TMC the metal company (TMC)2023-11-10 03:53Financial Data and Key Metrics - The company reported a net loss of approximately 0.04 per share in Q3 2023, compared to a net loss of 0.12 per share in Q3 2022 [33] - Exploration and evaluation expenses decreased to 22.7 million in Q3 2022, primarily due to reduced environmental study spending and completion of the pilot mining test system [33] - General and administrative expenses were 5.9 million in Q3 2022, reflecting lower share-based compensation and insurance costs [34] - Free cash flow for Q3 2023 was negative 9.1 million in Q3 2022 [35] - The company held 56 million, including expected additional capital raise proceeds and an undrawn 56 million, including 22.5 million in cash, and a 25 million undrawn credit facility [6] - The company's NORI and TOML projects are ranked as the largest undeveloped nickel projects in the world, with a nickel equivalent grade that stands apart from other resources [7] Strategic Direction and Industry Competition - The company is focused on delivering its mission with a capital-light approach, leveraging existing facilities like PAMCO in Japan for initial production [9] - The company's NORI D project outperforms all analyzed land-based production routes for nickel and copper and most for cobalt, according to a lifecycle assessment by Benchmark Minerals [14] - The company has developed a comprehensive set of sustainability goals and is engaging stakeholders for feedback to refine and finalize a robust set of targets and KPIs [17][18] Management Commentary on Operating Environment and Future Outlook - The company is encouraged by the progress at the ISA and the positive commentary from the ISA Secretary General on the close-to-final form of the regulations [28] - The company maintains its guidance on the intention to launch an application for an exploitation contract over the NORI D Area following the July 2024 ISA meeting [29] - The company believes its liquidity will be sufficient to meet working capital and capital expenditure requirements for the next 12 months [37] Other Important Information - The company has published its Second Annual Impact Report, examining the full scope of existing and future potential impacts, including lifecycle comparisons versus land-based resources [5] - The company has executed a complex three-desal campaign and continues to build upon its rich deep-sea dataset, with eight peer-reviewed papers published and many more to come [15] - The company has advanced its industry-first digital twin, DPE, in collaboration with Kongsberg Digital, bringing AI and hybrid machine learning to future deep-sea nodule collection operations [15] Q&A Session Summary Question: Regulatory concerns and potential delays - The company noted that 23 ISA member states have expressed reservations, but the majority continue to work on finalizing robust regulations [39] - The company believes that the legal obligation to deliver the mining code is not up for debate and expects more states to support the regulations as they near finalization [43] Question: Timing of profitability - The company expects to provide more detail on the economic model and profitability timeline with the release of the pre-feasibility study results in the first half of 2024 [44] Question: Processing of nodules sent to Japan - The 22 tons of nodules delivered to PAMCO in Japan have been used to demonstrate the viability of processing through existing facilities, while the remaining 2,980 tons are being used for testing and sharing with potential strategic partners [46][47] Question: Timing of additional capital raise - The 9 million capital raise is expected to be completed in staggered amounts, with 6.5 million in January [48] Question: China's potential illegal mining activities - The company views China's engagement with the ISA as constructive and does not speculate on potential illegal activities [49] Question: Post-collection test campaign - The company is not disclosing specific timing for the post-collection test campaign for security reasons but expects initial results to be available by the end of Q1 2024 [50][51] Question: China's potential application submission - The company believes it is unlikely for China or any other contractor to submit an application within several years due to the prerequisite of having at least three-plus years of environmental baseline data [52] Question: Cost of additional offshore campaign - The cost of the additional offshore campaign is within the company's guidance and is expected to be covered by the capital raise proceeds [53]