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

no child labor no social displacement or no deforestation onshore our production would generate near zero solid waste national technology but we're pushing to do better than that we believe it is a much better than the alternatives but it isn't a miracle we would be impacting a deep sea environment. And a lot of care is going into making sure that we characterize and mitigate our impacts on biodiversity. So what does it take to get to production?

It all starts with the resource. We have secured exclusive exploration rights to three areas sponsored by three Pacific Island nations. Next, we have to figure out how much is there and of what quality. We have resource estimates on two of our exploration areas as an exploitation contract. How do we pick up nodules from four communities? But we have to design and test our own system, and we're doing it. Doing this in partnership with All Seas, What are the environmental impacts of nodule collection and how do we mitigate them? Here, we have a much higher bar than most projects on land. First, we must baseline the marine environment from sea floor to surface. Then we must run our pilot system and monitor and measure its environmental impacts. The deliverable here is an environmental impact statement that is an important part of our application to the ISA for an exploitation contract. Once you have the nodules, how do you turn them into metals? Well, we invested effort in developing two different flow sheets and chose to go with the lower risk option for our development and operational plans. It uses conventional equipment, and we expect to generate near zero solid waste. We have to model it, then test at lab and pilot scale. Before any production, we need to make sure our project is economically viable. So we go through a sequence of studies with increasing levels of confidence on project economics. We started with an initial assessment, but we are now in the middle of our pre-feasibility study, followed by a bankable feasibility study. We currently have sufficient level of cash to fund the milestones highlighted in blue. And we believe that the four most important are, firstly, to complete our onshore pilot plan program to process and refine polymetallic nodules into critical metals. Secondly, to build and deploy a pilot collection system to lift nodules to the surface with a dual focus on operational performance and environmental impact mitigation. And thirdly, to complete the offshore environmental impact statement of future production on Nori D. And then finally, submit an application to the ISA for an exploitation contract for the Nori D area. So where do we stand at the end of Q3 2021? As mentioned previously, our business combination with Sustainable Opportunity Acquisition Corp was completed on September 9, 2021. The company renamed to TMC The Metals Company. And on September 10, 2021, we commenced trading on NASDAQ. TMC received approximately $137 million in cash prior to transaction fees, including approximately $27 million from the SOAC trust account after accounting for As we've noted previously, SOAC entered into subscription agreements for a $330 million pipe, but only $110 million of the pipe funding has been received today. SOAC and TMC continue to seek to enforce the funding obligations. Two lawsuits have been filed against the non-performing investors in New York State Court. So with cash in bank of approximately $113 million, that's September 30, we have maintained our expectations of funding our operations through the key milestone of submitting our application for an exploitation contract to the IAEA in Q3 2023. In terms of project development, it's been a record-setting nine months. You can see the highlights on this slide, but I'd like to share some of these in more detail. To date, our technical resource statements were done in compliance with a stringent Canadian 43-101 standard. To become a U.S.-listed entity, we had to comply with the SEC regulation, SK-1300 standards. And accordingly, AMC consultants reissued technical resource statements on Nori and Tomal areas to issue resource of nickel, copper, cobalt, and manganese, equivalent to the requirements stated for 280 million electric vehicles. One way to understand the significance of this resource is to compare it to other undeveloped and producing projects. Nickel is a key metal for us, Almost half of our expected future revenues. And as you can see on the left side of this page, our estimated resource is significantly larger than other known undeveloped nickel projects. And earlier this year, mining.com ranked just our Nori D asset as the largest undeveloped nickel project on the planet. And if you convert all the metal contents into a nickel equivalent grade, at 3.2%, no other undeveloped or producing project comes close. Resource quality translates into attractive economics. And back in March, AMC consultants issued a SEC regulation SK 1300 compliant initial assessment of project economics for the Nor-ED area. This area represents about 20%. and is expected to have a net present value of $6.8 billion using very conservative commodity prices. And as you may know, the prices of most of our metals have reached multi-year highs.

Current prices, the net present value would nearly double.

And Q3 saw an important milestone on the regulatory side. For us to move from exploration to exploitation, the International Seabed Authority needs to complete the adoption of the exploitation regime. And the work on this regime started already back in 2011, but completion was targeted July

2020 was disrupted by COVID.

