TMC the metals company Inc.

And thank you for participating in the Metals Company's fourth quarter and full year 2021 Corporate Update Conference Call. Joining us today are the Metals Company's Chairman and Chief Executive Officer, Jared Barron, the Metals Company's Chief Financial Officer, Craig Szczeski, and Epsilon Carbon's Managing Director, Vikram Honda. Following their remarks, we'll open the call for your questions. Before we go further, I would 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 Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements and information about the use of non-GAAP measures. Craig, please go ahead.

Thank you. And please note that during the call, certain statements made by the company will be forward-looking and based on management's beliefs and assumptions from information 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 our safe harbor provisions or forward-looking statements that can be found at the end of our fourth quarter 2021 corporate update press release. Such statements may also be found in our Form 10-K 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. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide deck being used with this call. And the slide deck is available on our website, investors.metals.co. 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 fourth quarter corporate update. You're welcome to follow along with our slide deck, or as Craig mentioned, you can also access it at investors.metals.co. Today, we're going to take you through an update on strategic relationships, a discussion of recent market developments, our financial and project development highlights, and expected upcoming milestones for the company. But we'll start with a quick reminder of the TMC value proposition. We believe TMC's estimated resource of polymetallic nodules can really move the needle for battery metal supply. It's abundant. It's the largest estimated potential source of battery metals on the planet. We believe our portfolio alone has sufficient estimated in situ quantities of nickel, copper, cobalt, and manganese to electrify 280 million EVs, about the size of the entire US passenger fleet. It's secure, nodules sit in international waters, and we are regulated by the International Seabed Authority, or the ISA, comprised of 167 member states, and the European Union. The ISA resumed in-person meetings in December after a nearly two-year hiatus due to COVID. And they are meeting again as we speak in Kingston, Jamaica, with a stated target of finalizing the exploitation regime by July 9, 2023. We expect our production costs to be low due to the high grades of four metals. 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, which could put us firmly in the bottom quartile of the C1 nickel cost curve. At potential steady state production, we expect to be the second lowest cost reducer of nickel in the world and lowest outside of Russia. Importantly, we also expect to significantly compress ESG impacts compared to land-based miners. We expect 70% to 99% reduction of lifecycle ESG impacts. No child labour, no social displacement, no deforestation, no poisonous hexavalent chromium, which was recently reported in communities near nickel mines in Indonesia. Onshore, our production is expected to generate near zero solid waste and zero tailings. We also expect to compress CO2 equivalent emissions by up to 90%. And this is all using conventional technology. But we are pushing to do better than that. And then finally, the recent rally in metal prices has led to a large increase in the expected NPV for Nori-D, the first project we are developing. Using current metal prices and nickel at $30,000 per tonne, the estimated NPV PV for Nori-D would be $22 billion, all other imports being equal. So we believe TMC is positioned at the intersection of three megatrends in the clean energy transition. At COP26 in Glasgow end of last year, the world decided to accelerate electrification, now targeting 100% zero emissions car sales by 2025 in major markets and by 2040 globally. At this point in time, these ambitions appear to be divorced from the geological and geopolitical constraints of raw material supply chains. Availability and price of metal supply continue to be a risk for the clean energy transition. And reshoring supply chains of critical metals is now a top priority for many governments around the world. It took a few years for the world to realize how effective China has been in cornering the battery material supply chain and how hard it is to achieve mineral independence if your country does not have a sufficient domestic source of the right minerals. And focus on the ESG continues to be a catch-22. We want to accelerate the clean energy transition, but we also want to end all destruction of nature, including from mining critical minerals needed for the clean energy transition. There are no zero impact critical metals, but we believe TMC can offer much lower impact metals that would not be destroying anyone's backyard nor any rainforest. Few of us anticipated a war in Ukraine. The humanitarian crisis is overwhelming, and it's hard to talk about things like supply chains amidst death and suffering. But supply chain disruptions have real consequences. Russia controls roughly 20% of class one nickel market, while the Chinese control most of nickel growth. And fears around Russian supply, coupled with the Chinese producers shorting nickel, have caused chaos on the London Metals Exchange, pushing nickel prices to all time highs. And this type of volatility is unhelpful for the clean energy transition. At TMC, we are working to become the largest, lowest cost and lowest ESG impact source of class one nickel supply outside of Russia. Nickel is a key metal for us, representing about 50% of our expected future revenues at current metal prices. And as you can see on the left-hand side of this page, our estimated resource is significantly larger than other known undeveloped nickel projects. Earlier this year, mining.com ranked just our Nori-D asset as the largest undeveloped nickel project on the planet. Our strategy has always been to develop the polymetallic nodule resource through partnerships, both because this potentially allows us to move faster and because we expect that this will allow us to get into production in a capital-light manner. And the two strategic developments we announced last week are important steps in that direction. Project Zero is our first small-scale commercial production project expected to collect and process around 1.3 million wet tons of nodules from the Nori D area. And as a result of the two strategic developments with all seas and Epsilon carbon, we expect to reduce the share of pre-production costs carried by TMC from US 193 million to approximately 55 million. Onshore, we announced a non-binding term sheet with our partner, Allseas. It lays out the potential framework and commercial terms for upgrading the pilot collection system into a project zero system and operating it in Nori D area. The pilot collection system you see on the image consists of surface production vessel, the hidden gem, the collector vehicle used to collect nodules on the sea floor, the launch and recovery system to deploy the collector, and an airlift riser to move nodules from the collector to the vessel. Allseas is currently in the middle of a test program, and we expect the full system to do a multi-month pilot trial on the Nori-D area in Q3 this year. And after completing these pilot trials, Allseas intends to upgrade this pilot system into our small-scale production system. The total costs to get into production are currently estimated at less than $110 million. And Allseas have agreed to finance these costs with TMC's subsidiary, Nori, reimbursing Allseas 50% of these costs between March 31, 2023 and production start, which is expected in Q4 2024, subject to Nori securing an ISA exploitation contract. And once in production and subject to Allseas achieving certain production targets, Nori expects to pay Allseas a nodule collection and transshipment fee that will cover Allseas operating expenses, Allseas share of pre-production costs, and a fee linked to the value of contained metals. It is currently estimated at around $165 per wet ton of nodules in the first year of potential production and expected to be reduced by over 20% in the following years, as all sees scales production up to 1.3 million tons of wet nodules. Assuming 24% moisture content, this would equate to around $217 of cost per dry tonne. And on the revenue side, at current metal prices, our internal estimates suggest that Project Zero would generate revenue of around $700 per dry tonne based on two products, our nickel copper mat and our manganese silicate material. We intend to further detail and revise the cost estimates in the definitive agreement we intend to enter by December 31st this year. And we also expect to see the per ton cost to further decrease from these estimates if all sees scales production capacity of its surface production vessel by adding multiple collectors on the seafloor. Here you can see additional images of the pilot collector being lowered into the water and driving on the seafloor of the North Atlantic earlier this month. We're also excited to report that Allseas and Nori intend to investigate acquiring a second production vessel similar to the hidden gem, a Samsung 10,000, that is expected to be engineered to a higher production rate of 3 million tonnes of wet nodules. A higher production rate system is expected to reduce the per tonne nodule collection cost significantly compared to the first production system. The exciting development onshore is that we have signed a non-binding MOU with Epsilon Carbon to do a pre-feasibility study for a renewables-powered Project Zero plant in India that could process 1.3 million tons of wet nodules per year collected using Allsea's Project Zero system operating on Nori D. I've invited Vikram Handa, Managing Director of Epsilon Carbon, to give you a bit more background on the company.