Good afternoon everyone and thank you for participating in the metals company's Third Quarter 2023 Corporate Update Conference Call. Joining us today are the metals company's Chairman and Chief Executive Officer, Gerard Barron; and Chief Financial Officer, Craig Shesky. 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 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 very much. Please note that, during this call, certain statements made by the company are going to 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 statements. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows. And additional details regarding non-GAAP financial measures can be found on our slide deck with this call. And you're welcome to follow along with that slide deck or if joining us by phone, you can access it at any time at investors.metals.co. And I will now turn the call over to our Chairman and CEO, Gerard Barron. Gerard please go ahead.

Thanks, Craig and thanks to all of you for joining us today for our third quarter 2023 corporate update call. And thanks also in order to my team for the tremendous effort this quarter as we remain on track for the expected launch of our application for an exploitation contract over the NORI D Area following the July 2024 ISA session. I'm pleased to say we've made significant progress on prefeasibility work this quarter as well as our environmental impact statement, both of which are key prerequisites for our application. Our environmental program has not been cheap with cumulative spending of approximately $150 million over the last decade plus. But that investment in science is resulting in a growing body of data that we believe is making a definitive case for the responsible collection of polymetallic nodules. We've already been sharing this environmental data with stakeholders around the world including presentations during the recent ISA Meeting in Jamaica, and it's heartening to see how well-received these insights have been. This study of evidence will continue to grow and will include the results our previously disclosed upcoming offshore campaign, the company's 20th Environmental Campaign in the CCZ in order to gather further information on ecosystem recovery and functioning, 12 months after last year's successful nodule collection system test. I'm also delighted that we've published our Second Annual Impact Report, which examines the full scope of our existing and future potential impacts including life cycle comparisons versus land-based resources. We also recently debuted our sustainability approach and I'd encourage everyone to read through our press release from October 31 with links to these documents. And of course, we're always looking to improve, so feel free to share any feedback via impacts@metals.co. At the same time, progress on the regulatory front continues at…

Thanks very much, Gerard. As shared in previous update calls, this will be a very familiar slide that in March 2021, AMC Consultants issued a SEC Reg S-K 1300 compliant initial assessment of the project economics for the NORI D Area. And that initial assessment is available on the Investors section of our website, both in Excel and PDF 4. And the initial assessment arrived at a net present value of $6.8 billion at the time for NORI D, and that was around the beginning of 2021. And running the same model simply updated for current metal prices, the net present value of NORI D will be approximately $8.6 billion. Now this is a lower valuation than what we've shown previously, due mainly to nickel prices being down approximately 40% year-to-date. And yet, that's still a whole lot of value. And it's why we're fortunate to have four key metals in one resource. We anticipate being able to withstand commodity cycles better than most win in production due to the high grades of these metals inherent in the resource. Now, the next page lays out some of the critical milestones that had that can lead to re-ratings potentially in our public valuation even amidst a tough point in the commodity cycle. And we're still only trading at roughly 3.5% of the underlying NPV for NORI D at current oil prices. And keep in mind, that's only roughly 22% of our total estimated resource. Now, the milestones ahead that can lead to potential valuation changes are as follows: reaching binding agreements commercially with our partners, all Season PAMCO which will then feed into our prefeasibility study, the finalization of our environmental impact statement, continued progress from the ISA, which Gerard just discussed, nor submitting an application for an exploitation contract over…

Yes. Thank you, Craig. So in closing, it certainly feels good to see how much progress we continue to make. And finally, we're at a stage where the results of our hard work over the last decade plus on the environmental and social impacts can be shared openly with stakeholders around the globe, and we're delighted by those initial reactions. In the quarters ahead, I can promise you this we will remain laser-focused on the key deliverables in front of us being prudent with our cash and achieving what we say we're going to achieve in a transparent manner. As the first contract expected to launch an application for the mining of the Seaport resources in international waters, the world should expect no less. I would like to extend my sincerest thanks to my entire TMC team to our extensive network of highly skilled partners [Technical difficulty] to the team of highly skilled engineers designing our new offshore collector system at all fees, thank you for your dedication to this very important project. And thanks to everyone who tuned in for your interest and attention. And with that, we'd like to turn it back over to the operator for some Q&A.

[Operator Instructions] Our first question comes from the line of Matthew O'Keefe with Cantor Fitzgerald.

Hey, Matt. How you doing?

Good. Good. Thanks. Thanks for taking my call, and providing that extensive overview. It's been a lot of work has obviously been done. I'm just pausing here on Slide 21, which is the regulatory update. And you've highlighted 23 member states out of 169 publicly expressing reservations, which is great that you actually did highlight that. But I'm just wondering if you can provide any kind of sense of -- there's a lot there. I mean I've heard Canada and I've heard France come out. But the other nations, is there a common theme among them? And do any of these hold more sway or less way within the assembly than others? And what's to prevent more delays? And not to say that, the last delay was politically motivated, but I was just wondering if you had a little more color around this.

