Q1 2025 TMC Metals Co Earnings Call
Okay.
Speaker Change: Good day and thank you for standing by welcome to the metals Company first quarter 2025, corporate update conference call.
Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question.
Speaker Change: During the session you will need to press star one on your telephone.
Speaker Change: And here an automated message advising you. Your hand is raised to withdraw your question. Please press star. One again, please be advised to today's conference is being recorded I would now like to hand, the conference over to your speaker today.
Speaker Change: <unk> Chief Financial Officer. Please go ahead Sir.
Michelle: Thank you Michelle.
Speaker Change: Please note that during this call certain statements made by the company will be forward looking and based on management's beliefs and assumptions from information available. At this time. These statements are subject to known and unknown risks and uncertainties many of which may be beyond our control.
Speaker Change: Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law. We undertake no obligation to update any forward looking statements.
Speaker Change: Our remarks today May also include non-GAAP financial measures, including with respect to free cash flows and additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call you're welcome to follow along with our slide deck of work joining by phone you can access it at any time at investors.
Metals Duffy: Metals Duffy.
Speaker Change: Now I'll turn the conference call over to our chairman and CEO Jared Baird.
Thank you Greg well, usually also this quarter conference calls or requires as they occur roughly six weeks all throughout year end report that we have just experienced a six week period in which our company and this industry have taken some historic leaps forward.
Speaker Change: While the Trump executive order on seabed minerals had been rumored for some time in the media.
Speaker Change: Our application months ahead of expectations was not.
Speaker Change: And I'd like to personally thank our team for their tremendous efforts to get these three applications over the line in an accelerated fashion.
Given all of the Derisking milestones achieved since our company's inception, we believe that the one thing previously holding back our stock price was the lack of a clear regulatory pathway and we believe we now have it and frankly I don't think the market has accurately priced that in despite a nice run up this year, we believe that.
Speaker Change: The spring remains tightly coiled for the stock.
Speaker Change: We were cognizant that another key overhanging the stock was fundraising.
Speaker Change: And we've seen short interest tick upward and even after some incredible achievements, we did not want to drift into summer without shoring up the cash balance so.
Speaker Change: This week, we did just that through a 37 million registered direct offering from Michael Hess, and Brian tastes, Braga and as existing strategic investor in TMC.
Speaker Change: These are all parties that want to be with us for the long haul and we're ready willing and able to roll up their sleeves to help us continue to create shareholder value through significant experience in networks in the resource space, both offshore and onshore.
Speaker Change: Michael has from the has corporate family has 15 years of exploration and production experience as both an investor and operator, along with deep relationships across the United States and Brian tastes, Roger as a long time investor in TMC former Board member when the company was doing his deep green and continues to be a valuable supporter of the <unk>.
Speaker Change: <unk> had a good trend and I'd like to take this opportunity to officially welcome our newest member of the executive team rocket Bosland.
Speaker Change: <unk> joins us from our partner all six and was the pioneer in engineering technical lead on the development of that Nacho collection system, leading up to the successful test in 2022 in which we lifted or the 3000 tons of nodules to the surface.
Speaker Change: And as our Chief innovation and offshore Technology Officer Roku is already played a key role in optimizing the performance of our commercial scale Nacho collection system. The.
Speaker Change: The teams at TMC and also all these are excited about the <unk>.
Speaker Change: Continuity maintained on this project as we work together to drive toward commercial readiness.
So here's our agenda for today and while the milestones achieved in the last two months. Our historic we're just getting warmed up and I'm very excited about some key catalysts in the near term.
Speaker Change: Last later this quarter, we expect to all applications for exploration licenses and a commercial recovery pattern to be deemed substantially compliant and complete respectively by NOAA, which kicks off the next stage of technical Environmental review.
Speaker Change: Also this quarter, we expect further detail from the Commerce Department and Noah on tangible actions to expedite these review processes and look forward to providing a more definitive step by step permitting timeline to the market soon after.
Speaker Change: We will continue to explore alternative financing sources with U S government departments and agencies as directed in the executive order as well as strategic partners to prepare for commercial production.
But let me be very clear.
Speaker Change: The equity round, just announced is more than sufficient to get us past the expected review process on a commercial recovery coming.
Speaker Change: Finally, we are pleased to announce that our PFS will be completed next quarter. So the commercial recovery area, which ever which we applied allowing us to reflect new assumptions made possible by our U S. Permitting strategy. So that with this path to commercial production now coming into focus we intend to provide more clarity.
Speaker Change: On the potential valuation across our total estimated resource beyond <unk>.
Speaker Change: So as most of you know on April 28, TNC USA submitted the world's first application to the U S government or a commercial recovery tablet for deep sea minerals in international waters, alongside two exploration license applications under the deep sea bed hard mineral resources Act.
Speaker Change: This decision followed many months of due diligence and dialogue with the U S agencies and policymakers.
Speaker Change: We engaged multiple law firms to review dishwasher and know his long standing implementing regulations and establish stream work that is legally sound robust and enforceable.
Speaker Change: In the lead up to our application, we consulted extensively with Noah as to the regulatory requirements that we will be asked of us and since then have had productive engagements with them as well as the White house and members of Congress all of who recognize the strategic importance of this industry to America's energy security.
Speaker Change: <unk> and industrial base and.
