TMC the metals company Inc.

Update conference call. Joining us today are the metals company's executive chairman and chief executive officer, Gerard Barron, and chief financial officer, Craig Shefsky. Following their remarks, we'll open the call for your questions. I would now like to turn the call over to CFO Craig Sheskey as he reads the company's safe harbor statement within the meaning of the Private Security Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Craig, please go ahead.

Thank you. Please note that during this call, certain statements made by the company will be forward-looking and based on management's beliefs and assumptions from information currently available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in the safe harbor provisions or forward-looking statements that can be found at the end of our third quarter 2021 corporate update press release. Such statements may also be found in a Form 10-Q when it's available, and other reports filed with the SEC, all that provide further detail about the risks related to our business. Additionally, please note that the company's actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking statement. And the slide deck is available on our website at investors.metals.co. I'm now happy to turn it over to Jared Barron, the metals company chairman and chief executive officer. Jared, please go ahead.

Thank you, Craig, and good afternoon. And thank you all for joining us today for our third quarter corporate update conference call. You're welcome to follow along with our slide deck, or if joining us by phone, you can access it at any time at www.metals.co. So today we'll be reviewing our recently completed business combination, our financial and project development highlights, and expected upcoming milestones for the company. I'd like to begin with a recap on recent market developments and how we believe the metals company could fit into the big picture. So the green future is metallic. At COP26, the world's governments are committing to a rapid transformation of energy and transport. What's catching people by surprise is that this transition starts and ends with metals. last year the world bank pointed out that we will need to extract two to three billion tons of metal by 2050 a five-fold increase in production and a couple of months back the international energy agency ran an analysis of their own and arrived at the conclusion that to hit net zero globally by 2050 would require six times more mineral inputs than 2040 than today So in an attempt to get the message across, an industry analyst firm, Wood Mac, in October did not mince words. The energy transition starts and ends with metals. And to hit the 1.5 degree Celsius target, a five-fold increase in base metal supply would be needed, requiring an investment of $2 trillion. So meeting demands could be mission impossible. As we hurry to get out of one extractive industry in fossil fuels, the fact that the whole enterprise depends on scaling up another extractive industry in metals is understandably a hard pill to swallow. But we cannot afford to ignore it because you can't build your gigafactories in renewable power out of thin air. If you look at the U.S., it's been a dizzying few months. To electrify U.S. car sales, you need about 1.2 terawatt in battery cell production capacity. And in August, President Biden outlined the target of 50% EV sales share in 2030. And his announcement was followed by a flurry of industry announcements to construct gigafactories in the U.S., but not much detail around how these gigafactories will be supplied with raw materials. And they do need to worry about this now because it takes on average about a decade to permit and develop a new mine, even longer in the U.S. So 2030 is already yesterday with respect to the United States' domestic capability to meet the expected demand. So where will the battery metals come from? Let's imagine... that the U.S. implements mining permitting reform and moves as quickly as China. In that scenario, we think the U.S. might be able to solve copper and maybe find some more lithium. But we don't think you can solve nickel, cobalt and manganese because the resources aren't there. The plot thickens when you look at the current supply chain from mining to processing and refining and cathode material production. It's a 50,000-mile supply chain controlled by China. The United States spends so much effort to achieve energy independence only to find itself headed for metal dependence. Metal is the new oil, and China is more powerful than OPEC. The Biden administration understands this and nickel has finally been elevated to most critical status and was mentioned 146 times in the 100 day supply chain review. Building a nickel refinery in the US was framed as the highest short to medium term priority in that document. And it so happens that there is a potential solution of the Western seaboard of the United States. This realization is slowly percolating through the system. Over the summer, the Wilson Center, a key nonpartisan policy forum in the US, held a dialogue with key level groups of stakeholders trying to find solutions to the troubling scenario faced by the United States when it comes to the supply chain for critical minerals. Their report acknowledged the significant domestic opportunity to get the nickel, cobalt, and manganese from polymetallic nodules in the clarion-clipidin zone. And developing the nodule resource offers a 1,500-mile supply chain and an opportunity to reshore processing and refining in the U.S., So here is what a polymetallic nodule field looks like. And these images were taken at 4.3 kilometer depth. And the view is about 1.2 meters above the seafloor. And you can see continuous nodule coverage. Nodules form by precipitating metals. that are in solution in ocean water and the sediment pore water. And these are loose rocks with approximately 95% of nodule mass exposed on top of the seafloor mud. And we are using lighting here for visibility, but otherwise it's a dark, cold, food-poor place. And limited food means limited life. Indeed, it's one of the lowest biomass places on the planet. Compared to deserts on land and an ice-free Arctic in Arctic, antarctic and most life here is bacterial once in a while you can spot a worm or a sponge or a sea star and in general animals tend to be small four centimeters is a giant in this world it's a fascinating slow changing world that must be protected and as a precaution more area is already under protection here than under exploration. And protected areas account for about 34% of the total Clarion-Clippenden zone, already exceeding, at least for the CCZ, the global push to protect 30% of the oceans. In addition to the relative proximity to the US and the option to process and refine these nodules in the US, this resource has several other advantages. It's abundant. It's the largest estimated source of battery metals on the planet. Our portfolio alone has sufficient estimated in situ quantities of these metals to electrify around 280 million EVs. or the entire US passenger fleet. And it's high grade. On land, you would possibly need three different mines to obtain these metals, and the grades are falling. Nodules contain high grades of four metals in a single resource. On average, we need to process several times less mass to get at the same amount of metal. and security. These nodules sit in international waters and are regulated by an intergovernmental organization, the International Seabed Authority, or ISA, comprised of 160 member states and the EU. Decisions are subject to intense scrutiny and consensus takes time, but they cannot be changed on the whim of a single government. and low production cost at potential steady state production we expect to be the second lowest cost nickel producer on the planet largely due to the high grade multi-metal nature of the resource and lowest low esg cost we expect between 70 and 99 reduction of life cycle essg impacts