TMC the metals company (TMC) Q2 2024 earnings summary

Executive summary

• Liquidity improved to $48.3 million from credit facilities as of August 2024, with increased borrowing capacity secured from major shareholders and $2.6 million raised through ATM at $1.61/share.

• Net loss of $20.2 million ($0.06 per share) for Q2 2024, up from $14.1 million ($0.05 per share) in Q2 2023, driven by higher exploration, evaluation, and administrative expenses.

• Two new board directors with expertise in disruptive technology and sustainability joined, strengthening leadership.

• Achieved world-first production of cobalt sulfate and nickel sulfate from deep-seafloor polymetallic nodules, supporting battery-grade material ambitions.

• U.S. House allocated $2 million for nodule processing study; company awaiting response on $9 million Defense Department grant.

Financial highlights

• Q2 2024 net loss was $20.2 million (6¢/share), up from $14.1 million (5¢/share) in Q2 2023; net cash used in operating activities was $12.1 million, up from $8.4 million.

• Exploration and evaluation expenses rose to $12.4 million from $8.1 million year-over-year, mainly due to increased engineering and share-based compensation.

• General and administrative expenses increased to $7.9 million from $5.1 million, driven by higher share-based comp, personnel, and legal costs.

• Cash at June 30, 2024, was $0.5 million, with total assets of $60.6 million and total liabilities of $70.3 million.

• Weighted average shares outstanding for Q2 2024 were 320.9 million.

Outlook and guidance

• Application for exploitation contract to be submitted before March 2025 ISA session, with a one-year review process anticipated; first offshore production targeted for end of Q1 2026, pending regulatory approval.

• Feasibility study with PAMCO for toll processing of nodules expected to be completed in Q4 2024, with potential production in Japan starting in Q2 2026, subject to ISA contract approval.

• Liquidity, including credit facilities, is expected to cover working capital and capital expenditure needs for at least the next twelve months.

• Ongoing strategic discussions and disciplined use of ATM for future capital needs.

• The company anticipates continued significant operating losses and expenses as it advances toward commercialization and will require additional financing.