Tmc The Metals Company Inc. · NASDAQ:TMC
Tmc The Metals — Q2 2023 Earnings Presentation
45 slides from Tmc The Metals's earnings presentation, Aug 14, 2023
Slide 1: Q2 2023 Corporate Update: Unlocking the World's Largest Estimated Undeveloped Source of Battery Metals
The Metals Company Q2 2023 Corporate Update: Unlocking the World’s Largest Estimated Undeveloped Source of Battery Metals August 14, 2023
Slide 2: Forward looking statements
2 Forward looking statements. This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that relate to future events, TMC the metals company Inc.’s (“TMC” or
Slide 3: Highlights: new financing, new ISA roadmap and progress on NORI-D
3 HIGHLIGHTS Summary since last quarterly update: new financing, new ISA roadmap and progress on NORI-D. Business developments: - Estimated Timeline to Finalization of Application to the ISA for an Exploitation Contract for Q2 results NORI Area D: In July 2023, the ISA Council announced reaching a c
Slide 4: Regulatory update: ISA progress toward final regulations
4 REGULATORY UPDATE ISA making progress toward final regulations, while TMC subsidiary NORI reserves legal rights to submit application before final Timeline 2011 Fiji requests the ISA to prepare workplan for adopting the Mining Code regulations are in place. 2012 ISA Secretariat prepares a workplan
Slide 5: Agenda
5 Agenda. Corporate update and capital raise 6 Market update 9 Our value proposition 12 Regulatory update 16 Environmental case for TMC 19 Financial highlights 29 Appendix 35
Slide 6: Key takeaways from corporate update press release and 8-K on August 1
6 CORPORATE UPDATE AND CAPITAL RAISE Key takeaways from corporate update press release and 8-K on August 1. Estimated timeline to submit TMC subsidiary Nauru Ocean Resources Inc. (NORI) intends to submit an application to the ISA for an exploitation contract for application for an exploitation NORI
Slide 7: TMC liquidity at June 30, 2023 and shelf capacity
7 CORPORATE UPDATE AND CAPITAL RAISE TMC liquidity at June 30, 2023 of ~$45 million inclusive of cash and unsecured credit facility, plus $100 million capacity on effective SEC Form S-3 registration statement (incl. $30M at-the-market equity program). USD’000 150.0 125.0 TMC has a shelf registration
Slide 8: Capital raise announced Aug. 14: ~$27 million common stock issuance
8 CORPORATE UPDATE AND CAPITAL RAISE Capital raise announced Aug. 14: ~$27 million common stock issuance (potential to upsize to ~$38 million) at $2.00 plus warrants. Issuer TMC the metals company Inc. (NASDAQ: TMC) Proposed Transaction Registered direct placement on existing effective form S-3 ~$27
Slide 9: Market update: commercial nodule collection a question of 'when,' not 'if'
9 MARKET UPDATE Recent reporting suggests commercial nodule collection is now a question of ‘when,’ not ‘if,’ with strong support from The Economist and deep-sea explorer & director James Cameron. Eric Lipton tweet: “Doesn’t appear to Deep sea mining for minerals be enough votes to indefinitely bloc
Slide 10: Recent global headlines reflect increased investment in seafloor resources
10 MARKET UPDATE Recent global headlines reflect increased investment in seafloor resources, including prioritization from China. Transocean / GSR Norway Japan China - In February 2023, Transocean - In June 2023, the Norwegian - In December 2022, Japan - On February 28, 2023, China Ocean Mineral agr
Slide 11: Growing support from US political and military leaders
11 MARKET UPDATE Growing support from US political and military leaders, with US House members asking President Biden and Pentagon to deliver a plan on nodules. Letter from 9 House members to House NDAA: “It is essential that the President Biden / DoD: “keep all US secures its own innovative supply
Slide 12: TMC estimated resource could supply U.S. demand for nickel, cobalt and manganese
