TMC the metals company Aktie

Ladies and gentlemen, welcome to the Annual General Meeting of Shareholders of TMC the metals company Inc. Please note that today's meeting is being recorded.

I would like to introduce you to Mr. Gerard Barron, CEO and Chairman of the company. Mr. Barron, the floor is yours.

Well, good morning or good evening, wherever you are. My name is Gerard Barron, and I'm the Chairman of TMC the metals company Inc., and I am pleased to welcome you to our annual meeting. The meeting is being held virtually as we believe hosting a virtual meeting enables greater shareholder attendance and participation from any location around the world, improves meeting efficiency and our ability to communicate effectively with our shareholders and reduces the cost and the environmental impact of our annual meeting.

At the meeting, registered shareholders and duly appointed proxy holders will have an opportunity to participate, ask questions and vote, all in real time, through a web-based platform. And I would like to remind you that only registered shareholders that have logged in to the meeting with their previously obtained 12-digit control number or duly appointed proxy holders are entitled to vote at the meeting. Ask questions or take an active part in the meeting on the web-based platform. If during the meeting, we encounter any technical difficulties, please remain logged on, and we will resume as soon as practical.

I remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve risks and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission, or the SEC, which are available on the website of the SEC at www.sec.gov or in the Investors SEC Filings section of our website at www.metals.co.

And in accordance with the articles of the company, I will act as the Chairman of this meeting. I will now call the meeting to order. I call upon Craig Shesky, the Chief Financial Officer, to act as secretary of the meeting. Maria Vaz of Continental Stock Transfer will transfer -- and Trust will act as the Scrutineer and inspector of elections for the meeting. This meeting will consist of the formal business of the meeting, followed by an opportunity for general questions and answers.

Before we proceed with the business of the meeting, I would like to note that for each matter being considered here today, you may ask questions through the virtual meeting platform. If you are a registered shareholder or a duly appointed proxy holder and have a question that is relevant to the business of this meeting, you are welcome to ask it through the web portal. And if you have a question not directly related to the business of this meeting, I kindly ask that you wait and ask that question after the formal business of the meeting. We propose to address questions not relevant to this meeting after the formal business portion of this meeting has concluded. And I will, therefore, ask that any questions regarding the operations or financial status of the company be deferred until that time.

The notice calling the meeting and the shareholders and describing the matters to be considered today was mailed on April 17, 2026, to the company's shareholders of record on April 2, 2026. The declaration with respect to such mailing is available for inspection by any shareholder and will be retained with the records of the company.

As Chairman of the meeting, I have asked our General Counsel, Ryan Coombes, to administer the formal voting portion of the meeting. I remain Chairman of the meeting. So Ryan, please proceed.

Thank you, Gerard. Voting on matters today will proceed as follows. I will ask for someone to make the formal motions at the appropriate times. Voting on all motions will be conducted through the virtual meeting platform. Voting on the applicable items of business will be conducted by electronic ballot. Polling is now open for all matters presented in the proxy statement, which was made available to shareholders on April 17, 2026. We will announce when voting will close to allow you time to submit your final ballots. If you have submitted a proxy, you do not need to vote today. You would only vote today if you are changing the vote you submitted by proxy.

Once the balloting closes, the scrutineer will tabulate the results of the vote for each matter. Official results of the vote will be announced closer to the end of the meeting, and the company will file a Form 8-K with the SEC within 4 business days of the meeting reporting the results of the vote.

The scrutineer has advised me that prior to the meeting, proxies were received from the holders of a sufficient number of common shares to constitute a quorum.

There are at least 2 persons present in person or represented by proxy, representing shareholders holding in the aggregate at least 213,376,047 common shares.

Thank you. I adopt the scrutineer's report and declare that a quorum is present. I ask the secretary of the meeting to please ensure the scrutineer's report forms part of the minutes of the meeting.

Notice has been given in accordance with the articles of the company. And as a quorum is present, I declare that this meeting is properly constituted for the transaction of business.

