Benzinga | Oct 4, 2021 09:17AM EDT

The Metals Company Provides Business Update

The Metals Company (NASDAQ:TMC) (the "Company" or "TMC"), an explorer of the world's largest estimated undeveloped source of battery metals for EVs, today reaffirmed its development and capital outlook and provided a business update.



Development and Capital Outlook

TMC today reaffirmed its development and capital plan through the third quarter of 2023, when it expects to submit its application to the International Seabed Authority for an Exploitation Contract for its NORI-D contract area in the Clarion-Clipperton Zone (CCZ) of the Pacific Ocean over 1,000 miles off the US western seaboard.

Gerard Barron, Chairman and CEO of The Metals Company, said: "TMC is uniquely positioned at the intersection of three megatrends underpinning the multi-decade green energy transition: electrification, decoupling of supply chains and increased focus on ESG impacts. With the rally in prices for the metals contained in polymetallic nodules and President Biden prominently highlighting the need for more domestic processing and refining of critical minerals like nickel, we expect that the demand for battery metals will continue to grow. We continue buildingthe operational, strategic and scientific foundations we need to unlock our enormous estimated resource with a lighter planetary and social footprint than land-based mining. This momentum, combined with our substantial cash position and world-class strategic partners and investors -- including Allseas, Maersk and Glencore -- position us strongly to deliver on our goals over the next two years. We expect to meet all key requirements to lodge our application by the end of the third quarter of 2023 for an exploitation contract for NORI-D, where a 3rd party economic analysis indicated, as of January 1, 2021, a project net present value of $6.8 billion assuming conservative metal prices1. The NORI-D area, ranked as the largest undeveloped nickel project in the world and representing just 22% of the Company's estimated defined resource, is only the beginning. Across our full NORI and TOML contract areas, we have identified a sufficient estimated amount of nickel, copper, cobalt and manganese in situ to support the electrification of 280 million EVs, or approximately the entire US passenger vehicle fleet."

As of September 30, 2021, TMC held cash and cash equivalents of approximately $113 million, which it believes will enable it to achieve four key milestones by the end of the third quarter of 2023. These include:

2 Completion of a pilot plant program to process and refine polymetallic nodules into critical metals including nickel, copper, cobalt and manganese which are essential to the transition to clean energy and electric vehicles;

4 Construction and deployment of the pilot collection system to lift nodules to the surface and transport them to shore where they can be processed with near-zero solid waste, no tailings or deforestation, and with careful attention to limit harm to the integrity of the deep-ocean ecosystem;

6 Completion and submission of the Environmental Impact Assessment, a key part of one of the most comprehensive deep-sea research programs to date; and

8 Submission of an application to the ISA for an exploitation contract for its NORI-D area of the CCZ, which is estimated to contain 356 million metric tonnes of wet nodules containing high-grade nickel, copper, cobalt and manganese mineral resources.2

Business Update

Following the completion of the business combination between DeepGreen Metals Inc. and Sustainable Opportunities Acquisition Corp. on September 9, 2021, there have been a number of developments related to the advancement of TMC's business and strategy, including:

* The 228-meter-long former drill ship renamed the Hidden Gem arrived in Rotterdam on September 21, 2021, to begin its conversion into what is expected to be the first ship classified as a sub-sea mining vessel by the American Bureau of Shipping. TMC and its partner Allseas expect the vessel to be operational for pilot nodule collection tests in 2022.

* TMC completed the pilot smelting phase of its pyrometallurgical campaign, deriving an alloy comprised of high-grade battery metals. The smelting work was conducted in Canada in partnership with Expert Process Solutions (XPS) with support from Hatch and Optimize Group.

* The Company launched its fourth environmental campaign this year, Expedition 5C, advancing its multi-year deep-sea research program intended to establish a rigorous environmental baseline and characterize the potential impacts of its proposed nodule collection operations, with researchers from the University of Hawaii at Mnoa, University of Maryland, Texas A&M and the Japan Agency for Marine-Earth Science and Technology.

* The International Seabed Authority continues to work against a two-year deadline to finalize regulations regarding deep sea mining by July 9, 2023, pursuant to the Republic of Nauru exercising its sovereign rights under Section 1, paragraph 15 of the 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea ("UNCLOS"). This notice has obliged the ISA to complete the adoption of exploitation regulations within two years of the request made by the member state. If the ISA has not completed the adoption of such regulations within the prescribed time and an application for approval of a plan of work for exploitation, as TMC's subsidiary NORI intends to submit, is pending before the ISA, the ISA shall nonetheless consider and provisionally approve such plan of work. An in-person ISA Council & Assembly meeting in Kingston, Jamaica has been scheduled for December 6 -- 15, 2021.