Good afternoon, everyone and thank you for participating in the Metals Company’s First Quarter 2022 Corporate Update Conference Call. Joining us today are the Metals Company’s Chairman and Chief Executive Officer, Gerard Baron and Chief Financial Officer, Craig Shesky. Following their remarks, we will open the call for your questions. Before we go any further, I would like to turn the call over to CFO, Craig Shesky, as he reached 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. Please note that during this call, certain statements made by the company that are 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 maybe beyond our control, including those set forth in our Safe Harbor provisions are forward-looking statements that can be found at the end of our first quarter 2022 corporate update press release. Such statements may also be found in our Form 10-Q when it is 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 and 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 that slide deck is available on our website right now, investors.metals.co. I will now turn it over to Gerry Barron, the Metals Company’s Chairman and Chief Executive Officer. Gerard, please go ahead.

Thank you, Craig and good afternoon and thank you all for joining us today for our first quarter 2022 corporate update. You are welcome to follow along with our slide deck or if you are joining us by phone, you can also access it at anytime at investors.metals.co. Today, we will take you through the highlights from Q1, including significant progress offshore and onshore, a discussion of recent market and industry developments, our financial and project development highlights, and the expected upcoming milestones for the company. We will start with a brief reminder of the TMC value proposition. TMC is developing 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 U.S. passenger fleet. And with all of the raw material inflation squeezing automakers, this is a fantastic time to be developing a resource that can actually move the needle for them. The resources also secure nodules sit in international waters and are regulated by the International Seabed Authority, or the ISA. The ISA resumed in-person meetings in December last year after nearly a 2-year hiatus due to COVID. The ISA also met again in March and have additional meetings scheduled in July and November of this year, with a stated target of finalizing the exploitation regime by July 2023. We expect our production costs to be low as 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. And importantly, we also expect to significantly compress ESG impacts compared to land-based miners, no digging, no blasting, no drilling, no child labor, no social displacement,…

Thank you very much, Gerard. So as of the end of March, we had a cash balance of $69 million, which we will use to continue progressing the work on our critical milestones, including the pilot collection system test in the CCZ beginning this summer and further advancement of our environmental impact statement, both of which are prerequisites for application to the ISA for exploitation contract. And we make that application in the second half of 2023. We believe that the cash on hand $69 million could find us for at least the next 12 months from today. Now like most companies and individuals, we certainly are noticing some cost inflation, including fuel prices and vessel rates. And of course, we are always constantly evaluating our internal cost estimates. But when you are exposed to the basket of metals that we are, inflation can actually be a significant tailwind. The supply limitations of these metal markets are becoming increasingly worrisome to, as Gerard noted, politicians, military leaders, automakers and the general public. In nickel, the short squeeze and the 10-day trading shutdown at the London Metals Exchange in March showed just how precarious the situation is. And since February, nickel liquidity on the LME has been cut in half, which we think could provide further incentive for nickel customers to think long and hard about locking up long-term production. So, how do these higher metal prices translate into affecting our project economics? In short, it’s a massively positive impact. In March 2021, AMC consultants issued an SEC regulation SK1300 compliant initial assessment of the project economics for the NORI-D area. This initial assessment is available in the Investors section of our website. And the NORI Area D financial model can be found beginning on Page 310 of that document. The…

Thanks Craig. First of all, I would just like to thank our team and our partner Allseas for hitting some very important milestones already this year. In the world of metals, our expected production date of Q4 2024 is just around the corner. And we fully intend to keep this progress going to achieve that target. And in closing, I will paraphrase what I said during our last quarter update call, because it’s even more apparent now. At a time when the inherent risks of battery metal supply chains are becoming increasingly obvious to the media, automakers, politicians, military leaders and investors, we have taken major steps towards de-risking the world’s largest estimated undeveloped source of battery metals. And we believe our current market cap represents less than 1% of the fundamental value of our estimated resource. So, while I am convinced that TMC shares are extremely undervalued, our stock today represents a very inexpensive way to gain exposure to the world’s number one and number two largest nickel projects on the planet. So, thank you for your interest and attention today. And with that, we would like to turn it back to the operator for some Q&A.