I now place before the meeting the financial statements of the company for the year ended December 31, 2025, together with the report of the auditors of the company thereon. These documents are also available on EDGAR. I do not propose to read these documents at this meeting. You may ask questions about the financial statements through the virtual meeting platform at this time, although as previously mentioned, questions regarding the broader operations and financial status of the company should be deferred until the Q&A session, which will take place after the formal business portion of the meeting.

I now declare the financial statements of the company for the year ended December 31, 2025, together with the report of the auditors of the company thereon have been received by the shareholders as submitted to the meeting.

The next item of business is to fix the number of directors of the company to be elected at this meeting at 10. Will someone move that the following ordinary resolution be adopted and approved, resolved that the number of directors of the company be fixed at 10.

I so move.

You've heard that the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask that those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect to fixing the number of directors.

[Voting]

I will now move to the next item of business. As mentioned, all results will be announced at the end of the meeting.

The next item of business is the election of directors. The only persons who have been nominated to stand for election as directors in accordance with the procedures set forth in the advance notice provision contained in the company's articles are the nominees set forth in the proxy statement for this meeting. As set forth in that proxy statement, the Board of Directors has nominated the following directors: Gerard Barron; Andrew Greig; Andrew Hall; Michael Hess; Stephen Jurvetson; Andrei Karkar; Sheila Khama; Christian Madsbjerg; Brendan May; and Alex Spiro. Since there are no further nominations, I declare the nominations closed.

Will someone move the election of the persons nominated as directors of the company?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there is no -- as there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the election of directors.

[Voting]

I will now move to the next item of business. As mentioned, all results will be announced at the end of the meeting.

The next matter to be dealt with is the proposed appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026.

Will someone move that the following ordinary resolution be adopted and approved, resolved that Ernst & Young LLP be appointed as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the appointment of Ernst & Young.

[Voting]

I will now move to the next item of business. All results will be announced at the end of the meeting.

The next matter to be dealt with is the nonbinding advisory vote to approve the compensation of our named executive officers as disclosed in the proxy statement for this meeting. The description of the compensation of our named executive officers is set out in the heading, Executive Officer and Director Compensation in the proxy statement.

Will someone move that the following resolution be adopted and approved on a nonbinding advisory basis, resolved on an advisory basis that the compensation paid to the named executive officers of TMC the metals company Inc., as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including under the section of the proxy statement, Executive Officer and Director Compensation and the related material disclosed in the proxy statement is hereby approved?

I so move.

You've heard that the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the advisory vote on executive compensation.

[Voting]

I will now move to the next item of business. The next matter to be dealt with is the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our NEOs. Shareholders may vote to hold such advisory vote every 1 year, every 2 years, every 3 years or may abstain. The Board of Directors recommends a frequency of every 2 years as more particularly described in the proxy statement for this meeting.

Will someone move that the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our named executive officers as set out in the proxy statement be put to a vote of shareholders?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask the shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the frequency of future advisory votes on executive compensation, selecting 1 year, 2 years, 3 years or abstain.

That concludes the placement before the meeting of all the resolutions and other items. You've heard the motions and have had the opportunity to cast your ballots in respect of each of today's resolutions and other items on the virtual meeting platform. As a reminder, if you have already submitted a proxy, there is no need to vote today.

Balloting will be closing momentarily, so please submit your final ballots now. Once the electronic balloting closes, your ballots will automatically be submitted.

[Voting]

I would now ask the scrutineer to please close the polling. Thank you, and voting is now closed.

I confirm the voting results.

I declare the motion fixing the number of directors at 10 to be carried. With respect to the election of directors, each nominee has been duly elected to act as a director of the company until the next Annual General Meeting of Shareholders or until their successors are elected or appointed, subject to the provision of the Business Corporations Act, British Columbia and the articles of the company.