Speaker Change: And we believe this U S based pathway offers the greatest probability of receiving a commercial planted in a timely transparent and legally robust manner, giving us clear line of sight to responsible commercial operations.
Speaker Change: The application areas for commercial production Cabos or the 25000 square kilometers and the clarity of the reserve.
Speaker Change: And this is ground, we've got to know very well, having conducted years environmental research and offshore resource evaluation.
Speaker Change: And where we've already defined measured and indicated resources.
Speaker Change: In parallel we've also submitted to exploration license applications, covering nearly 200000 square kilometers and based on our extensive data. We estimate these areas contain over $1 six $1 6 billion tonnes of modules with an additional 500 million tons of exploration.
Speaker Change: Upside, representing approximately 15, and a half million tonnes of nickel.
Speaker Change: $12 8 million tonnes of copper 2 million tonnes of cobalt and 345 million tons of manganese.
Speaker Change: We believe these license areas offer a shovel ready pathway to help deliver critical mineral independence to the United States and as noted in the recent executive order deliver over 100000 jobs and more than $300 billion in annual GDP.
Speaker Change: So America's role as a pioneer in deep sea mining in the high seas is often overlooked but president Trump's recent executive order reminded the world of that legacy.
Speaker Change: And robust regulatory framework already in place to support this industry.
Speaker Change: Notice the President's signature there in the middle of the map.
Speaker Change: And the order directs the secretary of Commerce to expedite permitting under the U S deep seabed mineral resources Act.
Speaker Change: And tasks multiple federal agencies, including defense and energy with assessing offtake opportunities and domestic processing capabilities.
Speaker Change: A further calls on key U S development finance agencies to identify tools to support the industry and in line with our long standing partnerships in the Pacific We welcomed the director for a joint Interagency assessment alongside U S allies on the feasibility of an international seabed benefit sharing.
Speaker Change: Mechanism and rest assured that we are having continuous and productive dialogues with the governments of Nauru Antonia on these points.
Speaker Change: And the signal is clear the United States is ready to again lead this industry backed by a transparent and enforceable legal framework.
Speaker Change: For TNC. This brings the regulatory clarity that we've been seeking for all application and supports the broader investment case for developing a strategic domestic supply chain based on deep sea bed minerals.
Speaker Change: It's refreshing to work with the regulator, there's not any transparent, but also support is flexible and even enthusiastic about the strategic importance of this industry.
Speaker Change: <unk> has publicly committed to expediting the review of applications and is dedicating the resources needed to avoid undue delays they've already taken steps to streamlined inter agency coordination something were already seen firsthand in our early consultations.
Speaker Change: The Department of Commerce has made clear that companies like house can apply today under existing U S law, while secretary of state Marco Rubio put it plainly the United States not China will lead the world in responsibly, unlocking seabed mineral resources and securing critical minerals supply chain.
Speaker Change: <unk> with our partners and allies.
Speaker Change: And we're encouraged by the level of professionalism and urgency from the U S agency that we have so far experienced.
Speaker Change: Some in the media also applauding the new U S focused pathway.
Speaker Change: We've always admired the economist for quality independent journalism and were pleased to see the paper once again return to the topic of.
Speaker Change: <unk> deep sea mining with two pieces in.
Speaker Change: And it's may 1st leader, the Paypal took stock of the executive orders for government agencies to ready themselves to start issuing commercial recovery patents for deep sea nodules.
Speaker Change: Had acknowledged Tmc's front runner position at the head of and I quote Mr. Trump's deep C Q.
Speaker Change: The paper also also had strong words to the ongoing regulatory delays at the international C that authority wanting that if the body wish to retain any influence over the development of this industry that it would do well to pay less heed to activist speculation and focus on fulfilling its legal mandate to establish regulation.
Speaker Change: <unk>.
Speaker Change: And while some media remains focused on speculative studies that ignore decades of real world data from offshore trials, it's encouraging to see the economist continue to acknowledge the need for tradeoffs and that sourcing metals from deep sea nodules is far less harmful than the destruction caused by <unk>.
Speaker Change: Spend in mining in bio diverse rainforest.
Speaker Change: With deep sea mining firmly in the spotlight I was honored to be invited to testify before the house natural resources Subcommittee on how nodules can help revitalize U S industry and manufacturing.
Speaker Change: In his opening remarks sure Paul Gaza urged his colleagues to consider the positive economic implications of seabed money and how the U S with its legacy of technological and environmental leadership can ensure the frontier isn't seeded to China.
Speaker Change: Echoing the sentiments my own testimony, which is available on the committee's website and Youtube spoke to the opportunity for the U S to reclaim leadership in an industry. It helped pioneer while strengthening critical mineral independents in Jumpstarting, a new era of American into industrial strength.
Speaker Change: Importantly, the hearing gave space for one of the world's leading scientists and sediment clues to directly counter actavis speculation and reinforce what the data actually shows Dr.
Speaker Change: Dr. Thomas Peacock, one of the world's leading experts on deep sea sediment plume dynamics at M. I T.
Speaker Change: One is that unfortunately, the latest scientific findings are not being used to guide decision, making on deep sea mining instead.
Speaker Change: Instead outdated and debunk claims from Actavis, such as the fallacies that operations could impact impact carbon sequestration or spreads sediment clues for thousands of miles are being amplified in the media despite having no basis in current scientific data.
