The Metals Company Provides Q2 2022 Corporate Update

NEW YORK, Aug. 15, 2022 (GLOBE NEWSWIRE) — TMC the metals company Inc. (Nasdaq: TMC) (“TMC” or “the Company”), an explorer of lower-impact battery metals from seafloor polymetallic nodules, today provided a corporate update and financial results for the second quarter ending June 30, 2022.

Financial Highlights

• Net loss of $12.4 million and loss per share of $0.05 for the quarter ended June 30, 2022.
• Total cash on hand of approximately $46.3 million at June 30, 2022.
• The Company announced today a private placement financing for an aggregate of 38 million common shares to investors at a price per share of $0.80 ($0.9645 for TMC Chairman & CEO Gerard Barron), with expected gross proceeds of $30.4 million.
• Approximately 70% of the commitments came from existing TMC shareholders and insiders, including Allseas, ERAS Capital (the family office of TMC Director Andrei Karkar), SAF Group Managing Partner and entrepreneur Brian Paes-Braga, Front End Chairman & CEO Majid Alghaslan, and Gerard Barron and his family.
• The Company believes that with the full proceeds expected this quarter from the private placement financing plus existing cash will be sufficient to fund operations for at least the next twelve months, past the July 2023 date targeted by the International Seabed Authority (ISA) as the date for the final adoption of the exploitation regulations for the industry.

Gerard Barron, TMC Chairman and CEO, commented: “It’s been an eventful and important few months for TMC. Following successful deep-water trials of the pilot nodule collection system in the Atlantic, we have been planning and mobilizing for the most complex project ever undertaken by this company – a multi-vessel, ~250-person pilot test and environmental monitoring campaign in the NORI Area D. The pilot test and environmental monitoring program are an integral part of our work program and a foundational step towards our journey to completing our application for an exploitation contract from the International Seabed Authority (“ISA”). I would also like to highlight the important work done in Kingston, Jamaica, where the ISA was meeting in a month-long session, with progress being made in various areas of the draft exploitation regulations. At the same time, we obtained commitments for additional capital to help ensure that we can manage inflation in our offshore costs and help to ensure we can fund our operations for at least the next twelve months.”

Operational Highlights

• Pilot Collection System Trials:- Riser and Jumper Trials:In May 2022, the pilot riser system and jumper hose was successfully deployed in the Atlantic Ocean. Engineers aboard the Hidden Gem deployed the flexible jumper hose, connected it to the base of the riser and then launched the pilot riser, lowering the assembly to a depth of around 650 meters before making a sub-sea connection between the jumper hose and collector vehicle in 745 meters water depth.
• Atlantic Deepwater Trials:In May 2022, the pilot collector vehicle underwent extensive testing of its various pumps and critical mobility functions in ultra-deepwater in the Atlantic Ocean. Engineers successfully lowered the collector vehicle to depths of 2,470 meters and drove 1,018 meters across the seafloor, in advance of pilot trials in the NORI Area-D in the Clarion Clipperton Zone (CCZ) expected to commence in the second half of 2022.
• NORI Area D Offshore Environmental and Social Impact Assessment:
• NORI Collector Test Monitoring Program:As part of the TMC-funded Environmental Impact Statement for the NORI Area D project, thirty scientists from around the world gathered in London to review plans for the environmental monitoring campaign designed to gather key impact data from pilot trials in the NORI Area D expected to be conducted later this year. The resulting Environmental Monitoring and Management Plan (EMMP) for the NORI Collector Test was then submitted to the ISA and an offshore monitoring campaign commissioned, involving over a dozen research groups.
• NORI Exploitation Contract Application EMMP:In July 2022, we announced that that our Australian subsidiary, The Metals Company Australia Pty Ltd., had entered into a research funding agreement with a consortium of institutions led by Australia’s national science agency, the Commonwealth Scientific Industrial Research Organisation (CSIRO) to create a framework for the development of an ecosystem-based EMMP for our proposed commercial deep-sea polymetallic nodule collection operations in the NORI Area D.
• Onshore Processing:
• SINTEF Report on Manganese Product:In May 2022, we announced that we had retained SINTEF, one of Europe’s leading independent research institutions, to analyze our manganese silicate product that can be used to produce silicomanganese alloy for steelmaking. SINTEF found that our high-grade nodule-derived manganese silicate, which we estimate could account for approximately 30% of future revenues, behaves similarly to traditional manganese sources and appears to have significant advantages in downstream silicomanganese production on cost and CO- 2footprint, with the potential for 7 to 17% higher value-in-use, depending on carbon tax regimes.
• Project Zero Plant:Together with Epsilon Carbon, we have selected a suitable plant site in India and developed and issued Request for Proposal for Project Zero Pre-feasibility and Feasibility Study.
• TMC Releases Inaugural Impact Report:In May 2022, we published our inaugural Impact Report setting out our motivations for developing nodule resources and providing a forward-looking view of the impacts of our expected operations and the efforts underway to eliminate or reduce them.
• Benchmark Mineral Intelligence LCA for Project Zero:In April 2022, we announced that we had chosen Benchmark Mineral Intelligence (Benchmark), to conduct an independent lifecycle assessment (LCA) of the environmental impacts of our planned NORI Area D polymetallic nodule project and compare these impacts to producing the same metals from commonly used production pathways using conventional land ores. Benchmark anticipates completing this comprehensive lifecycle impact assessment by the end of the third quarter of 2022.