[Operator Instructions] Speaker, our first question is from the line of Jake Sekelsky of AGP. Your line is now open.

Hey, guys. Thanks for taking my questions. So, just starting the deep-sea trials in April, I am just curious, were there any surprises with the equipment? I mean it sounds like everything functioned properly. But I am just wondering if you came across any surprises or any areas for improvement as you move towards commercialization?

I am happy to say, no. I mean there were minor operational things, a part needed replacing or a bolt needed tightening. But the pressure testing and putting this machine together and planning it as Allseas has been doing since 2019. To then drop it in the water for it to work so seamlessly, 2,500 meters below sea level was really exciting from our perspective. I think if you were to ask Allseas that question, they would say, it was always going to work that way. But I am sure there were some very happy engineer faces on that boat as well and so – and yes, so far, so good. And I guess that plays into our strategy, right. I mean, if you – our strategy was to bring industry expertise in to support us, because, at the peak, Allseas had up to 400 people working on that project. And so, they threw a lot of skills and hands at making sure that it all worked.

Got it. Okay. That makes sense. And then just looking at capital spending, and Craig, you touched on this a bit with the trials underway, I am just sort of curious if you are able to give us any color on capital spend over the next couple of quarters as we head into the second half of the year?

Well, so we have laid out that, it’s again, this is dependent upon getting to final ingredients with Allseas and Epsilon Carbon, but we would expect, at some point to have capital spending of $55 million. And that’s pre-production CapEx for the Project Zero commercial system, as well as some engineering costs. We are, obviously, as everybody else is looking at inflation closely and making sure that we are managing costs. As you know, is we best possibly can. As I mentioned, we do have the benefit of actually getting a tailwind from inflation in terms of project economics, given that, the basket of metals, even after a pretty difficult last few days for metals trading, it’s still up very significantly, nickel is up 45% already this year. So, we were managing that closely and always assessing and discussing with our team and the Board. But we can say that the cash on hand is going to be sufficient to fund our operations and our capital expenditure needs for at least the next 12 months from today.

And I will just add to that, that would be when we reached our agreement with Allseas, we did agree a fixed price contract as well, which I think has worked out pretty favorably, because firstly, Allseas only like to do things to a very exacting standard. And so they spent considerably more than was budgeted to deliver that pilot, main system, collective system. So, it’s worked out pretty well. And it certainly helped us in managing our capital outflow.

Okay. And then just lastly, on the PFS for the Project Zero plant, is the plant being designed in a modular fashion, I guess that being designed as an off the shelf type plant where you can take the results from the PFS and apply it to potential additional plants down the road?

Yes, absolutely. I mean, we chose this flow sheet. We worked with a variety of companies, including Hatch on it. And we chose a flow sheet that works in many locations around the world today. Primarily, it’s used for the treatment of nickel laterite. And so what we found through all of the pilot trials was that nickel laterites and polymetallic nodules behave very analogously when they are in the kiln and the electric arc furnace, so that was encouraging. And there are many dozens of those operating globally. And so if you think about our flow sheet, it comes with a pyrometallurgical front end, which was where we dry the nodules and we throw them into an electric arc furnace. And then we produce an alloy material, and a big pile of manganese silicate, which you heard us talk about on the call. And then we take that alloy and convert that into a matte material. And that matte material currently contains about 40% nickel and 30% cobalt and several percent of sorry, 30% copper and 7% [ph] cobalt. The plan was to then refine that into battery materials, into sulfates and copper cathode. And so that’s like a separate, if you like flow sheet and so optionality, we could do the pyrometallurgical stuff in one location, and the hydro net in another, or we could just sell that intermediate product, because today in the market, we would get paid between 90% and 95% of the payable that matte. So, it affords us a whole lot more flexibility to the way that we have designed it.

