Tmc The Metals Company Inc. · NASDAQ:TMC
Tmc The Metals — SPAC Merger (March 2021)
57 slides from Tmc The Metals's SPAC merger presentation, Mar 4, 2021
Slide 1: Better Metals for EVs: Investment summary for TMC the metals company
BETTER METALS FOR EVs Revolutionizing the Mineral Supply Chain for Fast Growing EV Demand Investment summary for TMC the metals company Inc. March 2021
Slide 2: Important information about the proposed business combination
BETTER METALS FOR EVs This presentation is for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to the proposed business combination between Sustainable Opportunities Acquisition Corporation (“SOAC”) and DeepGreen Metals Inc .
Slide 3: DeepGreen + SOAC = TMC the metals company Inc.
BETTER METALS FOR EVs 3 DeepGreen + SOAC = TMC the metals company Inc. (“TMC”, “The Metals Company”) Erika Ilves Strategy Tony O’Sullivan Project Development Gerard Barron CEO & Chairman Sc o tt Leonard CEO Scott Honour Chairman David Quiram CFO The Metals Company SOAC has identified DeepGreen as a
Slide 4: Transaction summary
BETTER METALS FOR EVs 4 Tra n saction summary. The business - Founded in 2009, DeepGreen Metals, Inc. is the developer of the world’s largest estimated deposit of battery metals 1 — seafloor polymetallic nodules — with the lowest expected lifecycle ESG footprint on the planet and people 2 Transactio
Slide 5: BETTER METALS FOR EVs
BETTER METALS FOR EVs
Slide 6: Assuming 75kWh batteries with NMC811 chemistry and nodule resource grade and abundance, “Where Should
1 Assuming 75kWh batteries with NMC811 chemistry and nodule resource grade and abundance, “Where Should Metals for the Green Transition Come From?”, Paulikas et al, LCA white paper, April 2020. Calculation based on estimated contained value of nickel. 2 Nickel equivalence calculation uses NORI - D M
Slide 7: EV revolution is metal intensive
BETTER METALS FOR EVs BETTER METALS FOR EVs EV revolution is metal intensive. 85 kg 29 Cu C opp er 63.546 56 kg 28 Ni Nickel 58 . 69 3 7.1 kg 27 Co C ob a l t 58 . 93 3 6.6 kg 25 Mn M a n g ane s e 54.938 Metal requirements for a 75kWh battery with NMC cathode chemistry and average copper contents f
Slide 8: Surge in EV demand will test the limits of metals supply
BETTER METALS FOR EVs ~$18bn 3 investment in electromobility and hybridization through 2025 ~$84bn 3 committed to R&D and capex spend, with a particular focus on electrification and digitalization through 2025 ~$11bn 3 investment in development and production of EVs $22bn committed towards electrifi
Slide 9: Massive deficits in key EV battery metals expected from 2025
BETTER METALS FOR EVs 14 16 18 20 22 24 26 28 12 30 1 “Powering up sustainable energy,” McKinsey, June 2020. 2 “How clean can the nickel industry become?”, McKinsey, September 2020. 3 Q4 2020 Copper Long Term Outlook, Wood Mackenzie. Massive deficits in key EV battery metals are expected from 2025.