Speaker Change: But hopefully that scale speculative narrative will continue to work itself out in the face of increasing infield observed data.
Speaker Change: Especially once we're in production.
Craig: I'd now like to turn it back over to Craig to discuss the results a little bit further.
Craig: Thanks Jared.
Speaker Change: So there is a remarkable correlation between the nodules mineral composition and the composition of EV battery cathodes and wiring.
Craig: So while lithium iron phosphate or LLP battery attractions chemistries have gained traction over 90% of the <unk> supply chain is in China.
Craig: And in the West nickel Rich Chemistries makeup over 65% of EV battery cathode sold today.
Craig: Most of that are expected to be sold in the future.
Craig: It was great to see today.
Craig: Excuse me yesterday, GM and LG chemical announce their excitement over our new lithium manganese rich or LMR catheter technology.
Craig: <unk> offers 33% greater energy density than LSP will be incomparable on cost with sales made up of 65% manganese at 35% nickel plus.
Craig: Plus typical ebs, requiring 100 to 200 pounds of copper there is going to be a very robust demand growth market to the metals contained and nodules.
Craig: Now as automakers come closer to delivering full autonomy study suggests that this will require as much battery power for computing as it would require for the powertrain, meaning energy dense nickel batteries should continue to be in high demand.
Craig: Still many opposition groups like to say, we don't need these metals so don't bother.
Craig: Well nobody asked it but the U S government on commodity experts globally would disagree.
Speaker Change: As a former metal analysts myself I am surprised at how many global NGL spokespeople also moonlight as commodity experts, but even if all of the current and future EV demand magically vanished the demand for our products will be just fine.
Speaker Change: These four metals are all deemed critical by the U S Department of energy or the U S. Geological survey due to their necessity and myriad applications for nickel that includes stainless steel generators turbines and power grid infrastructure for cobalt its aircraft engines magnets paints and Super alloys.
Speaker Change: For manganese includes carbon steel alloys, and building materials and for copper, it's basically everything wiring piping electronics traditional cars HVAC long haul transmission cables and also that includes a tremendous future power needs for the data center supporting artificial intelligence and other current and future technologies. So in.
Speaker Change: Now that we have a better sense of the users. We can also give you a sense of scale what would it mean for the U S to gain access to let's say 1 billion tonnes.
Speaker Change: The answer is that we would be transformational and if measured by current U S consumption 1 billion tons of nodules would provide 456 years of manganese 165 years of Kobalt 81 years of nickel and four years of copper.
Speaker Change: But it's worth remembering that it was U S companies in the U S government, including NOAA, which pioneered the evaluation and development of this resource back in the 19 seventies.
Speaker Change: Government developed a regulatory framework and conducted strategic environmental impact assessments.
Speaker Change: U S companies, including Transocean, you'll steal Lockheed Martin developed and piloted natural collection technology.
Speaker Change: So this U S leadership did slow however, when the U S did not ratified the UN convention of the Odyssey or on class B.
Speaker Change: The U S did have the foresight however to enact described so that the U S citizens and entities could access seabed resources in international waters.
As we've said going back to last quarter U S entities can apply to nowhere for exploration of commercial recovery licenses and because the U S has never submitted to the jurisdiction of the RSA. This U S law, obviously remains in full effect.
Speaker Change: There are a few handful of nations that have bilateral agreements with the U S regarding each other's activities in international waters, but beyond that U S. Law continues to offer freedom of activity in the Ics.
Speaker Change: Now over the last few weeks, we've gotten quite a few questions from investors and stakeholders on the legal side of this question.
Speaker Change: Many people ask about overlap between the USA, but mining code and the IFA, but that's not exactly the right way to think about the U S isn't claiming any ground or territory in international waters. This is not a question of overlap.
Speaker Change: Through different and the NOAA regulations. The U S is merely regulating the free activities of its citizens in international waters in accordance with any law that would apply to what citizens under the freedom of the Ics just as it would apply to somebody on a fishing boat.
Speaker Change: As our private subsidiary TMC USA doesn't bear obligations under Unclos Tmc's USAA's rights are solely defined by the laws of the United States.
Speaker Change: And on cost does not apply to the U S. Because the U S never ratified it nor did it ratified the 1994 IC implementation agreement.
Getting a bit technical but according to article 34, there'd be a convention on the law of treaties a treaty does not create either obligations or rights for a third state without consent.
Speaker Change: Another article 14 of ethane document a treaty is binding upon the state only one and has expressed its consent to be bound typically through ratification.
Speaker Change: So while the U S does not volatile the U S does excuse me voluntarily abide by certain aspects of bone clubs. The U S has never contradicted its original understanding of deep Sea mining is a freedom of the high seas and has steadfastly opposed part elevens framework for the IFA led exploitation of deep sea bed minerals.
Speaker Change: But turning back to our project.
Focusing on the onshore side of our operations in April of this year TMC and PEMCO welcomed over 50 representatives, including equity research analysts commodity traders steelmakers and battery consumers and some TMT employees, including myself to Pam Coast Chinoy plant in Japan for a site visit.
Speaker Change: During the tour attendance.
Speaker Change: Engineers about Tmc's commercial production flow sheet and the final specification.
