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Date
Thursday, August 14, 2025 at 4:30 p.m. ET
Call participants
Chief Executive Officer — Gerard Barron
Chief Financial Officer — Craig Shesky
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Takeaways
Project net present value-- Combined NPV is reported at $23.6 billion as of 2025, comprising $5.5 billion for the Nori D area in the prefeasibility study (PFS) and $18.1 billion for additional areas from the new initial assessment (IA).
Production timeline-- Management confirmed Q4 2027 as the targeted production start date, following permitting and ramp-up periods.
PFS reserves-- First-ever reserves declared for a nodule project, with 164 million wet tons of recoverable nodules in the PFS; assumed life of mine is just over eighteen years, with production start date modeled as Q4 2027.
Steady-state production-- Steady-state annual production is modeled at 10.8 million wet tons during 2031-2043, scaling up to nameplate capacity of 12 million tons in select years.
Cost competitiveness-- C1 nickel cash costs (non-GAAP) are projected at just over $1,000 per ton, positioning the company below most global nickel producers outside Russia.
EBITDA margins-- Steady-state EBITDA margins are expected at 43%, or $254 per ton, during 2031 to 2043, with margins projected to approach 50% by 2040 as US refining capacity is added.
Development CapEx-- Offshore pre-production CapEx is reduced to under $500 million in the PFS; onshore refining CapEx is estimated at $4.4 billion, with $4.2 billion planned for the 2030s, after production begins.
Liquidity and cash position-- Pro forma cash was $120 million as of July 4, 2025, following receipt of $85.2 million from Korea’s Inc., $35 million from a registered direct offering, $148.8 million via ATM, and $6.9 million from warrant and stock option exercises.
Regulatory progress-- NOAA confirmed full compliance for exploration license applications, initiating a 100-day certification process as of July 27-28, 2025; the company expects permitting and regulatory milestones to continue advancing in tandem.
Strategic investment-- Korea’s Inc. completed a strategic investment of $85 million in June 2025, with potential for expanded US-based refining in partnership withTMC the metals company(TMC -0.55%).
Board and partnerships-- Two new board members added: Michael Hess and Alex Spiro, both bringing significant expertise in energy, finance, and high-stakes negotiations relevant to project execution and capital access.
Offtake flexibility-- Until US refining capacity is built, management is considering offtake to Korea’s Inc. or tolling options, with processed materials targeted to return to the US.
Operating expenses-- General and administrative expenses increased to $11.5 million for fiscal Q2 2025 (period ended June 30, 2025), mainly reflecting share-based compensation and consulting costs related to the US regulatory pathway.
Accounts payable-- Balance was $47.1 million at June 30, 2025, including $32.4 million owed to Allseas, with most amounts eligible for settlement in equity at TMC the metals company’s discretion.
Summary
The earnings call unveiled a significant advancement in project economics, with the PFS and IA supporting a multi-billion dollar NPV underpinned by first-ever nodule reserves and a robust regulatory pathway led by NOAA. Management emphasized the start of production in Q4 2027, facilitated by recent strategic investments and strong alignment with US mineral policy. During the period, cash balances were meaningfully strengthened through equity raises and the Korea’s Inc. partnership, supporting near-term capital needs and providing flexibility for staged offshore and onshore development. Board appointments and updated state sponsorship agreements broadened strategic reach and facilitated operational progress. The regulatory process continues to advance as proposed amendments and concurrent license reviews accelerate the permitting timeline, bolstering confidence in execution.
CEO Barron stated, "TMC is here to stay, and we are just getting started," citing a "wide moat" and regulatory clarity as key differentiators from industry peers.
CFO Shesky stated, "Our development CapEx assumes $4.4 billion for onshore with the majority of spending planned well after initial production is underway."
Management confirmed, "NOAA has begun the process of certifying these applications," highlighting each regulatory milestone as a derisking event for investors.
The company reported free cash flow (non-GAAP) for fiscal Q2 2025 was negative $10.7 million, compared to negative $122 million in fiscal Q2 2024, attributing improvement to lower vendor payments and increased environmental spending.
Industry glossary
CCZ (Clarion Clipperton Zone): A mineral-rich area of the Pacific Ocean seafloor targeted for polymetallic nodule collection and processing.
PFS (Prefeasibility study): A technical and economic assessment of a mining project with a ±25% cost estimate accuracy, used to guide investment decisions prior to full feasibility analysis.
IA (Initial assessment): An early-stage economic evaluation of a project, typically presenting broad assumptions and ±50% cost accuracy.
NOAA: United States National Oceanic and Atmospheric Administration, the primary federal regulator overseeing deep-sea mineral exploration and mining permitting in US jurisdiction.
C1 cash cost: A metric representing the direct cash cost of producing one unit of finished metal, net of byproduct credits, and used to assess cost competitiveness.
EBITDA margin: The ratio of earnings before interest, taxes, depreciation, and amortization to total revenue, indicating core profitability.
Nodule: Naturally occurring mineral concretions on the seafloor, containing economically significant concentrations of nickel, manganese, copper, and cobalt.
ATM (At-the-market offering): A financing mechanism enabling a company to sell shares directly into the market over time at prevailing prices.
Offtake agreement: A contractual arrangement for the purchase of a portion of a project's future production, often used to secure financing or strategic partnerships.
Allseas: A partner company providing offshore engineering and vessel services for TMC the metals company’s mineral collection operations.
