Financial Highlights
- Net loss of $12.4 million and loss per share of $0.05 for the quarter ended June 30, 2022.
- Total cash on hand of approximately $46.3 million at June 30, 2022.
- The Company announced today a private placement financing for an aggregate of 38 million common shares to investors at a price per share of
$0.80 ($0.9645 for TMC Chairman & CEOGerard Barron ), with expected gross proceeds of$30.4 million . - Approximately 70% of the commitments came from existing TMC shareholders and insiders, including Allseas,
ERAS Capital (the family office of TMC DirectorAndrei Karkar ), SAF Group Managing Partner and entrepreneurBrian Paes-Braga , Front End Chairman & CEOMajid Alghaslan , andGerard Barron and his family. - The Company believes that with the full proceeds expected this quarter from the private placement financing plus existing cash will be sufficient to fund operations for at least the next twelve months, past the
July 2023 date targeted by theInternational Seabed Authority (ISA) as the date for the final adoption of the exploitation regulations for the industry.
Operational Highlights
- Pilot Collection System Trials:
- Riser and Jumper Trials: In
May 2022 , the pilot riser system and jumper hose was successfully deployed in theAtlantic Ocean . Engineers aboard the Hidden Gem deployed the flexible jumper hose, connected it to the base of the riser and then launched the pilot riser, lowering the assembly to a depth of around 650 meters before making a sub-sea connection between the jumper hose and collector vehicle in 745 meters water depth. - Atlantic Deepwater Trials: In
May 2022 , the pilot collector vehicle underwent extensive testing of its various pumps and critical mobility functions in ultra-deepwater in theAtlantic Ocean . Engineers successfully lowered the collector vehicle to depths of 2,470 meters and drove 1,018 meters across the seafloor, in advance of pilot trials in the NORI Area-D in theClarion Clipperton Zone (CCZ) expected to commence in the second half of 2022.
- Riser and Jumper Trials: In
- NORI Area D Offshore Environmental and Social Impact Assessment:
- NORI Collector Test Monitoring Program: As part of the TMC-funded Environmental Impact Statement for the NORI Area D project, thirty scientists from around the world gathered in
London to review plans for the environmental monitoring campaign designed to gather key impact data from pilot trials in the NORI Area D expected to be conducted later this year. The resulting Environmental Monitoring and Management Plan (EMMP) for the NORI Collector Test was then submitted to the ISA and an offshore monitoring campaign commissioned, involving over a dozen research groups. - NORI Exploitation Contract Application EMMP: In
July 2022 , we announced that that our Australian subsidiary,The Metals Company Australia Pty Ltd. , had entered into a research funding agreement with a consortium of institutions led by Australia’s national science agency, theCommonwealth Scientific Industrial Research Organisation (CSIRO) to create a framework for the development of an ecosystem-based EMMP for our proposed commercial deep-sea polymetallic nodule collection operations in the NORI Area D.
- NORI Collector Test Monitoring Program: As part of the TMC-funded Environmental Impact Statement for the NORI Area D project, thirty scientists from around the world gathered in
- Onshore Processing:
- SINTEF Report on Manganese Product: In
May 2022 , we announced that we had retained SINTEF, one of Europe’s leading independent research institutions, to analyze our manganese silicate product that can be used to produce silicomanganese alloy for steelmaking. SINTEF found that our high-grade nodule-derived manganese silicate, which we estimate could account for approximately 30% of future revenues, behaves similarly to traditional manganese sources and appears to have significant advantages in downstream silicomanganese production on cost and CO2 footprint, with the potential for 7 to 17% higher value-in-use, depending on carbon tax regimes. - Project Zero Plant: Together with
Epsilon Carbon , we have selected a suitable plant site inIndia and developed and issued Request for Proposal for Project Zero Pre-feasibility and Feasibility Study.
- SINTEF Report on Manganese Product: In
- TMC Releases Inaugural Impact Report: In
May 2022 , we published our inaugural Impact Report setting out our motivations for developing nodule resources and providing a forward-looking view of the impacts of our expected operations and the efforts underway to eliminate or reduce them. - Benchmark Mineral Intelligence LCA for Project Zero: In
April 2022 , we announced that we had chosen Benchmark Mineral Intelligence (Benchmark), to conduct an independent lifecycle assessment (LCA) of the environmental impacts of our planned NORI Area D polymetallic nodule project and compare these impacts to producing the same metals from commonly used production pathways using conventional land ores. Benchmark anticipates completing this comprehensive lifecycle impact assessment by the end of the third quarter of 2022.