I declare that Gerard Barron; Andrew Greig; Andrew Hall; Michael Hess; Stephen Jurvetson; Andrei Karkar; Sheila Khama; Christian Madsbjerg; Brendan May; and Alex Spiro be elected as directors of the company to hold office until the next Annual General Meeting of the company, subject to the articles of the company, unless they cease to be directors before then.

I declare the motion to appoint Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026, to be carried.

I declare the nonbinding resolution approving on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement for this meeting to be carried.

And finally, with respect to the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our named executive officers, that the frequency of 2 years received a majority of the votes cast and is the frequency selected on an advisory basis by shareholders.

Will someone conclude -- move to conclude this meeting?

I so move.

Thank you. Since the motion has been duly moved, the motion is carried by acclamation. The meeting is now concluded. Thank you.

As mentioned above, at this time, I would like to thank everyone who's attended today's meeting and open the floor for any questions.

Seeing no questions at this time, I will turn it back over to the moderator.

Thank you for attending today's meeting. You may now disconnect.

Good afternoon, everyone and thank you for participating in The Metals Company Third Quarter 2026 Corporate Update Conference Call.

Joining us today are the metal company's Chairman and Chief Executive Officer, Gerard Barron; Chief Financial Officer, Craig Shesky; and Chief Innovation and Offshore Technology Officer, Rutger Bosland .

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 read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 and 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 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 statements. 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 will also be posted on our website.

You're welcome to follow along with that slide deck or if you're joining by phone, access it at any time at investors.medals.co.

I'll now turn the call over to our Chairman and CEO, Gerard Barron. Gerard, please go ahead.

Thank you, Craig, and thanks to all of you for joining us today. Well, as we said during our last call, if 2025 was about a transformational piece, 2026 is about accelerated execution. In the 6 weeks since our last call, we have several developments to report from TMC, our partners, our regulator and the emerging nodule industry in general. The big development this week was the signing of our production agreement with Allseas, which will enable us to complete commission and operate the first commercial polymetallic nodule collection system.

The agreement [indiscernible], and while many of the key commercial terms and concepts have been reflected within our filings and technical reports for years, I believe the signing of this agreement shows the confidence that we and Allseas have in the regulatory path forward and the confidence that now is the time to prepare for commercial production.

In late April, NOAA determined our consolidated application for TMC USA project to be in full compliance. With the requirements of the Deep Seabed Hard Mineral Resources Act and its implementing regulations. This milestone represents the latest in what we expect to be a consistent and transparent cadence of regulatory milestones in the coming weeks and months.

And we expect that our application will shortly be posted to the federal registrar. Kick starting one of a number of sequential public comment periods as part of NOAA's rigorous process. Once our application is certified, NOAA will notify the public of its intent to prepare and publish an environmental impact statement under the National Environmental Policy Act. A draft EIS and TCRs will also be posted for public comment. And once the EIS and TCRs are finalized, NOAA is expected to make a final determination on issuing the license and permits.

You'll notice that the commentary in blue on this slide are required to remain open for 60 days, and they represent elements of the compressed ensuring due consideration for our application and a robust process. Noncompressible [indiscernible], there are no mandatory time limits on other steps. So the regulator has some flexibility in how they move through the [ trials ] and we continue to expect the grant of our commercial recovery permit during Q1 of next year.

Our strategy has always relied on partnerships. The quality and depth of the strategic partnership we've assembled across offshore operations, onshore processing and refining and project execution is what has allowed us to move fast.

And on the offshore side, Allseas brings more than 40 years of deepwater engineering and operations including a long track record of pioneering entirely new offshore technologies at industrial scale.

Across processing and refining, we have strong relationships with globally recognized metallurgical and engineering groups, including PAMCO, Glencore's XPS, Hatch, Korea Zinc, all of whom have already worked with nodule derived materials.

And together with our partners, we have collected, lifted and processed thousands of tons of polymetallic modules, something no other company in our industry has achieved. We believe in this level of industrial capability around the project is one of the reasons TMC continues to maintain a [indiscernible] over others in the offshore mineral sector.

