Tmc The Metals Company Inc. · NASDAQ:TMC

Tmc The Metals — Q2 2022 Earnings Presentation

48 slides from Tmc The Metals's earnings presentation, Aug 15, 2022

  1. Slide 1: Q2 2022 Update: Unlocking the World's Largest Estimated Undeveloped Source of Battery Metals

    Q2 2022 Update: Unlocking the World’s Largest Estimated Undeveloped Source of Battery Metals August 15, 2022

  2. 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 (the “Com

  3. Slide 3: Agenda

    3 Agenda. Q2 2022 highlights 4 Equity financing 5 Market update 6 Lifecycle impacts 14 Regulatory update 16 NORI-D project update 19 Upcoming company milestones 28 Financial update 29 Appendix 35

  4. Slide 4: Major project development milestones achieved in Q2 2022, both offshore and onshore

    4 HIGHLIGHTS Major project development milestones achieved in Q2 2022, both offshore and onshore. Q2 results: Summary of TMC progress since last update: - Net loss of $12.4 million and loss per share of $0.05 for Q2 2022 compared to a net loss of $29.1 million and $0.15 per share in Q2 Offshore nodu

  5. Slide 5: $30M additional cash committed in a new equity issuance led by existing shareholders

    5 EQUITY FINANCING $30M additional cash committed in a new equity issuance led by $30M PIPE FINANCING existing shareholders $30.4 million committed through private investment in public equity (PIPE) including Allseas. Transaction announced on Monday, August 15 Key terms - 38M new shares issuable at

  6. Slide 6: Abundant, secure, low production cost and low ESG cost potential supply of metals

    6 MARKET UPDATE Abundant, secure, low production cost and low ESG Abundant 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 th

  7. Slide 7: U.S. Inflation Reduction Act of 2022 tackles American energy security

    7 MARKET UPDATE U.S. Inflation Reduction Act CURRENT SITUATION (IRA) of 2022 tackles ~50,000-mile supply chain controlled by China American energy security... Metals mining Refining Cathode production Battery cell production “The Inflation Reduction Act1… …Increases American energy security through

  8. Slide 8: ...and creates favorable conditions for nodules

    8 MARKET UPDATE …and creates favorable POTENTIAL NODULE SOLUTION conditions for nodules. OFF U.S. WESTERN SEABOARD ~1,500-mile supply chain re-shored in the Unites States Battery cell production “The Inflation Reduction Act… Metals mining Refining Cathode production* Includes direct consumer incenti

  9. Slide 9: For nickel, nearly all net supply growth on land is expected from Indonesia

    9 MARKET UPDATE For nickel, nearly all net supply growth on land is expected to come from Indonesia, which is not a U.S. FTA partner. Global terrestrial nickel production forecast Kilotonnes per annum Rest of World Indonesia 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2015 2016 2017 2018 2019

  10. Slide 10: Total CCZ nodule resource is estimated to be much bigger than critical mineral reserves

    10 MARKET UPDATE Total CCZ nodule resource is estimated to be much bigger than critical mineral reserves Total estimated CCZ nodule resource U.S. FTA partner of countries with U.S. FTAs. Not a U.S. FTA partner Nickel Cobalt Manganese Million metric tons Million metric tons Million metric tons 274 44

  11. Slide 11: TMC technical resource statements issued on NORI and TOML

    11 MARKET UPDATE 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

  12. Slide 12: #1 and #2 largest undeveloped nickel projects on the planet

    12 MARKET UPDATE 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), in Mt1

  13. Slide 13: Growing recognition of the seafloor solution and the rainforest nickel problem

    13 MARKET UPDATE Growing recognition of …and growing recognition of the seafloor solution… the rainforest nickel problem. Admiral Blair op-ed on seafloor nodules, Jun 2022: Tiyashi Datta on potential TSLA rainforest nickel, Jul 2022: “Securing new supplies of battery-grade nickel should be a “Dozens

  14. Slide 14: Our first Impact Report released

    14 LIFECYCLE IMPACTS Our first Impact Report released. 2021 Sustainability Highlights:

  15. Slide 15: Existing LCA suggests nodules may offer a lower impact source for nickel

    15 LIFECYCLE IMPACTS GHG emissions Carbon sinks at risk Existing LCA kgCO2-eq per kg of nickel, lifecycle impacts kgCO2-eq per kg of nickel, lifecycle impacts suggests nodules Laterites Laterites may offer a lower Matte via NPI Laterites impact source for HPAL Sulfides nickel. Benchmark Sulfides Min