Speaker Change: And they were given the opportunity to view samples of the products of course.
Speaker Change: In February of 2025, as we previously announced PEMCO successfully demonstrated the smelting of calcined at high grade nickel copper cobalt alloys, and manganese silicon products.
Speaker Change: By using <unk> existing facility TMT can eliminate the need for upfront onshore capital expenditures as part of its capital light approach.
Speaker Change: As a reminder, our application center or backed by one of the largest.
Speaker Change: Environmental dataset ever compiled.
Speaker Change: Just on work alongside dozens of respected research institutions, and well over $200 million accumulative environmental spending.
Speaker Change: Bottom line, we believe that we along with the research pioneer from nowhere and others before that.
Speaker Change: We've answered the questions posed for our environmental impact statement, which has now been launched as part of a process and we strongly believe that the time has come to move forward begin production and allowed the data collection to increase exponentially in share even more evidence on the manageable impacts of deep Sea natural collection.
Speaker Change: So now, let's turn to project economics, and the long anticipated pre feasibility study or PFS.
Speaker Change: As Jerry noted upfront, we expect to release next quarter, our PFS for our first commercial production area, but on top of that some additional detail and higher level of valuation parameters on the resource beyond Norrie D, which to date has been nearly all of what people are focused on for underwriting our stock often ignoring the other 78% of the estimates.
Speaker Change: Resource.
Speaker Change: We often get the question why not just release all the information now well for one we've been busy getting these applications applications complete but also as a NASDAQ listed an SEC regulated company Theyre very specific rules on the assumptions and sign offs required to make resource and financial projections to ensure its all based on reality and can reasonably be relied upon.
Speaker Change: By investors.
Speaker Change: Thus, we are chomping at the bit to be able to share this data with you.
Speaker Change: However, our pivot to the U S. Earlier. This year has led to some changes in long term assumptions that you require careful consideration accurate modeling the sign off from a handful of external qualified persons or <unk> now.
Speaker Change: Now that we have submitted our applications on an accelerated basis based on an all hands on deck push our teams attention can turn back to this important work.
Speaker Change: As we've discussed for many years, our capital light approach is made possible by partners like all season, PEMCO, providing existing assets on the offshore side. The U S path requires some additional steps such as the flagging of vessels and onshore we are looking forward to processing in the U S. One day, but we in the U S government understand the reality is that processing will occur outside.
Speaker Change: The United States for some period of time.
Speaker Change: And on the royalty front, that's one area, where the U S path very significantly.
Speaker Change: There will be economic benefits for some allied countries as laid out in the executive order, but it's going to be a far cry from some of the more onerous proposals being discussed at the IAC over recent years.
Speaker Change: Again, we're looking forward to sharing more in the third quarter on this important work stream to provide not only PFS level clarity on our first commercial recovery area, but also additional information on the potential read through for the entire estimated resource.
Speaker Change: So now onto the financial results.
Speaker Change: <unk> reported a net loss of approximately $20 6 million or <unk> <unk> per share in the first quarter of 2025 compared to a net loss of $25 2 million or <unk> <unk> per share for the same period in 2024.
Speaker Change: Exploration and evaluation expenses for the three months ended March 31, 2025, or $9 5 million compared.
Speaker Change: Compared to $18 1 million in 2024, due to lower mining technological and process development cost as the Comparatives quarter included costs to transport nodules to pimco facility resource definition cost incurred during campaign eight which was completed in the first quarter of 2024 and lower cost incurred on environmental and pre feasibility studies, partially offset by an increase.
Speaker Change: And share based comp.
G&A expenses in Q1, 2025 were $8 $5 million compared to $6 6 million in the comfort of quarter due to an increase in share based compensation, partially offset by a decrease in legal costs in the first quarter of 2025.
Speaker Change: Q1 2025 results also include <unk> 5 million for the change in fair value of warrants liability and charges of $1 $1 million for foreign exchange losses, and $1 million of fees and interest on our credit facilities and borrowings.
Speaker Change: Net cash used in operating activities in Q1, 2025 amounted to $9 $3 million compared to $11 8 million in 2020 for.
Speaker Change: The reduction in Q1, 2025 is mainly due to higher cash outflows relating to campaign eight last year, partially offset by higher corporate costs. This year.
Speaker Change: Free cash flow for Q1 was negative $9 4 million compared to negative $12 1 million in 2024.
Speaker Change: Free cash flow is a non-GAAP measure and I would point you to the non-GAAP reconciliation table included in the appendix of the slide deck.
Speaker Change: Now, taking a step back to liquidity and capital reason tools TMC liquidity, which is cash plus borrowing capacity stood at about 44 million as of March 31, 2025, or <unk> 81 million pro forma following this month's registered direct offering of $37 million of gross proceeds.
Speaker Change: In March of 2025, we increased the principal amount of our unsecured arris bearing credit facility by 6 million from $38 million to $44 million.
Speaker Change: The credit facility with the affiliate of all six group S. A a $25 million was terminated by mutual agreement as we previously reported as maturity was approaching and there were no amounts outstanding.
Speaker Change: The maturity of the $7 $5 million also use working capital loan was extended to September of 2025.
Speaker Change: In Q1 of 2025, the company repaid $1 8 million of previously drawn amounts on the arris bearing facility and did not draw any further amount.