So to increase regulatory certainty at the end of June, the Republic of Nauru, the sponsoring state of the Nauru area, exercised its sovereign right. under Section 1, Paragraph 15 of the 1994 Agreement relating to the implementation of Part 11 of the United Nations Convention of the Law of the Sea, unclosed by submitting a two-year notice. This notice was obliged the ISA to complete the adoption of exploitation regulations within two years of the request to deliver on their work program and complete the adoption of the regulations with the consensus of the 167 nations and the EU behind them. However, the 1994 implementation agreement does lay out what happens if this does not materialize. 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 is pending before the ISA, the ISA shall nonetheless consider and provisionally approve such plan of work. So we expect that our subsidiary, Nori, will have submitted its plan of work for exploitation within the prescribed time.

After no changes are received,

and the application is approved, we can expect to start production in Q3 2024, subject to our ability to fund the development of Project Zero. Putting together an application is a multi-year effort that includes a comprehensive environmental impact statement, The foundations of the EIS is collecting baseline data on the environment. And we need to understand the pre-impact state so we can compare it to what happens after nodule collection. While we started doing environmental data collection campaigns... several years ago this has been a wreck for us with four campaigns and 140 day 48 days spent at sea in the first nine months of this year all completed safely with all the data collection goals accomplished by our research partners and under superb management of our vessel operation partner nurse supply services the last completed campaign 5c had researchers from the university of hawaii texas a m and the japan agency for marine earth science and technology or jamstack one of the campaign achievements was sampling pelagic biodata at depths down to 4 000 meters marking what we believe was the world's first deep mock nest net toe in the eastern tropical pacific ocean And I've just returned from San Diego, where we are mobilizing for the fifth campaign this year, and the final of our baseline data collection campaigns. And in parallel, together with our offshore partner, Allseas, we've been building a pilot collection system in the Netherlands. The system consists of a surface production vessel, seafloor collector robot, and an airlift riser system. the hidden gem a former drill ship acquired by all seas last year is in rotterdam undergoing conversion into the surface production vessel it is expected to be the first ship classified as a subsea mining vessel by the american bureau of shipping and the red launch and recovery system that you can see in the middle used to lower and retrieve collector robots has already been installed The collector robot has been assembled as well, and you can see the current state of our collector on the right-hand side picture. And these images were taken at the end of October when we invited key stakeholders to Rotterdam to review progress on the conversion of the hidden gem and the assembly of our collector robot. We are targeting system completion at the end of this year, followed by wet collector drive test in the North Sea in full pilot system trial in the Nori-D area in the Pacific next year. Even a pilot trial requires an environmental impact statement of its own, and our subsidiary, Nori, submitted the EIS for the upcoming pilot trial to the ISA in July 21. We are planning a 12-week trial with about 260 hours of system operation, and the directly impacted area is small. It's 0.5 of one square kilometre. One of the high-profile issues addressed in the EIS is the potential environmental impact of plumes. Plumes are essentially suspended seafloor mud particles, and early speculations about plumes suggested giant clouds of mud would be traveling for thousands of kilometers, either staying suspended for long periods of time or falling out and suffocating organisms in protected areas. We believe these initial speculations are proving to be wildly exaggerated. Modelling by a third-party expert, DHI, using MetOcean data collected from the Nori-D, and using Nori-D sediment properties, supports predictions that plumes from the pilot system will be limited and

and localized.

And although the pilot system is similar to production system, we believe it is representative of the relative order of magnitude of the impacts that we can expect from the production system. Results from DHI are consistent with the work published by MIT on seafloor and midwater plumes. And furthermore, for seafloor plumes, our results are consistent with Field ESR, who did a seafloor collector test in the CCZ earlier this year. And we look forward to having our own field observations next year. While our work offshore gets a lot of coverage, I personally get as excited about what we've been able to achieve onshore. For anyone wondering whether we can turn nodules into valuable critical metals, the answer now is a resounding yes. First, our pilot program turned nodules into a manganese silicate product that can go directly into manganese alloy production. And a nickel, copper, cobalt alloy an intermediate product that can be used as feedstock in some of the existing smelting and refining operations, and that could go into most nickel refineries. And here is what Matt looks like. So we have started on the final part of our pilot plan program, and that is turning Matt into nickel sulfate, cobalt sulfate, and copper cathode. So looking forward, here is an overview of what we are focusing on next. It will be an equally intense six to nine months for us. 2024 is my number one priority. To that end, we are working on multiple fronts, securing bankable off-takes for Project Zero production, finalizing

Project Zero Economics with Allseas and securing an onshore partnership and site.