  16. 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 bey

  17. Slide 17: ISA process targeting final regulations by July 2023

    17 REGULATORY UPDATE ISA process targeting final regulations by July 2023. Timeline July 2020 ISA stated goal for adoption was delayed due to COVID 9 July 2021 Government of Nauru (Sponsor of NORI) submitted a 2-year notice Dec 2021 In-person ISA meetings resume in Jamaica, after a nearly 2-year hia

  18. Slide 18: ISA finished a month-long working session in Jamaica in August

    18 REGULATORY UPDATE ISA finished a month-long ISA Council working session in Jamaica in August. ISA 27th session Part II Legal and Technical Commission 4-15 July 2022 Finance Committee 13-15 July 2022 Council 18-29 July 2022 Assembly 1-5 August 2022 ISA Finance Committee ISA Assembly

  19. Slide 19: NORI-D project at a glance

    19 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

  20. Slide 20: NORI-D project estimated at $6.8 billion NPV based on SEC-compliant Initial Assessment

    20 NORI-D PROJECT UPDATE Based on SEC-compliant NORI-D Financial Model 2 $ billions unless otherwise noted Initial Assessment, NORI-D project estimated at $6.8 Prices CRU forecast Current price Increase billion NPV (est. $15.2 billion Nickel $16,106/t $23,212/t 44% using current metal prices). Coppe

  21. Slide 21: Key milestones and de-risking events ahead to unlock value

    21 NORI-D PROJECT UPDATE Key milestones and de-risking events ahead to unlock value. Expected timing H2 2022 H2 2023 H2 2023 H2 2024 H2 2024 and beyond De-risking milestones Pilot Collection Test ISA Exploitation NORI-D Exploitation NORI-D Exploitation NORI-D Project Zero P0 offshore/onshore terms R

  22. Slide 22: Major de-risking steps on the path to potential production and lower pre-production CAPEX

    22 NORI-D PROJECT UPDATE Major de-risking PROJECT ZERO steps on the path Project Zero costs borne by TMC prior to production reduced from US$193M to ~US$55M1 to potential OFFSHORE ONSHORE Expected start: Q4 2024 Expected start: Q4 2024 production and Expected production: Expected production: signifi

  23. Slide 23: Offshore progress: ongoing testing of Pilot Collection System

    23 NORI-D PROJECT UPDATE Offshore progress: ongoing testing of Pilot Collection Completed Ongoing/upcoming System before planned upgrade to Project Zero System. PILOT COLLECTOR SYSTEM TEST PROGRAM 2022 January Riser acceptance test February Thruster re-lift, dockside vessel commissioning, review of

  24. Slide 24: Additional images of Pilot Collection System taken during testing in North Atlantic

    24 NORI-D PROJECT UPDATE Additional images of Pilot Collection System taken during testing in North Atlantic.

  25. Slide 25: Video available at vimeo

    25 Video available at: https://vimeo.com/739618697

  26. Slide 26: New world-class partnerships to manage and monitor impacts

    26 NORI-D PROJECT UPDATE New world-class Australia’s National Science Agency A Crown Research Institute of New Zealand partnerships to manage & monitor impacts and provide eyes and ears on future operations. About CSIRO: About NIWA: - Commonwealth Scientific Industrial Research - National Institute

  27. Slide 27: Video available at vimeo

    27 Video available at: https://vimeo.com/645332455

  28. Slide 28: Completion of major milestones in the first half of 2022 with more expected in the second half

    28 UPCOMING COMPANY MILESTONES Completed Completion of major milestones in Ongoing/upcoming the first half of 2022 with more expected in the second half. Project Zero offtakes & strategic partnerships - Finalize agreement with Epsilon Carbon - Finalize agreement with Allseas - Secure offtake for NiC

  29. Slide 29: Income statement highlights: three months ended June 30, 2022

    29 FINANCIAL UPDATE Income statement highlights: three months ended June 30, 2022. ($mm) Q2 2021 Q2 2022 Change Exploration expenses 18.2 10.0 (8.2) Offshore technology development and campaigns 6.8 3.6 (3.2) Environmental program 0.4 1.8 1.4 Onshore flowsheet development 0.5 0.1 (0.4) Project devel

  30. Slide 30: Cash flow highlights: three months ended June 30, 2022

    30 FINANCIAL UPDATE Cash flow highlights: three months ended June 30, 2022. ($mm) Q2 2021 Q2 2022 Change Cash used in operating activities 7.8 22.6 14.8 Capital expenditures 1.6 0.3 (1.3) Settlement of deferred acquisition costs 1.2 (1.2) Acquisition of equipment 0.4 0.3 (0.1) Less non-recurring ite