Speaker Change: The company also raised in the quarter $5 $7 million under the ATM facility issuing approximately 3 million shares at an average share price in Q1 of $1 93.
Speaker Change: And one matter on corporate housekeeping, the 37 million registered direct offering when combined with the <unk>.
Speaker Change: <unk> 5 million in potential future proceeds from the associated warrants at $4 50 per share that would use up the majority of the existing S. Three shelf capacity sure.
Speaker Change: Self capacity calculations do assume that future exercise of any warrants must be included at the time of issue.
Speaker Change: So this financing can't run the company well beyond the key milestone of permitting for commercial production.
Speaker Change: But again, it's a matter of good corporate housekeeping TMC expects to put in place another shelf to allow for future issuance of various securities.
Speaker Change: As discussions with additional strategic investors continue and as we prepare ourselves for commercial production.
Speaker Change: <unk> been strategics do like registered transaction, whether that's debtor equity securities. So it's better to have the toolkit full before we need to use it.
Speaker Change: So now I might turn it over to the operator to open it up for any Q&A.
Speaker Change: Thank you.
Speaker Change: If you would like to ask a question at this time. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: Your question. Please press star one again, one moment as we can.
Speaker Change: Our Q&A roster.
Speaker Change: Our first question is going to come from the line of Matthew O'keefe with Cantor Fitzgerald. Your line is open. Please go ahead.
Speaker Change: Thanks, operator.
Speaker Change: Hi, gentlemen.
Speaker Change: Great.
Speaker Change: We had a busy quarter its been in some great progress.
Speaker Change: And congratulations on that.
Speaker Change: Thank you for the.
Speaker Change: Invitation down to see the Bancorp facility that was a real real eye opener and.
Speaker Change: Joe.
Speaker Change: The partnerships that you've established as it.
Speaker Change: It was pretty impressive.
Speaker Change: Confidence building.
Speaker Change: A quick question around the.
Speaker Change: Around the application to NOLA.
Speaker Change: In particular, it seems as though the ground that you've applied for any of the exploration ground and then you need there the commercial operations, but it looks like the ground is covering the existing.
Speaker Change: Two concessions you already have.
Speaker Change: You had under no that is I'm, sorry that you had under.
Speaker Change: I would say that as the nori.
Speaker Change: What we called before the area in the <unk> area.
Speaker Change: But theres no extra like Theres, an extra concession there as well and I think you referred to that as saying it has about a 500 million times.
Speaker Change: Potential can you give us any more color on where that is or.
Speaker Change: What what we might expect to see.
Speaker Change: Around that this is again speaking to the upside that youre talking about.
Metals Duffy: Sure well firstly, thanks, Matt and thank you for attending the Japan events.
Metals Duffy: It was great to see several people from the analyst community attend and see firsthand just how real it all is up there and.
Metals Duffy: I was sorry, not to be able to join you on that day, but youre right.
Metals Duffy: We haven't released a matter the exact area yes.
Metals Duffy: We will very soon but the additional area.
Is very complementary to some of the norrie and tomo ground.
Metals Duffy: And.
Metals Duffy: It's area that is not claimed by any other sovereign and we feel thats important.
Metals Duffy: While there is a ability to lay claim of the ground that is currently under license through the RSA by other countries. We made a deliberate plan not to do that.
Metals Duffy: Obviously, we have the support of Tonga and NAIRU and our assets.
Metals Duffy: And we are.
Sorry can you still hear me.
Metals Duffy: Yes, we can yes great.
Metals Duffy: So we have the support of not ruin toner that we wanted to make sure any additional ground that we did apply for would not have a competing claim over it. So I can't tell you, specifically where that it makes it useful.
Metals Duffy: Total mining unit and I can't wait to share more detail on it and.
Metals Duffy: We know a lot about the ground because.
Metals Duffy: Its neighboring to some of the other blocks and so.
Metals Duffy: We can talk with some confidence about what we think is on it yes, and just to add one point on that too that does not also does not encompass any areas that had been set aside as areas of particular environmental interest.
Speaker Change: So look we are very eager to sheriff matts exactly where it is.
Speaker Change: But for commercial sensitivity reasons, it makes sense to get past our initial review with Noah and then share quite a bit more detail very soon.
Speaker Change: Right.
Speaker Change: Makes sense and I guess, we're coming up on the first 30 day.
Speaker Change: At the end of this month will be the first 30 day, where you should hear back about the status of your application.
Speaker Change: Can you just expand a little bit on that process and how you see it unfolding both the 36, 6% and 60 day processes and then beyond that.
Speaker Change: We're going to get a roadmap at that time.
Speaker Change: That's our plan, yes, I'm traveling to D C tomorrow actually.
Speaker Change: We are in regular contact with the authority.
We I think it's fair to say.
Dean: It's dean.
Dean: A lot of action that we've generated by our application and.
Dean: I think I wouldn't be speaking out of school to say a lot of excitement inside that department as well, but I have it on good authority that's.
Dean: We should be expecting something very soon.
Dean: Great well, thanks and let's.
Dean: Looking forward to seeing this momentum continue thanks very much yes. Thank you Matt.
Dean: Thank you and one moment for our next question.
Speaker Change: Our next question comes from the line of Jacob Schakowsky list.
