Tmc The Metals Company Inc. · NASDAQ:TMC
Tmc The Metals — Q1 2022 Earnings Presentation
45 slides from Tmc The Metals's earnings presentation, May 9, 2022
Slide 1: Q1 2022 Update: Unlocking the World's Largest Estimated Undeveloped Source of Battery Metals
Q1 2022 Update: Unlocking the World’s Largest Estimated Undeveloped Source of Battery Metals. May 9, 2022
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
Slide 3: Agenda
3 Agenda. TMC value proposition 4 Nodule resource overview 6 Q1 2022 highlights 8 Project development progress 9 Growing public support for nodules 15 ESG case for nodules 18 Regulatory progress 24 Upcoming milestones for TMC 26 Financial update and project economics 27 Appendix 33
Slide 4: Our value proposition: abundant, secure, low production cost, low ESG cost supply of metals
4 OUR VALUE PROPOSITION 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 Locat
Slide 5: TMC: #1 and #2 largest undeveloped nickel projects on the planet
5 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 6: Technical resource statements issued on NORI and TOML
6 NODULE RESOURCE OVERVIEW 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 US passenger car fleet1. TMC exploration contract area NORI2 TOML3 Marawa Sponsoring Republic of Kingdom of Republic of Stat
Slide 7: NORI-D project: expected production volumes
7 NODULE RESOURCE OVERVIEW NORI-D project: expected production Nickel, kt Copper, kt volumes. 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
Slide 8: Major project development milestones achieved in Q1 2022
8 Q1 2022 HIGHLIGHTS Major project development milestones achieved in Q1 2022, both offshore and onshore. Q1 results: Q1 2022 summary of progress: - Net loss of $21.1 million and loss per share of $0.09 for Q1 2022 compared to a net loss of $55.7 million Offshore nodule collection system and $0.29 p
Slide 9: Major de-risking steps on the path to potential production
9 PROJECT DEVELOPMENT PROGRESS 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: s
Slide 10: Offshore progress: ongoing testing of Pilot Collection System
10 PROJECT DEVELOPMENT PROGRESS Offshore progress: ongoing testing of Pilot Collection 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 nodule offloading &
Slide 11: Video: pilot collector test
Video available at: https://vimeo.com/705860453}
Slide 12: Offshore progress: collector driving 1km on the seafloor
12 PROJECT DEVELOPMENT PROGRESS Offshore progress: nodule collector vehicle driving a distance of 1km on the seafloor at ~2,500m depth.
Slide 13: Onshore progress: partnering with Epsilon Carbon for Project Zero
13 PROJECT DEVELOPMENT PROGRESS Onshore progress: partnering with Epsilon Carbon for Project Zero. - Established in 2010 as world-class supplier of carbon-based products - Long-term exclusive raw materials (steel waste stream) purchase agreement with JSW Steel, India’s largest steel manufacturer - S
Slide 14: Onshore progress: SINTEF study on manganese silicate
14 PROJECT DEVELOPMENT PROGRESS Onshore progress: SINTEF study suggests that TMC manganese silicate (MnSi) has significant advantages on cost and CO2 NORI-D projected revenue by product1 footprint over conventional Mn 29 ores for steel. Cu Copper 63.546 - SINTEF, one of Europe’s largest independent
Slide 15: Recent letters from US political and military leaders on seafloor resources
15 GROWING SUPPORT FOR NODULES Recent letters from US political and military leaders discussing seafloor resources. Letter from Senator Marco Rubio (Florida) to Volkswagen on Letter from Senator Lisa Murkowski (Alaska) to US terrestrial and seafloor metals, April 2022: Secretary of Energy, February
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Slide 17: Growing recognition of the seafloor solution
17 GROWING SUPPORT FOR NODULES Growing recognition of …and growing recognition of the seafloor solution… the rainforest nickel problem. Fareed Zakaria on seafloor resources, April 2022: Matt Fernley on VW rainforest nickel/cobalt sourcing, April 2022: “If people want to protect the planet from clima
Slide 18: Existing LCA suggests nodules may offer a lower impact source for nickel
18 ESG CASE FOR NODULES 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
Slide 19: Nearly all net nickel supply growth on land expected from Indonesia
19 ESG CASE FOR NODULES For nickel, nearly all net supply growth on land is expected to come from Indonesia, most of which has guaranteed offtake by China. Global terrestrial nickel production forecast Kilotonnes per annum Rest of World Indonesia 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000
Slide 20: The alternative to nodules: nickel mining in Indonesia
20 ESG CASE FOR NODULES The alternative to nodules: deforestation, tailings, high emissions, and enormous waste. NICKEL MINING IN INDONESIA.
