Tmc The Metals Company Inc. · NASDAQ:TMC
Tmc The Metals — Q4 2022 Earnings Presentation
43 slides from Tmc The Metals's earnings presentation, Mar 23, 2023
Slide 1: Q4 and FY 2022 Corporate Update Call
The Metals Company Q4 and FY 2022 Corporate Update Call: Unlocking the World’s Largest Estimated Undeveloped Source of Battery Metals 23 March 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: De-risking project development and financing milestones
3 HIGHLIGHTS De-risking project development and financing milestones since last update. Q4 results Milestones achieved since last corporate update: - Net loss of $109.6 million and loss per share of $0.41 for Q4 2022 - Successful conclusion of pilot collection system trial and environmental monitori
Slide 4: Near term funding options have increased
4 HIGHLIGHTS Near term funding options have increased, affording flexibility as asset-level discussions continue. Unsecured Credit Facility Low Carbon Royalties (LCR) At-the-market Equity Program (ATM) Principal amount: $25 million Consideration: $5 million + 35% stake in LCR Program size: $30 milli
Slide 5: Agenda
5 Agenda. Market update 6 Our value proposition 9 Regulatory update 11 NORI-D project update 12 ESG case for TMC 21 Milestones 26 Financial highlights 28 Appendix 31
Slide 6: Increasing investment and interest in seafloor resources
6 MARKET UPDATE Recent global headlines reflect increasing investment and interest in seafloor resources… Transocean / GSR Norway Japan France - In February 2023, Transocean - In January 2023, Norway announced - In December 2022, Japan - In February 2023, French Research agreed to contribute the sta
Slide 7: Prioritization of seafloor resources by Chinese leadership
7 MARKET UPDATE …and prioritization of seafloor resources by Chinese leadership. China - On February 28, 2023, China Ocean Mineral Resources Research and Development Association (COMRA) signed a second contract extension for exploration for polymetallic nodules1 - On March 14, 2023, Mining.com relea
Slide 8: #1 and #2 largest undeveloped nickel projects on the planet
8 OUR VALUE PROPOSITION TMC: #1 and #2 largest undeveloped nickel projects on the planet, and the alternative to Russian- and Chinese-controlled supply. World’s largest nickel projects – 2022 World’s largest nickel operations ranked by resource Total est. resources (inferred, indicated & measured),
Slide 9: Largest NiEq resource and highest NiEq grade among peers
9 OUR VALUE PROPOSITION Some nickel projects only have high grade, some only 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 and 3.50% Avg: 15.7Blbs TMC
Slide 10: Our resource alone can supply U.S. demand for nickel, cobalt and manganese
10 OUR VALUE PROPOSITION Our resource alone can The Metals Company supply U.S. demand for nickel, 15,700,000 t Ni / 2,400,000 t Co / 13,300,000 t Cu / 350,000,000 t Mn Total Resource cobalt and manganese. Estimated In situ quantities of nickel, copper, cobalt and manganese equivalent to the requirem
Slide 11: High Seas Treaty is a positive step; does not impact ISA mandate
11 REGULATORY UPDATE High Seas Treaty is a positive step; does not impact ISA mandate. The final treaty will be the third implementing agreement under UNCLOS, along the 1994 Implementation Agreement that was the basis for establishing the ISA. The High Seas Treaty does not 1994 IMPLEMENTATION AGREEM
Slide 12: 43% of the CCZ under protection today
12 REGULATORY UPDATE With 43% of the CCZ under protection today, ISA exceeds High Seas Treaty target of 30% by 2030. 1.97m km2 under protection 1.28m km2 under exploration APEI-3 APEI-6 APEI-2 APEI-10 APEI-12 APEI-13 APEI-1 APEI-9 APEI-11 PROTECTED AREAS APEI-5 APEI-4 Areas of Particular Environment
Slide 13: March ISA meeting toward final regulations
13 REGULATORY UPDATE March ISA meeting is ongoing to make progress toward final regulations. Timeline 2011 Fiji requests the ISA to prepare workplan for adopting the Mining Code 2012 ISA Secretariat prepares a workplan for adopting the Mining Code 2013 ISA produces technical study no. 11 “Towards th
Slide 14: NORI-D Project Zero: Work streams to get it permitted and into production
14 NORI-D PROJECT UPDATE NORI-D Project Zero: In February 2023, TMC announced it had engaged Bechtel, one of the most respected engineering, construction, and project management companies Work streams to get it in the world, to support the NORI-D exploitation contract application. permitted and into
Slide 15: Processing nodules: near-zero-waste metallurgical process
15 NORI-D PROJECT UPDATE Processing nodules: We developed a near-zero- waste metallurgical process that uses almost all of nodule mass.