They include car makers, cathode material manufacturers, mining majors, oil and gas majors, and EPC companies. Offshore, the pilot trial of our offshore collection system is a major event. And while there have been a collective robot tests on the seafloor, a full system test, including the riser, has not been done since the 1970s. So a digital twin system for a nodule collection operation has never been developed and operated successfully. either. So this is another exciting development for us. And onshore, we anticipate that we will complete our pilot plant program, going from nodules to battery cathode precursor materials and copper cathode. So with that, I am turning over to Craig to speak on TMC's recent third quarter and year-to-date financial statements.

Thank you very much, Jared. Before we get into the results, I do want to draw your attention to certain restatements to our first quarter and second quarter 2021 financials, which were included in our recent press release. Now, the restatements resulted from A, certain invoices for exploration expenses not being appropriately accrued as of June 30th, 2021, and B, expensing of options granted in the first quarter of 2021 based on the grantee's historical start date with the company rather than the grant date of the options on March 4th, 2021. More information This information is provided in the company press release, as well as our soon-to-be-filed 10-Q. Now, in terms of the financial results for the third quarter of 2021, the company reported a net loss of $36.7 million, or $0.18 per share, compared to TMC's net loss of $6.8 million, or $0.04 per share, for the third quarter of 2020. The higher net loss was mainly attributable to $12.9 million in milestone payments accrued under the amended pilot mining test system agreement with Allseas. and a $2.8 million increase in offshore campaign expense, given increased offshore activity versus the prior year period. Exploration expenses during the third quarter of 2021 were $23.8 million, compared to $4.6 million for the third quarter of 2020, also explained by the All Seas Milestone payments, and increased offshore expense. General and administrative expenses were $13.3 million for the third quarter of 2021, compared to $2.2 million for the third quarter of 2020, mainly driven by higher non-cash stock-based comp expense and overall higher costs as a result of being a public company. The third quarter of 2021 was negative $9.8 million, compared to negative $3.8 million in the third quarter of 2020. And for the nine months ended September 30, recorded a net loss of $121.5 million, compared to $39.5 million Exploration expenses increased from $35.7 million to $80.2 million, and G&A expenses increased from $3.8 million to $41 million during the first nine months of 2021. The largest increases both in exploration expenses and G&A expenses were stock options for Deep Green employees and contractors in the first quarter of 2021 before the business combination was finalized. This represents the catch of equity awards for key employees who have been progressing the project over the last several years. And of course, retaining our key employees is a very high priority for us. For the first nine months of 2021 was negative 23.8 million compared to negative 21.4 million in the first nine months of 2020. With that, I will turn it back over to Jared for some final comments.

Thanks, Greg. So before we go to questions, let me address the recent short report. Clearly, this report was written by someone who doesn't know much about resource economics. Resource quality drives the value of exploration contract, not the fee you pay to apply for the contract. We acquired the TOML asset for $32 million from a third party who had no relation to any of the shareholders or executives of TMC or Deep Green. And by the time of the acquisition in 2020, TOML and had a 43-101 compliant resource of 750 wet nodules. For comparison, Nori-D has a 43-101 compliant resource of 356 million tons, so less than half of the TOML resource.

It also has an SEC SK-1300 compliant initial assessment

with an NPV of $6.8 billion. And if we use today's commodity prices, that NPV would exceed $12 billion. So I think a $32 million acquisition of the TOML asset was an outstanding deal by any measure. also worth noting that in our opinion that nearly all of the good ground has already been claimed in the ccz so if the short seller believes getting an exploration contract for an area with high quality resource and sponsorship from a sovereign nation as easy as paying 250 000 contract application fee well you should go ahead and try the report also suggests that we oversee And that is also incorrect. As part of the business combination, we were required to adjust our accounting from IFRS to U.S.

GAAP. And that meant we needed to fair value the shares we paid to Maersk, resulting in the increase from $14.9 million to $35.4 million. SEC regulated company.