Korea’s Inc.: A major global nonferrous metals smelter and key strategic investor in TMC the metals company, with processing capabilities relevant to anticipated production streams.
Full Conference Call Transcript
Gerard Barron: Thanks, Craig, and thanks to all of you for attending. So firstly, I want to acknowledge everyone who made the pilgrimage to New York for our first-ever strategy day on August. And that includes my leadership team, board of directors, our new and long-time strategic partners, our sponsoring states, our research analysts, institutional investors, and a select group from our army of retail investors. I believe this experiment was a resounding success, probably the single most exciting workday that I've ever experienced, and if you are not part of it this year, fear not. We intend to repeat this on an annual basis, getting bigger and better each time.
And as our coalition of investors and partners continues to grow, just make sure you hold enough TMC shares when the invites go up. So the day was packed with meaningful conversations, a deep dive into our partnerships with an exciting panel, Edward and Stephanie Herimer of Allseas and Korea's Inc. Chairman Yunbi Choi. And in true TMC style, the evening ended on a high note, quite literally, with a spirited karaoke party. The strategy day also featured the ringing of the Nasdaq closing bell, which our Nasdaq rep said was one of the most enthusiastic and well-attended that they ever had.
And this moment gave me an opportunity to reflect on what has happened in the previous four years since we last rang that same bell. And I keep coming back to our key TMC motto, adapt or die. And it's not just that we've been able to adapt to a capital-light approach, it's not that we've been able to adapt to a new regulator, it's that amidst all of this adaptation, we've been able to keep the project moving forward while so many others have been stuck at zero.
And this now puts us in a unique position where we have a wide moat around the business due in part to all of the project spending and historic milestones over the last fourteen years. But also because we're one of the unique companies with competency in this new industry that can actually take the path offered by the existing US seabed mining code. Many others have no choice but to wait for the long-promised and never-delivered ISA mining code. And I believe that the pace of our progress is only going to accelerate from here.
With a PFS in hand as the only commercially viable deep seabed resource opportunity in the next several years for any potential customers, commercial partners, and, of course, public shareholders. Make no mistake. TMC is here to stay, and we are just getting started. Another highlight of August 4 was the release of our PFS and initial assessment. Two documents with sign-off from qualified persons showing a combined project net present value of more than $23 billion while also showing a clear capital attrition path to first production. The PFS also included a world first, reserves for a nodule project.
Now I do know that there are some who may have been hoping for production sooner than Q4 2027 expected start date. First of all, as anyone familiar with resource investing will tell you, Q4 2027 is right around the corner when talking about a multi-decade project of this scale and value. It's also important to keep in mind that there has always been an anticipated ramp-up period post-permitting. Where modifications and mobilization with the hidden gem would be required prior to beginning commercial production. And this anticipated ramp-up period has always been expected by the research analysts who cover our stock.
Back last year in November when the share price was below a dollar, we discussed the fact that we would not be making investment on the hidden gem until we had regulatory certainty. We're now excited to be ramping up this work again. And with partner, Allseas. And instead of a sequence where that work begins after the grant of a permit, we and the board soon expect to have the confidence to get moving. And this is due to the signals and tangible progress coming to us from DC. Not just to issue a permit, but do it in a way that can be legally defensible, for many decades to come.
So today's agenda, first, we'll take you through a summary of all the amazing things that have happened in the last few months, including the strategic investment from Korea's Inc. We've also renewed our partnerships with Nauru and Tonga. Reaffirming our shared science and rules-based approach to delivering lasting benefits for the Pacific nations while building the secure critical mineral supply chains underpinning reindustrialization, good jobs, and resilient economies. I will then discuss our cadence of regular predictable progress at NOAA including our notice this week of full compliance on our exploration applications. And I'll then turn it over to Craig to discuss the PFS DIA, and our financials.
Well, I'm happy to again report that we have renewed and strengthened our agreements with both The Republic Of Nauru and the Kingdom Of Tonga. Our longstanding sponsoring states who have led from the front since the beginning. And these updated agreements reaffirm our shared commitment to a science rules-based approach to developing this new industry. Setting a high bar for environmental stewardship, transparency, and community benefit. For Nauru and Tonga, these partnerships are designed to deliver durable, economic opportunities. Capacity building, and long-term revenues that can support generations to come. They provide the stable, collaborative partnerships we need to responsibly advance, towards first production. supplies of critical minerals.
Also contributing to US and allied efforts to secure resilient On a personal note, I was I very much enjoyed our meetings in DC with the Nauruan delegation on August 6. And it was great to see the US State Department recognize the importance of our sponsoring state. In June, we announced a landmark strategic investment of $85 million from Korea's Inc, the world's largest smelter of nonferrous metals. Korea's Inc is positioned to use TMC's USA nodule-derived materials to produce refined metals copper foil, and p cam in their existing facilities in South Korea and potentially build new facilities here in The USA.
To further that ambition in August, I traveled to DC with Chairman Choi, Among others, we met with David Copley, the president's critical mineral czar, to discuss securing domestic supply chains and advancing US mineral independence. And I look forward to another visit with Korea's Inc. On their home turf this September as we push on bringing additional investment into The United States. This quarter, we welcomed Michael Hess, and Alex Spiro to the TMC board, two highly connected leaders whose experience spans global energy, finance, law, and high-stakes negotiation.