Slide 16: After demonstrating we can turn nodules into manganese silicate and NiCuCo alloy & matte
16 NORI-D PROJECT UPDATE 26 Better 26 26BetterBetter Metals Metals for s for E for Metals E sE s After demonstrating we can turn nodules into manganesenshore nshore nshore silicate dededeelopment elopment elopment and NiCuCo alloy & matte… ilot ilotilotlant lant lant rogress rogress rogress WeWeWe i
Slide 17: MoU with PAMCO to process nodules at existing RKEF facility in Japan
17 NORI-D PROJECT UPDATE … e signed an MoU ith AMC to explore processing nodules at existing RKEF facility in Japan, in line with TMC capital-light strategy. Hachinohe facility Signed non-binding MoU with Pacific Metals Company (PAMCO) of Japan to evaluate the processing of 1.3 million tonnes per ye
Slide 18: NORI-D project at a glance
18 NORI-D PROJECT UPDATE NORI-D project at a glance. Resource - The estimated largest and highest nickel-equivalent grade undeveloped nickel project on the planet - Contained metals (Ni, Cu, Co, Mn) well matched to the critical mineral requirements of the energy transition - NORI-D as the 1st projec
Slide 19: Pilot collection system test and environmental monitoring completed in Dec 2022
19 NORI-D PROJECT UPDATE Pilot collection system test and 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 progr
Slide 20: NORI & Allseas first integrated collection system trial since 1970s
NORI & Allseas - First Integrated Collection System Trial Since 1970s: https://vimeo.com/778303976/28d019f234
Slide 21: Biological and physical impacts: collaborating with research institutions
21 ESG CASE FOR TMC Biological and physical impacts: Collaborating with leading research institutions on the NORI-D Collector Test.
Slide 22: A precautionary approach and new level of transparency
22 ESG CASE FOR TMC A precautionary approach and new level of transparency. HIGHER ORDER MITIGATION STRATEGIES ENVIRONMENTAL BASELINING, IMPACT MODELING, ADAPTIVE MANAGEMENT & IMPACT MONITORING PILOT & SMALL-SCALE MINING TESTS 43% of CCZ is under conservation by the ISA1 Adaptive Management System a
Slide 23: Remoteness and depth of the site has several advantages
23 ESG CASE FOR TMC Remoteness & depth of the site has several advantages. Biomass on Earth Contained carbon kg/m2 15-30 Deforestation Child labour Social displacement Destruction of carbon sinks 3.6 0.01 Abyssal seabed Land biome average Rainforests (e.g., Indonesia) Note: The seafloor-biomass valu
Slide 24: Benchmark LCA: Nickel from NORI-D shows lowest impact
24 ESG CASE FOR TMC Benchmark LCA: Nickel from NORI-D shows lowest impact. Global Warming Potential Kilogram of CO2e emissions per kilogram of nickel in nickel sulfate Lowest impact value 120 102.0 100 80 64.4 60 40 29.2 28.5 19.2 20 13.9 8.0 6.2 0 Laterite PYRO (laterite) Laterite Caron Sulfide PYR
Slide 25: NORI-D project estimated at $6.8 billion NPV
25 FINANCIAL UPDATE Based on SEC-compliant NORI-D Financial Model2 $ billions unless otherwise noted Initial Assessment, NORI-D project estimated at $6.8 Prices CRU forecast Current price Increase billion NPV (est. $13.1 billion Nickel $16,106/t $22,788/t 41% using current metal prices). Copper $6,7
Slide 26: Major milestones achieved in 2022
26 KEY MILESTONES Major milestones Completed achieved in 2022. In progress Offshore nodule collection system - Deep-water tests of pilot collector in the North Atlantic - Pilot Collection System Test in the Pacific (NORI-D, CCZ) - Digital twin implementation for NORI-D pilot collection system test O
Slide 27: Key de-risking milestones ahead to unlock NORI-D project value
27 KEY MILESTONES Key de-risking milestones ahead to unlock NORI-D project value. Expected timing H2 2022 H2 2023 H2 2023 H2 2024 Late ‘24 / Early ‘25 De-risking milestones - Pilot Collection System Test ISA adopts final NORI submits NORI-D ISA grants NORI NORI-D Project Zero - P.Zero commercial ter