And while others are still exploring, we are already building an integrated [indiscernible] refining and ultimately downstream. On May 11, we signed an agreement with Allseas for the completion of the development of the first commercial production system and the future operation of this system after expected permitting approval. Much of this work is already well advanced.

And in a clear sign of their confidence that this industry is moving towards commercial readiness, Allseas have agreed to fund a significant portion of the preproduction costs after these costs to be repaid over time after commencement of production. This agreement is not just a major milestone for TMC and Allseas, but for the development of the Seabed Mineral Industry more broadly.

And I'm pleased today we have TMC's Chief Innovation and Offshore Technology Officer, Rutger Bosland on the line to tell you more about our offshore system and operations.

And of course, Rutger led the development and successful testing of our pilot module collection system, while he was at Allseas before coming over to join our team to help bring us to commercial operations. Rutger, over to you.

Thank you, Gerard. It is a pleasure to be here today. What you see here are the key elements of the first Integrated Commercial Offshore and Production System designed for continuous operation, the system collects nodules on the sea floor and lift them to the Hidden Gem production vessel where they are dewalled, temporarily stored and then transferred to transport vessels to be shipped to shore for processing.

The operation integrate offshore nodule collection, vertical transport, transfer activities, support vessels, environmental monitoring and adaptive management and downstream logistics into a continuous operating model with tightly coordinated logistics.

Our offshore operational model has been designed to support uninterrupted offshore nodule collection. A transfer vessel will move alongside and receive nodules from the hidden gem, while the hidden gem system keeps collecting nodules and move to the offshore transfer area for loading on to-go carriers. Now carriers are then loaded offshore and transport nodules onward to onshore processing facilities.

Supply vessels rotate crew and shuttle fuel and materials between our logistics base in San Diego and Hidden Gem and the transfer vessel. These operations require highly synchronized vessel movements, dynamic positioning and coordinated transfer activities to maintain safe, efficient and continuous production.

To achieve this, our project team and Allseas have conducted extensive simulation and modeling to refine these logistic cycles on the real offshore conditions. As engineers, we love a challenge. And we are focused on ensuring that our system can operate reliable and efficiently day after day, while integrating seamlessly with production support, transport and handling systems at the surface to maintain continuous operations.

This work has produced what we believe will be practical and scalable operations, and we will continue to further optimize every aspect of these cycles ahead of commercial production. The execution program for the offshore production system is underway. Concept and basic engineering activities for the key room lead packages have been substantially event and completed by all seeds including for key items like the riser, lounge recovery system, umbilical and vessel integration works.

With these activities complete, we are now in a position to move into procurement and subcontracting activities with suppliers. This program keeps us on track to begin integration and commissioning of the production system in late 2027. The first commercial module production system is a major milestone for the company and this industry. It also establishes the operational and engineering baseline for future optimization. As we deploy additional offshore production system, it becomes easier to repeat engineering processes at scale and to incorporate operational learnings across the broader production network.

The team has been hard at work evaluating opportunities to optimize our operations including large-scale production system, autonomous and remote vessel operations, alternative logistic configurations and what could potentially be the first nuclear-powered vessels in commercial use a topic that Allseas discussed during the TMC Strategy Day panel in 2025.

A larger production system and wider collector spreads could significantly improve throughput and overall asset utilization while autonomous and remote offshore operations could reduce offshore crew, fuel and support requirements over time.

We are also evaluating the direct offloading of modules from the Hidden Gem to dynamically position still carriers, simplifying offshore transfer activities and reducing transport costs. This growing industry is dynamic as we scale the many optimizations being developed to serve the Seabed Minerals ecosystem are creating incredible roots towards continuous reduction of offshore collection and transfer costs. Though some of these concepts require further development they highlight the optionality and scalability of our offshore production model beyond the first system.

With that, I would like to hand it back over to Gerard. Gerard, please proceed.