Industry Update
- 27th Session (Part II) of the
International Seabed Authority (ISA): The ISA continues to work to finalize regulations regarding exploitation of deep-sea minerals. A month-long ISA working session took place fromJuly 4 to August 5, 2022 in person inKingston, Jamaica where the ISA continued its development of the exploitation regulations and committed to continue work on the regulations intersessionally.The ISA Council is expected to meet inNovember 2022 ,March 2023 andJuly 2023 , along with intersessional working groups in order to complete their drafting of the regulations. U.S. Inflation Reduction Act (IRA) of 2022: The IRA adopted by theU.S. Congress inAugust 2022 introduces strong incentives forU.S. electric vehicle (EV) manufacturers—through consumer EV tax credits—to use critical minerals like nickel, cobalt and manganese that have been mined, processed or refined in theU.S. or theU.S. free-trade partners. It also disqualifies any EVs that use critical minerals fromChina ,Russia and certain other jurisdiction from such tax credits The IRA creates favourable conditions for TMC’s nodule resource that could be processed and refined in theU.S. or its free-trade partners.- G7 Communique on Deep-Sea Mining: At the G7 Summit in
Germany inMay 2022 , environmental ministers reaffirmed their support for the development of a strong regulatory framework to govern responsible seabed mineral exploitation. In their communique, ministers stated: "With regard to possible future deep-sea mining, we highlight the unique chance to regulate a human activity before it is put into practice in order to prevent damage to the marine environment."
Financial Results Overview
At June 30, 2022, TMC held cash of $46.3 million and held no debt.
TMC reported a net loss for the second quarter of 2022 of $12.4 million, or $0.05 per share, compared to TMC’s net loss of $29.1 million, or $0.15 per share, for the second quarter of 2021. The net loss for the second quarter of 2022 included exploration and evaluation expenses of
Conference Call
TMC will hold a conference call today at 4:30 p.m. ET to provide an update on recent corporate developments, second quarter financial results and upcoming milestones.
Second Quarter 2022 Conference Call Details
Date: | |
Time: | |
Daylight Time | |
Virtual webcast with slides: | Register Here |
Audio-only dial-in: | Register Here |
Please register with the links above at least ten minutes prior to the conference call. The virtual webcast will be available for replay in the ‘Investors’ tab of the Company’s website under ‘Investors’ > ‘Media’ > ‘Events and Presentations’, approximately two hours after the event.
About
The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the clean energy transition with the least possible negative environmental and social impact and (2) accelerate the transition to a circular metal economy. The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.
More information is available at www.metals.co.
Forward Looking Statements
Certain statements made in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, including related to how long TMC’s cash will fund operations, the private placement financing, including the timing of receipt, and amount, of expected proceeds therefrom, and TMC’s planned system tests, including the timing thereof and the timing and content of environmental and operational assessments. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside TMC’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: TMC’s successful completion of the private placement financing and receipt of all expected funding therefrom; TMC’s ability to execute and complete the pilot test and environmental monitoring campaign in NORI Area D in the CCZ, TMC’s ability to submit an application for and obtain exploitation contracts for its areas in the CCZ from the ISA; regulatory uncertainties and the impact of government regulation and political instability on TMC’s resource activities; changes to any of the laws, rules, regulations or policies to which TMC is subject; the impact of extensive and costly environmental requirements on TMC’s operations; environmental liabilities; the impact of polymetallic nodule collection on biodiversity in the CCZ and recovery rates of impacted ecosystems; TMC’s ability to develop minerals in sufficient grade or quantities to justify commercial operations; the lack of development of seafloor polymetallic nodule deposit; uncertainty in the estimates for mineral resource calculations from certain contract areas and for the grade and quality of polymetallic nodule deposits; risks associated with natural hazards; uncertainty with respect to the specialized treatment and processing of polymetallic nodules that TMC may recover; risks associated with collective, development and processing operations, including with respect to the proposed plant in