Speaker Change: Alliance Global Partners. Your line is open. Please go ahead.
Speaker Change: Hey, Jared and Craig Thanks for taking my questions.
Jake: Hi, Jake Jake.
Speaker Change: A lot to unpack here, obviously, but just a few questions on my end.
Speaker Change: We've seen a wave of supply obviously for the space for the last quarter I'm. Just curious if you have any thoughts or insights on how this might translate.
Speaker Change: Over to the processing side of the equation going downstream longer term is something that you've thought about.
Speaker Change: Hmm.
Speaker Change: Yes sure.
Speaker Change: I mean, if we wind the clock back about two years ago, we had an application to the Dod to Carryout a.
Speaker Change: A feasibility study on a refinery.
Speaker Change: At a site we had identified in Texas.
Speaker Change: Since that time.
Speaker Change: We have.
Speaker Change: Made tremendous progress understanding how to treat the nodules without partner tanker, we've engaged with potential processing partners in other nations as well, including Indonesia, which has a wide variety.
Speaker Change: Or what why a number of options available to us.
Speaker Change: And.
Speaker Change: One of the requirements, though under Dyshirah is that.
Speaker Change: While you can seek exemptions it theres no ability to process those nodules in the USA.
Speaker Change: They want to see those jobs and that.
Speaker Change: Economic activity come back to the United States and so we.
Speaker Change: We are working feverishly with two groups.
Speaker Change: To evaluate that.
Speaker Change: We're excited about the progress that has been made.
Speaker Change: We're encouraged by the noises, we're receiving from government agencies about the permitting cycle and.
Speaker Change: We have also been approached by a wide number of what I call Patriot capital providers people that are very interested in investing in hard assets on the ground to service the future needs of the United States. So we give it a lot of thoughts we think it's a tremendous value out of.
Speaker Change: <unk> of course, if we.
To do this 20 years ago, then automation wouldn't be as advanced as it is today and I think.
Speaker Change: Looking at how efficient we can make those processing plants is a high priority and we're dealing with some of the best people.
Speaker Change: Imaginable on helping us on that at the moment. So yeah. So it is a commitment we like the idea of doing it in the United States.
Speaker Change: And we've certainly been.
Speaker Change: I think inundated would be too strong a word but we've had a lot of inbound from parties, who have expressed interest in.
Speaker Change: Having some kind of partnership with us.
Speaker Change: To put that investment into the U S.
Speaker Change: Indeed, and make no mistake.
Speaker Change: The key equation is going to be the same as it would be prior to the U S approach, which is trying to.
Speaker Change: Accrete shareholder value, making sure that we're evaluating each of these downstream opportunities on the <unk>.
Speaker Change: That alone basis based on.
Speaker Change: IRR based on sort of the return on invested capital, but the point here is until such time as we have a commercial recovery permit the invested capital portion needs to be as small as possible. So therefore.
Speaker Change: This was just a great opportunity to continue to bring in partners with strong balance sheets and deep pocket Wifi connections within the U S government.
Speaker Change: This is an amazing opportunity for us medium term long term.
Speaker Change: But certainly we are always keeping an eye on not getting out over our skis in terms of.
Speaker Change:
Speaker Change: Going too far downstream to quickly given the fact that all of us want to see this in commercial production and as capital lightest weight.
Speaker Change: Capital light way as possible.
Speaker Change: Yeah.
Speaker Change: Got it Okay. That's extremely helpful. That's all for me I'll hop back in queue. Thanks.
Jay: Thanks Jay.
Speaker Change: Thank you and one moment our next question.
Speaker Change: Our next question comes from the line of Dmitry Silverstein with <unk>.
Speaker Change: <unk> Research. Your line is open. Please go ahead.
Speaker Change: Thank you.
John: Thank you John.
John: Craig for taking my questions Craig I'd like to just add my comments on the Trups too.
John: Facility and the excellent job that TMC folks started organizing in carrying out that trip.
John: He was really first rate.
John: Now to the questions you mentioned in your remarks that you were exploring some funding opportunities within the U S. Government framework. So what exactly are you looking to chase down here in terms of either loans or grants or any other financial assistance that the government can provide you.
John: In this scenario.
John: Yes, very much taking the and thank you for the questions Dimitrios pleasure spending time with you in.
John: The rest of the team for the Pimco site visit it was an excellent opportunity to see that firsthand, but.
John: The answer is all of the above approach, we want to ensure that we.
John: We're not leaving any stone unturned from what is a great window of opportunity here with a <unk>.
John: Very supportive government.
John: So we can't comment on tumor specifically other than I would direct you.
John: The executive order, which pointed out.
John: The exploration of off take arrangements of rights of first refusal the directions that the president gave the departments of defense and energy on that front as well as directives to explore financing opportunities for this new seats.
John: Seafloor natural industrial ecosystem, but the U S wants to build out.
John: Directing.
John: Old initiatives from the development Finance Corp, Exim Bank there were a lot of names as part of that executive order.
John: I would tell you will be easier to list the agencies in cabinets named of that order that we haven't been having active dialogues with than the other way around.
John: We feel very confident that the time is right to take some of this from the theoretical two actually signatures on a page and we're going to.
John: Push that as aggressively as possible.
