registered direct offering, and credit capacity to meet working capital and capital expenditure needs for at least 12 months.
• Expectations for Pentagon report, NDAA signing, and U.S. government grants related to refinery development.
• Plan to announce Strategy Day before year-end to explain new initiatives.

• Regulatory Uncertainty: Impact on share price and project development due to ongoing ISA mining code negotiations.
• Market Perception: TMC's market cap below capital raised, need for ISA mining code adoption for stock rerating.
• NGO/Activist Concerns: Misinformation about environmental impacts, requiring data-driven rebuttals to address misperceptions.

Q: Matthew O'Keefe inquired about the services business potential, revenue model, and scope.

A: Gerard Barron stated the services business has advanced, with RFPs out, and expects contracts soon, with potential beyond the Clarion and Clipperton zone. Craig Shesky added the services business is built on expertise and is nimble with capital.

Q: Dmitry Silversteyn followed up on services business progress and timing of Strategy Day.

A: Gerard Barron mentioned the Strategy Day will be before year-end, and the services business is advanced with strong team credentials.

Q: Jacob Sekelsky asked about $9M government funding for domestic refining capacity and application date certainty.

A: Craig Shesky said potential sites for the refinery are identified, and the application date of June 2025 is firmly in place with strong stakeholder dialogue supporting it