TMC's Q3 2025: Contradictions Emerge on Regulatory Streamlining, Production Timing, and Warrant Proceeds

Date of Call: None provided

Financials Results

• EPS: $0.46 net loss per share, compared to $0.06 net loss per share in Q3 2024 (net loss $184.5M vs $20.5M in Q3 2024)

Guidance:

• Targeting commercial production in Q4 2027.
• Company expects a commercial recovery permit in 2027 and says NOAA's streamlined/consolidated application process could accelerate timing.
• Liquidity position: approximately $165M cash today, >$50M from in‑the‑money warrants and over $432M potential if all warrants exercised.
• Management states cash is sufficient for at least the next 12 months and is preparing to order some long‑lead items.

Business Commentary:

• Regulatory Progress and Collaboration:
• TMC reported ongoing productive discussions with NOAA, with both exploration applications deemed compliant, and the exploration permit expected to be granted concurrently with the commercial recovery permit.

• Proposed regulations combining exploration and commercial recovery permits aim to streamline the process, and TMC's unique position with prepared commercial recovery permit applications is expected to benefit from this streamlining.

• Cash Position and Warrant Exercises:

• As of Q3 2025, TMC has $165 million in liquidity, with additional potential proceeds from warrant exercises exceeding $400 million.
• The strong cash position is attributed to recent warrant exercises, and the potential for more incoming cash from warrant exercises is expected to support TMC's expansion efforts.

• Technical Milestones and Resource Potential:
• TMC achieved a significant milestone by converting nodule-derived manganese silicate into battery-grade manganese sulfate.

• This milestone demonstrates the viability of extracting essential metals from nodules, enhancing the potential for future production and reducing technical risks.

• Strategic Partnerships and International Collaboration:

• TMC announced a collaboration with Japan to test nodule collection, with Altis's hidden gem vessel playing a key role.
• This partnership supports TMC's global presence, enhances its technical readiness, and potentially opens new commercial opportunities.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "we continue to feel confident that our U.S. pivot will lead to a commercial recovery permit in 2027"; "we have no need anytime soon to tap the public capital markets"; highlighted milestones (SEC/Canadian resource statements, PFS, reserves) and strong liquidity (~$165M) as reasons for confidence.

Q&A:

• Question from Dmitry Silversteyn (Water Tower Research): Can you repeat the total potential proceeds if all warrants are exercised?
  Response: Total potential additional proceeds would be over $432 million (majority from $11.50 SOC warrants); current liquidity ~$165M and >$50M from in‑the‑money warrants.

• Question from Dmitry Silversteyn (Water Tower Research): Is the Hidden Gem deployment to Japan pro bono or will TMC be paid for the work?
  Response: TMC will not do it pro bono; Allseas will contract with the funding foundation and TMC will receive some financial benefit under that arrangement.

• Question from Dmitry Silversteyn (Water Tower Research): How would NOAA's combined exploration and commercial recovery permit process work in your case?
  Response: Regulatory changes would allow NOAA to consider the commercial recovery permit concurrently (rather than sequentially) for applicants like TMC who already have commercial‑grade data, potentially accelerating reviews, though a sequential path still aligns with a Q4 2027 start.

• Question from Jakob Stefanski (webcast): Will the exploration permit be granted at the same time as the production permit? If not, when is the exploration permit anticipated to be approved?
  Response: Management said timing is not specified but either a consolidated or sequential (exploration then commercial) path is consistent with the Q4 2027 production target; commercial permit is not the sole critical path to begin preparations.

• Question from James Silke (webcast): What opportunities exist to fund, permit and construct US refining capacity as implied by the PFS?
  Response: Most refining investment is expected in the 2030s; TMC emphasizes flexibility in product formats, clear PFS assumptions, and multiple potential capital sources (US government and private markets).

Contradiction Point 1

Regulatory Streamlining and TMC's Permit Process

It involves the streamlining of regulatory processes, which could significantly impact TMC's permit acquisition timeline and project execution, affecting investor expectations and operational planning.

Does a gating and exploration license require a commercial project? Why combine these two licenses, and how does this apply to your specific situation? - Dmitry Silversteyn (Water Tower Research)

20251114-2025 Q3: Today, if you read the regulations, you have to have an exploration license before they'll consider a commercial recovery comment. That's impractical in our case because we are slightly unique case. And in fact, I'd say we're the only company in the world who has an already prepared commercial recovery permit application with all of the substantiating data. So from NOAA perspective, like we've already got an exploration license, it's with the ISA. So we'd like you to sell work on the commercial recovery permit straight away. And they're like, yes, we want to start work on that as well. but we do need to change the regs to allow for that. - Gerard Barron(CEO)

How will NOAA adjust its regulatory process, and how does this apply to TMC specifically? - Dmitry Silversteyn (Water Tower Research)

2025Q3: NOAA's proposed regulatory changes aim to streamline the application process. Currently, a separate exploration license is required before a commercial recovery permit can be considered. As TMC's case is unique with a pre-prepared commercial recovery permit application, the proposed regulations will allow for immediate consideration of the commercial permit. - Gerard Barron(CEO)

Contradiction Point 2

Production Timing and Permit Requirements

It involves potential changes to the production start date and permit requirements, which could impact investor expectations and operational planning.

Will the exploration permit be granted concurrently with the production permit? If not, when is the exploration permit expected to be approved? - Jacob Stefanski (Webcast)

20251114-2025 Q3: The production start date in Q4 2027 is independent of the permit granting process. - Craig Shesky(CFO)

Will the exploration and production permits be granted simultaneously? If not, when is the exploration permit expected to be approved? - Jacob Stefanski (Webcast)

2025Q3: The production start date in Q4 2027 is independent of the permit granting process. While there is potential for a streamlined exploration and commercial recovery permit process, the timeline remains consistent with the original production start date. - Craig Shesky(CFO)

Contradiction Point 3

Potential Proceeds from Warrant Exercises

It involves the total potential proceeds from warrant exercises, which impacts financial planning and investor expectations.

What is the total potential cash if all warrants are exercised? - Dmitry Silversteyn (Water Tower Research)

20251114-2025 Q3: The total potential proceeds, excluding some that were exercised over the course of Q3 and in October, total potential additional proceeds would be over $432 million, the majority of which would be the $11.50 strike price public and private warrants from the SOC deep green business combination, and those have an expiration date of September 2026. - Craig Shesky(CFO)

What are the total potential proceeds if all warrants are exercised? - Dmitry Silversteyn (Water Tower Research)

2025Q3: The total potential proceeds are over $432 million, primarily from the $11.50 strike price public and private warrants from the SOAC/DeepGreen business combination, which expire in September 2026. There are also other warrant categories that may involve cashless exercise. - Craig Shesky(CFO)