Speaker Change: Understood great. Thank you for that.
John: Now since.
John: These executive orders have come out rapid fire way in the last six weeks and then you guys submitted the application now.
John: Have you seen any.
John: I guess, that's what you're asking the question what are you hearing from your context with IFA I know there.
John: Inter cessionary discussions right now.
John: Have you picked up any sense of urgency on their part.
John: Or is it all integration and compensation at this point.
Speaker Change: No I think hi, Dimitri and.
I, what we're hearing is that the.
Speaker Change: Yeah.
Speaker Change: Is action.
What we are hearing is that people understand that.
This has been.
Shining a spotlight.
Speaker Change: On the fact that.
Speaker Change: The regulator had an obligation and hasnt met its obligations and I think Lee.
Speaker Change: Listen to some of the comments that are being made by the SG.
Speaker Change: Well, they're a little bit speculative I would suggest what they do highlight is urgency and what we hear discretely from some of the member nations is that there seems to be.
Speaker Change: Momentum no of course.
Speaker Change: Al.
Speaker Change: Decision is made we are moving in this direction, but I hope for.
Speaker Change: Other member Nations, who relied on Clos.
Speaker Change: Two have been acting in good faith by Tony up and carried out all of this research work to further their license ground I hope for their sake that the regulator can agree a set of terms for the mining code and join us at that.
Speaker Change: Okay. Okay. Thank you just a follow up on that a little bit and get some clarity on how these low epic license. This will work so let's assume that you get the Illinois.
Speaker Change: Or a license.
Speaker Change: Collection license within the next.
Speaker Change: X amount of time, but before I would say is ready to issue shares and Youll begin collections and then.
Speaker Change: <unk> dot to get its act together does have a regulatory code in place and does the value of the full year application for collection and minority.
Tom: Tom will air total areas.
Speaker Change: How does that.
Tom: Will that work.
Tom: Nigel is that Youre lifting.
Tom: Let's say be the revenues from them will be shared between a rule in this case.
Tom: Laurie.
Tom: Under RSA rules versus under an hour.
Tom: <unk> rules.
Speaker Change: So okay just to be clear, we are applying under the U S rigs and not.
Tom: I would say yet to be completed regs.
Tom: So there will be.
Tom: Once you get let's say you get the license when you start collecting commercially.
Tom: In the areas.
Tom: Comes through with their cold and.
It's just issued a collection license part of it how does that work well they want because we won't have applied.
Tom: We're now applying okay, we're not applying to the I would say, we're only going to be applying to Noah.
Tom: Got it.
Tom: Our exploration licenses will be will still be an effect, but youre not applying for collection license correct correct got it.
Tom: Yeah Dmitry there were some comments from some of the media or the global community.
Tom: Where they're kind of attempting to treat it all as one ball of wax in Pierce the corporate veil.
Tom: <unk> USA as a private entity established 12 years ago.
Tom: Northern Tamil are separate subsidiaries and Oriental will continue to do what they need to do to keep the RSA exploration contracts and compliance.
Tom: But at the same time, we wouldnt want to situation, where the complication of.
Tom: Having to consider permitting over the same area from two regimes.
Tom: But there would be no reason for us to relinquish our rights to those exploration contracts before any commercial recovery permitted with the same areas granted.
Got it Okay understood and then one final question along similar lines.
Tom: Do you foresee any issues with potential customers for your models or your product that our ISR member states not being able to purchase these models from you.
Tom: There will not be.
Tom: Collected on very nicely.
Tom: Yes.
Tom: No I do not.
Heard that reported in the media.
Tom: And that I don't see that as being any risk whatsoever.
Tom: Once again, there's a bit of.
Tom: The wing flapping going on around that sort of language.
Tom: But the world is moving to a position where it is scheduled shorted these metals and of course.
Tom: We think having the United States says.
Tom: As a sponsor.
Tom: <unk> is probably the best well is the best sponsor, we could possibly wishful.
Tom: <unk>.
Tom: We don't think certainly talking to the commodity traders as we have done in.
Tom: Recent weeks because of the renewed interest and it seems that everyone is.
Tom: BD and path to our door to have a conversation to see what they can fit into this.
Tom: Data to see the issues around that either.
Speaker Change: Okay. That's encouraging thank you Derek thanks, Dmitry. Thanks Dmitry.
Speaker Change: Thank you and again, ladies and gentlemen, if you have a question. Please press star one on your telephone.
Speaker Change: While that's occurring Michelle I think will take a couple of questions that people have written in the webcast.
Speaker Change: Michael Domanski asks can we confirm the PFS release date, yes.
Speaker Change: Yes, I had said next quarter, but to be clear third quarter of 2025.
Speaker Change: And a question from Conor reader can we provide an update on our path to commercialization and any milestones you expect to hit over the next 12 months regarding offtake and regulatory progress a great question as Jared had spoken to on discussions with potential commercial partners with <unk>.
Speaker Change: Feel very good about where things are heading during our site visit to <unk>.
Speaker Change: Ampco facility.
Speaker Change: We're a company and not just by the sell side research community, but also battery makers precursor producers steelmakers and even in the United States Youre seeing increasing headlines of some of the large automakers relying on battery technology that could benefit from additional supply of nickel or manganese.
Speaker Change: And look keep in mind most of these U S automakers.