Michael Hess spent time at Goldman Sachs and KKR and now heads the Hess family Corporation and brings deep relationships across government and industry that will help accelerate our access to capital and strategic partnerships. Of course, the Hess family are recognized as one of the great industrial giants in The United States. Alex Spiro, one of America's most prominent trial lawyers and strategic advisers, represented some of the biggest names in the business, and technology and his insight and network will be invaluable as we navigate the complex intersection of policy, markets, and innovation And together, this board combines unmatched vision, credibility, and connections, giving TMC the strategic edge we need to move Norad into production.
This quarter, we continued methodically moving the regulatory ball forward under The US deep Seabed Hard Mineral Resources Act. A clear enforceable framework that gives us visibility and confidence in our path to production. I know it's not always quick enough for everyone, but just take a step back on how fast these milestones have been achieved since the initial applications were submitted just a few months ago. In April, application submissions, in May, substantial compliance on the exploration license applications and in July, proposed amendments to Dishmora to expedite the process.
And on August 12, NOAA confirmed full compliance for our exploration license applications, another important milestone that validates the thoroughness of our submission and moves us to the next stage in the process. And I'm pleased to say that NOAA has begun the process of certifying these applications. A hundred-day process that started on July 27 and July 28. Each regulatory milestone derisks the project and strengthens the investment case. And we are systematically progressing through a transparent US regulatory process. And with a clear path ahead toward first production from NORED in Q4 2027.
We're also looking forward to this administration's proposed amendments to streamline permitting and supportive guidance from senior officials underscoring the US government's intent to lead in the production and processing of deep seabed critical minerals. The public comment period on these amendments will be concluded in September. And in contrast to NOAA's great progress in the last several months, I'd like to acknowledge that the ISA finished their thirtieth session this July. The ISA calls continue to keep calling for regulations, but to be particularly interested in delivering those regulations. Keep in mind that NOAA had pioneered deep-sea environmental research and had put in place working regulations prior to the ISA ever being formed.
So on that note, I would like to turn the call over to our chief financial officer, Craig Shesky.
Craig Shesky: Thank you, Gerard. For those in attendance, or for those who have reviewed the presentation during strategy day, a lot of this is going to be familiar. But there's quite a bit of detail. So I'm now happy to go through some of the key points in our historic landmark prefeasibility study and initial assessment in deeper detail. Project economic studies come with three levels of increasing confidence. An initial assessment, which gives you a sense of what the project could be, within a broadband of plus or minus 50% cost estimate accuracy. We produced an IA in March 2021 over the Noridi area. A prefeasibility study gives you a sense of what the project should be.
Then narrows that accuracy to within 25%. And last is the feasibility study that describes what the project will be an even tighter cost accuracy band, and that's often the basis for project finance. So on August 4, we published two new studies, a PFS for Nori D, and a new IA that covers the rest of the resource in Nori and TOML. Together, these two studies should give you a good sense of what our first project should be in the Noridian area and what the rest of the resource can be in terms of Economics. So Taking A Step Back And Looking At The Geographical Areas That Each Study Covers, The PFS Covers NORE D.
The IA Covers Everything Else. But Neither Study Covers The Additional Ground That We've Applied For Under The US law where we know we have priority right. And our management team estimates these areas to have approximately 300 million tons of exploration potential. The proximity to Nori D and Tamalev areas where we do have quite a bit of exploration data. So the results as of the 2025 total combined project billion dollars comprised of an NPV of $5.5 billion of that, an additional $18.1 billion on NPV for everything else. So let's zoom in a little bit on the feasibility study or PFS. The estimated amount of recoverable nodules for this study is 164 million wet tons.
Assume production start date is Q4 2027, with a life of mine just over eighteen years. Annual production in steady state was modeled at 10.8 million tons of wet nodules, and steady state for the PFS is defined as the years 2031 through 2043. Off shore, this level of steady state production is going to require four converted drill ships. In onshore, we assume processing existing RKEFs, rotary kiln electric arc furnaces in Asia, and then building refining capacity in The United States. We expect to start relatively small towards the end 2027 and gradually remain for capacity. Before adding a second vessel in 2030.
Then ramping up to steady state four vessels by 2031, hitting our nameplate capacity of 12 million tons per year in a few of the years of production. But, again, on average, during that steady state, 10.8 million tons per annum. We expect to generate almost $600 per dry ton of nodules during steady state production. As one might expect, it's not a smooth line, Prior to the construction of US refineries, the revenue per dry ton will be a bit lower, a bit less than $500 per ton in 2032, for example. And then by the end of the twenty thirties, with two US refineries running, expected revenue per ton is approximately $640.
Overall, the revenue mix is expected to be similar to what we shared with the market over the last several years based on the initial assessment on NorED from 2021. 45% of revenue coming from nickel products, 28% from manganese, 17% from copper, and a 9% cobalt is the smallest contributor to revenue. So where does all of that put TMC on the cost curve? Well, including the valuable byproducts, are estimated to account for about 55% of total revenue, our c one nickel cash costs are just over $1,000 per ton. And that's lower than nearly all producers outside of Russia. Including most Indonesian producers.
