Key points
- Q3 2023 net loss of $12.5 million, or $0.04 per share, for the quarter ended September 30, 2023
- Total cash of approximately $22.5 million and total liquidity of approximately $56 million, including a $25 million undrawn Allseas credit facility
- Targeting commercial production from NORI-D as early as Q4 2025, with the pre-feasibility study and Environmental Impact Statement underway with partner Allseas
- August 2023 Registered Direct Offering of shares and warrants at $2 per share raised approximately $24.9 million in gross proceeds
NEW YORK, Nov. 09, 2023 (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 third quarter ending September 30, 2023.
Q3 2023 Financial Highlights
- Net loss of $12.5 million and net loss per share of $0.04 for the quarter ended September 30, 2023
- Total cash of approximately $22.5 million at September 30, 2023
- Total liquidity of approximately $56 million at September 30, 2023 inclusive of existing cash, $9 million expected additional closings from ERAS Capital LLC in the previously announced Registered Direct Offering, and the undrawn $25 million unsecured credit facility from an affiliate of Allseas Group SA
Gerard Barron, TMC Chairman and CEO, commented: “We are laser-focused on putting together the best possible application to allow us to move from exploration to exploitation phase on our NORI-D contract area, and we remain focused on targeting commercial production as early as Q4 2025. To this end, the pre-feasibility study (“PFS”) and Environmental Impact Statement (“EIS”) are currently taking most of TMC’s resources and attention.
For the offshore segment of the PFS, together with our strategic partner Allseas, we have gone through several mine planning iterations and design reviews of the Project Zero nodule collection and transport system with expected capacity to handle 3 million wet tonnes of nodules per year. The offshore EIS process is generating very encouraging insights based on last year’s nodule collection test which are informing our designs and plans. We have also started sharing these insights with stakeholders at ISA events and, importantly, we are now in a position to meaningfully engage with the ocean conservation community—an invitation I extended through my open letter earlier this month. To further strengthen our EIS, we are planning to conduct an additional offshore campaign to revisit the collector test site 12 months after completion of the initial collector tests. To support our operations, including this additional campaign, in August 2023 we announced a Registered Direct Offering of common shares and accompanying Class A warrants at $2 per share, with anticipated gross proceeds to TMC of approximately $24.9 million.
For the onshore segment of the PFS, we have made real progress in Japan where Pacific Metals Co Ltd (PAMCO) has done considerable work and validated that seafloor nodules can be tolled through their facility producing intermediate products that align with our specifications. Therefore, we believe all of the pieces are starting to come together—albeit we still have a few more quarters’ worth of hard work ahead of us to deliver an application for an exploitation contract of which we can all be proud.”
Operational Highlights
- NORI Researchers to Revisit Site of Last Year’s Nodule Collection System Test:In November 2023, TMC and its subsidiary Nauru Ocean Resources Inc. (NORI) provided further details on a previously announced offshore campaign to assess seafloor ecosystem function in NORI Area D a year after its pilot collection system trials. Marine scientists will conduct an array of studies to collect further environmental data on ecosystem recovery and functioning in the area of the pilot nodule collection system test as well as in areas adjacent to and at various distances from the collector tracks, which are expected to increase the quality of NORI’s application for an exploitation contract expected to be lodged following the July 2024 session of the International Seabed Authority (ISA).
- TMC Releases Second Annual Impact Report:In October 2023, TMC published its 2022 Impact Report, which provides an update on key milestones achieved in its assessment of the environmental and social impacts of seafloor nodule collection and those impacts relative to land-based alternatives, and the efforts TMC is undertaking to eliminate or reduce such impacts. As part of the Impact Report, TMC also introduced its Sustainability Approach highlighting its thought processes about how TMC intends to fully align its activities to environmental, social and governance (ESG) principles.
- TMC Provides a Closing Update on Registered Direct Offering:In August 2023, TMC entered into a securities purchase agreement for a Registered Direct Offering of up to 12,461,540 of its common shares and Class A warrants to purchase up to 6,230,770 common shares for expected gross proceeds of $24.9 million, the majority of which has already been received. We expect that two additional closings will occur on or before November 30, 2023 and January 31, 2024 for approximately $2.5 million and $6.5 million, respectively, from ERAS Capital LLC. Each common share and the accompanying Class A Warrant to purchase 0.5 of a common share were sold at a price of $2.00. The exercise price of the Class A warrants is $3.00 with a mandatory warrant exercise provision if the 30-day volume weighted-average price (VWAP) of TMC’s common stock exceeds $6.50.
- Next Phase of Adaptive Management System Development Announced:Following the delivery of a prototype Digital Twin from Kongsberg Digital in 2022 and its deployment during the collector tests in the same year, TMC announced in September 2023 that it had entered into the next phase of its relationship with Kongsberg Digital to further develop the Digital Twin which will integrate multiple data streams from TMC’s future production system and is designed to enable 3D visualization of its deep-sea operating environment, providing ‘eyes and ears’ to the regulator and stakeholders. The Digital Twin is a core component of TMC’s broader Adaptive Management System (AMS) which is designed to utilise AI and hybrid machine learning capabilities of the Digital Twin with expert analysis to ensure operations remain within environmental impact thresholds, a system with potential applications for resource operations at sea and on land.
Industry Update
- International Seabed Authority:From October 30 to November 8, 2023, Part III of the ISA’s 28- __th__
- Letter from US House Leaders from Texas in Support of Funding for TMC Feasibility Study:In November 2023, TMC welcomed a letter from Members of the US House of Representatives from Texas to the Department of Defense in support of funding a bankable feasibility study for a nodule processing plant along the Texas Gulf Coast. The letter recognizes such a plant represents an investment in US national security, domestic economy, and production of clean energy materials. Given the concentration of robust marine, energy and chemicals industries concentrated along the Texas Gulf Coast, the region could be well-suited to support TMC’s Project One facility requirements but does not change TMC’s capital-light approach to initial production using existing processing facilities in Asia.
Financial Results Overview
At September 30, 2023, TMC held cash of $22.5 million and held no debt. We believe that our cash on hand, the remaining expected net proceeds from the Registered Direct Offering and borrowing availability under our recently amended and extended credit facility with an affiliate of Allseas will be sufficient to meet our working capital and capital expenditure commitments for at least the next twelve months from today.
TMC reported net loss of approximately $12.5 million, or $0.04 per share for the quarter ended September 30, 2023, compared to net loss of $27.9 million, or $0.12 per share, for the quarter ended September 30, 2022. Exploration and evaluation expenses during the quarter ended September 30, 2023 were $7.9 million compared to $22.7 million for the quarter ended September 30, 2022, a significant decrease in 2023 as the prior year included active work on the collector test which was completed in November 2022, partially offset by increased spending on prefeasibility studies and engineering work which commenced in the fourth quarter of 2022. General and administrative expenses were $4.6 million for the quarter ended September 30, 2023 compared to $5.9 million for the quarter ended September 30, 2022, reflecting lower share-based compensation in the 2023 period, as options with specific market capitalization vesting conditions were fully amortized in 2022, partially offset by higher spending on consulting and advisory work.
Conference Call
TMC will hold a conference call today at 4:30 p.m. ET to provide an update on recent corporate developments, third quarter 2023 financial results and upcoming milestones.
Third Quarter 2023 Conference Call Details
| Date: | Thursday, November 9, 2023 | |
| Time: | 4:30 pm ET | |
| Audio-only Dial-in: | Register Here | |
| Virtual webcast w/ slides: | 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 global energy transition with the least
possible negative impacts on planet and people and (2) trace, recover and recycle the metals we supply to help create a metals commons that can be used in perpetuity. 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.
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