Slide 10: ESG impacts of conventional metal production compound the metal supply problem
Note: In - depth quantification of lifecycle ESG impacts of sourcing four metals for 1 billion EVs from conventional land ores detailed in “Where Should Metals for the Green Transition Come From?”, Paulikas et al, LCA white paper, April 2020. C h i l d l a b o r BETTER METALS FOR EVs ESG impacts of
Slide 11: Sourcing battery metals from polymetallic nodules
BETTER METALS FOR EVs 4 1 7 5 8 9 3 6 2 Areas of Particular Environmental Interest (APEI) PROTECTED AREAS (1.44 million km 2 ) EXPLORATION AREAS (1.1 million km 2 ) Exploration contract areas granted by the International Seabed Authority (ISA) Solution : sourcing battery metals from a vast resource
Slide 12: High-grade, consistent and scalable resource offers many advantages
BETTER METALS FOR EVs Unattached to the seafloor – no need for drilling & blasting High - grades of four metals in a single ore – much less ore mass to process Very low hazardous elements like As, Sb, Hg – no toxic processing tailings Low head - grade variability – easier to process 2 - 10 cm diamet
Slide 13: Dramatically reduce lifecycle ESG impacts of EV battery metals
BETTER METALS FOR EVs - 75% - 94% Ore Land +99.6% Seafloor - 89% Water Resource use Habitat damage Climate change - 93% Megafauna wildlife at risk - 99% Human toxicity Humans Land based mining impacts globally includes deep sea tailings placement which can be very damaging to the environment - 70% -
Slide 14: Expect to become the second lowest-cost nickel producer
BETTER METALS FOR EVs N O R I - D A v e r a g e 2 , 3 ( $ 2 . 4 / l b ) C 1 c a s h c o s t , $ / l b W o r l d ’ s c u m u l a t i v e n i c k e l p r o d u c t i o n b y m i n e r , m i l l i o n l b s …and expect to become the second lowest - cost nickel producer in the world 1 . Nickel C1 cost c
Slide 15: Exploration contract areas: NORI, TOML, Marawa
BETTER METALS FOR EVs Ex p lor a t i on contract area NORI 1 TOML 2 Marawa Sponsoring state Republic of Nauru Kingdom of Tonga Republic of Kiribati Exploration area 74,830 km 2 74,713 km 2 74,990 km 2 Technical resource statement Yes Yes Resource definition work still required Polymetallic nodules I
Slide 16: NORI-D first, with upside from the full portfolio
BETTER METALS FOR EVs Marawa Resource definition work still required 1 Canadian NI 43 - 101 Resource Statement for full field financial model (internal DeepGreen development scenario). 2 Canadian NI 43 - 101 and SEC Regulation S - K (Subpart 1300) Compliant NORI Area D Clarion Clipperton Zone Minera
Slide 17: Comparing our portfolio to other nickel projects
BETTER METALS FOR EVs 0.3% Nickel equivalent grades 4 1.2% 1.1% 1.9% 3.2% Comparing our portfolio to other nickel projects. 1 Global Nickel Industry Cost Summary, Wood Mackenzie, August 2020; inclusive of reserves. 2 Canadian NI 43 - 101 Resource Statement for full field financial model (internal De
Slide 18: Potentially massive scale and upside on estimated resource and value
BETTER METALS FOR EVs 34 31 26 25 12 11 10 5 1 Canadian NI 43 - 101 Resource Statement for full field financial model (internal DeepGreen development scenario). 2 Market data and net asset value estimates from FactSet, as of February 8, 2021. Potentially massive scale and upside on estimated resourc
Slide 19: What it takes to develop a nodule resource
BETTER METALS FOR EVs BETTER METALS FOR EVs R E S O U R C E C O L L E C T S H I P P R O C E S S A C Q U I S I T I O N Secure State Sponsorship & Exploration Contracts from the International Seabed authority D E F I N I T I O N Survey the resource to increase resource certainty USE Secure Exploitatio
Slide 20: Resource is effectively and efficiently defined
BETTER METALS FOR EVs B O X C O R E S A M P L I N G 1 A U V C A M E R A I M A G E R Y 1 1 Images from DeepGreen’s resource survey offshore campaigns in NORI contract area. 2 Boxcores, nodules collected, high - res bathymetry, detailed bathymetry – compiled by DeepGreen from - Canadian NI 43 - 101 an
Slide 21: History of seabed mining
