Tmc The Metals Company Inc. · NASDAQ:TMC
Tmc The Metals — Q1 2023 Earnings Presentation
39 slides from Tmc The Metals's earnings presentation, May 11, 2023
Slide 1: The Metals Company Q1 2023 Corporate Update
The Metals Company Q1 2023 Corporate Update: Unlocking the World’s Largest Estimated Undeveloped Source of Battery Metals May 11, 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: Q1 2023 summary: key partnerships, ESG milestones and additional financial flexibility
3 HIGHLIGHTS Q1 2023 summary: key Milestones achieved in Q1: partnerships, ESG milestones - Extensive deep-sea environmental data submission to the ISA: In March 2023, we announced that our wholly-owned subsidiary Nauru Ocean Resources Inc. (NORI) had begun the process of and additional financial fl
Slide 4: Agenda
4 Agenda. Regulatory update 5 Market update 9 Our value proposition 11 NORI-D project update 15 ESG case for TMC 19 Financial update 25 Appendix 31
Slide 5: Regulated by the International Seabed Authority established in 1994 by UNCLOS
5 REGULATORY UPDATE Regulated by the International Seabed UNCLOS Parties UNCLOS Signatories Authority established UNCLOS Parties Calling For Pause / Moratorium in Int’l Waters Chile, Costa Rica, Dominican Republic, Ecuador, FSM, Fiji, France, in 1994 by UNCLOS. Germany, New Zealand, Palau, Panama, S
Slide 6: Recent reporting on the ISA suggesting commercial nodule collection is a question of when
6 REGULATORY UPDATE Recent reporting on the ISA suggesting commercial nodule collection is now a question of ‘when,’ not ‘if.’ Eric Lipton: “Doesn’t appear to be UN to start taking deep-sea enough votes to indefinitely block mining applications this July mining…it appears it is a question of March 2
Slide 7: Our take, following the March ISA session
7 REGULATORY UPDATE Our take, following the March ISA session. - We were pleased to see the progress made by Member States during the recent 2+ week ISA Council meeting - All States reiterated their commitment to the adoption of the rules, regulations and procedures (Mining Code) - The ISA Council c
Slide 8: ISA continuing progress toward final regulations
8 REGULATORY UPDATE ISA continuing 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 the Development of a Regu
Slide 9: Recent global headlines reflect increasing investment and interest in seafloor resources
9 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 10: and prioritization of seafloor resources by Chinese leadership
10 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 rele
Slide 11: TMC: an in situ estimated resource of Ni, Cu, Co and Mn sufficient to electrify the U.S. car fleet
11 OUR VALUE PROPOSITION TMC: an in situ estimated resource of The Metals Company Ni, Cu, Co and Mn sufficient to electrify 15,700,000 t Ni / 2,400,000 t Co / 13,300,000 t Cu / 350,000,000 t Mn Total Resource the entire U.S. passenger car fleet1. Estimated In situ quantities of nickel, copper, cobal
Slide 12: TMC: ranked #1 and #2 largest undeveloped nickel projects
12 OUR VALUE PROPOSITION TMC: ranked in 2022 and 2023 as #1 and #2 largest undeveloped nickel projects on the planet; 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, ind
Slide 13: Grade matters: declining grades in nickel and copper on land
13 OUR VALUE PROPOSITION Grade matters: declining grades in NORI-D nickel equivalent (NiEq) grade of 3.2%, nickel and copper on land, reducing with four key metals in one resource1 returns and increasing environmental impacts for the same amount of metal. Nickel Grades (%) Copper Grades (%) Nodules
Slide 14: TMC an outlier among peers with largest NiEq resource and highest NiEq 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: NORI-D Project spans from seafloor to factory gate
15 NORI-D PROJECT UPDATE NORI-D Project spans from seafloor to factory gate while NORI-D application is focused on offshore nodule collection. ISA JURISDICTION NORI-D APPLICATION NORI-D PROJECT Battery & steel manufacturing >> end use
Slide 16: Processing nodules: near-zero-waste metallurgical process
16 NORI-D PROJECT UPDATE Processing nodules: We developed a near-zero- waste metallurgical process that uses all of nodule mass.
Slide 17: MoU with PAMCO to explore processing nodules at existing RKEF facility in Japan
17 NORI-D PROJECT UPDATE MoU with PAMCO 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 year of wet n
Slide 18: Pilot collection system test and environmental impact monitoring campaign completed in Dec 2022
18 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 19: Biological and physical impacts: engaged leading research institutions and companies
19 NORI-D PROJECT UPDATE Biological and physical impacts: engaged leading research institutions and companies. Over 200 terabytes of data collected in 2022 alone.
