Good afternoon, everyone and thank you for participating in the Metals Company's Second 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 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. 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 available at the 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 second quarter 2022 corporate update press release. Such statements may also be found in our annual report on Form 10-Q for the year ended December 31, 2021 and other reports subsequently 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 that slide deck is available on our website right now, investors.metals.co. And I'd 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 second 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 any time at investors.metals.co. Today, we'll take you through the highlights from Q2, a discussion of recent market and regulatory developments, an update on the no NORI-D project, expected upcoming milestones for the company and financial updates. Well, it's been an intense and action-packed quarter for us on several fronts. Most of the action for us has been offshore. We have been planning and mobilizing for the most complex campaign, we have ever attempted as a company. Our collector test and environmental monitoring campaign in the CCZ. It requires coordination between three vessels and over 250 people across dozens of organizations and onshore, we wrapped up the analyses of our pyrometallurgical pilot work and progressed our bench scale refinery test work. And in May, we released our Inaugural Impact Report, which lays out why we're on this mission, what we expect our future impacts might be and what we can do to manage and mitigate them. Intensity is also ramping up at the International Seabed Authority as they work towards final exploitation code. They just finished a month-long session and will meet again in November 22 in March, 2023 and again, in July, 2023, and combined with intercession working groups, we're confident that the regulations remain on track. Our cash balance as of March 31, was $46 million. In light of certain inflation redevelopments, this too required mobilization on our part. During quarter two, we have seen inflation in the cost of our offshore collector test environmental monitoring campaign, and to deal with these impacts…

Thank you, Gerard, and very quickly to just to correct something said earlier, the $46.3 million of cash was at the end of June 30 as I'm sure most of you assumed but now back to the slide deck. This page is used in some of the key attributes of the NORI-D area. Our first project, which represents just 22% of our total estimated resource. While TMCs current market cap is certainly disappointing to us, resource companies looking to grow their battery metal portfolios, particularly focused on the size and quality of this underlying resource. And on that basis, a massive and high grade project, like NORI-D is truly rare. NORI-D alone would be the largest undeveloped nickel project in the world without even considering the rest of NORI-D tunnel. And it's a project into which we've already invested over a decade of work and approximately $250 million. As Gerard mentioned earlier, we're exploring options to raise capital at the asset level, which might include royalties, offtakes or earning structures and in earngs specifically, if pursued, could be a way for resource company materially to grow their future battery metal portfolio and a way for us to potentially raise funds without having to issue equity at the hold-co level. Now as shared in previous update calls in March, 2021, the 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 Investor section of our website and the NORI-D financial model can be found beginning on Page 310 of that document. The initial assessment arrived at a net present value of $6.8 billion for NORI-D at the beginning of last year and that assumes $7 billion of project development CapEx. Our announcements earlier this year with…

Thanks, Craig. We wanted to briefly remind you of the strategic developments announced in March that can potentially allow us to get into production in a capital-light manner. Project Zero is our first small scale commercial production project expected to collect and process 1.3 million wet tons of nodules annually from the NORI-D area. In March, we signed a non-binding term sheet with Allseas and a non-binding MoU with Epsilon Carbon. We continue to work closely with Allseas on the Project Zero commercial arrangement, and we're pleased to receive their Vote of Confidence through a commitment in the $30 million pipe financing announced today. We're also making good progress with the team at Epsilon Carbon and are happy to report that a suitable site has been identified for Project Zero plant in India. During our last call, we reported on the progress of the pilot collection system, including the harbor wet-test, the dynamic positioning trials and the drive test of the collective vehicle in deep water on the sea floor of the Atlantic. In May, we announced that engineers aboard the hidden gem deployed their flexible jumper hose, connected it to the base of the riser, and then launched the pilot riser, lowering the assembly to a depth of about 650 meters and using the hidden gem's ROV, engineers then made a subsea connection between the jumper hose and the collective vehicle, which was previously deployed to the sea floor in 745 meter water depth. Allseas used the former drill ships Derek for at-sea construction of the pilot riser system, which will ultimately extend to four kilometers deep. So this progress keeps us on track to test the system in the CCZ commencing this quarter. When nodules in our contract area will be gently lifted off the sea floor and…

