TMC the metals co., Inc. Q1 FY2025 earnings call

Gerard Barron thanked the team for the efforts in getting three applications over the line. Noted the lack of clear regulatory pathway was a holdback for the stock but now believe they have it. Mentioned the recent $37 million registered direct offering. Introduced Rutger Bosland as the new Chief Innovation and Offshore Technology Officer. Discussed that later this quarter applications for exploration licenses and a commercial recovery permit are expected to be deemed substantially compliant and complete by NOAA. Expect further detail from the Commerce Department and NOAA on expediting review processes. PFS will be completed next quarter for the commercial recovery area. Engaged with multiple law firms on DSHMRA and NOAA's regulations. Had productive engagements with NOAA, White House, and members of Congress. TMC USA submitted the world's first application for a commercial recovery permit for deep sea minerals in international waters alongside two exploration license applications. Conducted a site visit at PAMCO's Hachinohe plant in Japan in April 2025.

TMC reported a net loss of approximately $20.6 million or $0.06 per share in the first quarter of 2025 compared to a net loss of $25.2 million or $0.08 per share for the same period in 2024. Exploration and evaluation expenses for the 3 months ended March 31, 2025, were $9.5 million compared to $18.1 million in 2024 due to lower mining, technological and process development costs as the comparative quarter included costs to transport nodules to PAMCO's facility, resource-definition costs incurred during Campaign 8, which was completed in the first quarter of 2024 and lower costs incurred on environmental and pre-feasibility studies, partially offset by increase in share-based comp. G&A expenses in Q1 2025 were $8.5 million compared to $6.6 million in the comparative quarter due to an increase in share-based compensation, partially offset by a decrease in legal costs in the first quarter of 2025. Q1 2025 results also include a loss of $0.5 million for the change in fair value of warrants liability and charges of $1.1 million for foreign exchange losses and $1 million of fees and interest on our credit facilities and borrowings. Net cash used in operating activities in Q1 2025 amounted to $9.3 million compared to $11.8 million in 2024. The reduction in Q1 2025 is mainly due to high cash outflows relating to the Campaign 8 last year, partially offset by higher corporate costs this year. Free cash flow for Q1 was negative $9.4 million compared to negative $12.1 million in 2024. Free cash flow is a non-GAAP measure, and I would point you to the non-GAAP reconciliation table included in the appendix of this slide deck. TMC liquidity, which is cash flows borrowing capacity, stood at about $44 million as of March 31, 2025, or $81 million pro forma following this month's registered direct offering of $37 million of gross proceeds.

PFS will be completed next quarter for the commercial recovery area. Later this quarter, applications for exploration licenses and a commercial recovery permit are expected to be deemed substantially compliant and complete by NOAA. Continue to explore alternative financing sources with US government departments and agencies. PFS release is expected in the third quarter of 2025.

Statements made are subject to known and unknown risks and uncertainties, many of which may be beyond control. Actual results may differ materially from anticipated. Lack of clear regulatory pathway previously held back the stock. Short interest ticked upward, and fundraising was a key overhang. Regulatory uncertainties and potential material differences between expected and actual outcomes.

Q: What's the color on the extra concession area mentioned?

A: Gerard Barron said the additional area is complementary to existing NORI and TOML ground, not claimed by other sovereigns, and they'll share more detail soon.

Q: Thoughts on the processing side and downstream opportunities?

A: Gerard Barron discussed working with partners, interest in US processing, and Craig Shesky mentioned evaluating downstream opportunities based on IRR and ensuring capital-light approach.

Q: What funding opportunities with US government are being explored?

A: Craig Shesky said an all of the above approach, exploring offtake arrangements, directions from the executive order to Departments of Defense and Energy, and financing initiatives from Development Finance Corp, Exim Bank, etc.