Never bent to the pressure from global Ngos to exclude these materials from their supply chain and as we get closer to commercial production that urgency that fear of missing out.
Speaker Change: The increase so in terms of the milestones the PFS coming up we think will be an important one but also a read through to the valuation of the rest of the resource portfolio.
Speaker Change: We are eager to upon having our applications deemed substantially complete excuse me substantially compliant or complete respectively laying out a path showing step by step what to expect over the coming quarters on that regulatory review. So this is not going to be a black box, it's not going to be fingers crossed I hope TMC gets perm.
Speaker Change: <unk>.
Speaker Change: There should be a very clear path on the milestones to expect so.
Speaker Change: Keep an eye on this coming a couple of months and we can't wait to share more data on that front.
Speaker Change: There's a question from Keith Agra, and providing an update on the status of the hidden gem.
Speaker Change: With respect to the commercial production system.
Speaker Change: So Gerry anything we might want to say on that it's certainly been a interesting environment from an oil price perspective or last few months, but.
Speaker Change: Certainly our team continues to be laser focused on that.
Speaker Change: The rate scenarios for getting the hidden gem ready for commercial production, yes look we had.
Speaker Change: The honest truth is we thought we had a bit more time, because we were going to be as we previously announced we were going to be getting the hidden gem ready for.
Speaker Change: The higher production target 3 million tonnes and right now based on the feedback we're receiving post the executive order. We're now looking at it how quickly can we get the vote on the water and how quickly can we get it to an economic number.
Such that it's making money, but sacrificing maybe some of the outside tonnage range for speed and so that basically means the engineers are back working very hard. So obviously, great that we welcome Rick.
Speaker Change: Our team who of course was the project director.
Speaker Change: On the commercial trials that we're very successfully completed in 2022.
Speaker Change: I can report Ocs remain super supportive.
Speaker Change: They're an amazing shareholder an amazing engineering partner for Us and.
Speaker Change: We're working through all of that now.
Speaker Change: One follow up question from Keith algorithm is noreen no longer planning to submit an application through the IFC in June of this year.
Speaker Change: That is correct that is correct.
Speaker Change: Just so we're clear the.
Speaker Change: Norrie license comes up for renewal next year.
Speaker Change: 2026, we will be.
Speaker Change: Renewing that because.
Speaker Change: Lori is in full compliance there is no legal basis, upon which that license cannot be renewed and.
Speaker Change: The basis that we would.
Speaker Change: The fact that we're putting in an application and under our U S subsidiary to NOLA has no bearing on the fact that we will be reviewing that license with the with the international seed that authority.
Speaker Change: So we are covering all basis.
Speaker Change: Michelle I think we have time for one more question from the line if there's anybody in Q I am showing no further questions on the phone lines at this time.
Speaker Change: And I would like to hand, the conference back over to Jarrod.
Erin: Erin for closing remarks.
Speaker Change: Thank you. Thank you well look.
Speaker Change: It's been a.
Speaker Change: It's been an amazing 2025, firstly and.
Speaker Change: I'm very proud of what we've achieved.
Speaker Change: <unk> proud of the team how everyone has stuck together over the last one.
Speaker Change: Certainly over the last decade.
Speaker Change: We've been through some interesting times see though we've had some highs and some lows.
Speaker Change: Yes.
Speaker Change: One thing we have done is stuck together as a team we have an amazing.
Speaker Change: Group of committed individuals committed to the purpose committed to doing the best Environmental research committed to getting this resource into production and I think everyone is feeling.
Speaker Change: Quiet.
Speaker Change: Proud of the fact that we are in this position where we are today, we have an amazing board. He has also been a tremendous guiding hand through the.
Speaker Change: <unk>.
Speaker Change: These last months and years and of course, we have amazing partners.
Speaker Change: Starting with our largest investor <unk>.
Speaker Change: <unk> remain at the ready to help us get <unk>.
Speaker Change: Production started we have great partners as many of you experienced so some of you experienced opt in Japan.
Speaker Change: Last month and of course, our sponsoring states.
Speaker Change: They entered into agreements with us in 2011 in the case of <unk> in 2012, and the case toner and of course, they did so in good shape.
Speaker Change: On the protection of Unclos.
Speaker Change: Unfortunately.
Speaker Change: <unk>.
Speaker Change: The commitments that they depended upon have not been fulfilled and yet they remain.
Speaker Change: Tremendously supportive and we will ensure always their best interests are protected as we move forward, so I'd like to especially thank them.
Speaker Change: The never ending support and of course, our shareholders.
We notice a retail shareholder base growing substantially.
Speaker Change: I got to tell you I love that retail shareholders I loved how committed they are and how they're prepared to.
Speaker Change: Go to the mat to defend a corner and to make sure that that some of the wonderful scientific results that are becoming apparent.
Speaker Change: Communicated and reminded to those people, who sometimes jumped to the wrong conclusions.
Speaker Change: I expect our institutional shareholder base will continue to grow.
Speaker Change: So to each and every one of you. Thank you for supporting us and sticking with us.
Speaker Change: Hope, it's going to be an amazing 2025.
Speaker Change: In the decades ahead are going to be a very exciting ones. Thanks, Deane part of that journey and thanks for attending today.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Yes.
Speaker Change: [music].