BETTER METALS FOR EVs Kennecott Copper Corp British Petroleum, Rio Tinto - Zinc Corp Consolidated Gold Fields Noranda Mines, Mitsubishi Corp Deepsea Ventures Inc. US Steel, Sun Oil, Union Miniere Ocean Management Inc. International Nickel Company Metallgesellschaft AG Sumitomo, Sedco Lockheed Amoco
Slide 22: Transparent regulatory regime supported by international law
BETTER METALS FOR EVs Regulator established International Seabed Authority is formed and member nations join 1994 exploration contracts granted to DeepGreen, sponsored by Nauru 1 2011 Commercial rights secured by DeepGreen, sponsored by Kiribati 3 2015 1st draft Exploitation Regulations issued by IS
Slide 23: Regulatory regime designed to drive equitable development
BETTER METALS FOR EVs Aerial view of Manra Island, Phoenix Islands, Kiribati -- Sponsoring State for the Marawa Area and one of the first countries to disappear as a result of sea level rise driven by climate change 1 Canadian NI 43 - 101 and SEC Regulation S - K (Subpart 1300) Compliant NORI Area D
Slide 24: Strategic partners helping us accelerate development
BETTER METALS FOR EVs R E S O U R C E C O L L E C T S H I P P R O C E S S O F F S H O R E O N S H O R E Strategic partners and other organizations helping us accelerate development. BETTER METALS FOR EVs 29 Cu Coppe r 63.546 Invested in 2012. Holds offtake on NORI Area: 28 Ni Nickel 58.693 50% of p
Slide 25: Offshore collection system development
1.2Mt (wet) p.a. early production system expected to be operational 1 12.5 - 54.5Mt 1,2 (wet) p.a. 2 - 6x drillships 1 - 6 purpose - built vessels expected 3 Technology selection for all systems and sub - systems for pilot /early production system 2019 Lab testing and final design of pilot / early p
Slide 26: Advantage of operating on the CCZ abyssal seafloor
Stable, food - poor environment dependent on particles sinking from oligotrophic surface waters Very low biomass • No plants • ~70% of biomass is bacteria • Most wildlife is small <4cm 20 3.64 0.0 1 3 Rainforests (e.g., Indonesia) Land biomass average Abyssal seabed Biomass Contained carbon kg/m 2 N
Slide 27: Environmental impacts of nodule collection
BETTER METALS FOR EVs 1 Modelling completed by DHI. Source: DeepGreen Metals’ ESIA program. 1. Nodule removal Some organisms need hard nodule surfaces for critical life function. To protect and enable repopulation: - 34% of CCZ is set aside by the ISA into protected areas - 10% additional “no - take
Slide 28: 100+ integrated environmental studies
BETTER M ETALS FOR EVs 100+ integrated studies Surface biology Surface fauna logbook (PelagOS) R e m ote S e n si n g , H ydr o p h o n e A c o u sitcs Pelagic biology Microbial Community Characterization Phytoplankton Community Characterization Zooplankton Community Characterization Gelatinous Zoop
Slide 29: Environmental impact assessment timeline
BETTER METALS FOR EVs Aug 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Scoping Study and ESIA Terms of Ref e r e nce Environmental Impact Assessment Environmental Impact Statement Development Environmental Monitoring and Managemen
Slide 30: Onshore processing flowsheet and pilot plant program
BETTER METALS FOR EVs 20 kg New flowsheet developed (pyromet processing / hydromet refinery), modelled and lab - tested 2019 75 tonnes Pilot plant program with FLSmidth in Whitehall, PA, USA and XPS Solutions (Glencore) in Sudbury, Canada 2020 - 2021 1.2 Mt (wet) 1 Project Zero - small scale commerc
Slide 31: Flexibility in plant site selection
BETTER METALS FOR EVs BETTER METALS FOR EVs Additional strategic advantage driven by our flexibility in plant site selection across the world. 31
Slide 32: Enough resource to fill 6 plants on three continents
BETTER METALS FOR EVs 1 GLS Location Study prepared for DeepGreen. We have enough estimated resource to fill 6 plants on three continents powered by renewables. 1 12 specific sites identified based on: - Deep - water port and cost of CCZ - to - port logistics - Cost & source of electric power, cost
Slide 33: Development timeline to commercial production