Slide 21: Precautionary principle favors responsible development of polymetallic nodules
21 ESG CASE FOR NODULES Precautionary principle: a true Precautionary approach: reading of both parts favors - 43% of CCZ already under protection1 - Decades of research prior to operations the responsible development - Digital twin offers real-time transparency of polymetallic nodules. Precautionar
Slide 22: Nodule exploration areas represent <0.5% of the global seafloor
22 ESG CASE FOR NODULES Nodule exploration areas represent <0.5% of the global seafloor. Protected areas, CCZ 1.97m km2 = 26 squares Global seafloor 361m km2 = 4,800 squares Nodules exploration areas, CCZ 1.28m km2 = 17 squares TMC nodules exploration areas, CCZ 0.15m km2 = 2 squares (NORI & TOML)
Slide 23: Trawling impacts 175x more seafloor every year than potential nodule collection
23 ESG CASE FOR NODULES Trawling today impacts 175x more Future seafloor use Offshore wind 2050: seafloor use2 seafloor every year than potential Current seafloor use 0.42 m km2 = 6 squares Global seafloor Trawling: annual seafloor use1 Nodule collection: annual seafloor use3 nodule collection tomor
Slide 24: ISA process on track for final regulations by July 2023
24 REGULATORY PROGRESS ISA process on track for 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 yea
Slide 25: Increased meeting cadence at ISA
25 REGULATORY PROGRESS Increased meeting cadence at ISA, with recent sessions in December & March and scheduled sessions for July & November. Following 2-year notice given by Nauru, the ISA proposed a work plan to finalize the regulations by 9 July 2023: “IV. Proposed roadmap for 2022 and 2023: …In
Slide 26: Major milestones expected in 2022
26 UPCOMING MILESTONES FOR TMC Major milestones expected in 2022 to keep TMC on track for estimated first production by end of 2024. Project Zero offtakes & strategic partnerships Completed - Finalize agreement with Epsilon Carbon Ongoing/upcoming - Finalize agreement with Allseas - Secure offtake f
Slide 27: Prices for critical metals including nickel have jumped substantially
27 PROJECT ECONOMICS Since the beginning of Q4 2021, prices for critical metals including nickel have jumped substantially. 180% - Nickel price increases are still well below those of lithium 160% carbonate which have increased by nearly 600% since the beginning of 2021 140% - Benchmark Minerals (BM
Slide 28: NORI-D project estimated at $6.8 billion NPV
28 PROJECT ECONOMICS 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. $22.0 billion Nickel $16,106/t $29,210/t 81% using current metal prices). Copper $6
Slide 29: Income statement highlights: three months ended March 31, 2022
29 FINANCIAL UPDATE Income statement highlights: three months ended March 31, 2022. ($mm) Q1 2021 Q1 2022 Change Exploration expenses 38.1 7.3 (30.8) Offshore campaigns and technology development 16.7 1.8 (14.9) Environmental program 1.5 1.1 (0.4) Onshore flowsheet development 0.4 0.1 (0.3) Project
Slide 30: Cash flow highlights: three months ended March 31, 2022
30 FINANCIAL UPDATE Cash flow highlights: three months ended March 31, 2022. ($mm) Q1 2021 Q1 2022 Change Cash used in operating activities 10.1 15.5 5.4 Cash used in investing activities 2.2 0.2 (2.0) Settlement of deferred acquisition costs 2.2 - (2.2) Acquisition of equipment - 0.2 0.2 Less: non-
Slide 31: Balance sheet highlights: as at March 31, 2022
31 FINANCIAL UPDATE Balance sheet highlights: as at March 31, 2022. ($mm) Dec 31, 2021 Mar 31, 2022 Change Total assets 133.2 116.7 (16.5) Cash 84.9 69.0 (15.9) Receivables and prepayments 3.7 3.0 (0.7) Exploration contracts 43.2 43.2 - Equipment 1.4 1.5 0.1 Total liabilities 40.4 37.0 (3.4) Account
Slide 32: Thank you
Investor Contact investors@metals.co Thank you. Media Contact media@metals.co Follow us
Slide 33: Appendix
Appendix
Slide 34: Appendix: non-GAAP reconciliation
34 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 35: TMC is positioned at the intersection of three megatrends
35 TMC is positioned at $5 trillion the intersection of Total addressable market for EVs over the next decade1 three megatrends in Electrification: the green transition. batteries for EVs and renewables $2 trillion Cumulative mining investment required to limit rise in global temperatures to 2°C2 ES
Slide 36: Here is what a polymetallic nodule field looks like
36 Here is what a polymetallic nodule field looks like.
Slide 37: Resource definition: 2D resource allows effective definition
37 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 38: Nodule collection technology demonstrated in the 1970s
38 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 39: Onshore, we have demonstrated we can turn nodules into manganese silicate and NiCuCo matte
39 Onshore, we have demonstrated Better BetterBetter Metals Metals for for for EVs Metals2 EVsEVs 2 2 we can turn nodules into nshore nshore nshore development: development: development: manganese silicate andPilot NiCuCo Pilot Plant Plant Progress. Progress. Pilot Plant Progress. alloy & matte. WeW
Slide 40: Near term focus on Project Zero, with plan to scale quickly
40 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
Slide 41: Nodules: increasingly recognized as a game-changer
41 Nodules: increasingly US Geological Survey, Mar 2020: NOAA report to US International Renewable “Deep-ocean mining can not only Congress, Dec 1995: Energy Agency, Mar 2022: recognized as a game- deliver the metals necessary for this “NOAA’s 1975-1980 Deep “Subsea manganese changer by experts and
Slide 42: Marine minerals: why we only focus on nodules
42 Marine minerals: why we only focus on nodules. 3,800-5,500m depth 800-2,500m depth 1,000-4,000m depth The Abyssal Plains Seamounts Hydrothermal vents Polymetallic nodules Cobalt crusts Seafloor massive sulfides 2-30 cm diameter discrete rocks formed by dissolved 2-26 cm thick, rock-hard, metallic
Slide 43: Remoteness and depth of the site has several advantages
43 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
Slide 44: GSR pilot collector test
44 GSR pilot collector test. Video available at: https://vimeo.com/653068330/7f4d928878 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, 202
Slide 45: Seafloor after a pilot collector test
45 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 — Q1 2022 Earnings Presentation on 6ix