Good day, and thank you for standing by. Welcome to the Metals Company First Quarter 2025 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Craig Shesky, Chief Financial Officer.

Thank you, Michelle. 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 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 reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call. You're welcome to follow along with our slide deck or if joining by phone. You can access it at any time at investors.metals.co. And I'll now turn the conference call over to our Chairman and CEO, Gerard Barron.

Thank you, Craig. Well, usually, our first quarter conference calls are a bit quieter as they occur roughly six weeks after our year-end report but we have just experienced a six-week period in which our company and this industry have taken some historic leaps forward. While the Trump executive order on seabed minerals had been rumored for some time in the media, the filing of our application months ahead of expectations was not, and I'd like to personally thank our team for the tremendous efforts to get these three applications over the line in an accelerated fashion. Given all of the derisking milestones achieved since our company's inception, we believe that the one thing previously holding back our stock price was the lack of a clear regulatory pathway. And we believe we now have it. And frankly, I don't think the market has accurately priced that in. Despite a nice run-up this year, we believe that the spring remains tightly coiled for the stock. Still, we were cognizant that another key overhang of the stock was fundraising, and we've seen short interest tick upward. And even after some incredible achievements, we did not want to drift into summer without shoring up the cash balance. So this week, we did just that through a $37 million registered direct offering from Michael Hess and Brian Paes-Braga, and an existing strategic investor in TMC. These are all parties that want to be with us for the long haul and are ready, willing and able to roll up their sleeves to help us continue to create shareholder value through significant experience and networks in the resource space, both offshore and onshore. Michael Hess, from the Hess corporate family has 15 years of exploration and production experience as both an investor and operator along with…

Thanks, Gerard. So there's a remarkable correlation between a nodule's mineral composition and the composition of EV battery cathodes and wiring. So while lithium iron phosphate or LFP battery attractions -- chemistries have gained traction, over 90% of the LFP supply chain is in China. And in the West, nickel-rich chemistries make up over 65% of EV battery cathodes sold today. And most of that are expected to be sold in the future. It was great to see today -- yesterday, GM and LG Chemical announced their excitement over new lithium manganese-rich or LMR cathode technology. LMR offers 33% greater energy density than LFP, while being comparable on cost. With sales made up of 65% manganese and 35% nickel, plus typical EVs requiring 100 to 200 pounds of copper, there is going to be a very robust demand growth market for the metals contained in nodules. Now as automakers come close to delivering full autonomy, studies suggest that this will require as much battery power for computing as it would require for the powertrain, meaning energy dense nickel batteries should continue to be in high demand. Still, many opposition groups like to say, we don't need these metals. So don't bother. Well, nobody asked you, but the US government and commodity experts globally would disagree. As a former metal analyst, myself, I am surprised at how many global NGO spokespeople, also moonlighters, commodity experts. But even if all of the current and future EV demand magically vanished, the demand for our products will be just fine. These four metals are all being critical by the US Department of Energy or the US Geological Survey due to their necessity in myriad applications. For nickel, that includes stainless steel, generators, turbines and power grid infrastructure. For cobalt, it's aircraft engines, magnets, paints…

[Operator Instructions] Our first question is going to come from the line of Matthew O'Keefe with Cantor Fitzgerald. Your line is open. Please go ahead. Matthew O’Keefe: Thanks, operator. Hi, gentlemen. What a great -- what a busy quarter it's been and some great progress. So again, congratulations on that, and I want to thank you for the invitation down to see the PAMCO facility. That was a real eye opener and the strength of partnerships that you've established is pretty impressive and very confidence building. But I did have a question around the application to NOAA. And particularly, it seems as though the ground that you've applied for, you need the exploration ground and then you need the commercial operations. But it looks like the ground is covering the existing two concessions you already have -- that you had under NOAA. That is -- sorry, that you had under the ISA that has been NORI -- what will you call before the NORI area and the TOML area. But there's an extra like -- there's an extra concession there as well, and I think you referred to that as saying it has about a 500 million ton potential. Can you give us any more color on where that is or what we might expect to see around that? This is, again, speaking to the upside that you'll be talking about.

Sure. Well, firstly, thanks, Matt, and thank you for attending the Japan events, and it was great to see several people from the analyst community attend and see firsthand just how real it all is up there. And I was sorry not to be able to join you on that day. But you're right, we haven't released a map of the exact area, yes. We will very soon. But the additional area is very complementary to some of the NORI and TOML ground. And it's an area that is not claimed by any other sovereign. And we feel that's important that while there is an ability to lay claim of the ground that is currently under license through the ISA by other countries, we made a deliberate plan not to do that. Obviously, we have the support of Tonga and Nauru in our efforts. And we are -- sorry, can you still hear me? Matthew O’Keefe: Yes, we can.