Thank you, Rutger. Well, a little over a year ago, President Trump issued an executive audio that altered the trajectory of our industry. It provided a clear policy signal that offshore minerals were a priority for the current administration and that was willing to leverage America's long-standing legal regime to secure industry leadership. The response was unprecedented. At least 9 American companies focused on offshore minerals in the high seas and exclusive economic zones.

We [indiscernible] companies now have about 1.5 million square kilometers of the sea floor under license or application, like virus $5 million to $8 trillion in contained mineral value. American Shale Revolution helped the U.S. to end its energy dependence and become a net energy exporter. And we believe that offshore minerals have the potential to do the same for American mineral dependence when it comes to critical and rare earth provided we established domestic processing and refining capacity. The national security case for construction of domestic nodule processing and refining facilities has grown stronger.

After all four of our base metals were designated critical in the latest USGS list. The administration issued a presidential reclamation warning of the Sirius National Security risks posed by Americas near total import reliance for metals like manganese, cobalt and nickel. And more recently, our request for project proposals from the Defense Industrial Base Consortium, which TMC recently joined, underscored the administration's efforts to reduce import dependencies and 13 minerals, including nickel. These domestic actions are unfolding in response to the weaponization of IPR in critical minerals.

Several governments are restricting exports of metals, such as nickel, manganese and cobalt as well as all present in our modules. Our recent OECD report found that nickel, cobalt and manganese from the 10 metals most affected by export restrictions. These are serious matters for the U.S. to solve, and we will continue working with officials on both sides of the aisle to do our part in the coming decades. And to that end, we've been looking at several sites to build domestic processing and refining facilities.

TMC USA currently holds an exclusive right of negotiation with the port of Brownsville over land that could support a large-scale metals processing and refining ecosystem. Importantly, this is not just about TMC's first process has been sized with the potential to support a broader American offshore minerals industry and facilities designed with the flexibility to potentially process terrestial feedstocks over time as well.

The proposed site covers approximately 1,466 acres across 2 parcels adjacent to the Brownsville shipping channel, with a pre-feasibility study already underway become what 12 million tonne per annum industrial park. And we're approaching this in a disciplined way. There is no capital commitment today, and any further development would remain contingent on government support. And I'm sure everyone can appreciate the sensitivity of our ongoing U.S. government discussions, but I'll just reiterate that we continue to have frequent discussions with the departments and agencies named in the [ order], and we'll share more information at the appropriate time.

To advance our potential processing and refining plant and a strategic partnership agreement with Mariana Minerals, whose team combines deep industrial project experience with software names designed specifically for large-scale mineral processing projects. What attracted us to Mariana was not just the means and construction experience, but their focus on integrating software, automation and AI-driven operational system in direct project delivery and planned operations from day 1. Mariana's leadership includes former executives and operators from companies, including Tesla, BASF, Exxon, Lithium Americas with experience spanning mineral processing, EPC execution, variable scale commissioning.

And the partnership is intended to accelerate feasibility work around the Brownsville site while also evaluating how advanced process controls operational software and digital project management tools could improve execution time lines, capital efficiency and long-term operating performance. Importantly, we're evaluating Brownsville not simply as a processing site for TMC USA's initial production area, but as a potential long-term industrial platform capable of supporting broader growth in American critical mineral supply chains.

As additional American operators move through the NOAA licensing process, we believe there could be meaningful strategic advantages in developing shared downstream processing infrastructure rather than duplicating stand-alone facilities. This is still early stage work, but we believe these are the kinds of long-term industrial partnerships required to build a scalable domestic critical minerals industry.

On April 8, the metals royalty company, TMC, began trading on NASDAQ. Craig joined NASDAQ with the TMC team including our current and former Board members, Michael Hess and Brian Paes-Braga. On a personal note, I'd like to congratulate Brian, Michael and the entire TMCR team on this milestone. And I'd like to congratulate them on their recent capital raise and [indiscernible] the Mesabi Metallics royalty. And I'll now turn the call over to Craig to discuss these topics in more detail and also walk you through our financials. Craig, over to you.