Slide 20: Video available at vimeo.com/807598753
20 Video available at: https://vimeo.com/807598753
Slide 21: Sediment plumes: research now based on in-field observation
21 ESG CASE FOR TMC 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 <10% of entrained Organized by Deep-Sea Conservation Coalition conducted in 2021-22 sediment
Slide 22: Video available at vimeo.com/776734700
22 Video available at: https://vimeo.com/776734700
Slide 23: Benchmark LCA: Nickel from NORI-D nodules could have lower impacts than land-based routes
23 ESG CASE FOR TMC Benchmark LCA: Nickel from NORI-D nodules could have lower impacts than compared land-based production routes across every category measured.
Slide 24: Our sponsoring states: social benefits and avoided human impact are often overlooked
24 ESG CASE FOR TMC 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 pro
Slide 25: Based on SEC-compliant Initial Assessment, NORI-D project estimated at $6.8 billion NPV
25 FINANCIAL UPDATE 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 billion NPV (est. $13.2 billion Nickel price forecast $
Slide 26: TMC trading at ~20x lower multiple than average for selected nickel developers
26 FINANCIAL UPDATE TMC trading at ~20x lower multiple than average for selected nickel developers, using NPV at current prices for NORI-D alone (22% of total estimated resource). Price / NAV 0.8 0.69 Price / Fundamental Value for Nickel Developers 0.7 0.6 0.5 0.4 0.29x P/NAV 0.36 Peer Average for 0
Slide 27: Key de-risking milestones ahead to unlock NORI-D project value
27 FINANCIAL UPDATE Key de-risking milestones ahead to unlock NORI-D project value. Expected timing H2 2022 / 2023 Est. H2 2023 Est. H2 2023 Est. 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
Slide 28: Income statement highlights: three months ended March 31, 2023
28 FINANCIAL UPDATE Income statement highlights: three months ended March 31, 2023. ($mm) Q1 2022 Q1 2023 Change Exploration and evaluation expenses 7.4 7.2 (0.2) General and administrative expenses 8.5 6.2 (2.3) Operating loss 15.9 13.4 (2.5) Equity-accounted investment loss - 0.2 0.2 Gain on dispo
Slide 29: Cash flow highlights: three months ended March 31, 2023
29 FINANCIAL UPDATE Cash flow highlights: three months ended March 31, 2023. ($mm) Q1 2022 Q1 2023 Change Cash used in operating activities 15.5 23.5 8.0 Capital expenditures 0.2 - (0.2) Acquisition of equipment 0.2 - (0.2) Free cash outflow 15.7 23.5 7.8
Slide 30: Balance sheet highlights: as of March 31, 2023
30 FINANCIAL UPDATE Balance sheet highlights: as of March 31, 2023. ($mm) Dec 31, 2022 Mar 31, 2023 Change Total Assets 94.8 85.3 (9.5) Cash 46.8 28.4 (18.4) Accounts receivable and prepaid expenses 2.8 3.2 0.4 Exploration and evaluation assets 43.2 42.9 (0.3) Property and equipment 2.0 2.0 - Invest
Slide 31: Appendix
APPENDIX
Slide 32: Here is what a polymetallic nodule field looks like
32 Here is what a polymetallic nodule field looks like.
Slide 33: Abundant, secure, low production cost and low ESG cost potential supply of metals
33 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 34: Resource definition: 2D resource allows effective definition through sampling and imagery
34 Resource definition: 2D resource allows effective definition BOX CORE SAMPLING 1 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 35: TMC: 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: ~3,000 tonnes of nodules inside the hold of Hidden Gem
~3,000 tonnes of nodules inside the hold of Hidden Gem.
Slide 37: We have demonstrated we can turn nodules into manganese silicate and NiCuCo alloy & matte
37 We have demonstrated we can turn nodules into manganese silicate and NiCuCo alloy & matte. Calcining image Calcining nodules at FLSmidth’s facilities in Smelting nodules in an Electric Arc Converting NiCuCo alloy into Matte pour post converting. End- Whitehall, Pennsylvania. Furnace at XPS facili
Slide 38: NORI-D project: expected production volumes from 2021 Initial Assessment
38 NORI-D project: expected production volumes from Nickel, kt Copper, kt 2021 Initial 150 120 Assessment. 130 100 110 80 100% 90 1,634Mt (wet) 60 70 50 ~125 ktpa ~93 ktpa 40 30 20 10 TOML + Rest of -10 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 20
Slide 39: We expect to become the second lowest-cost nickel producer in the world
39 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 0 Wo r l d ’s c u m u l a t
TMC the metals company — Q1 2023 Earnings Presentation on 6ix