We take our compliance very seriously. But more importantly, we're a company that values transparency. Nothing in this agenda-driven report causes me any concern. And we have purposely not commented on this report because the assertions were so unserious. They did not warrant a reply. But given that retail investors have asked me to, however, here it is. So the energy transition starts and ends with metals. Gigafactories can't make batteries out of thin air. And TMC is developing a massive resource that can truly move the needle in terms of metal feedstock for gigafactories. And while also shortening supply chains, compressing ESG impacts, and helping to ensure mineral independence for the United States. We have made an incredible amount of progress on the project this year, onshore, offshore, and environmental, and we're just getting warmed up. And with that, we'll turn it back to the operator for some questions.

Certainly. We will now begin the question. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly to allow questions to generate in queue. The first question is from the line of Daniel Ives with Wedbush. You may proceed. Thanks.

So can we just first talk about how conversations maybe have changed, whether it's strategic partners or within the auto food chain over the last, call it, three, six months. Is there a discernible change just giving more and more of the acceleration the EVs need for lithium?

Yeah, hi, Dan. Absolutely, lithium in our modules. We don't focus on it as a product. And I think automakers have historically been the very dominant party when it comes to supply chain.

And obviously, with the semiconductor experience in the past year, it's highlighted how raw materials can really disrupt the business.

The whole transition to electric vehicles has really sped up, I guess, since COVID came. And obviously, the stimulus packages being announced by President Biden and others means that everyone wants to catch up and go electric. And so all of a sudden, while historically they have pushed those conversations under the supply chain, Now it is not that easy. Now they realize that they have to get control of supply. Availability, price, sustainability are the key drivers for those automakers. And, yeah, we're having very different conversations with them today compared to even six months ago. Great.

But when we think about 2022, what are, like, let's call it, like, the three –

top priorities in terms of from an exploration or from a, we'll call it a strategic perspective that we want to be at a year perspective.

The priorities are this time next year, we will have completed our offshore pilot mining trial, pilot collecting trial, and that will be the full end to end system. And as I mentioned earlier, There has been a trial earlier by the Belgian contractor of the collective vehicle. It was very successful. But this is different. In February last year, Allseas, our partner, acquired the Hidden Gem. It's a 228-meter production vessel, formerly a drill ship that would be, I think its ticket price was $700 million 10 years ago. they bought it for low tens of millions of dollars and so you know we're busy uh they are busy converting that now uh in fact i i looked at the sheets there's around 240 people uh at all seats working on that conversion last month and so by this time next year we will have successfully well we will have been to the license area uh we will have conducted that that harvesting trial and observed it. And that's an important part of the permitting process because we have to demonstrate and we have to report on the impacts. The same with onshore. We've already completed our pyro phases of our hydro network.

But as I mentioned, the hydro network is very low risk. We're adopting a process that is carried out by

The really exciting thing will be more environmental papers being published, more environmental results, because, of course, the impacts. And as I reported on the plume, our estimation is that the plume will travel five to six meters above the ocean floor, and that is consistent with the MIT published papers.

They put out two papers this year.

that they released earlier this year from their actual trials in the CCZ, which is an area very near us.

So more of that environmental data being released is something we're really looking forward to.

And then on the strategic side, we are talking, as I said, with companies from the resources, from the oil and gas sector, and also with customers and intermediate players. And I think, you know, the thing that will really get this opportunity alight will be consumer-facing brands.

...evidence, supporting the... ...compared to land-based ores. But some of the other players, you know, the resource companies, there's no doubt they'll move faster, in my opinion. And because you just don't find all bodies.

Thanks. Thank you, Mr. Ives. The next question is from the line of Fabash Chandra with Benchmark. You may proceed.

Thank you. So, you know, I'm looking at, I think, slide 11. A lot of stuff going on. It doesn't seem like there's been any sort of changes to the to-do list, despite, you know, the failure of hedge funds or whoever that came up short on their price commitment or private equity funds.

I'm curious, you know, what adjustments do you have to make?

And, you know, how – at what point do you think in some of these things you're working on, bankable off-takes, negotiating, you know, with policies or, you know, strategic partnerships for Project 1 and beyond, at what point – what's the event do you think that – you know, I guess gives the market confidence in the liquidity to get to our full production and get through Project Zero.