Thank you, Gerard In the second quarter of 2022, TMC reported a net loss of $12.4 million or $0.05 per share compared to TMCs net loss of $29.1 million or $0.15 in the second quarter of 2021. This net loss for the second quarter of 2022 included exploration and evaluation expenses of $9.9 million versus $18.2 million in the same period last year. General and administrative expenses of $8.3 million versus $10.4 million in the same period last year, partially offset by decreasing the value of our warrants of $5.7 million. Exploration and evaluation expenses decreased in the second quarter of 2022, compared to the same period in 2021, as a result of decrease in offshore campaign activity, following the completion of NORI area D environmental baseline campaigns in the fourth quarter of 2021, a decrease in share-based compensation and an increase in the expenses incurred on the trials of the pilot mining test system. General and administrative expenses decreased in the second quarter of 2022, compared to the second quarter of 2021, reflecting a reduction in share-based compensation and a reduction in communication and advertising costs, partially offset by higher personnel, legal and other expenses, associated with being a public company. Excluding non-recurring items, free cash flow for the second quarter of 2022 was negative $22.9 million compared to negative $6.6 million in the second quarter of 2021. The significant cash payments made during the quarter were the second milestone payment to all seasons of $10 million and final payments to Maersk offshore campaigns of $5 million. Looking at the six-month period, TMC reported an operating loss of $34.2 million and a net loss of $33.5 million or $0.15 per share for the six months ended June 30, 2022, compared to TMCs net loss of $84.9 million or $0.44…

Thanks, Greg. So, first of all, I'd like to thank our team or their commitment and efforts in this revolutionary and truly historic endeavor. I'd like to thank our shareholders and our partners many of whom have committed more capital to the project for standing firm alongside us. And while this year has been undoubtedly a tumultuous chapter in the company's story, we're excited to turn the page to the dawn of this new industry, which will produce immense benefits for our shareholders, our team, our stakeholders and for the common heritage of humankind for many decades to come. The pieces of this puzzle are falling into place. The ISA is pushing ahead targeting July of next year to finalize rigs. We are embarking in on a fully integrated collector test to demonstrate ours and Allseas Technology and we have engaged some of the brightest people and brands for our environmental and social impact assessment and political leaders in the US are laying out a clear choice for automakers, find sources for battery metals, like nickel and cobalt outside of the borders of Indonesia and the DRC, China and Russia and others, or risk losing substantial EV incentives. In short, it couldn't be a better time to be developing the number one and number two largest nickel projects on the planet. Thank you for your interest and attention. With that, we'd like to turn it back over to the operator for any questions.

[Operator instructions]

There's one from John Elman [ph], the company plan to get initial work exploration contracts from the ISA beyond the three that they already have. And are there additional blocks available now? And how does it relate to the reserved areas, the areas of particular environmental interest in the clearing clip and zone. So Jerry, do you want to provide some commentary on that?

Yeah, absolutely. Thanks, John. As of today, there are no plans to push forward with new areas and are there blocks available? Well, there are, but the one thing we've learned about the CCZ is that while the grade of nodules is very consistent, the abundances are not. And so we believe that many of the unclaimed areas may in fact, the not as economic as the ones we have. So we have a lot of resource, 1.6 billion tons, and we're pretty happy with where we're sitting there at the moment.

And our next question, one moment comes from the line of Malcolm McDonald from ML. Your line is open.

Hi guys. Two quick questions. One, what is the estimated cost to get into production? And then number two, where else outside of the United States are you're looking at creating processing facilities and coming into the out result?

Yeah. Hi Malcolm. Well in answer to your first question, we think its CIRCA $100 million. And so that is what's required to on top of our current funding to move into production, but the good news is the spending of that money would not be called for until after the code is in place. And so we do think the final regulations been adopted are a major valuation changer for this company and for this industry. In answer to your second question, look, we have been thinking about the answer to that question for many, many years. We know that the messages that are coming from the US Government are consistent with the messages coming from other nations as well. I happen to be in Saudi Arabia at the moment, and if you study the Vision 2030 plan, it's fascinating. They understand that medals will be important to their future and I think you'll find the same for every developed country around the world. And so a big influencer in where we will locate those processing plants will be government support and the cost of the funding, and of course, as Craig and I both mentioned in our presentation, we will explore every avenue, including the very conventional farming type arrangements that resource companies use to develop projects and, the size and quality of this resource is unmatched as we've said and so that makes it a great conversation data.