Even on an all-in sustaining cost basis, our nickel costs including byproduct credits would be just over $2,500 per ton. Said simply, will be profitable in nearly any nickel price environment. With steady state revenue per dry ton of just under $100 and OpEx per ton of $340, which also accounts for corporate overhead and royalties, we arrive at our EBITDA margin per ton expected to be about 43% or $254 per ton during the steady state years defined as 2031 to 2043. During that time, of course, we expect to transition from mainly selling mat from Asia to then selling higher value refined products like nickel sulfate, cobalt sulfate, and copper cathode in The United States.
So the early twenty thirties would see EBITDA margins in the low thirties, but by 2040, that EBITDA margin is closer to 50%. And this anticipated ramp-up in profitability makes it worthwhile to spend on the offshore refinery CapEx after we begin production while also taking a huge step towards helping The US establish mineral independence. So how are we going to develop these commercially viable operations? Well, the March 2021 initial assessment for an OED envisioned $7 billion of upfront CapEx, of which $2.2 billion was for offshore vessel CapEx. For the prefeasibility study, we've been able to bring that offshore preproduction number down to less than $500 million for the offshore component.
And where possible, we've assumed contracting the services we need and only deploying CapEx where without deploying CapEx ourselves, we wouldn't be able to get the service. And as a result, our development CapEx assumes for $4.4 billion onshore for construction of the refining capacity to match the offshore production. This approach ensures that we can deliver critical products to The US as contemplated by NOAA regulations while significantly increasing our payables. By producing a higher value product, again, nickel sulfate.
Cobalt sulfate, before any US refineries are built we have an opportunity to either give offtake to Korea's zinc for our alloy and matte on the condition that processed materials are returned to The US, or we can toll through their facility and return processed materials to The US ourselves. Because we've not yet developed the definitive agreements with Korea's Inc, some of the production is left at the alloy and mat level. And as far as The US refining capacity, we're aiming to build that together. And many of the meetings that Gerard talked about and many that we expect to occur in the coming months are to give that effect.
But as I said earlier this month during the strategy day, not gonna bite off more than we can chew. And we do expect to be in production and producing significant revenue prior to greenlighting any such onshore spending. In fact, approximately $4.2 billion of this $4.4 billion onshore CapEx estimate is assumed to be spent in the twenty thirties, well after we've been in production for some time. Generating significant revenue. Moving on to the initial assessment, that second study shows the potential of the resource beyond NORE d. Effectively, the rest of Nori and Tamil. And the estimated amount of recoverable nodules for the initial assessment is 670 million tons wet.
Assumed production start date is 2037 with a life of mine of twenty-three years. This initial assessment assumes contracted services offshore with eight production vessels each equipped with three collectors at 20 meters each. So putting it all together, adding up the NPV of $18.1 billion for the IA, and $5.5 billion for the prefeasibility study we arrived at the total nest estimated resource NPV of $23.6 billion. And over the life of both projects, on an undiscounted basis, revenue of approximately $369 billion and EBITDA in excess of $200 billion and a position in the first quartile of the cost curve that makes this model very difficult to break across any commodity cycle.
And yet, despite the undeniable quality and size of this resource, and our expected position in the first quartile of the cost curve, feel we remain undervalued compared to peer developers and explorers. The left side of this page, you'll see a TMC valuation example, which, again, is purely for illustrative purposes. Using a slight premium to the upper end of the nickel developer and explorer evaluations, and you apply that to the NPV of $5.5 billion, which keep in mind, in that PFS, we expect to have a more defensible cost curve position and generally lower CapEx per ton than many of those peers.
And then you add to that the average nickel developer explorer valuation multiplied by the initial assessment NPV, you get to a total illustrative market value based on comps, approximately $10 billion. Which would be over $20 per share. From there, you can see on the right side of this page what nickel or copper producers trade at as a multiple of net asset value, and this shows the potential for multiple expansion. As production approaches, then begins. So moving on to our liquidity profile. At June 30, TMC had pro forma cash of approximately $120 million.
Now the headline in our filings from both our press release and our 10 q was $115.8 million, but that $120 million includes the final registered direct offering proceeds warrant exercises, and unsecured credit facility payments made just a few days after quarter end. By July 4, it was a $120 million. And as we disclosed last quarter, our s three shelf registration statement capacity has been used, and current ATM expires in the fourth quarter of this year. So, again, TNC expects to refresh the s three and ATM before year-end as a matter of good corporate housekeeping. The ATM was last used on 04/17/2025, and this was prior to the second quarter strategic capital raises.
Onto the financial results. In the 2025, TMT reported a net loss of $74.3 million or 20¢ per share, compared to a net loss of $20.2 million or 6¢ per share the same period 2024. The net loss for the 2025 included exploration and evaluation expenses of $10.5 million versus $12.4 million in Q2 2024, general and administrative expenses of $11.5 million versus $7.9 million in Q2 2024, and other items totaling $52.3 million versus a slight gain in Q2 2024.
Exploration and evaluation expenses decreased by $1.9 million in the 2025 compared to the same period in 2024, primarily due to a decrease in mining, technological, and process development activities, partially offset by an increase in share-based comp due to the amortization of the fair value of restricted stock units and options granted to officers in the 2024. G and A expenses increased by $3.6 million in the 2025, compared to the 2024 mainly due to an increase in share-based compensation a result of the amortization of the fair value of RSUs and options granted. To directors and officers in the second quarter of last year. As well as an increase in consulting costs pursuant to The US regulatory path.