Slide 28: Income statement highlights: three months ended Dec 31, 2022
28 FINANCIAL UPDATE Income statement highlights: three months - Exploration & evaluation expenses mostly comprised of $70 million fair value of Allseas warrant, valued at grant date of March 2021 based on DeepGreen ended Dec 31, 2022. Metals Inc. price per share of $7, which became exercisable follo
Slide 29: Cash flow highlights: three months ended Dec 31, 2022
29 FINANCIAL UPDATE Cash flow highlights: three months ended Dec 31, 2022. ($mm) Q4 2021 Q4 2022 Change Cash used in operating activities 27.8 19.8 (8.0) Capital expenditures - 0.2 0.2 Settlement of deferred acquisition costs - - - Acquisition of equipment - 0.2 0.2 Less non-recurring items - - - Se
Slide 30: Balance sheet highlights: year ended Dec 31, 2022
30 FINANCIAL UPDATE Balance sheet highlights: year ended Dec 31, 2022. ($mm) Dec 31, 2021 Dec 31, 2022 Change Total Assets 133.2 94.8 (38.4) Cash 84.9 46.8 (38.1) Accounts receivable and prepaid expenses 3.7 2.8 (0.9) Exploration and evaluation assets 43.2 43.2 - Property and equipment 1.4 2.0 0.6 T
Slide 31: Appendix
APPENDIX
Slide 32: Appendix: non-GAAP reconciliation
32 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 33: Appendix: non-GAAP reconciliation
33 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 34: Abundant, secure, low production cost and low ESG cost supply of metals
34 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 35: Technical resource statements issued on NORI + TOML
35 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 36: Resource definition: 2D resource allows effective definition
36 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 37: Nodule collection technology demonstrated in the 1970s
37 Nodule collection technology demonstrated in the 1970s. 1970’s pilot testing in CCZ Present Day Offshore Diamond Mining De Beers, NAMCO, Samicor Kennecott Copper Corp Ocean Management Inc. British Petroleum, Rio Tinto-Zinc Corp International Nickel Company Consolidated Gold Fields Metallgesellsch
Slide 38: Key objectives of NORI-D Pilot Collection System Test and Monitoring Campaign
38 Key objectives of NORI-D Pilot Collection System Test and Monitoring Campaign. Objective #1: Demonstrate integrated pilot system ✓ First successful integrated pilot capable of collecting and lifting nodules system test in CCZ since 1970s Objective #2: Collect ~3,600 wet tonnes of polymetallic ✓ 4
Slide 39: NORI-D project: expected production volumes
39 NORI-D project: expected production volumes. Nickel, kt Copper, kt 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 2043 2044 2045 2046 2024 2025
Slide 40: We expect to become the second lowest-cost nickel producer in the world
40 We expect to become the second lowest-cost nickel producer in the world. Nickel C1 cost curve on a by-products’ asis1 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 World’s cumulati e nickel pr
Slide 41: Sediment plumes: activists' speculation vs. published research
41 Sediment plumes acti ists’ speculation vs. published research. SPECULATION RESEARCH Deep-Sea Mining Statement Research published and field studies Midwater plume Signed by 653 people as of Nov 1, 2022 conducted in 2021-22 <10% of entrained Organized by Deep-Sea Conservation Coalition sediment fro
Slide 42: Our 2022 integrated collector test was audited by the ISA and deemed in compliance
42 Our 2022 integrated collector test was subject to audit by the ISA and was deemed to be in compliance. - ISA Compliance Assurance and Regulatory Management Unit (CARMU) released an inspection report in relation to NORI’s recent integrated collector system trials - CARMU attended a pre-planning me
Slide 43: Thank you
Gerard Barron, Chairman & CEO gerard@metals.co Thank you. Craig Shesky, CFO craig@metals.co Follow us
TMC the metals company — Q4 2022 Earnings Presentation on 6ix