TMC the metals company Inc. | |
Condensed Consolidated Balance Sheets (in thousands of US Dollars, except share amounts) (Unaudited) |
ASSETS | As at 2022 | As at 2021 | |||||||
Current | |||||||||
Cash | $ | 46,259 | $ | 84,873 | |||||
Receivables and prepayments | 4,700 | 3,686 | |||||||
50,959 | 88,559 | ||||||||
Non-current | |||||||||
Exploration contracts | 43,150 | 43,150 | |||||||
Equipment | 2,008 | 1,416 | |||||||
45,158 | 44,566 | ||||||||
TOTAL ASSETS | $ | 96,117 | $ | 133,125 | |||||
LIABILITIES | |||||||||
Current | |||||||||
Accounts payable and accrued liabilities | 9,189 | 26,573 | |||||||
9,189 | 26,573 | ||||||||
Non-current | |||||||||
Deferred tax liability | 10,675 | 10,675 | |||||||
Warrants liability | 2,584 | 3,126 | |||||||
TOTAL LIABILITIES | $ | 22,448 | $ | 40,374 | |||||
EQUITY | |||||||||
Common shares (unlimited shares, no par value – issued: 227,158,455 ( | 299,056 | 296,051 | |||||||
Class A - J Special Shares | - | - | |||||||
Additional paid in capital | 113,487 | 102,073 | |||||||
Accumulated other comprehensive loss | (1,216 | ) | (1,216 | ) | |||||
Deficit | (337,658 | ) | (304,157 | ) | |||||
TOTAL EQUITY | 73,669 | 92,751 | |||||||
TOTAL LIABILITIES AND EQUITY | $ | 96,117 | $ | 133,125 |
TMC the metals company Inc. | |
Condensed Consolidated Statements of Loss and Comprehensive Loss (in thousands of US Dollars, except share and per share amounts) (Unaudited) |
Three months ended | Six months ended | ||||||||||||
2022 | 2021 (Restated1) | 2022 | 2021 (Restated1) | ||||||||||
Operating expenses | |||||||||||||
Exploration and evaluation expenses | $ | 9,985 | $ | 18,226 | $ | 17,328 | $ | 56,333 | |||||
General and administrative expenses | 8,343 | 10,440 | 16,907 | 27,804 | |||||||||
Operating loss | 18,328 | 28,666 | 34,235 | 84,137 | |||||||||
Other items | |||||||||||||
Change in fair value of warrant liability | (5,730 | ) | - | (542 | ) | - | |||||||
Foreign exchange loss (gain) | (22 | ) | 33 | - | 52 | ||||||||
Interest expense (income) | (192 | ) | 441 | (192 | ) | 661 | |||||||
Loss and comprehensive loss for the period | $ | 12,384 | $ | 29,140 | $ | 33,501 | $ | 84,850 | |||||
Loss per share | |||||||||||||
- Basic and diluted | $ | 0.05 | $ | 0.15 | $ | 0.15 | $ | 0.44 | |||||
Weighted average number of common shares outstanding – basic and diluted | 227,119,216 | 196,508,806 | 226,600,186 | 194,455,031 |
(1) The condensed consolidated statements of loss and comprehensive loss for the three and six months ended
TMC the metals company Inc. | |||
Condensed Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) (Unaudited) |
Three months ended | Common Shares | Preferred Shares | Special Shares | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Deficit | Total | ||||||||||||
Shares | Amount | ||||||||||||||||||
226,780,843 | $ | 298,263 | $ | - | $ | - | $ | 107,952 | $ | (1,216 | ) | $ | (325,274 | ) | $ | 79,725 | |||
Exercise of stock options (Note 6) | 18,461 | 22 | - | - | (10 | ) | - | - | 12 | ||||||||||
Conversion of restricted share units, net of shares withheld for taxes (Note 6) | 316,725 | 705 | - | - | (705 | ) | - | - | - | ||||||||||
Share purchase under Employee Share Purchase Plan (Note 6) | 42,426 | 66 | - | - | (10 | ) | - | - | 56 | ||||||||||
Share-based compensation (Note 6) | - | - | - | - | 6,305 | - | - | 6,305 | |||||||||||
Expenses to be settled in share-based payments | - | - | - | - | (45 | ) | - | - | (45 | ) | |||||||||
Loss for the period | - | - | - | - | - | - | (12,384 | ) | (12,384 | ) | |||||||||
227,158,455 | $ | 299,056 | $ | - | $ | - | $ | 113,487 | $ | (1,216 | ) | $ | (337,658 | ) | $ | 73,669 |
Three months ended (Restated 1) | Common Shares | Preferred Shares | Special Shares | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Deficit | Total | ||||||||||||
Shares | Amount | ||||||||||||||||||
195,945,508 | $ | 183,137 | $ | 550 | $ | - | $ | 61,728 | $ | (1,216 | ) | $ | (218,568 | ) | $ | 25,631 | |||
Exercise of stock options (Note 6) | 1,841,944 | 5,716 | - | - | (4,530 | ) | - | - | 1,186 | ||||||||||
Share-based compensation (Note 6) | - | - | - | - | 15,343 | - | - | 15,343 | |||||||||||