Exploration Contracts and 43 - 101 resource statements Prefeasibility study (PFS) Feasibility study PROJECT #0 1.0Mt (wet) Initial Assessment (IA) 2023 NORI - D Exploitation C ontract Ap p licati o n, including Environmental Impact Assessment, on track for submission 2024 Start small scale commercia
Slide 34: Next step: how we scale
BETTER METALS FOR EVs Next step: how we scale. BETTER METALS FOR EVs 34
Slide 35: Project Zero to de-risk the rest of the operation
BETTER METALS FOR EVs Project Zero expected to achieve commercial production for NORI - D and de - risk the rest of the operation. Nickel 119.1 Kt Manganese 2,847.0 Kt Copper 88.7 Kt Cobalt 9.4 Kt Fertilizer 253.5 Kt PROJECT ZERO 1.0Mt (wet) 0.75Mt (dry) PROJECT ONE 12.2Mt (wet) 9.3Mt (dry) P ro d u
Slide 36: Options to finance CAPEX for Project One
BETTER METALS FOR EVS With Project Zero generating revenue, we expect to have several viable options to finance CAPEX for Project One. 1 Canadian NI 43 - 101 and SEC Regulation S - K (Subpart 1300) Compliant NORI Area D Clarion Clipperton Zone Mineral Resource Estimate and associated financial model
Slide 37: Capital plan with multiple non-dilutive financing options
BETTER METALS FOR EVS Capital plan has multiple options for non - dilutive financing. Co bre Pana m a Cascabel Q uella v e c o Kamo a Ka k u l a Royalty / s tre aming Offtake financing Debt financing (ECA - backed, project finance, capital markets) Capital - light model focused on leasing equipment
Slide 38: NORI-D discounted cash flow
D I S C O U N T E D C A S H F L O W J A N 2 0 2 1 Net present value at 9% discount rate $6.8 billion EST. ANNUAL REVENUE 1 $4.7 billion EST. ANNUAL EBITDA 1 $2.9 billion EST. PRE - CONSTRUCTION CAPEX $0.2 billion EST. OFFSHORE CONSTRUCTION CAPEX $2.2 billion EST. ONSHORE CONSTRUCTION CAPEX $4.8 bill
Slide 39: Highlighting the unique value proposition
BETTER METALS FOR EVs Highlighting the unique value proposition. BETTER METALS FOR EVs 39
Slide 40: SOAC management team track record
BETTER METALS FOR EVs Proven Fundraising and Public Company Track Record Strong Investor Base Inside of Trust Robust Relationships With Prospective PIPE Investors Scott Leonard CEO Scott Honour Chairman David Quiram CFO 10 0+ Our ability to deliver a successful transaction with The Metals Company is
Slide 41: Key transaction terms and illustrative pro forma valuation
BETTER METALS FOR EVs 1 Additional shares issued at $25.00, $35.00, $50.00, $75.00, $100.00, $150.00 and $200 (please see appendix for details) . 2 Pro forma ownership assumes no redemptions by SPAC shareholders and does not include the issuance of 10mm shares upon exercise of a warrant that will re
Slide 42: Electrification value chain informs our investment hypothesis
BETTER METALS FOR EVs The electrification value chain informs our investment hypothesis. B a s e m e t a l s p r o d u c e r s B a s e m e t a l s d e v e l o p e r s B a t t e r y v a l u e c h a i n D i s r u p t i v e b a t t e r y E V s E le c t r i f i cat io n f a c i l i t at or s E V m e t a
Slide 43: Discount to base metal producing peers
BETTER METALS FOR EVs 0.35x 1.1x 0.9x 0.8x 0.7x 0.4x 0.3x 0.3x 0.2x 1.6x TMC Western Areas Ivanhoe Mines Nickel Mines Trilogy Metals N evada Copper Sea b ridge Gold Base Metal Producers TMC offers a significant discount at its current valuation, as compared to trading levels of base metal producing
Slide 44: NORI-D stand-alone valuation
BETTER METALS FOR EVs NORI - D stand - alone valuation believed to justify TMC value before upside from the rest of the field. 65% discount to midpoint Full field fundamental value of $38bn as of 2023E; $31bn as of “today” 4 Discounted Key “go/no go” decision point to invest further for production F
Slide 45: Traditional miners provide a long-term floor valuation
BETTER METALS FOR EVs Traditional miners provide a lon g - t er m f loo r v alua t io n wi t h upside to more disruptive peers in the EV value chain. 1 Quantumscape multiples based on 2027E and 2028E. Microvast multiples based on 2023E and 2024E. 2 Disruptive battery EV multiples based on 2023E and
