TMC the metals company Inc.

Good afternoon, everyone, and thank you for participating in the Meadows Company's fourth quarter and full year 2023 Corporate Update Conference Call. Joining us today are the Meadows Company's Chairman and Chief Executive Officer, Gerard Barron, and Chief Financial Officer, Craig Sheskey. 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 very much. Please note that during the call, certain statements may be made which 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. 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, and additional details regarding these non-GAAP financial measures, including reconciliation to the most directly comparable GAAP financial measures, can be found in our slide deck being used with this call. And you're welcome to follow along with our slide deck. or if joining by phone, you can access at any time at investors.metals.co. I'll now turn the call over to our chairman and CEO, Jared Barry. Jared, please go ahead.

Thanks, Craig, and thanks to all of you for joining us today for our fourth quarter 2023 corporate update call. Firstly, I'd like to mention the great piece that ran last night on 60 Minutes regarding seafloor nodules and the United States' position on the law of the sea. and reflect a bit on just how far we've come. Just over four years ago, we hosted Bill Whitaker and the 60 Minutes team on board the launcher vessel to provide what was for many people their first glimpse of this impending new industry. In fact, some of our team members and key investors have cited that piece as what originally put Nodules and our company on their radar. And I'm amazed at just how much our team has accomplished in the four years since that original piece. In 2021, in advance of our transaction to go public, we put out two SEC-compliant resource statements and an initial assessment on the Nori-D contract area signed off by AMC Consultants, noting a net present value at the time of $6.8 billion. In 2022, we completed the first successful integrated pilot system test in the CCZ since the 1970s, lifting 3,000 wet tons of nodules and helping to de-risk our future offshore operations alongside our partner Allseas in late 2021. And we completed our pyrometallurgical processing pilot, de-risking our flow sheet in advance of future onshore operations. We've also now signed a binding MOU with PAMCO in Japan to initially process nodules at their existing RKEF facility. And we're also pleased to announce today that we successfully derived the first ever nickel sulfate from seafloor nodules, but more on that in a bit. And finally, we wrapped up the last of our 22 pre-production offshore campaigns, including the completion in late February of our environmental campaign one year following our pilot collection test. And our team is very encouraged by the initial results. So last night, Bill Whitaker and his 60 Minutes team revisited their original story, focusing on recent actions by US political and military and intelligence communities to catch up to China in this space. At the same time, the rest of the media seems to have caught up with the importance of this topic, which major new pieces just this month from the Wall Street Journal and the Financial Times, BBC, Politico, and many, many others. The takeaway to me is clear. At last, the time is now for this resource. And as the most advanced contractor with a multi-year head start, TMC is well positioned to leverage this increasingly favorable geopolitical landscape. Moving on to our current liquidity picture, I'm pleased to announce that along with Eris Capital, the family office of our director and largest shareholder, Andre Kaka, we have today agreed to provide a 20 million unsecured credit facility with a maturity date in 18 months. And the interest rate on this unsecured facility in the six month is the six month secured overnight funding rate plus 4%. Further, our partner Allseas has also agreed to extend their existing credit facility for a further period until August 2025. The ATM program, the extended Allseas unsecured credit facility, and the new facility, credit facility provided by Iris and myself all remain untapped today. And with existing cash at year end plus the $9 million in additional registered direct offering funds from Eris Capital received in January. Pro forma, year-ending liquidity is $61 million. As we have said previously, our preferred form of financing moving forward will be at the asset level, and we are making good progress with a number of parties there. You can certainly expect to hear more about this very soon. And we've seen an uptick this year in both number and quality of inbound financing offers from institutions, including underwritten equity transactions and convertible note offers. But even with a rising share price, we'd much rather fund the project through other less diluted means, as evidenced by today's credit facility announcements. And so this now means that TMC has sources of unsecured funding from each of its three largest shareholders, So believe us when we say we care deeply about minimizing dilution. And I hope this action speaks to our confidence in where things are headed with respect to potential strategic partners. The next slide provides an overview of our Q4 results and recent business developments since our last quarterly update. I won't read all of this detail to you, but I did want to flag an update to our expected first commercial production on Nori-D. We now expect to commence production offshore at the end of the first quarter, 2026, assuming an ISA review process of approximately one year from the submission of our application for an exploitation contract, which is still expected following the July 2024 ISA session. Alongside our partner, Altis, we've refined our assumptions to hit the ground running with a larger potential production system on the hidden gem vessel, upgraded from the initial target of 1.3 million tons annually to the new maximum annual production capacity of 3 million wet tons, an increase of 130%. And this also reflects some revisions to the ISA application review timeline in the latest consolidated draft text released. We never like any delays to our production timelines, but we want to make sure that we get everything right the first time. and avoid a situation where production has to slow down for further modifications after we've begun. So on the agenda today, we'll take you through the following items. A brief reminder of TMC's value proposition, a review of