TMC the metals company Inc. (TMC) Earnings

Management highlights

### Regulatory Progress - TMC's consolidated application for the TMC USA project was deemed fully compliant with U.S. Deep Seabed Hard Mineral Resources Act requirements by NOAA in late April 2026. - The application will soon enter sequential public comment periods, followed by NOAA preparation of a draft Environmental Impact Statement (EIS) before a final permit determination; management still expects commercial recovery permit approval in Q1 2027. - The permitting process follows long-standing 1980s U.S. regulations, with NOAA following all required procedural steps transparently. ### Offshore Production Milestones - TMC signed a production agreement with Allseas to complete, commission, and operate the world's first commercial polymetallic nodule collection system; Allseas will fund a significant portion of pre-production costs to be repaid after production launch, demonstrating confidence in the regulatory path. - Concept and basic engineering for all key system components is substantially complete, and the project is moving into procurement and subcontracting, keeping it on track for system integration and commissioning in late 2027. - The integrated continuous operation model combines seafloor collection, vertical lifting, temporary storage on the *Hidden Gem* production vessel, and offshore transfer to transport carriers, with extensive simulation and modeling completed to refine logistics for safe, efficient continuous production. - Management is actively evaluating near and long-term operational optimizations to reduce costs and improve scalability, including larger collector spreads, autonomous/remote operations, simplified direct offloading, and potential nuclear-powered commercial vessels, creating optionality for future expansion. ### Onshore Downstream Strategy - TMC holds exclusive negotiation rights for 1,466 acres at the Port of Brownsville, Texas, for a potential 12 million tonne per annum critical minerals processing and refining industrial park; a pre-feasibility study is currently underway, with no capital commitment made to date, and any development is contingent on U.S. government support. - TMC entered a strategic partnership with Mariana Minerals to accelerate feasibility work, leveraging Mariana's expertise in integrating automation, AI-driven operations, and digital project management to improve capital efficiency and execution timelines. - The Brownsville site is planned as a shared domestic industrial platform for the emerging U.S. seabed mineral industry, with flexibility to process feedstock from other operators and potentially terrestrial sources over time, aligning with U.S. goals to reduce critical mineral import reliance. ### Portfolio and Corporate Updates - TMC holds a 25% equity stake in TMCR, which listed on NASDAQ in April 2026 with a current market capitalization of ~$750 million, valuing TMC's stake at nearly $200 million; TMC retains the right to repurchase up to 75% of the 2% NORI gross overriding royalty at a capped return, reducing it to 0.5% long-term. - Completed PFS for the first production area established the world's first polymetallic nodule reserve, and confirmed strong commercial viability, with combined NPV of $23.6 billion across the PFS and broader resource assessment, positioning the project in the first quartile of the global nickel cost curve.

Guidance

- Commercial recovery permit grant from NOAA for the TMC USA project is still expected to occur during Q1 2027, unchanged from prior guidance. - Integration and commissioning of the first commercial nodule production system remains on track for late 2027, unchanged from prior guidance, with commercial production expected to begin shortly after commissioning. - Management confirms current liquidity of $164 million is sufficient to cover all working capital and capital expenditure requirements for at least 12 months from the call date, with no change to cash runway guidance. - No specific public release date is set for the Brownsville processing feasibility study; near-term focus is on completing detailed work required to unlock potential U.S. government project funding.