Yeah. Great. So we have the support of Nauru and Tonga. But we wanted to make sure any additional ground that we did apply for would not have a competing claim over it. So, I can't tell you specifically where but it makes a beautiful mining unit, and I can't wait to share more detail on it. And we know a lot about the ground because it's neighboring to some of our other blocks. And so we can talk with some confidence about what we think is on it.

Yeah. And just to add one point on that, too. It does not -- also does not encompass any areas that had been set aside as areas of particular environmental interest. So look, we are very eager to share, Matt, exactly where it is. But for commercial sensitivity reasons, it makes sense to get past our initial review with NOAA and then share quite a bit more detail very soon. Matthew O’Keefe: Right. No, that makes sense. And I guess we're coming up on the first 30-day, I guess, the end of this month will be the first 30-day where you should hear back about the status of your application. Can you expand a little bit on that process and how you see it unfolding both the 30- and 60-day processes and then beyond that? Is that when we get a roadmap at that time?

Look, that's our plan. Yes. I'm traveling to DC tomorrow actually. And we are in regular contact with the authority. And we -- I think it's fair to say it's been a lot of action that we've generated by our application. And I think I wouldn't be speaking out of school to say a lot of excitement inside that department as well. But I have it on good authority that we should be expecting something very soon. Matthew O’Keefe: Great. Well, thanks. And let's -- looking forward to seeing this momentum continue. Thanks very much.

Yeah, thank you, Matt.

Thanks, Matt.

Thank you. And one moment for our next question. Our next question comes from the line of Jake Sekelsky with Alliance Global Partners. Your line is open. Please go ahead.

Hey, Gerard and Craig, thanks for taking my questions.

Of course. Hi, Jake.

Hi, Jake.

So a lot to unpack here, obviously, but just a few questions from my end. We've seen a wave of support, obviously, for the space for the last quarter. I'm just curious if you have any thoughts or insights on how this might translate over to the processing side of the equation. And if going downstream longer term is something that you've thought about?

Yeah, sure. We -- I mean if we wind the clock back about two years ago, we had an application to the DoD to carry out a feasibility study on a refinery at a site we identified in Texas. And since that time, we have made tremendous progress understanding how to treat the nodules with our partner, PAMCO. We've engaged with potential processing partners in other nations as well, including Indonesia, which has a wide variety or wide number of options available to us. And one of the requirements though under DSHMRA is that while you can seek exemptions if there's no ability to process those nodules in the USA, that they want to see those jobs and that economic activity come back to the United States. And so we are working feverously with two groups to evaluate that. We're excited about the progress that has been made. We're encouraged by the noises we're receiving from government agencies about the permitting cycle. And we've also been approached by a wide number of what I call, Patriot capital providers, people that are very interested in investing in hard assets on the ground to service the future needs of the United States. So we give it a lot of thought. We think it's a tremendous value-add opportunity. Of course, if we were to do this 20 years ago, then automation wouldn't be as advanced as it is today. And I think looking at how efficient we can make those processing plants is a high priority, and we're dealing with some of the best people imaginable on helping us on that at the moment. So -- yes, so it is a commitment. We like the idea of doing it in the United States. And we've certainly been -- I think inundated would be too strong a word, but we've had a lot of inbound from parties who've expressed interest in having some kind of partnership with us to put that investment into the US.

Indeed. And make no mistake, Jake, the key equation is going to be the same as it would be prior to the US approach, which is trying to accrete shareholder value, making sure that we're evaluating each of these downstream opportunities. On a stand-alone basis, based on IRR, based on sort of the return on invested capital. But the point here is, until such time as we have a commercial recovery permit, the invested capital portion needs to be as small as possible. So therefore, this is just a great opportunity to continue to bring in partners with strong balance sheets and deep pockets and great connections within the US government. And this is an amazing opportunity for us, medium term, long term. But certainly, we are always keeping an eye on not getting out of our skis in terms of going too far downstream too quickly, given the fact that all of us want to see this in commercial production in its capital light way as possible.

Got it. Okay. That's extremely helpful. That's all for me. I'll hop back in queue.

Thanks, Jake.

Thank you. And one moment for our next question. Our next question comes from the line of Dmitry Silversteyn with Water Tower Research. Your line is open. Please go ahead.

Thank you. And thank you, Gerard and Craig for taking my questions. And, Craig, I'd like to just add my comments on the trip to PAMCO facility and an excellent job that TMC and the PAMCO folks did in organizing and carrying out that trip. It was really first rate. Now to the questions. You mentioned in your remarks that you're exploring some funding opportunities within the US government framework. So what exactly are you looking to chase down here in terms of either loans or grants or any other financial assistance that the government can provide you in this scenario?