Yes, happy to provide some and Gerard, happy for you to weigh in as well. I think a takeaway look, there is sometimes a gap in what is said coming out of, let's say, a President of Prime Minister's office versus what you sometimes see on the ground in terms of everybody focused on rolling up their sleeves and delivering what the ISA is mandated to deliver, which is mining code, which protects the environment from serious arm, but does allow this to go forward. This isn't a question of -- yes, it is a question of when. And the future exploitation of the resource has always been contemplated and that's why the ISA is had a dual mandate to first put in place the exploration rigs and now to deliver those exploitation rigs. So in terms of who has more or less influence, we may not get into that, but suffice it to say, what we did see in July from a lot of the member states, even some of those who are on the list of supporting a sensible a pause or moratorium, a real good faith effort to say, look, here's the additional time that we need to push this forward. We need additional thee meetings, we think. And -- there was a view that providing this additional time to them by TMC and noting that we had a recommendation from the legal and technical Commission to do some additional environmental work, which we are embarking upon. That would be the right path forward. So we do see that the statements that you sometimes see from those 23 member states don't always line up with the reality of how hard they continue to work on the ground at the Gerard, I'm not sure if you want to add anything to that. We may have lost a connection, but that's okay. And with respect to other states, I think you should expect going forward, while we continue to hear a lot in terms of those who might take a position against it, they do represent the minority. And what we are seeing now is that out of the more silent majority you're getting more states that are pushing ahead. And also we would expect to see some additional states perhaps coming out in support and trying to be sponsoring states themselves. So as we get closer to final regulations, I think we can expect it's not just going to be the voice is coming from one side that are yelling the loudest but a more varied approach to public opinion.

Okay. Thanks. I'll let someone ask a question.

Our next question comes from the line of Dmitry Silversteyn with Water Tower Research.

Hey, Dmitry, can you hear us okay?

Dmitry you may be on mute? [Operator Instructions]

As we're waiting for that to compile, we have a question in the chat from Christian Hornbeck at current projections, if nothing changes negatively when do we expect the company to turn a profit. I think you can expect to see a lot more detail on what the economic model is going to look like as we release some of the results from the pre-feasibility study. We do expect that even with the first vessel at relatively small scale that it won't take very long for us to be free cash flow positive on that vessel. But we're going to allow ourselves a little more time to put that pen to paper and you can expect quite a bit more detail on that coming up in the first half of 2024.

We have a question from the line of Dmitry Silversteyn with Water Tower Research. Your line is now open.

Looks like the Dmitry might be having some technical difficulties. So could we see if there are any else on the audio queue. And I'll also have a little look at the Q&A chat online.

I'm not showing any further questions on the phone at this time.

There's a question online from Timothy Burn. What has been done with the processing of the 22 million tons of nodules sent to Japan and the remaining 3,000 tons of nodules? That is a good question, and we get this one a fair amount. The 22 tons that we delivered to Pacific Metals in Japan have already been used to really show that they can use their existing facilities to produce the intermediate products such as nickel-copper-cobalt alloy and the manganese silicon product. So that 22 tons was really instructive in giving us confidence both on our side and PAMCO to potentially take that next step and enter into a binding agreement. And again, all of that would roll into our pre-feasibility studies as well. So that 22 tons has already done quite a lot in showing and demonstrating the viability of this capital-light approach with PAMCO in Japan. In terms of the remaining roughly 2,980 tons, we -- before we had our exploitation contract, cannot commercially sell those. So we do have them. We won't say specifically where they are at any point in time, but we are using that massive sample to potentially share with other potential strategic partners. And make sure that others who want to be able to do some test work on the nodules can use this as a sample. But there is no ability for us to sell those nodules prior to being in commercial production with an exploitation contract.

[Operator Instructions]

So Dmitry is able to get in touch via the chat. The question is on the $9 million still to be collected on the capital raise. What's the timing of that and why the delay? As we negotiated this, and there was some detail on it back in August when we released it, with ERAS Capital, there was a view of they wanted to participate at $2 a share. But for reasons in terms of portfolio construction and some of the other positions within ERAS Capital, it made sense to fund it in the staggered approach. We would have approximately $2.5 million of that funding coming in expected by the end of November and then the other amounts to be received in the month of January of $6.5 million. But of course, ERAS Capital remains our largest shareholder, Andrei Karkar, is family Allseas, on our Board of Directors and has consistently been a great supporter of us as has our partner Allseas, in terms of these recent capital raises that we've done. So that was the reason for it and some additional context beyond that. Now the operator, if you don't mind giving a call back to Gerard, you should be able to get back in here and I'll take a few more questions from the chat. Another one from Christian Hornbeck. With China active in the Pacific. Is there any concern that they might begin mining illegally? Is this going to be an issue? What we would say is it's very constructive the way that China is behaving with the ISA. They are more engaged, certainly, as we've seen over the last couple of years. And it's highlighted in the Washington Post article from October, they are really using their sphere of influence to make sure that regulations are…

[Operator Instructions] I'm not seeing any phone questions at this time.

And then we'll take one more question from the chat David Larkam at Edison Research. What's the likely cost of the additional offshore campaign? And is it within the guidance cash flow for the requirements for the application? Yes, David, it is within our guidance, saying that what we would need to deliver that application following the July 2024 session, that amount of the initial guidance would be offset dollar for dollar for the capital raise that we've announced. So assuming that $23.5 million of net proceeds that will leave you in the ballpark of $35 million to $45 million of funding remaining. That does incorporate all of the costs anticipated for this post mining campaign. In fact, the timing of our announcement for the capital raise did coincide with us deciding for certain based on feedback from the legal and technical commission that, look, if this is a campaign that needs to be done, let's go out and make sure that we raise funding to keep the project on track, and most of that funding was raised with a view to spend it on the post-collection test campaign. So that is within our estimates. That's within the guidance we provided, and we're happy to be kicking out of the reason. Are there any more questions on the line?

No questions on the phone lines at this time.

Very good. Well, everybody, thank you for your attention. Sorry to those who may not have been able to answer -- or excuse me, ask a question, but feel free to reach out. You can reach out to us directly through our website for investors@metals.co, and we'd be happy to follow-up. Thanks again for your attention, and we look forward to chatting with you soon on our next quarterly update call in March and a lot of progress to be reported between now and then. Thank you all very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.