Other financing activities. Other items significantly impacted the net loss in the 2025 include the Nauru warrant costs, change in the fair value of warrant liability, and foreign exchange movements. Moving on to free cash flow. Free cash flow for the '25 was negative $10.7 million compared to negative $122 million in the 2024. Net cash used in operating activities was $10.7 million, for the second quarter primarily due to higher payments to campaign eight vendors in the comparative period. And this was partially offset by an increase in environmental payments. Free cash flow is a non-GAAP measure, I would like to point you to the non-GAAP reconciliation table included in the slide deck on our website.
Do believe that the cash on hand is going to be more than sufficient to meet working capital and CapEx requirements for at least the next twelve months from today. In the 2025, of course, we had a significant increase in the cash balance, following the receipt of funds of $85.2 million from the Korea's Inc. Partnership, $35 million net proceeds from the registered direct offering, $148.8 million from the ATM use in the first half of the year, and $6.9 million from various stock option and warrant exercises. A portion of these proceeds was used to repay the $7.5 million all fees working capital loan along with outstanding interest prior to its maturity.
Our accounts payable and accrued liabilities balance as at 06/30/2025 was $47.1 million, and this includes $32.4 million owed to Allseas for various services provided again, the majority of which can be settled in equity at TMC's discretion. warrants, The significant increase in warrant liability is due to the increase in the fair value of private reflecting the significant increase in the company's share price. So with that, operator, we'll turn it back over to you take some questions from those on the line.
Operator: As a reminder, if you'd like to ask wait for your name to be announced. To withdraw your question, please press 11 again. First question comes from Jake Sekelsky with Alliance Global Partners.
Jake Sekelsky: Hey, Gerard and Craig. Thanks for taking the questions. Of course. Hey, Jake. How are you? Hey, Jake.
Gerard Barron: I'm good. Thank you. So now that the PFS is out,
Jake Sekelsky: can you just comment or provide some color on what work needs to be done in order to get through the feasibility level, and maybe the timeline there?
Gerard Barron: Yeah. Look, I think the biggest thing that we're gonna focus on is getting to our final agreement with our partner, Allseas. Now that we see a clear regulatory path through The United States, the next step is really not just focusing on feasibility, but getting ourselves to the you know, FID, the investment decision to begin ordering some of the longer lead time items to allow us to hit our target of Q4 2027 production date. So it's been this interesting, dance, this balance between not wanting to spend too early, certainly when the PMC valuation was much lower.
But now that we see clarity, making sure that we give sufficient ammo not just to all fees, not just to ourselves, not just to the board, but also to the market. To make clear that we expect the permit to be coming, and therefore, it makes sense to begin spending a little bit to get that production system ready to go. So I would say, Jake, that's probably the number one, important point. We also intend, of course, over the coming months to you know, think through the financing mix of you know, going beyond this first vessel. And ensuring that we explore every opportunity that is now being presented by the US government.
As you've probably seen, there's quite a bit more in terms of funding opportunities from various departments, whether it's within Department of Defense, DFC, Ex I'm Bank, Department of Energy. There was the $1 billion allocated for Critical Minerals just this week. So we're gonna be very busy again with partners such as AllSeas, Korea's Inc, and potentially the US government laying out what that timeline is going to be. But really focusing on that first vessel is priority number one.
Jake Sekelsky: Okay. That's helpful. And then on the permitting side of things under NOAA, now that you're in the certification stage, what are the next major steps or milestones that we should keep an eye out for as we head into the second half of the year in 2026?
Gerard Barron: Well, I guess the closing of the comment period and, you know, I think the administration and Noah have made it very clear that they have, introduced changes to those regulations to allow fast tracking of permitting. And so I think what you should look forward to is you know, good news coming out of the regulator. And, you know, I must say, considering this is the first live application that they've had in many years or first new application, Noah had been amazing. Know, I think they are motivated and excited about, you know, the work that comes with this application and, you know, of course, these rules of dishware have been around for decades.
And finally, the moment is here. So I think what you can expect to see is, you know, those amended changes adopted, and you can expect us know, to be you know, having a regular cadence. Would I say we are in daily contact with our regulator? Probably. Yep. Probably daily. And so you know, of course, the big part is permitting based on the environmental impact study. And, of course, we've spent, you know, hundreds of millions of dollars and more than a decade gathering that data, which is amazingly compelling.
And so, look, we expect to have you know, more information to be sharing with not only the regulator, but the broader public as, you know, we make that information available because you know, what I can tell you is it's all good news there. So I guess from a null perspective, just more permanent uncertainty. And they wanna see this resource in production. You know, you saw the critical minerals are, David, Copley traveled to the Cook Islands recently. We had a tremendous reception at the White House where they received not only, Korea's zinc and their team led by their chairman, but also the Republic Of Nauru.
And you know, the message that they are consistently saying is critical minerals are important, seabed minerals are super important. The United States wanna lead that race. And, obviously, we are the most advanced in that category, so it's a perfect coming together.
Jake Sekelsky: Fair enough. Okay. That's all on my end. Thanks again.
Gerard Barron: Thanks, Jake.
Operator: Our next question comes from Heiko Ihle with H. C. Wainwright.
Heiko Ihle: Hey, there. Thanks for taking my and thanks for inviting me to your Investor Day earlier this month. I like how the karaoke session came up on this call.
Gerard Barron: Hopefully, no photos or video, but thank you for attending, Heiko.