Thanks, Gerard. As a reminder, the cornerstone of TMCR's portfolio is a 2% gross overriding royalty on the Norway, which originated from our 2023 agreement with the predecessor company low-carbon royalties. As part of that agreement, TMC received an equity stake in TMCR itself, whose market capitalization has appreciated significantly and now stands at roughly $0.75 billion, indicating a value for TMC's current 25% equity stake of nearly $200 million.

Importantly, we retained the right to repurchase up to 75% of the [ NORI ] royalty over time at a capped return, which could ultimately reduce that royalty to 0.5%. And since listing, TMCR has also announced, as Gerard noted, a proposed royalty interest in Mesabi Metallics iron ore project in Minnesota. One of the United States only large-scale sources of merchant DR-grade iron ore pellets with production targeted for the second half of 2026, alongside a concurrent equity financing.

It's also worth mentioning that the US Exxon Bank previously announced its support up to $10 billion for development of a major iron ore processing and refining facility with Mesabi Metallics in Minnesota. I would encourage all of our investors to check out the corporate update webinar held by TMCR on May 13, just yesterday, and that's available for replay at their website, the metalsroyaltyco.com. Last August, we announced two major technical studies, pre-feasibility study and an initial assessment. The PFS on our first production area -- excuse me, the PFS is focused on our first production area. And establish the world's first reserve for a nodule project, while also confirming the project's strong commercial case.

The initial assessment extended across the other areas highlighted on this slide in Royal Blue. These studies were comprehensive and independently supported by multiple qualified persons, but they do not include the additional ground where we have priority rights under U.S. law. Because those areas sit close to the zones already assessed in our published studies, we see them offering substantial further exploration upside. And it's important to remember that these studies are point-in-time analyses, which do not reflect certain potential plans, such as the U.S. government supported processing facility nor do they reflect every opportunity that we and Allseas might have to reduce costs offshore, as Rutger walked us through earlier.

But they do provide a helpful snapshot into the commercial viability of our proposed operations, particularly given the world first declaration of probable reserves in our PFS for a nodule project. At today's metal prices or close to today's metal prices, the value reflected in these studies is substantial. Taken together, the $5.5 billion NPV from the PFS plus the $18.1 billion NPV from the initial assessment, imply combined estimated resource of $23.6 billion. And across the life of both projects on an undiscounted basis, the studies point to approximately $369 billion in revenue and more than $200 billion in EBITDA and a cost profile that places the project in the first quartile of the nickel cost curve.

Now on to our liquidity and financials. You would have noticed that our liquidity, defined as cash on hand plus our credit facilities, was approximately $164 million as of March 31, 2026. However, I want to be clear, as noted in our earnings release, this is inclusive of $9 million received on the last day of the quarter related to sell to cover tax transactions on stock-based compensation granted in prior years which was then remitted to tax authorities shortly after quarter end.

So this is merely a bit of a timing cork, given the date on which the sell-to-cover transactions had to occur following our last reporting period. And then once that was finished and funds received, those are remitted to the tax authorities. Keep in mind that the headline number reflecting vesting shares that were granted at far lower share prices, and we expect a strong alignment of interest between TMC employees and shareholders will continue to deliver results in the years ahead. On to the financial results.

TMC reported a net loss of approximately $20.6 million in the first quarter of 2026, which was the same as the comparable period in 2025. Net loss per share was $0.05 in the first quarter of 2026 compared to $0.06 in the comparative period. Exploration and evaluation expenses for the 3 months ended March 31, 2026, were $13.3 million compared to $9.5 million in 2025 and due to higher share-based compensation from third quarter 2025 awards for employee retention and higher PFS costs due to the PFS refresh, partially offset by lower all-season engineering costs.