Sure. Thanks for the question, Sebastian. Well, there's no doubt we were disappointed to raise less money than we had anticipated. And We always plan to take more money because it would fund us all the way through the production. In fact, it would have funded us through until 2025. But that has to be done. So, you know, fortunately, we have sufficient capital to do the really value-adding stuff at the moment, which is the offshore pilot, the onshore pilot processing work, all of the environmental impact studies, and, of course, be ready to submit our application. That first production...

what we called Project Zero.

However, you know, one of the great advantages of the partners that we have chosen in 2021, sorry, 2020, February, and so we put it out for the pilot trials. In fact, you know, it came out of dry dock some weeks ago. We had a crew of people on it inspecting it a couple of weeks ago, a stakeholder day, And so it will be in the Atlantic doing trials straight after Christmas. We will be busy figuring out through all of the strategics that I mentioned during my presentation about what those funding options will be to get us into that first production. But we have a lot of choices there. For example, even on the production vessel, there is you've seen the numbers, there's margin in this all body. And so if we had to sacrifice some OPEX for CAPEX, then that's an option that's always available to us. But I remain confident that based on the size and quality of the resource, that we will have solved that funding issue before it starts impacting production on 2024. Yeah.

And I may just add in there too, one of the big takeaways from the event in Rotterdam a couple of weeks ago was it was just great to be able to share with a lot of stakeholders, you know, whether potential investors or strategics, et cetera, the tangibility of that progress. size of the resource, they know how attractive it is.

But as we continue to hit these milestones over the next two years with the cash that we have on hand, that'll just increase the certainty and continue to de-risk.

So Obviously, we are disappointed in the situation with the pipe, but it did refocus us on making sure we get the boat on the water. We show the successful collector test. We show that we can convert these nodules into usable metal, which we're making great strides on, and that will put us in an even better position when it comes to raising the additional capital.

Okay, good. And so maybe a little help there. You have two years, a long time, and it certainly seems like, you know, the macro trends are in your favor and your options, you know, should solidify, if not improve. But at what point do we sort of need to solve the project zero capital question?

Yeah, we need to solve that by Q1 2023. Okay.

Great. A follow-up here, maybe my second follow-up. I think you talked about the public comment period. I think for Nauru, I think for the pilot test in the seat, any color on what the initial comments look like and and, you know, what they might be concerned about or how excited they might be about the CCZ mining pilot.

Sebastian, would you just repeat the first part of that question, the comments about what the – was it about the environmental – Yeah, so I think –

for the CCZ mining pilot, and I thought the public comment period had already opened, and if you had any color on what some of those initial comments have been focusing on.

Sorry, I understand now. Look, it's an open period now, and we're engaging with all those stakeholders through a through a stakeholder engagement program. And I think the feedback we've been receiving from the extensive paper that we lodged and that's available on our website and also the ISA website has been very complementary to the range of the scope of that study. And so, you know, we certainly don't see any showstoppers in it. Okay. Thank you.

Thank you, Mr. Chandra. Again, to ask a question, please press star followed by 1 on your telephone keypad. The next question is from the line of Malcolm McDonald with Bank of America. You may proceed.

Hey, guys. Quick question. Why does it take 315 days for the ISA to make a decision?

Yeah, that's a process that they have laid out. It goes to the Legal and Technical Commission and It's a big document. There'll be wheelbarrows to carry it in there. And so that's just a process that they have laid out. And it's encouraging to see how the ISA is preparing for that as well. You know, they are recruiting heavily. They are bringing in lots of expertise to be able to make these assessments and also to become the regulator. And so it's a pretty reliable system. it's a pretty reliable timeframe from our perspective. I think that the one point I would highlight about the approval process that we have, and we often talk about the ISA as a regulator, why we're very happy with them. I mean, the ISA was set up in 1994. And it was set up to govern the high seas and to put in place a regulatory framework to allow the development of this resource. And with land-based applications, if I just use them as a comparison, what you end up finding, of course, are changes. You might find governments who get voted out because of their position or their approval. You might find native title claims and so on. And, of course, we don't have those issues. And so we don't see the delays that some land-based projects that are located in a certain jurisdiction would be subjected to. We just don't have those.

Would it be possible for the ISA to make a decision specifically

sooner than the 315 days they're allotted we hope so and we'll be doing everything to encourage it but we're not banking on it at the moment and by the way what happens when we get the boat back um well when also you bring the boat back from the pilot it goes straight back into um dry dock to have some more modifications made to make it ready for Project Zero production. And so, you know, we're using the time pretty effectively. We would clearly like to bring this resource into production as soon as possible, but I think that's a good time frame. And keep in mind, you know, I made the point during the presentation that permitting process on land is becoming more and more challenging. And I think that you know, getting anything approved in a developed country or a developing country, you know, does not have a lot of certainty around it in this day and age. So I think we're in a good place there.