Got it. Okay, so it sounds like you are not necessarily reinventing the wheel with the plant design at all.

No, we are not.

It’s the same thing, Jake. It’s the same thing too, of course offshore. And we are trying to thread the needle. We absolutely in no way want to diminish just how important that these tests are and how impressive it is and what the team at Allseas has been able to do. But I think it’s a good example, both onshore in terms of that flow sheet. And offshore, it’s really building on a lot of technology that has been tested. It’s not quite at commercial scale. So, we are able to take the learnings on a lot of people have done before us and build upon them in a more efficient manner. But still pretty amazing achievements, especially from our partner Allseas this quarter.

Yes, absolutely. And that’s helpful. That was all on my end. Thanks again, guys.

Yes. Thanks Jake.

Thanks.

Speakers, next question is from the line of John Katsingris of Wedbush Securities. Your line is now open.

I am on for Dan.

Hi John.

I had a quick question. So, taking a look for more of a bird’s eye view, looking at what’s going on in the world supply chain problems and more so macro headwinds, do you see any potential headwinds looking forward into 2022 or 2023? Thank you.

Look, I see tailwinds. I think the headwinds are probably supply chain risk. But we have been facing those supply chain risks for the last 2 years as have other manufacturing or companies who are building to that side, or but if you look at how we have managed that, last year, we spent 170 days at sea. We completed five environmental campaigns with moving, 50 to 65 people on a boat, off a boat, all without a single day loss to COVID. We had multiple vendors on every campaign. During that same year, we with Allseas, we are building an offshore pilot collector system. And as you have heard today, it’s in the water been tested. And so, between ourselves and our partners, we have a lot of expertise and success. We have chosen our partners very, very well. And along with our own disciplines, I think when you compare our progress, it’s been exemplary. Now, what I do see the tailwinds. And I think those tailwinds will further, as you heard in today’s presentation, just make it obvious to people that, we need to be prepared to go to new frontiers. This problem is not going away. If I go to the environmental issue, climate change is and global warming is the biggest threat to our oceans. And so then you add on top of that the security of supply of these metals that, without the battery materials, you can’t build the batteries. And so, I think all of these things work in favor of our projects. And I feel fortunate on this project. But I think the challenge is we can overcome with the help are very, very solid partnerships. Of course, cost of capital is always something that will be something we have to earn. We have to work hard with the investigation [ph] to make sure that we can reduce that. And we are confident by delivering the milestones on this project that we will achieve it.

Thank you.

Thank you, John. Say hi to Dan.

Will do.

[Operator Instructions]

While we are waiting for that queue to popping up, Jessie, there was a question on the chat regarding our relationship with Glencore. Just an overall update on that relationship, Gerard, if you have any comments, and I guess the question was, given their GM transaction, has that changed anything via the relationship with TMC?

Sure. Look, I would say that we have a good relationship with Glencore. They have their small shareholder in the company. They have off-take for some of the nickel and copper on one of their license areas. And they are always at the other end of the phone when we need some advice or some help on something and so, no changes.

And one other question from the chat, from Steven Clark, regarding the ISA process, we talked about it quite a bit, but any change in our competence for the process over the Nauru zone and the timeline to potentially get that exploitation contract.

We would remain confident that the ISA is on track to have the exploitation code adopted by the time the council finishes sitting in July 2023. And so, as you heard in our presentation we do you have a fallback solution, thanks to Nauru lodging that 2 year notice. But at this point in time, I think we are pleased with the amount of progress and the hard work that is happening by everyone at the Secretariat and also the member states who are all chipping into, to do what needs to be done.

Jessie, I think we are about to wrap anyway. So, unless there are any more questions in your queue, we will just turn it back over to Gerard to conclude the call.

Speakers, no further questions at this time.

Okay. Well, look, thank you everyone for taking the time to join us on the conference call. We look forward to sharing even more progress in our second quarter update. And wish you all a good day. Thank you.

This concludes today’s conference call. Thank you all for joining. You may now disconnect.