12 OUR VALUE PROPOSITION TMC estimated resource alone has The Metals Company the potential to supply U.S. demand 15,700,000 t Ni / 2,400,000 t Co / 13,300,000 t Cu / 350,000,000 t Mn Total Resource for nickel, cobalt and manganese. Estimated In situ quantities of nickel, copper, cobalt and manganese
Slide 13: Ranked as #1 and #2 largest undeveloped nickel projects
13 OUR VALUE PROPOSITION TMC: ranked in 2022 and 2023 as #1 and #2 largest undeveloped nickel projects on the planet1; the alternative to Russian- and Chinese-funded supply. World’s largest nickel projects – 2023 World’s largest nickel operations ranked by resource Total est. resources (inferred, in
Slide 14: TMC an outlier among peers on NiEq resource and grade
14 OUR VALUE PROPOSITION Some nickel projects have high grade, some have a large resource, but TMC is an outlier Nickel Equivalent Grade (%) vs. Resource (Billion Pounds) - Bubble Size Reflects Relative Enterprise Value1 among peers with the largest NiEq resource 3.50% Avg: 15.7Blbs TMC - NORI alone
Slide 15: Video available at vimeo link
Video available at: https://vimeo.com/845081517/d9611ccc5a?share=copy
Slide 16: Regulated by the International Seabed Authority established in 1994 by UNCLOS
16 REGULATORY UPDATE Regulated by the UNCLOS Parties International Seabed UNCLOS Signatories Authority established in 1994 by UNCLOS. - The International Seabed Authority (ISA) was established in 1994 by the United Nations Convention on the Law of the Sea (UNCLOS) and regulates seabed minerals beyon
Slide 17: 21 Member States out of 169 publicly expressed reservations
17 REGULATORY UPDATE Assembly 21 Member States out of AFRICAN GROUP (47) ASIA-PACIFIC (45) GRULAC (29) WESTERN EUROPEAN (23) EASTERN EUROPEAN (23) 169 Members publicly Algeria Angola Benin Bahrain Bangladesh Brunei Antigua and Barbuda Argentina Bahamas Australia Austria Belgium Albania Armenia Azerb
Slide 18: Our sponsoring states: social benefits and avoided human impact
18 REGULATORY UPDATE Our sponsoring states: social benefits and avoided human impact are often overlooked. “I would like to remind the Assembly that the original purpose behind the parallel system of exploitation as Republic of Nauru 2015 Nauru Seabed Minerals Act set out in the Convention was to pr
Slide 19: Biological and physical impacts: over 200 terabytes of data collected in 2022
19 ENVIRONMENTAL CASE Biological and physical impacts: engaged many leading research institutions and companies, with over 200 terabytes of data collected in 2022 alone.
Slide 20: Initial batch of data shared with the world, with more to come
20 ENVIRONMENTAL CASE Initial batch of data shared with the world, with more to come. Biological occurrence records – OBIS ISA node UNESCO’s OBIS database is the world’s largest depository of marine biodiversity data. The OBIS ISA node contains: NORI-D 2022 79,490 - 99 data sets - 131,994 occurrence
Slide 21: Sediment plumes: concerns based on speculation, research now in-field
21 ENVIRONMENTAL CASE Sediment plumes: concerns based on speculation, research now based on in-field observation. CONCERNS RESEARCH Midwater plume Deep-Sea Mining Statement Research published and field studies The entrained sediment from Organized by Deep-Sea Conservation Coalition conducted in 2021
Slide 22: In-field plume modelling by leading experts
22 In-field plume modelling by leading experts Video available at: https://vimeo.com/851319010/79c7c9ff18?share=copy
Slide 23: Still image from Blue Peril film with speculative plume modeling
Still image from Blue Peril film with speculative modeling of plume impact in TOML contract area.
Slide 24: Estimated worst-case plume footprint is far smaller
Using observed data in collector test, the estimated worst-case scenario for plume footprint is far smaller.