Yeah, very much taking a -- and thank you for the questions, Dmitry, and it was a pleasure spending time with you and the rest of the team for that PAMCO site visit. It was an excellent opportunity to see that firsthand. But the answer is an all of the above approach. We want to ensure that we're not leaving any stone unturned from what is a great window of opportunity here with a very supportive government. So we can't comment on too much specifically other than I would direct you to the executive order, which pointed out the exploration of offtake arrangements or rights of first refusal, the directions that the President gave to the Departments of Defense and Energy on that front as well as directives to explore financing opportunities for this new seafloor nodule industrial ecosystem that the US wants to build out, directing financial initiatives from the Development Finance Corp, Exim Bank. There were a lot of names as part of that executive order. And it's -- I would say, it will be easier to list the agencies and cabinets named to that order that we haven't been having active dialogues with than the other way around. We feel very confident that the time is right to take some of this from theoretical to actually signatures on a page, and we're going to push that as aggressively as possible.

Understood. Great. Thank you for that. Now since these executive orders have come out in rapid fire way in the last 6 weeks, and you guys submitted the application now. Have you seen any -- would -- I guess the best way to ask this question is, what are you hearing from your contacts at ISA? I know they're in the inter-sessionary discussions right now. Have you picked up any sense of urgency on their part? Or is it all integration and combination at this point?

No, I think -- hi, Dmitry, and I -- what we're hearing is that there is action. What we are hearing is that people understand that this has been shining a spotlight on the fact that the regulator had an obligation and hasn't met its obligation. And I think if you listen to some of the comments that have been made by the SG while they're a little bit speculative, I would suggest what they do highlight is urgency. And what we hear discretely from some of the member nations is that there seems to be momentum. Now of course, our decision is made, we are moving in this direction. But I hope for the other member nations who relied on UNCLOS and who have been acting in good faith by turning up and carried out all of this research work to further their license ground. I hope for their sake that the regulator can agree a set of terms for the mining code and join us out there.

Okay. Thank you. Just to follow up on that a little bit and get some clarity on how these overlapping licenses will work. So let's assume that you get the NOAA license -- collection license within the next X amount of time but before ISA is ready to issue theirs and you begin collections. And then ISA does get its act together, it does have the regulatory code in place and does evaluate and approve your application for collection in the NORI-D and TOML areas, how does that -- how will that work? How the nodules that you're lifting, let's say, the revenues from them will be shared between Nauru in this case, of NORI under ISA rules versus under NOAA rules?

So okay, just to be clear, we are applying under the US regs and not the ISA yet to be completed regs. So there will be...

Yeah, I understand that. What I'm saying is once you -- let's say you get the license and you start collecting commercially in the areas. And then the ISA comes through with their code and issued the collection license. How does that work?

Well, they won't because we won't have applied. We're not applying to the ISA. We're only going to be applying to NOAA.

Got it. So your exploration licenses will be -- will still be in effect, but you're not applying for a collection license?

Correct, correct.

Dmitry, there were some comments from some of the media or the global community, where they're kind of attempting to treat it all as one ball of wax and pierce the corporate veil. TMC USA is a private entity established 12 years ago. NORI and TOML are separate subsidiaries, and NORI and TOML will continue to do what they need to do to keep the ISA exploration contracts and compliance. But at the same time, we wouldn't want a situation where the complication of having to consider permitting over the same area from two regimes, but there would be no reason for us to relinquish our rights to those exploration contracts before any commercial recovery permit of the same area is granted.

Got it. Okay. Understood. And then one final question along similar lines. Do you foresee any issues with potential customers for your metals, for your product that are ISA member states not being able to purchase these metals from you since there will not be collected under an ISA license?

No, I do not. I've heard that reported in the media and -- but I don't see that as being any risk whatsoever. And once again, there's a bit of wing flapping going on around that sort of language. But the world is moving to a position where it is going to be short of these metals. And of course, we think having the United States as our sponsor, so to speak, is probably the best -- well, is the best sponsor we could possibly wish for. And so, we don't think -- certainly talking to the commodity traders as we have done in recent weeks because of the renewed interest, and it seems that everyone is beating a path to our door to have a conversation to see where they can fit into this, they don't perceive issues around that either.

Okay. That’s encouraging. Thank you, Gerard.

Thanks, Dmitry.

Thanks, Dmitry.

