The Metals Company (TMC 0.77%) is a Canada-based deep-sea mining company that could be on the cusp of unlocking a new source of critical metals.
The company owns exploration rights for a zone in the Pacific Ocean with billions of wet tonnes of nodules that contain nickel, copper, cobalt, and manganese, which is essentially the critical parts of an electric car battery in a potato-sized rock.
Given the scarcity of these metals, and the viability of the zone under its exploration licenses, TMC's stock has soared over the past 12 months, with an impressive gain of more than 800%.
If you had invested $1,000 in TMC this time last year and held on to your shares, your investment would be worth about $9,000 today.
NASDAQ: TMC
Key Data Points
Trading at almost $8 a share today, the stock could look inexpensive at first glance. But price and value are not the same thing, so before you decide to buy in, let's take a quick look under the hood.
TMC's future looks shiny, but risks lurk beneath the surface
The first thing to understand about TMC is that it's still pre-revenue; it's not taking in money. It doesn't mine nodules commercially, nor does it have a highly certain timeline when mining will start.
A large part of that has to do with a regulatory impasse that has stalled TMC's operations for multiple years.
There are two things to know about that. One, there's no global rulebook governing how deep-sea mining should proceed. And, two, the agency responsible for making one (the International Seabed Authority) has spent years debating the rules without finalizing them.
A deep-sea nodule collector docking on an offshore vessel. Image source: The Metals Company.
Without that rulebook, TMC's future looked murky. But then, the White House took an interest this year. Now, an obscure U.S. deep-sea mining law could help TMC initiate commercialization at the end of 2027, though it's far from clear if the company can legally bypass the ISA.
TMC reported a third-quarter net loss of $184.5 million, with about $165 million in liquidity. As such, this metals stock remains a speculative play. Aggressive investors comfortable with the risk should size their positions accordingly.