Heiko Ihle: Yeah. Allegedly. You're still calling for you're still calling for first production in '27, and your remarks and premier remarks here. It was listed in the presentation. As you know from the reports we've written, we think this is a doable timeline In your view, what main factors could either accelerate or slow down this progress in your in your view? You know, like, some societal regulatory factors that may not be quite as obvious to outsiders like me that don't talk to the government and the communities, you know, on a daily, weekly basis. And, is there maybe anything that you would leave us with on how to build our models a little bit more accurately?
Gerard Barron: Look. I don't think the government will give us anything other than encouragement to that date. Yeah. You know, what we announced to the marketplace was that you know, that timetable will take about two years, but you can know, clearly, we are receiving enough encouragement from the administration and the regulator for our board of directors to know, start deploying that capital. And, you know, I must say, with the right rigors in place and for those people that were able to, you know, review our very qualified board of directors around these topics. People like Andy Greg, who built more than $500 billion worth of capital projects in the resources space over his career at Bechtel.
Know, we have a lot of expertise on that board that understands how to allocate capital and how to how to provide governance around that. So you know, I can tell you is that we've got a very supportive board of spending that money carefully, and we've got an amazing partner in AllSeas who are equally committed to getting that boat into production. And we've also got an administration who want us to get moving. And so, you know, I think I don't see anything on the regulatory side that should influence that.
Of course, there are supply chain issues, but, you know, that's what our job at Alti's as our partner there know, that's that's our job to manage that. And Yep. You know, getting into production during the forty-seventh administration
Heiko Ihle: Hello? Hello? Yeah. During the forty-seventh administration is super important.
Gerard Barron: And so, sorry. I got disconnected for a minute. So I think all of the risks are you know, just normal business risks, Hakur, and I think we're well equipped to be able to handle those. Along with our partners.
Heiko Ihle: Fair enough. Building on that last question just a little bit. Earlier on this call, you were talking about adapt or die adapt or die. I agree with your viewpoint of having, you know, a white moat around the business. And you alluded to that as well earlier on this call. Just thinking out loud here. Given, you know, all the geopolitical risk factors and some of that was discussed earlier this month as well, Is there anything in particular that keeps you up at night or anything in particular where things have just come in, you know, substantially better? Than you anticipate?
I mean, because from the way we look at it, a lot of things were discussed earlier this month. Where, you know, the support was substantially stronger than what anyone would have envisioned. I mean, you literally had some of the government representatives present with you at the hotel.
Gerard Barron: Look. I think there's been a lot of surprises to the upside. Heiko. And I think, you know, we knew some of the cabinet when they were in opposition, of course. And so when the Trump administration came into being, know, it was very encouraging for us to find people like secretary Rubio you know, take such a prominent role in the cabinet because he had written letters and opined on this topic on both on our behalf while in opposition as had many others in the cabinet.
And so we knew the support was there, but sometimes you just know, you sometimes you get surprised, you know, and then we have we turn up at the White House and, you know, we're invited to the White House very regularly. And know, you turn up there like we did last week, and you find a room filled with all of the major departments that have a have the ability to contribute because the strong leadership coming out of the White House is saying, we want this to happen. And by the way, you'll you'll notice every agency that can help you make it happen is in the room. What do we need to do?
And then, of course, you know, a surprise to the upside is to find Careers Inc, who when I first met their chairman, was not convinced about The USA investment opportunity, but was very keen to get our material to supply his Korean facility, but over time has become absolutely convinced that he can play such an important role in supporting the critical mineral needs of this administration in The United States. And he also produces some critical minerals that the US administration really wants, like antimony and gallium. And so, you know, I'd say they're pleasant surprises on the upside. Just how the administration is mobilizing, how they want this to happen.
And, you know, I took the when I had the chairman with me last week from Careers Inc, I we asked the administration, we are you at all worried about you know, some of the criticism? And they're like, not at all. Like, it's clear we need to secure the supplies of these critical minerals you know, for decades to come. And know, so and, of course, they have experts in who've been appointed, and that's, I think, one of the encouraging things about the administration is that, you know, they have experts throughout that administration.
The political appointees that are taking the reins you know, are moving I've I've never seen a group of people other than my own team work as hard And you know, senior director Copley had just returned from a quick visit to the Cook Islands. Two days to get there, two days back, he reminded me in the back of the bus for a day on the ground, just so he could express the administration's support for this new industry. And so yeah. I'd say they're all really positive surprises to the upside. Micah.
Heiko Ihle: Fair enough. I will stop talking to question to you, and for taking my questions.
Gerard Barron: Thank you.
Operator: Our next question comes from Matthew O'Keefe with Cantor Fitzgerald.
Matthew O'Keefe: Thanks, operator. Afternoon, Gerard and Greg and team. Just a question here on the feasibility studies, particularly for the PFS there. Looked very good, and we had some discussions on it. But I was just wondering there is a cap capital sorry. There's about a $492 million CapEx to get you into the production that was outlined in the feasibility study. So I'm just wondering I know in the past and you've all Cs because they're taking care of most of the ships and such are have taken a big part of that. You have an idea of how that might be split among your partners? And will it and, you know, when we might get a sense of that?
Craig Shesky: Yeah. Sure, Matt. In terms of that $492 million and sort of the assumptions that go into it in a pre-feasibility study, there is, you know, allowance for contingencies, you know, some buffers, specific growth. There are elements in there that, you know, for a point in time, relatively conservative analysis. Ultimately end up being, something that has to be cash flow out the door between now. And commercial production. What I would say in terms of bridging to here's the breakdown of know, what's TNC, what's all Cs, you know, we've had the assumption now.
With our partner Allseas for several years of know, splitting that, preproduction CapEx which, you know, we do believe is gonna be much smaller ultimately. Than what was in the PFS. But this is what we're all drawing our eyes to now with our you know, PFS and IA release, with the strategy day behind us, with the applications over the line, and now with a pretty clear path The US regulatory front, That gives confidence to us on all to use to sharpen the pencils again and you know, make sure that we hammer out those details.
So I think it would still be a little bit premature to give a more detailed breakdown on it, but suffice it to say that it's a priority for us and for them as well. And I think that's evidenced by the fact that the LC's founder, Edward Hirma and Stephanie Hirma, you know, came over for the strategy day and, you know, spent a lot of time talking to analysts and investors on that panel, kind of laying out why they stuck with TMC through what have been some difficult times and you know, have been key participants in nearly every major equity raise that we've done. As a public company and even before that.
Matthew O'Keefe: Yeah. No. You've you've definitely got a lot of support. In the work with your partners and your so and investor base, which seems to be growing. Just to follow on that though, you mentioned earlier in the call about you know, the Department of Energy, Department of Defense, other US institutions that are do have a lot of money now allocated for critical metals. Are you in the have you looked at the I'm assuming you've looked at those programs, but are you actually applying for any, and would any of those monies be available or at least applicable to this first part of the, like, the Yes.
Ramp up, or would that all have to go towards sort of US processing capability?
Craig Shesky: I'm glad you asked that and, you know, it's a great clarification. The answer is it's not just necessarily for funding the onshore component. But there are certain programs that can have cash available for the offshore side as well. Now some of those programs, it's really it's not quite the same as it was in the Biden administration where you know, a lot of focus was downstream, but there were various programs that you know, you go through a long application process and you might not hear for nine months. Here, it's a lot more all hands on deck and perhaps it can be chaotic sometimes, but you get to the right answer.
At least you get to the right people a lot quicker. The reality is that even beyond DOD and DOE, there are certain programs where you know, the folks who would be controlling the purse strings aren't yet even confirmed. And that confirmation is likely to occur in September or October. So a lot of these conversations are gonna ripen, but the answer is absolutely yes. We are pursuing you know, potential dollars that could be made available for the offshore side as well. We don't wanna say too much on that because, obviously, you know, this a path we've been pursuing for a long time. But I would say it's less now about just, hey.
Let's fill up the application. This is one of the reasons, frankly, that you know, it perhaps wasn't as noted noticed over the course of summer, but I believe it was late June that there was a adjustment to the way funding is done within the US government And it's not just one applicant goes to DOE and DOD or DFC and EXIM. And you do it all separately. Rather there's a coordination among the National Energy Dominance Council, which of course, David Copley was one of the key people in for a long time and now is in the National Security Council. The same people are really overseeing all of the programs.
So less about sort of the very dogmatic which program you're replying to and fingers crossed, you get some response many months later. Here, it's much more coordinated and I think much more intentional. So the answer is yes, both offshore and onshore. And, we're pursuing all of these concurrently.
Matthew O'Keefe: That sounds promising. And if I may, just one last little one here just to follow on that. I know you've got a lot to do between now and ramping up, but just know, you didn't cite, like, in the mid twenty thirties or early twenty thirties to get a processing plant. If monies were available because, you know, that it would be a quake quite a quite a boon for The US to have some processing capability of the hydromet nature that you guys are looking at. Could what would sort of be could you go quicker on that?
I mean, do you still have a lot of work to do vis a vis engineering and you know, development for your for your process plant?
Gerard Barron: No. We could absolutely go quicker. And, you know, that's that's the significance of having Careers Inc's involvement. Know, they have just built a state of the art facility in Korea. And you know, so they've you know, they'd like to come and build that here in The United States. And you know, from our perspective, you know, we'd like to see that on the ground. Providing money was the right terms were available from you know, those agencies that Craig has mentioned. And Mhmm. That we think it would be a boom to support the reindustrialization ambitions for The United States. And, Matt, you know better than anyone if it ain't grown, it's mined.
And we're talking about bits, of course, because AI has everyone's attention, but we need to be thinking about atoms as well. You know, we need to build the infrastructure, and for that, you need metals. And the question is where are they going to come from? And I, you know, I wish we were as sexy as the I AI industry, but, you know, our time is coming. Because people are starting to talk about this and, as being the being part of the equation that has been a little bit overlooked. And, of course, it's become a very hot geopolitical issue, and, you know, we're we're starting to see, you know, smart money move into it.
And, you know, of course, the administration is going to lead that pathway. We saw them do a very, interesting deal with MP recently, MP Materials. And, you know, I think we're gonna be seeing them do a lot more like that
Matthew O'Keefe: Yep. Totally agree. Alright. Thanks very much.
Gerard Barron: Thank you, man.
Operator: Our next question comes from Dmitry Silversteyn with Water Tower Research.
Dmitry Silversteyn: Good excuse me. Good afternoon, gentlemen. Thank you for taking my call. Hi. Just a quick follow-up or maybe not a follow-up clarification. You didn't include it in these slides, but in your Investor Day slides, get a more detailed timeline, and you had something called provisional approval. You expect to get by the end of the SEER, if I remember correctly, the slide. And then the final approval kind of by the 2026 to let you get into production and '27. What's the what's what's the sort of the difference between provisional approval and file approval and thus getting provisional approval do anything from you for you in terms of expediting the decision-making process?
I'm I'm funding the first batch of capital expenditures or how should we think about that milestone approaching?
Gerard Barron: Look. The administration had been very, open on this topic and because there are some hoops we need to hop through. And you know, what has been made very clear to us is that if the administration came and just gave us a permit today, then we'd be tied up in legal knots, and we made out of achieve the objective that was set out in the executive order, and that is to fast track the permitting. And so the legal minds have opined on this, and it makes sense. And so what we've said, though, is it would be nice if we could have something, and hence that word provisional.
That would you know, give all of us the confidence. However, I think it's fair to say that our board, and as you know, we've raised quite a bit of money you know, in the last quarter. And our board and our investors wanna see you spend that money. Because they feel there is enough confidence coming out of the signals we have from the administration to get that permit. In fine time. But, you know, the dates we mentioned, strategy day still stick You know, we think we'll have that in a form to share by the end of the year. And, you know, it's but it'll it'll be a confidence booster. You might say. Dmitry.
Dmitry Silversteyn: Understood. Okay. That's helpful, Gerard. Thank you. Can you talk a little bit about you mentioned it a couple of times during the call about the changing regulations that Noah is has written and has published, and now they're in the common period, I guess, that's closing. What you know, you talk about it being helpful in expediting approval processes. But specifically to your project, what do you think that these new regulations can do in terms of getting you online in getting the approval?
Gerard Barron: Well, the main one is that the way the regulations stood, you needed to submit a exploration And then, once that was granted, you know, they would start working on your commercial recovery permit. But the key driver will be to be able to do those two things in tandem, because, as you know, we submitted two applications for exploration licenses. And we submitted one application for a commercial recovery permit. And so whilst that application is with the agency, the changes will just put in stone the fact that they can do those things in tandem, and they will massively shrink the permitting time frame.
Craig Shesky: Yeah. And just to clarify too, Dmitry, in reading the plain language, of DSHRA and the implementing regulations, it was always a read that, you know, yes, the exploration license grants would have to come prior to the grant to the CRP. But the plain language is clear that the applications or at least the review process could be concurrent. So what we think is ongoing with the public comment period and the proposed amendments is really a confirmation of something that really already made pure common sense, especially for some, you know, applicants like TMC where much of the environmental work for the exploration side has already been done.
Beyond that too, there's, you know, some helpful amendments in terms of just modernizing you know, these rules that were put in place in the nineteen eighties in terms of delivery of physical copies. In terms of ensuring that you know, the contractor who's done, much of the environmental work is able to write that environmental impact statement as opposed to know, sort of putting that work on a silver platter and then having you know, the writing being done, let's say, by Noah. In fact, that was actually a clarification that came through the NEPA process even before. This in 2023.
So it's really just a as they say on the on sort of the federal register, which is, I compliant comment. It's a modernization of a lot of that great work that was done. It is pretty amazing. When you look at the DSHRA legislation and then the implementing regulations and then you compare it, to what the ISA had begun working on in the nineteen nineties and beyond. They're really taking a lot of the great work and great ideas that came originally from this US seabed mining code.
So it was in very good shape, and now we're just kind of tidying it up or Noah's tidying it up around the edges to make sure that it can be more modern, more commercial, and clarifying the concurrent reprocess that Jared laid out.
Dmitry Silversteyn: Got it. Thank you, Craig. Thank you thank you for that great all the question I have. Thank you.
Craig Shesky: We have nothing else in the in the phone queue. There's one question on the webcast, from Nelson Sellers. Can the administration halt mining operations? I think that goes back to one of the reasons that we are going through this very robust and clear legal process and make sure that we're not skipping over any steps. To ensure that, you know, this permit is legally defensible for decades to come.
Very similar to any land-based mining operation where so long as the process itself was followed and all of the necessary, you know, permits were granted under the authority is actually, you know, provided to whoever that particular regulator was It's a situation where you can ensure that just a change in administration isn't going to you know, somehow alter the legal validity of that permit. Of course, we don't view this as a left versus right issue. No matter who the next administration is going to be, Critical Minerals is bipartisan. And it's not even US versus China. It's really a recognition that The US is dependent on a lot of sources for critical minerals and TMC.
Can take three of those dependencies off the table. Just from the NoriD project. So, this mineral independence issue is not something where we expect any future administration that's going to somehow decide, you know what? We're okay with, you know, being dependent on Chinese or Chinese-funded sources for some of these metals. So we anticipate that this legal process is going to be very robust and one of the reasons that it's important to let it play out. Liz, is there anything else on the phone line? Any other questions that we have?
Operator: No phone line questions at this time.
Craig Shesky: Jared, I might turn it back over to you for some closing comments.
Gerard Barron: Yeah. Thank you, Greg. Well, I guess, thank you everyone for turning up today. Thank you to my team for the amazing efforts be able to produce these results over recent months. It's it's truly admirable what we achieve with a type small team. And, of course, thank you to our strategic partners and our sponsor in states, and thanks importantly to all of our shareholders. And until next time.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.