Common shares issued for services | 6,947 | 48 | - | - | - | - | - | 48 | |||||||||||
Loss for the period | - | - | - | - | - | - | (29,140 | ) | (29,140 | ) | |||||||||
197,794,399 | $ | 188,901 | $ | 550 | $ | - | $ | 72,541 | $ | (1,216 | ) | $ | (247,708 | ) | $ | 13,068 |
(1) The condensed consolidated statement of changes in shareholders' equity for the three months ended
TMC the metals company Inc. | |
Condensed Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) (Unaudited) |
Six months ended | Common Shares | Preferred Shares | Special Shares | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Deficit | Total | ||||||||||||
Shares | Amount | ||||||||||||||||||
225,432,493 | $ | 296,051 | $ | - | $ | - | $ | 102,073 | $ | (1,216 | ) | $ | (304,157 | ) | $ | 92,751 | |||
Exercise of stock options (Note 6) | 18,461 | 22 | - | - | (10 | ) | - | - | 12 | ||||||||||
Conversion of restricted share units, net of shares withheld for taxes (Note 6) | 1,665,075 | 2,917 | - | - | (2,995 | ) | - | - | (78 | ) | |||||||||
Share purchase under Employee Share Purchase Plan (Note 6) | 42,426 | 66 | - | - | (10 | ) | - | - | 56 | ||||||||||
Share-based compensation (Note 6) | - | - | - | - | 14,429 | - | - | 14,429 | |||||||||||
Loss for the period | - | - | - | - | - | - | (33,501 | ) | (33,501 | ) | |||||||||
227,158,455 | $ | 299,056 | $ | - | $ | - | 113,487 | $ | (1,216 | ) | $ | (337,658 | ) | $ | 73,669 |
Six months ended (Restated 1) | Common Shares | Preferred Shares | Special Shares | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Deficit | Total | ||||||||||||
Shares | Amount | ||||||||||||||||||
189,493,593 | $ | 154,431 | $ | 550 | $ | - | $ | 45,347 | $ | (1,216 | ) | $ | (162,858 | ) | $ | 36,254 | |||
Exercise of stock options (Note 6) | 3,990,934 | 8,258 | - | - | (5,702 | ) | - | - | 2,556 | ||||||||||
Common shares to be issued for exploration and evaluation expenses | 4,245,031 | 25,664 | - | - | (12,879 | ) | - | - | 12,785 | ||||||||||
Share-based compensation (Note 6) | - | - | - | - | 45,768 | - | - | 45,768 | |||||||||||
Common shares to be issued for stock options exercise | - | - | - | - | 7 | - | - | 7 | |||||||||||
Common shares issued for services | 6,947 | 48 | 48 | ||||||||||||||||
Conversion of debentures | 57,894 | 500 | - | - | - | - | - | 500 | |||||||||||
Loss for the period | - | - | - | - | - | - | (84,850 | ) | (84,850 | ) | |||||||||
197,794,399 | $ | 188,901 | $ | 550 | $ | - | $ | 72,541 | $ | (1,216 | ) | $ | (247,708 | ) | $ | 13,068 |
(1) The condensed consolidated statement of changes in shareholders’ equity for the six months ended
TMC the metals company Inc. | |
Condensed Consolidated Statements of Cash Flows (in thousands of US Dollars) (Unaudited) |
Six months ended | Six months ended | ||||||||
2022 | 2021 (Restated 1) | ||||||||
Cash provided by (used in) | |||||||||
Operating activities | |||||||||
Loss for the period | $ | (33,501 | ) | $ | (84,850 | ) | |||
Items not affecting cash: | |||||||||
Amortization | 189 | 196 | |||||||
Expenses settled with share-based payments | 12,746 | 58,600 | |||||||
Interest on convertible debentures | - | 661 | |||||||
Change in fair value of warrants liability | (542 | ) | - | ||||||
Unrealized foreign exchange | 29 | (8 | ) | ||||||
Changes in working capital: | |||||||||
Receivables and prepayments | (1,089 | ) | 74 | ||||||
Accounts payable and accrued liabilities | (15,955 | ) | 7,382 | ||||||
Net cash used in operating activities | (38,123 | ) | (17,945 | ) | |||||
Investing activities | |||||||||
Settlement of deferred acquisition costs | - | (3,440 | ) | ||||||
Acquisition of equipment | (452 | ) | (402 | ) | |||||
Net cash used in investing activities | (452 | ) | (3,842 | ) | |||||
Financing activities | |||||||||
Proceeds from employee share purchase plan | 56 | - | |||||||
Proceeds from exercise of stock options | 12 | 2,563 | |||||||
Proceeds from issuance of convertible debentures | - | 26,000 | |||||||
Taxes withheld and paid on share-based compensation | (78 | ) | - | ||||||
Net cash (used in) provided by financing activities | (10 | ) | 28,563 | ||||||
(Decrease) increase in cash | $ | (38,585 | ) | $ | 6,776 | ||||
Impact of exchange rate changes on cash | (29 | ) | 8 | ||||||
Cash - beginning of period | 84,873 | 10,096 | |||||||
Cash - end of period | $ | 46,259 | $ | 16,880 |
The condensed consolidated statement of cash flows for the six months ended
Investors: investors@metals.co
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