Just a quick follow up there. So given Macron's statement the other week or the other day at COP26, um, have they been in touch with you guys regarding any sort of offtake and, um, just a follow-up on that. Where is China relative to TMC?

Well, you know, let me first address Macron. Firstly, thank you, President Macron, for, you know, making those comments because for those that weren't across it, he gave an update on his 2030 plan and, you know, made the pitch that For France's future, they need to reindustrialize. They need to develop secure supply lines. They need to create local jobs. And that means they're going to need a lot of metals. And France is a very large ocean economic zone holder. They also have a license in the same area that we do. And he said polymetallic nodules look like being the solution to that. And so they have allocated some billions of dollars for the development of that. And I think that's significant to have a G7 leader, a European leader, come out and support. Of course, we have the leaders from our developing nations, and we have China and Japan and Korea. But to have a president so vocally supporting that was good news. In regard to China, there is no doubt they have, you know, three licenses, two of them in, you know, very close to us. We were in Changsha before COVID struck and, you know, my team and I, and we visited China Min Metals onshore processing pilot plant. They had been processing nodules for 20 years. The same nodules that we're picking up, they had been processing for 20 years. We also inspected their harvesting system, and we understand they've been doing more trials, but not in the CCZ, more in their territorial waters. So I think it's safe to assume that China is moving. We know they have an insatiable appetite for these important base metals. And, you know, we always thought it was a good thing that China was involved. But I still remain confident that we'll be the first out of the gate.

And certainly just to expand on that a little bit, you know, more and more focus has come on this topic over the last year, more focus from policymakers, not just in Europe and Asia, but more so in North America as well. When there was the news earlier this year that China was doing some deep water testing for their collector system, there were a lot of inbound calls and emails asking what the implications were. So

certainly you know we don't shy away from any competition and in fact um you know nothing validates the business model in the company more than other people looking at this resource as well thank you yeah i think it's just one more kind of collecting if china are collecting nodules to make battery metals then hopefully that means they're going to be destroying less carbon sinks less rainforest that's biodiversity because if you look at the only growth Avenue for nickel is from nickel laterites, and we know where they form. They form in some of the most biodiverse carbon sinks on our planet. So that's the real enemy here.

Awesome. And just one more kind of follow-up on what you just mentioned. When you go into production and start generating revenue, would you guys consider – taking it one more step further in regards to the race to net zero and actually, you know, allocate a percentage possibly of your revenue to maybe even reforestation or becoming a leader in terms of ESG and electrifying the world and decarbonization?

Well, there's no doubt we want to take that leadership role. And, of course, there are a lot of economic benefits that flow from this project, not only to our sponsoring nations, the nations that have impacted climate change least, yet are in the front row to be impacted by the effects of climate change through rising sea levels. And so once we're in production, this will deliver them royalties that will provide jobs, training opportunities, and have a meaningful impact on their GDP. And, of course, a much bigger royalty gets paid into the International Seabed Authority. And UNCLOS was very prescriptive about what should happen to those royalties. They should be, after paying for the cost of the regulator, they should be distributed to the developing nations of the world, particularly the landlocked nations. So, you know, we are building this on an ESG platform. There is no doubt about it. So I guess you can expect us to strive for the gold standard when it comes to all of those ESG metrics.

Awesome. Thank you so much.

Thank you, Mr. McDonald. There are no additional questions waiting at this time. I would like to pass the conference back to Craig Shefsky for any closing remarks.

And I'll pass it right back to Jared Barron, our CEO.

Well, to conclude, our recent accomplishments have been significant, and our strategic priorities remain on track to achieve four key milestones by the end of the third quarter 2023, when we expect to submit our application to the International Seabed Authority for an exploitation contract for our Nori-D area. So thank you for taking the time to join us on the conference call today. It's our first earnings call, so we've been very much looking forward to it. And we look forward to speaking to you on our fourth quarter corporate update call in not so many months. Thank you.

That concludes the Metals Company's third quarter 2021 corporate update conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines.