TMC the metals company Inc. ((TMC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for TMC the metals company Inc. presented a mixed sentiment, highlighting both the company’s robust financial standing and strategic advancements, while also acknowledging challenges such as increased net losses and regulatory delays. The call underscored TMC’s strong liquidity position and significant resource valuation, alongside progress in regulatory applications and strategic international partnerships. However, these positives were tempered by the impact of increased net losses and regulatory delays due to the government shutdown.
Strong Liquidity Position
TMC the metals company Inc. reported a solid liquidity position with approximately $165 million available. The company also anticipates additional proceeds from in-the-money warrants and other sources, potentially amounting to over $400 million. This financial strength is expected to support the company’s working capital and capital expenditure needs for the foreseeable future.
Significant Resource Valuation
The company has published SEC-compliant technical reports indicating a total resource value exceeding $23 billion. The combined project net present value (NPV) is reported at $23.6 billion, underscoring the substantial economic potential of TMC’s resources.
First Commercial Recovery Permit Application
TMC has made significant strides in its regulatory efforts, launching three applications with NOAA, including the first-ever application for a commercial recovery permit. This marks a critical step towards achieving operational readiness.
Milestone in Battery-Grade Manganese Production
The company successfully converted nodule-derived manganese silicate into battery-grade manganese sulfate. This achievement demonstrates TMC’s capability to produce key metals in sulfate form, essential for next-generation electric vehicle platforms.
Strategic International Partnerships
TMC’s Hidden Gem vessel is set to participate in Japanese nodule collection trials, highlighting the company’s international collaboration efforts and opening up commercial opportunities.
Increased Net Loss
The company reported a net loss of $184.5 million for the quarter, a significant increase from $20.5 million in the same period of the previous year. This increase was primarily driven by share-based compensation and changes in royalty liability valuations.
Regulatory Delays Due to US Government Shutdown
Progress on NOAA’s review of TMC’s applications was slowed due to the US government shutdown. However, work has resumed, and the company remains optimistic about its regulatory progress.
Forward-Looking Guidance
During the earnings call, TMC reiterated its strong liquidity position and substantial resource value. The company projected anticipated revenues of nearly $600 per dry ton of nodules during steady-state production from 2031 to 2043, with a projected EBITDA margin of about 43% per ton. Despite the reported net loss, TMC expressed confidence in obtaining a commercial recovery permit by 2027, supported by ongoing regulatory progress and its strategic positioning to reduce US dependency on foreign critical minerals.
In conclusion, TMC the metals company Inc.’s earnings call painted a picture of a company with strong financial underpinnings and promising strategic initiatives. While challenges such as increased net losses and regulatory delays were acknowledged, the overall sentiment was one of cautious optimism, with significant advancements in resource valuation, regulatory applications, and international partnerships paving the way for future growth.