some important industry headlines, and an update on the progress of our Nori-D project, a snapshot of the environmental case for TMC and nodule collection more broadly, a regulatory update on this month's ISA meeting, And finally, our financial update. But let's start at first principles. Why look to the seafloor nodules in the first place? Well, for starters, the abyssal plain represents an area of the planet with the least life, the lowest biomass per square meter, second only to polar ice. And the world has woken up to the fact that we need to shift away from fossil fuels and the current challenges of sourcing metals from the land are gaining increased attention. Nodules offer real tangible advantages over their terrestrial equivalents and containing high grades of four metals in one ore. Sourcing battery metals from nodules requires no digging or blasting and produces near zero solid waste. And far offshore, we also don't have to displace human communities nor build the costly fixed infrastructure necessary to access mineral resources on land. And when you put all that together, it is clear that nodules hold significant potential to dramatically reduce the human and planetary costs of sourcing metals. And this resource is also remarkable for the direct correlation between its mineral composition and that of electric vehicle battery cathodes and wiring. Rich in nickel, copper, cobalt, and manganese, these nodules closely fit the requirements for the majority of the EV battery cathodes being sold today. And new chemistries are in development, though these can take decades to commercialize, if ever. And based on our conversation with major OEMs, many new batteries are expected to continue relying upon nickel-rich chemistries. Of course, we cannot forget the additional demand pressures for the metals contained in nodules, including infrastructure, the ongoing industrialization of the developing world, and the addition of 2 billion people to the planet. As we've said many times before, our resource is an outlier among the world's nickel projects. Not only are Nori and Toml ranked by mining.com as the largest two undeveloped nickel projects in the world, but the nickel equivalent grade of this resource truly stands apart. The nickel market has been reeling over the last year due to an influx of lower cost supply from underneath Indonesian rainforests. BHP estimated recently that 50% of the nickel cost curve was loss-making at current nickel prices on an all-in sustaining cost basis. So with a nickel equivalent grade of over 3% and four key metals in one resource, TMC is able to withstand commodity price volatility better than most and provide an economically viable counterweight to the portion of nickel market controlled and funded by China or Russia. It's fair to say that the eyes of the world are watching this new industry with major media outlets leading think tanks acknowledging that commercial operations will soon be a reality. In a new analysis by the influential breakthrough Institute oceanographer and co-director of climate and energy Siva Wang Found that sourcing key metals like nickel and copper from nodules could deliver far lower impacts than sourcing them on land despite much exaggerated claims to the contrary and in a recent interview with CNBC a ISA Secretary General Michael Lodge noted that growing interest in marine minerals by countries like China, India, and Norway means that commercial operations now appear inevitable. This lines up with the takeaway last year from the New York Times reporter Eric Lipton that the start of this industry is a question of when rather than if, and when is coming even sooner. So the nodule resource is also gaining support in Washington, D.C. Over the last two years, congressional members have made repeated calls to action to the defense and energy departments to begin planning for the development of processing and refining capabilities for deep sea nodules, most recently with the introduction of the Responsible Use of Seafloor Resources Act. And with the signing into law of the National Defense Authorization Act by President Biden, The Pentagon has now been tasked with formulating a report assessing just how the US might process nodules domestically, but more on that shortly. Increasingly, policymakers and the broader political community are driving the conversation. As reported in the Wall Street Journal this month, a bill aimed at providing support for domestic nodule collection, processing, and refining has been introduced by members of the House of Representatives with support from a broad coalition of leaders drawn from the offshore energy industry, marine mineral exploration, and global research centers. Also this month, over 350 former political and military leaders, including former Secretaries of State and Defense, Hillary Clinton, Leon Panetta, urged the US Senate to ratify the Law of the Sea Treaty and take its seat at the table on ocean matters. Of course, this recent spate of news has taken place within the context of the pending delivery of a report by the Pentagon to the House Armed Services Committee, assessing the opportunities offered by nodules to diversify critical mineral supply chains away from China. So at a minimum, the report will outline controlling parties of deep sea resources, America's current production and processing capabilities, and crucially, a roadmap laying out recommendations for how the U.S. can leverage its domestic industrial expertise and capabilities to process nodules and play a leading role in the industry. Though the March 1 deadline was ambitious, our conversations with relevant parties in the DOD and Congress give us confidence that the team readying the report are well aware of the challenges of metal supply and the opportunities that nodules present. And we remain optimistic about the prospect of funding to do feasibility work on a potential U.S. refinery, which can take nodule-derived products as feedstock, whether through our existing DOD grant application or through congressional appropriations. This underscores the massive longer-term potential that we represent for the United States, which could go from near total import dependence for nickel, cobalt, and manganese to metal independence in all three, just from our contract areas alone. However, this does not change our capital light plan to begin production at existing RKF facilities such as PAMCO in Japan. And I'd now like to turn it over to Craig to discuss the progress of our Nori-D project.