Segment performance

As a pre-commercial development-stage company, The Metals Company (TMC) has no active operating product segments generating revenue. Reported Q1 2026 financials are all corporate-level: net loss of $20.6 million ($0.05 per diluted share), equal to the Q1 2025 net loss of $20.6 million ($0.06 per diluted share). Exploration and evaluation expenses were $13.3 million for Q1 2026, up from $9.5 million in Q1 2025, driven by higher share-based compensation for employee retention and updated pre-feasibility study (PFS) costs, partially offset by lower Allseas engineering costs. G&A expenses were $20.7 million in Q1 2026, up from $8.5 million in Q1 2025, primarily due to amortization of one-time executive retention share-based compensation granted in Q3 2025. A $10.7 million gain on the change in fair value of private warrants reduced the net loss, alongside higher interest income and a dilution gain from the Metals Royalty Company (TMCR) private placement, partially offset by equity investment losses. Net cash used in operating activities was $0.6 million for Q1 2026, versus $9.3 million in Q1 2025; the low 2026 figure reflects a timing difference from a $9 million tax-related holding that was remitted shortly after quarter end, with adjusted operating cash use of $9.6 million in line with 2025 levels. Liquidity (cash plus undrawn credit facilities) was $164 million as of March 31, 2026, with $44 million available from the undrawn credit facility, sufficient to cover all needs for at least 12 months.

Risks & headwinds

- All forward-looking statements regarding permitting timelines, production launch, commercial viability, and funding are subject to known and unknown risks and uncertainties, many outside of TMC's control, and actual results may differ materially from projected outcomes. - The permitting process has no mandatory time limits for certain regulatory steps, and approval could be delayed beyond the expected Q1 2027 timeline. - Development of the Brownsville processing facility is contingent on U.S. government support, which may not be approved on acceptable terms or at all. - Many of the long-term cost optimization concepts (autonomous operations, nuclear-powered vessels) require additional development and may not be commercially viable. - A 2021 SPAC warrant expiration is scheduled for September 2026, and there is no current confirmation of an extension, creating potential warrant expiration risk for holders. - The emerging seabed mining industry faces ongoing regulatory and public scrutiny that could impact project timelines or operations.

Analyst Q&A

• Q: What is TMC's perspective on the growing number of new entrants to the U.S. offshore mineral sector, and are there opportunities for collaboration with these new players?

  A: Management notes that capital flowing into U.S.-based projects (as opposed to projects governed by the International Seabed Authority) indicates growing market confidence in the U.S. regulatory path. TMC is far ahead of new entrants, having completed 15 years of work and $700 million in cumulative investment to reach the permitting stage, so new entrants face a significant catch-up period. TMC welcomes new players, is open to future collaboration, and has already signed a collaboration MOU with Deep Sea Vision. Management sees potential for TMC to act as a hub for the U.S. industry, including offering shared processing capacity at Brownsville for other operators, creating value for TMC shareholders.

• Q: Near-term, what concrete opportunities does TMC have to reduce offshore collection and transport costs before full production scaling?

  A: Management acknowledges that long-term optimizations like autonomous operations and nuclear power are further in the future. It confirms that near-term, achievable optimizations focused on improving energy efficiency and streamlining offshore logistics can be implemented as soon as the first production vessel enters operation, to drive early cost reductions.

• Q: The 12 million tonne annual Brownsville processing complex has much higher capacity than TMC's initial projected output. Is the extra capacity预留 for third-party processing, or does TMC expect to fill it with its own production quickly?

  A: TMC's ambition is to ultimately fill the full 12 million tonne capacity with nodules from its own license areas, given that scale improves project economics significantly. However, management plans to retain flexibility, as the marginal cost of adding processing lines for other operators is very low after the core civil infrastructure is built. TMC is already in early discussions with other operators, and is open to deals for third-party throughput that benefit both the industry and TMC shareholders.

• Q: What is the current capital share for offshore system development between TMC and Allseas, after the new agreement? Is Allseas funding more than the originally planned 50%?

  A: Management confirmed that the original 50/50 cost sharing arrangement between TMC and Allseas remains in place, with no change to the expected capital contribution split.

• Q: Could the 2026 U.S. midterms and potential change in Congressional control impact the NOAA permitting timeline or final permit validity for TMC?

  A: Management states that the NOAA permitting process follows long-standing regulations enacted in the 1980s that have already been upheld across multiple Democratic and Republican administrations. Support for domestic critical mineral development is a bipartisan issue, with both parties prioritizing reducing reliance on foreign imports. TMC is following all procedural requirements fully, so a change in Congressional control is not expected to impact the permit approval process or the validity of the final permit.