[Operator Instructions]

While that's occurring, Michelle, I think we'll take a couple of questions that people have written in the webcast. [indiscernible] asked, can we confirm the PFS release date? Yes, I had said next quarter, but to be clear, third quarter of 2025. And a question from [indiscernible]. Can we provide an update on our path to commercialization and any milestones you expect to hit over the next 12 months regarding offtake and regulatory progress? A great question, as Gerard had spoken to on discussions with potential commercial partners, we feel very good about where things are heading. During our site visit at the PAMCO facility, we were accompanied not just by the sell-side research community, but also battery makers, precursor producers and steelmakers. And even in the United States, you're seeing increasing headlines of some of the large automakers relying on battery technology that could benefit from additional supply of nickel or manganese. And look, keep in mind, most of these US automakers never bent to the pressure from global NGOs to exclude these materials from their supply chains. And as we get closer to commercial production, that urgency, that fear of missing out, will only increase. So in terms of the milestones, the PFS coming up, we think, will be an important one, but also a read-through to the valuation of the rest of the resource portfolio. We're very eager to -- upon having our applications deemed substantially complete -- substantially compliant or complete, respectively, laying out a path showing step-by-step what to expect over the coming quarters on that regulatory review. So this is not going to be a black box. It's not going to be fingers crossed, I hope TMC gets permitted. There should be a very clear path on the milestones to expect. So keep an eye on this over the coming couple of months, and we can't wait to share more data on that front. There's a question from [indiscernible], providing an update on the status of the Hidden Gem with respect to the commercial production system. So, Gerard, anything we might want to say on that? It's certainly been an interesting environment from an oil price perspective over the last few months. But certainly, our team continues to be laser-focused on the right scenarios for getting the Hidden Gem ready for commercial production.

Yeah. Look, we had -- the honest truth is we thought we had a bit more time because we were going to be -- as we previously announced, we were going to be getting the Hidden Gem ready for -- at the higher production target, 3 million tons. And right now, based on the feedback we're receiving post the executive order, we're now looking at it, how quickly can we get the boat on the water. And how quickly can we get it to an economic number such that it's making money, but sacrificing maybe some of the upper tonnage range for speed. And so that basically means the engineers are back working very hard. It's obviously great that we welcome Rutger onto our team, who, of course, was the Project Director on the commercial trials that were very successfully completed in 2022. I can report Allseas remain super supportive. They're an amazing shareholder and an amazing engineering partner for us, and we're working through all of that now.

One follow-up question from [indiscernible], is NORI no longer planning to submit an application through the ISA in June of this year?

That is correct. And just to be clear, the NORI license comes up for renewal next year and -- 2026. We will be renewing that because NORI is in full compliance. There is no legal basis upon which that license cannot be renewed. And the basis that we would -- the fact that we're putting an application in under our US subsidiary to NOAA has no bearing on the fact that we will be renewing that license with the International Seabed Authority. So, we're covering all bases.

Michelle, I think we have time for one more question from the line if there's anybody in queue.

I am showing no further questions on the phone lines at this time. And I would like to hand the conference back over to Gerard Barron for closing remarks.

Thank you. Well, look, it's been an amazing 2025, firstly. And I'm very proud of what we've achieved. I'm very proud of the team, how everyone has stuck together over the last -- well certainly over the last decade. And we've been through some interesting times. We've had some highs and some lows, and the one thing we have done is stuck together as a team. We have an amazing group of committed individuals, committed to the purpose, committed to doing the best environmental research, committed to getting this new resource into production. And I think everyone is feeling quite proud of the fact that we are in this position where we are today. We have an amazing Board who's also been a tremendous guiding hand through these last months and years. And of course, we have amazing partners, starting with our largest investor, Allseas, who remain at the ready to help us get production started. We have great partners, as many of you experienced or some of you experienced up in Japan last month. And of course, our sponsoring states. They entered into agreements with us in 2011, in the case of Nauru and 2012 in the case of Tonga. And of course, they did so in good faith under the protection of UNCLOS. Unfortunately, the commitments that they depended upon have not been fulfilled. And yet they remain tremendously supportive, and we will ensure always that their best interests are protected as we move forward. So I'd like to especially thank them for their never-ending support. And of course, our shareholders. We have -- we noticed our retail shareholder base growing substantially. I got to tell you, I love our retail shareholders. I love how committed they are and how they're prepared to go to the mat to defend our corner and to make sure that some of the wonderful scientific results that are becoming apparent, communicated, and reminded to those people who sometimes jump to the wrong conclusions. Obviously, I expect our institutional shareholder base will continue to grow. So, to each and every one of you, thank you for supporting us and sticking with us. And I hope it's going to be an amazing 2025, and the decades ahead are going to be a very exciting one. So, thanks for being part of our journey, and thanks for attending today.

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