  31. Slide 31: Balance sheet highlights: as at June 30, 2022

    31 FINANCIAL UPDATE Balance sheet highlights: as at June 30, 2022. ($mm) Dec 31, 2021 Jun 30, 2022 Change Total Assets 133.2 96.2 (37.0) Cash 84.9 46.3 (38.6) Accounts receivable and prepaid expenses 3.7 4.7 1.0 Exploration and evaluation assets 43.2 43.2 - Property and equipment 1.4 2.0 0.6 Total L

  32. Slide 32: Income statement highlights: six months ended June 30, 2022

    32 FINANCIAL UPDATE Income statement highlights: six months ended June 30, 2022. ($mm) YTD 2021 YTD 2022 Change Exploration expenses 56.3 17.3 (39.0) Offshore technology development and campaigns 23.5 5.4 (18.1) Environmental program 1.9 2.9 1.0 Onshore flowsheet development 0.9 0.2 (0.7) Project de

  33. Slide 33: Cash flow highlights: six months ended June 30, 2022

    33 FINANCIAL UPDATE Cash flow highlights: six months ended June 30, 2022. ($mm) YTD 2021 YTD 2022 Change Cash used in operating activities 17.9 38.1 20.2 Capital expenditures 3.8 0.5 (3.3) Settlement of deferred acquisition costs 3.4 (3.4) Acquisition of equipment 0.4 0.5 0.1 Less non-recurring item

  34. Slide 34: Q&A

    Investor Contact investors@metals.co Q&A. Media Contact media@metals.co Follow us

  35. Slide 35: Appendix

    Appendix

  36. 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

  37. Slide 37: Appendix: non-GAAP reconciliation

    37 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

  38. Slide 38: Here is what a polymetallic nodule field looks like

    38 Here is what a polymetallic nodule field looks like.

  39. Slide 39: Resource definition: 2D resource allows effective definition through sampling and imagery

    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

  40. Slide 40: Nodule collection technology demonstrated in the 1970s

    40 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

  41. Slide 41: Onshore, we have demonstrated we can turn nodules into manganese silicate and NiCuCo alloy and matte

    41 Onshore, we have demonstrated Better BetterBetter Metals Metals for Metals for for EVs 26 EVsEVs 26 26 we can turn nodules into nshore nshore nshore development: development: development: manganese silicate and NiCuCo ilotilot ilot lant lant rogress rogress lant rogress alloy & matte. WeWeWe will

  42. Slide 42: NORI-D project: expected production volumes

    42 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

  43. Slide 43: We expect to become the second lowest-cost nickel producer in the world

    43 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 Wo r l d ’s c u m u l a t i

  44. Slide 44: Near term focus on Project Zero, with plan to scale quickly

    44 Near term focus on Project Zero, with plan to Products Production3 scale quickly. Nickel 125 Kt Manganese 2,903 Kt Copper 93 Kt NiCuCo alloy 25Kt Cobalt 10 Kt Mn in silicate 303Kt Fertilizer 254 Kt PROJECT ZERO ~$55M PROJECT ONE 1.3Mt (wet) Project Zero construction and 12.5Mt (wet) 1.0Mt (dry) e

  45. Slide 45: Marine minerals: why we only focus on nodules

    45 Marine minerals: why we only focus on nodules. Polymetallic nodules Cobalt crusts Seafloor massive sulfides (SMS) 27 28 25 78 29 79 47 30 25 28 29 27 Mn Ni Cu Co Co Ni Nickel Mn Manganese Pt Platinum Cu Copper AuGold AgSilver Zn Zinc Cobalt Manganese Nickel Copper Cobalt 58.693 54.938 195.084 196

  46. Slide 46: Remoteness and depth of the site has several advantages

    46 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 value incorporates an

  47. Slide 47: GSR pilot collector test

    47 GSR pilot collector test. Source: First test of a manganese nodule collector in around four kilometers of water: research consortium successfully completes monitoring of environmental impacts in Video available at: https://vimeo.com/653068330/7f4d928878 the Pacific, BGR press release, May 12, 202

  48. Slide 48: And here is what the seafloor looks like after a pilot collector test

    48 And here is what the seafloor looks like after a pilot collector test. Source: First test of a manganese nodule collector in around four kilometers of water: research consortium successfully completes monitoring of environmental impacts in the Pacific, BGR press release, May 12, 2021

TMC the metals company — Q2 2022 Earnings Presentation on 6ix