Slide 46: Value upside from trading up to EV metals producer peers
BETTER METALS FOR EVs Value upside driven by ultimate trading up of TMC to EV metals producer peers. 63% Discount to Midpoint Discounted $2bn EBITDA reached NORI - D 46 Note: Equity value per share calculations assume $440mm of balance sheet cash (proceeds from transaction net of fees). $12.9bn ($39
Slide 47: Why SOAC is excited to partner with DeepGreen
Why SOAC is excited to partner with DeepGreen to form The Metals Company. 47 BETTER METALS FOR EVs Significant projected supply shortfall and increasingly costly greenfields Diminishing resources and a steady decline in grades expected to create a deficit and support higher prices The Metals Company
Slide 48: Appendix
BETTER METALS FOR EVs Appendix. BETTER METALS FOR EVs 48
Slide 49: Conventional mining in high-risk jurisdictions with most biodiversity
BETTER METALS FOR EVs Note: Biodiversity defined as species richness. Source: Mineral Commodity Summaries, U.S. Geological Survey, January 2020; “Where Should Metals for the Green Transition Come From?”, Paulikas et al, April 2020. Conventional mining in high - risk jurisdictions with most biodivers
Slide 50: Tricky geopolitics will stay as we decarbonize
10 0 % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 29 Cu 27 Co 25 Mn Ni 28 Li 3 Oil Natural gas Top 3 producing countries Share in total production, 2019 1 China 10% 23% 55% Australia Russia 4% 4% 71% Chile 13% 17% 31% Gabon 10% 16% 30% Iran Russia China 6% 18% 23% 8% 11% 28% 12% 13% 18% Russia Philip -
Slide 51: Incentives aligned through an earn-out structure
BETTER METALS FOR EVs Overview • Eight tranches of earn - out shares available to selling shareholders • Shares vest if share price trades above the strike price for 20 out of 30 trading days • Tranches range from $15.00 per share to $200.00 per share as shown below • Additionally, the sponsor will
Slide 52: Backed by an experienced and committed group of professionals
BETTER METALS FOR EVs Backed by an experienced and committed group of professionals. +30 - 50 people at Maersk Supply Services supporting offshore campaigns +100 researchers & contractors contributing to the ESIA 1 program +55 engineers at Allseas working on pilot collection system JON MACHIN Head o
Slide 53: Average estimated annual production and revenue
1 Average estimated annual production and revenue 2030 - 2046. Source: Canadian NI 43 - 101 and SEC Regulation S - K (Subpart 1300) Compliant NORI Area D Clarion Clipperton Zone Mineral Resource Estimate and associated financial model, AMC, March 2021. $503 per dry tonne Polymetallic Nodules 9.3 Kt
Slide 54: Average product prices assumed in the Initial Assessment
1 Manganese ores are priced in dmtu (dry metric tonne units). A unit is 10 kg, or 1/100th of a tonne. A tonne of ore grading 40% Mn priced at US$4.53/dmtu would be worth US$181/t of ore. Source: Market Overviews for The Metals Company Initial Assessment, CRU International, October 2020. N I C K E L
Slide 55: Notice to Canadian investors
BETTER METALS FOR EVs NOTICE TO CANADIAN INVESTORS This presentation has been prepared by SPAC solely for information purposes and is furnished to you on a confidential basis. Recipients of this presentation may not reproduce or otherwise redistribute, in whole or in part, this presentation to any o
Slide 56: Saskatchewan
BETTER METALS FOR EVs Saskatchewan The right of action for damages or rescission described herein is conferred by section 138 of The Securities Act, 1988 (Saskatchewan), as amended (the “Saskatchewan Act”). The Saskatchewan Act provides, in relevant part, that where an offering memorandum (such as t
Slide 57: Nova Scotia
BETTER METALS FOR EVs Nova Scotia The right of action for damages or rescission described herein is conferred by section 138 of the Securities Act (Nova Scotia) (the “Nova Scotia Act”). The Nova Scotia Act provides, in relevant part, that in the event that an offering memorandum (such as this presen
DeepGreen Metals Inc. (TMC the metals company Inc.) — SPAC Merger (March 2021) on 6ix