And I think that dovetails. Yeah, no, thank you. Malcolm. That dovetails into a question that we had in the chat from Aton [ph] from Wedbush and what are your future financing plans? So I think Gerard just touched on it. Look, we're always going to be opportunistic and as conditions changed, we'll reevaluate, but certainly one of the attractive elements of the transaction that we announced today was that it does give us that runway, that runaway past the point when the ISA is targeting the final exploitation regulations and gives us a lot more breathing room to pursue some of the other asset level type financing that should be available to us in the coming months. So Norma, we would like to turn it back to the question queue.

[Operator instructions] And I am currently showing no further questions in the queue at this time.

So we'll go to the questions in the chat. So feel free to keep on populating those. Another question from John Alman [ph]; does the net present value include the total cost of processing the nodules? The answer is yes, it does. So for more information, we encourage you to go to the NORI initial assessment and the TOML resource statement available@investorsdotmetals.co. And you'll see some of the assumptions, both in terms of capital costs and operating expenses that went into those NPVs. So the $6.8 billion NPV that was released in the first quarter of 2021 from AMC consultants in that document included roughly $7 billion of pre-production CapEx and again, we expect to significantly reduce that with our capital light approach, and it also included the OpEx assumptions that are available in that model. So yes, the NPVs that we mentioned, the $6.8 billion from AMC consultants, which we believe would be $15.2 billion today for NORI-D updating just metal prices do include full processing costs.

[Operator instructions]

Okay. I see Hendrix [ph] has asked a question there, Craig, I'd be happy to have an answer. Igna [ph] asked early in the presentation, the claim was made to reduce spending, please specify some examples where costs can be reduced. Look, we have always run this business very leanly. We don't have a large corporate office overhead something that we were once upon a time looking to change, and then of course came COVID and we were very grateful for not having it. And going forward, there is no doubt that we will be wanting to bring the team together. At the moment, we tend to operate ourselves and we use shared office services as required. I think, when you look at the work program that we do, it is very heavy and a lot of the cost reduction has fallen on the shoulders of the team who I think today, because we did plan on adding significant personnel to enable us to carry out this work program and we just haven't been able to afford to do it. Yet we've maintained our ambitious program and for that, I really do thank our team and we run this business in a very, very tight cost control manner and certainly there are no pay rises. We look for every single dollar and we've taken out every bit of consulting expense. We've talked to our advisors, we've looked for under every stern, without compromising our ability to get the job done and the job is to complete the prefeasibility work that allows us to submit an application. I also see a question from Bill. Craig asking what's the status of any pending litigation and what kind of effect will this have on the company? Well, of course there was a class action files and we were fortunate enough to have one of the world's leading law firms put together a defense for us, which they did on a contingency basis and you can read the response that's filed in the courts. Personally, I thought it was a well-prepared response that gave me a lot of confidence reading it, and we remain confident and hopeful that that can be dismissed.

There was also a question now from David Carr in the chat. Is there any incentive to bring forward production from a current plan of late 2024? Look, I think the answer on that is we wouldn't believe so. We are of course doing all the work necessary to put us in a position to apply to the ISA for an exploitation contract, with that, late 2023 timeline, assuming the final code is in place. And then from that point, the ISA is a process of roughly 315 days for reviewing your application. But the good news about a project like this certainly is not something that you would see on land is that there's not a bunch of fixed infrastructure to go out and fund and construct prior to beginning production. Our first production system is that pilot collection system that you saw a video of earlier. So we anticipate that upon successful exploitation contract grant from the ISA over the NORI-D area that we could begin production very shortly thereafter in a manner of a couple of months. And then Norma, I see that's it for I check one more time with the chat. Yes. That's it for our questions. So we might turn it back over to Jared.

Yeah, well, just before we do, I see a couple of people asked about the World TMC be delisted because our price is under a $100. NASDAQ are very clear on that. You have 30 days to rectify it. Then you receive a notice and you have six months to rectify it. We're very confident or that shareholders will start to see the true value that lies behind the equity and there are well proven paths that companies can take if in fact they find themselves through stock consolidations. So it's not something that we're concerned about, but we're working very hard to make people see the value in the company. And that's by delivering on our milestones as we move towards first production. Okay. So thank you for taking the time to join us today on this conference call. And we look forward to sharing even more progress on our third quarter corporate updates in November. Thank you very much.

Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect. Everyone have a wonderful day.