Slide 25: Indonesia has highest species richness and highest nickel production
25 ENVIRONMENTAL CASE Benchmark: Indonesia has the highest species richness as well as the highest nickel production. Nickel mining in Indonesia
Slide 26: Abyssal plains contain less living biomass than deserts on land
26 ENVIRONMENTAL CASE The abyssal plains contain less living biomass than deserts on land. Source: Houghton, R. A., Hall, F., and Goetz, S. J. (2009), Importance of biomass in the global carbon cycle, J. Geophys. Res., 114, G00E03, doi:10.1029/2009JG000935.
Slide 27: Nickel from NORI-D could have dramatically lower lifecycle impacts than Indonesia
27 ENVIRONMENTAL CASE Nickel from NORI-D could have dramatically Indonesia - laterites NORI-D nodules lower lifecycle impacts Impact of 1 kg nickel in nickel sulfate Impact of 1 kg nickel in nickel sulfate than Indonesia… Laterite Indonesia RKEF route Laterite Indonesia HPAL (MHP) Nodules NORI-D RKE
Slide 28: Substantially lower CO2e emissions
28 ENVIRONMENTAL CASE …including substantially lower CO2e emissions. Global Warming Potential Kilogram of CO2e emissions per kilogram of nickel in nickel sulfate Lowest impact value 102.0 64.4 29.2 28.5 19.2 13.9 8.0 6.2 Laterite Laterite Sulfide Sulfide Laterite Laterite Sulfide Nodules Indonesia C
Slide 29: NORI-D project estimated at $6.8 billion NPV
29 FINANCIAL HIGHLIGHTS NORI-D Financial Model2 Based on SEC-compliant $ billions unless otherwise noted Initial Assessment, NORI-D Estimated March ‘21 Initial Current prices, Increase project estimated at $6.8 Prices Assess. w/CRU all other inputs price forecast unchanged billion NPV (est. $10.1 bi
Slide 30: TMC trading at lower multiple than selected nickel developers
30 FINANCIAL HIGHLIGHTS TMC trading at ~12x lower multiple than average for selected nickel developers, using NPV at current prices for NORI-D alone (22% of total estimated resource). Price / NAV 1.2 1.09 Price / Fundamental Value for Nickel Developers 1 0.8 0.74 0.6 0.38x P/NAV 0.43 0.43 Peer Avera
Slide 31: Key de-risking milestones ahead to unlock NORI-D project value
31 FINANCIAL HIGHLIGHTS Key de-risking milestones ahead to unlock NORI-D project value. Following July Potential timing H2 2022 / 2023 2024 ISA Meeting Est. 2025 Est. 2025 Est. Q4 2025 De-risking milestones - Pilot Collection System Test NORI submits NORI-D ISA adopts final ISA grants NORI NORI-D Pr
Slide 32: Income statement highlights: three months ended June 30, 2023
32 FINANCIAL HIGHLIGHTS Income statement highlights: three months ended June 30, 2023. ($mm) Q2 2022 Q2 2023 Change Exploration and evaluation expenses 10.2 8.1 (2.1) General and administrative expenses 8.1 5.1 (3.0) Operating loss 18.3 13.2 (5.1) Equity-accounted investment loss - 0.1 0.1 Change in
Slide 33: Cash flow highlights: three months ended June 30, 2023
33 FINANCIAL HIGHLIGHTS Cash flow highlights: three months ended June 30, 2023. ($mm) Q2 2022 Q2 2023 Change Cash used in operating activities 22.6 8.4 (14.2) Investing activities 0.3 0.1 (0.2) Acquisition of equipment 0.3 0.1 (0.2) Less non-recurring items - - - Free cash outflow excluding non-recu
Slide 34: Balance sheet highlights: as at June 30, 2023
34 FINANCIAL HIGHLIGHTS Balance sheet highlights: as at June 30, 2023. ($mm) Dec 31, 2022 Jun 30, 2023 Change Total Assets 94.8 75.2 (19.6) Cash 46.8 20.0 (26.8) Accounts receivable and prepaid expenses 2.8 1.7 (1.1) Exploration and evaluation assets 43.2 42.9 (0.3) Property and equipment 2.0 2.0 -
Slide 35: Appendix
APPENDIX
Slide 36: Appendix: non-GAAP reconciliation
36 Appendix: non-GAAP reconciliation. Non-GAAP Financial Measures – Free Cash Outflow Excluding Non-Recurring Items Free cash outflow excluding non-recurring items is a non-GAAP financial measure. Free cash outflow excluding non-recurring items is used in addition to and in conjunction with results