Industry Update

• 27- th- Session (Part II) of the International Seabed Authority (ISA):The ISA continues to work to finalize regulations regarding exploitation of deep-sea minerals. A month-long ISA working session took place from July 4 to August 5, 2022 in person in Kingston, Jamaica where the ISA continued its development of the exploitation regulations and committed to continue work on the regulations intersessionally. The ISA Council is expected to meet in November 2022, March 2023 and July 2023, along with intersessional working groups in order to complete their drafting of the regulations.
• U.S. Inflation Reduction Act (IRA) of 2022:The IRA adopted by the U.S. Congress in August 2022 introduces strong incentives for U.S. electric vehicle (EV) manufacturers—through consumer EV tax credits—to use critical minerals like nickel, cobalt and manganese that have been mined, processed or refined in the U.S. or the U.S. free-trade partners. It also disqualifies any EVs that use critical minerals from China, Russia and certain other jurisdiction from such tax credits The IRA creates favourable conditions for TMC’s nodule resource that could be processed and refined in the U.S. or its free-trade partners.
• G7 Communique on Deep-Sea Mining:At the G7 Summit in Germany in May 2022, environmental ministers reaffirmed their support for the development of a strong regulatory framework to govern responsible seabed mineral exploitation. In their communique, ministers stated: “With regard to possible future deep-sea mining, we highlight the unique chance to regulate a human activity before it is put into practice in order to prevent damage to the marine environment.”

Financial Results Overview

At June 30, 2022, TMC held cash of $46.3 million and held no debt.

TMC reported a net loss for the second quarter of 2022 of $12.4 million, or $0.05 per share, compared to TMC’s net loss of $29.1 million, or $0.15 per share, for the second quarter of 2021. The net loss for the second quarter of 2022 included exploration and evaluation expenses of $9.9 million (Q2 2021: $18.2 million), general and administrative expenses of $8.3 million (Q2 2021: $10.4 million), partially offset by a decrease in the value of our warrants of $5.7 million. Exploration and evaluation expenses decreased in the second quarter of 2022 compared to the same period in 2021, as a result of a decrease in offshore campaign activity following the completion of NORI Area D environmental baseline campaigns in the fourth quarter of 2021, a decrease in share-based compensation and an increase in the expenses incurred on the trials of the pilot mining test system. General and administrative expenses decreased in the second quarter of 2022 compared to the second quarter of 2021, reflecting a reduction in share-based compensation, and a reduction in communication and advertising costs, partially offset by higher personnel, legal and other expenses associated with being a public company.

Conference Call

TMC will hold a conference call today at 4:30 p.m. ET to provide an update on recent corporate developments, second quarter financial results and upcoming milestones.

Second Quarter 2022 Conference Call Details

Date:	Monday, August 15, 2022
Time:	4:30 pm Eastern
Daylight Time
Virtual webcast with slides:	Register Here
Audio-only dial-in:	Register Here

Please register with the links above at least ten minutes prior to the conference call. The virtual webcast will be available for replay in the ‘Investors’ tab of the Company’s website under ‘Investors’ > ‘Media’ > ‘Events and Presentations’, approximately two hours after the event.

About The Metals Company

The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the clean energy transition with the least possible negative environmental and social impact and (2) accelerate the transition to a circular metal economy. The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.

More information is available at  www.metals.co.