TMC the metals company Inc.

Good day, and thank you for standing by. Welcome to the Meadows Company Third Quarter 2024 Corporate Update Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 while on your telephone. You will then hear an automated message inviting your hand to raise. To answer your question, please press star 1 again. Please advise that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, Craig Krzyzewski, CFO. Please go ahead.

Thanks, everybody, and please accept our apologies for a bit of a delay here. We appreciate you joining for our third quarter 2024 corporate update conference call. Please note that during this call, certain statements made by the company will be forward-looking 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 flow, 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 joining by phone. You can access it anytime at investors.metals.co. And I will now turn the call over to our chairman and CEO, Jared Baron.

Thanks, Craig. And thanks to all of you for joining our third quarter conference call. Typically in these calls, we remind everyone about our value proposition and provide incremental project updates. But if you're listening, you likely already know that this is a world-class high-grade resource that is significantly undervalued based on any reasonable metric. You may even be sick of us reminding you of that. All of that information is still readily available and included in the appendix. What we'd really like to talk about is our strategy to start unlocking that significant value now rather than waiting for first production. And over the last two weeks, we've seen some events that we believe are going to be watershed moments in TMC's journey. Last week, we saw a US election where Republicans will see themselves take the White House and both houses of Congress. We have allies on both sides of the aisle and have been talking with the Biden administration for years. But since people ask us all the time if this was a good outcome for TMC, the answer is an emphatic yes, but more on that shortly. Earlier this week, we issued a press release which confirms our plans to submit Nori's application for an exploitation contract on June 27, 2025, along with our strategy and detailed rationale for the selection of this date. And just a few minutes ago, we announced a registered direct offering led by our largest non-affiliate institutional shareholder to help ensure that we will have the financial resiliency to see this work through. As you have heard from me many times before, protecting the equity is something that I care deeply about. And this is also a key consideration for our two largest shareholders, Allseas and our director, Andre Karkar. And it's why the three of us have provided over $60 million in credit facility capacity for the company following an upsizing of mine and Andre's facility this month. At the same time, we've also heard from some in the market that they just don't like seeing such a low cash balance, nor are they comfortable with a rising debt balance during a period of regulatory uncertainty. As such, we're pleased to announce that we've taken some money and terms, which by no means are up to my expectations for where we should be valued, but are above market terms for a normal course public transaction like this. And this deal was anchored by a major institutional shareholder that we've gotten to know closely over the last years. And I'm delighted to deepen that relationship. It was also supported by various existing shareholders for good measure. It is certainly reassuring to see this kind of support from the market to augment the continued strong support from Allseas and Eris Capital and to keep our team's eyes on the critical work ahead. On that point, We issued a press release which confirms our plan to submit Nori's application for an exploitation contract to the ISA on June 27 of next year. This decision was made in consultation with our sponsoring state of Nauru, who have formally requested in a letter that the ISA clarify the submission and review process at the March 2025 meetings before Nori submits the application. And this will allow Council to agree on the process prior to Nori's application submission date of June 27, 2025, providing certainty to Nori, the company, and the ISA, and allow for the review of the application to begin immediately after it is submitted under an agreed upon process. But TMC's value proposition extends beyond a narrow focus on mining code and the Nori application. We are now in a strong position to leverage our investment of over half a billion dollars and capabilities developed over the last decade plus as the eyes of the world's largest economies turn to the seafloor to produce the metals needed for the energy transition, defense, infrastructure, and the needs of a growing world population. To that end, we are pleased to announce this week that we are developing a new services business for seafloor resource development. We are already in discussion with several parties on services contracts to provide our expertise the areas of new exploration plans of work, resource definition, environmental impact assessments, data management, and offshore campaign execution. We also intend to optimize and diversify our To help explain some of these new initiatives, we intend to announce a strategy day to occur before and while our new services business may assist on the revenue side, we're also taking a sharp look at the cost side of the business. First of all, We are going to cut spending with a target of less than $5 million in operating expenses per quarter. Further, we do not expect to raise funds for capital expenditures related to the preparation of the hidden gem vessel until such time as the final regulations are adopted, the application is approved based on the draft regulations, or until other potential non-dilutive strategic finance is in place. So how did we come to the decision of delaying the production capital spending and reducing operating costs post-application? Well, the answer is through input from our key stakeholders after taking a hard and honest look at what has been holding our share price back since going public. A year before going public, we were raising money at $3 per share. Just before proceeding with our public listing, we were raising money at $10 per share, but today the price is around $1. And if you look at the capital we have raised and invested in what we certainly believed were value-creating project development milestones, you are forced to confront a stark reality, and that is that the TMC market cap is below the total capital raised. Considering what we've accomplished since 2021 alone, It's frustrating for us, and I'm sure for many of you, to see our market cap sitting at about 60% of the nearly half a billion dollars we've spent since inception de-risking these projects, never mind what may be tens of billions of underlying asset value based on the resource itself. We clearly think this historic milestones achieved have inherently created value, and this coiled spring has just kept getting tighter And has all of this work been worth it? And why doesn't the market seem to agree currently? Our resource is more than just nickel, but focusing on nickel developers for a public company comp, it's quite obvious that we're valued at a small fraction of our peers, many of which face their own regulatory and permitting hurdles, in addition to higher capex requirements inherent in land-based capital-heavy mining. But the share price is the share price. And rather than complain and second guess what the market thinks, we reached out to our institutional investors and analysts with an informal survey. We asked them to rank five factors by importance for any potential re-rating of the TMC stock. And adoption of the ISA mining code emerged as the single most important factor that is likely depressing the TMC stock. So through this lens of shareholder value maximization, we believe it is wiser to get the application over the line and then resume project development after the ISA adopts the mining code or grants our application based on the existing draft rules. But I'll now turn it over to Craig to discuss some of these capital considerations further.