Slide 37: Here is what a polymetallic nodule field looks like
37 Here is what a polymetallic nodule field looks like.
Slide 38: Abundant, secure, low production cost and low ESG cost potential supply of metals
38 Abundant, secure, low Abundant production cost and low ESG TMC is developing the world’s largest estimated source of battery metals with enough cost potential supply of metals. nickel, copper, manganese and cobalt in situ to potentially electrify 280 million EVs1 Secure Located on the abyssal sea
Slide 39: Resource definition: 2D resource allows effective definition
39 Resource definition: 2D resource allows BOX CORE SAMPLING 1 effective definition through sampling and imagery. 250 box cores collected2 82,000 kg (wet) nodules collected2 13,950 biological samples collected2 AUV CAMERA IMAGERY1 178,591 km2 of high-res bathymetric survey2 5,439 km2 detailed seaflo
Slide 40: Technical resource statements issued on NORI + TOML
40 TMC: technical resource statements issued on NORI + TOML, with an in situ estimated resource of Ni, Cu, Co and Mn sufficient to electrify the entire U.S. passenger car fleet1. TMC exploration contract area NORI2 TOML3 Marawa Sponsoring Republic of Kingdom of Republic of State Nauru Tonga Kiribati
Slide 41: Pilot collection system test and environmental monitoring campaign completed in Dec 2022
41 Pilot collection system test and initial environmental impact monitoring campaign completed in Dec 2022. PILOT COLLECTOR SYSTEM TEST PROGRAM 2022 January Riser acceptance test February Thruster re-lift, dockside vessel commissioning, review of nodule offloading & handling test program Feb 7 LARS
Slide 42: ~3,000 tonnes of nodules inside the hold of Hidden Gem
~3,000 tonnes of nodules inside the hold of Hidden Gem. NORI & Allseas - First Integrated Collection System Trial Since 1970s: https://vimeo.com/778303976/28d019f234
Slide 43: NORI-D application focused on offshore collection; project spans seafloor to factory gate
43 NORI-D application is focused on offshore nodule collection, but NORI-D Project spans from seafloor to factory gate. ISA JURISDICTION NORI-D APPLICATION NORI-D PROJECT Battery & steel manufacturing >> end use - Signed non-binding MoU with Pacific Metals Company (PAMCO) of Japan to evaluate the pr
Slide 44: NORI-D project: expected production volumes from 2021 Initial Assessment
44 NORI-D project: expected production volumes from 2021 Nickel, kt Copper, kt Initial Assessment. 150 120 130 100 110 80 100% 90 1,634Mt (wet) 60 70 50 ~125 ktpa ~93 ktpa 40 30 20 10 TOML + 0 Rest of -10 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042
Slide 45: At steady state, expected to become second lowest-cost nickel producer
45 At steady state production, we expect to become the second lowest-cost nickel producer in the world. Nickel C1 cost curve on a by-products’ basis1 C1 Cash Cost represents all direct costs, including mining, processing, freight, SG&A minus revenue from by-products 10.0 5.0 C1 cash cost, $ / lb 0.0
TMC the metals company — Q2 2023 Earnings Presentation on 6ix