G&A expenses in Q1 2026 were $20.7 million compared to the $8.5 million in the comparative quarter last year. primarily due, again, to the amortization of higher onetime executive retention grants to share-based compensation issues in the third quarter of 2025. I'm getting a bit of an echo. So if anybody else in the line is able to mute, hopefully, we can get rid of that. In Q1 2026, the gain on change in fair value of warrants was $10.7 million as the value of the private warrants decreased due to the lower share price at the end of Q1 2026 compared to the share price year-end 2025 in the shorter maturity term.

On other nonoperating items, other nonoperating items that reduced the net loss in Q1 2026 included higher interest income generated from increased cash balances and a gain resulting from the dilution of our ownership in the metals royalty company as it completed a private placement to third parties at a price well in excess of book value, and that was partially offset by equity accounted investment losses. On the cash flow side, net cash used in operating activities was in the first quarter of 2026, $0.6 million compared to $9.3 million used in operating activities in the first quarter of 2025.

The outflow in Q1 2026 is nominal due to a timing difference, as I mentioned earlier, the $9 million of taxi Holdings received at the end of March and remitted to tax authorities shortly after the end of the quarter. If the taxable holding receipts are excluded, the cash used in operations would have been $9.6 million, which is in line with the first quarter of 2025. Free cash flow for Q1 2026 was negative $0.6 million compared to negative $9.4 million in Q1 2025. And free cash flow is a non-GAAP measure. And I would point you to our disclosure in the non-GAAP reconciliation table that will be posted in the slide deck with our website.

We do believe that our cash on hand, along with the undrawn unsecured credit facility from Gerard, our CEO and Chairman; and ARIS Capital LLC will be more than sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from today. TMC liquidity stood at $164 million as of March 31, including $44 million available from that undrawn credit facility. O

ur accounts payable and accrued liabilities balance at March 31, 2026, was $53.9 million and includes $32.1 million that was owed to Allseas through various services provided, the majority of which is being settled through the issuance of TMC shares as disclosed in our 10-Q. Excluding the Allseas payable to be settled in equity and the $9 million payable to tax authorities, which has since been remitted, accounts payable and accrued liabilities would have been at quarter end $13 million. Operator, we would now like to open it up to the phone line for any Q&A.

[Operator Instructions]. And our first question will be coming from the line of Matthew O'Keefe of Cantor Fitzgerald.

Thanks gentlemen. It sounds like things are moving along pretty well. I just had a kind of -- I like one of your slides there. You had -- you showed that you have some new -- well, not new entrants, but there are more entrants jumping on to the American offshore industry here. You've shown some other companies and all in their properties lying about in the CCZ and also, I guess, other parts of the ocean there.

What are your thoughts on these other players? And are you working at all with them? I mean you have arguably a leadership position in this. I would imagine there has been some outreach to you, just maybe for some best practices or given that you've done so much environmental work, I would maybe some advice on that as well?

Yes. Look, Matt, we've been familiar with some of the other entrants. We know them well. And frankly, the last 5 years as a public company has damaged my belief in the efficient market hypothesis. But at the same time, it wouldn't be good for us to be the only ones through the wall here, seeing the opportunity. So I think what it really signifies is the fact that the capital, the smart money is flowing into names that are pursuing exploration licenses through the U.S. process as opposed to the International Seabed Authority process.

That's clear. The market is voting with their feet.

Are there opportunities to -- are there opportunities there potentially to work with some of these entrants? Sure. I mean we've done quite a bit of work over the course of the last several years that many other people might want to catch up to. Of course, we released some of our environmental data just a few weeks ago. But there really is, I think, a recognition that many of the new entrants have some catch-up to do. They're starting on exploration type work, whereas TMC has done much of that because we are preparing to launch an application to the ISA process with some of that data.

So there will be, I think, a catch-up period for others, and that creates opportunities. One thing to really focus on -- and by the way, you would have noticed there was an announcement within the last couple of months that the team had deep sea vision. We have an MOU to collaborate potentially together, whether it's on some offshore exploration side initiatives or we're potentially down the road on processing and refining. We do want to be able to help the United States create an ecosystem that can potentially create dominance in the metal processing and refining for nickel, copper, cobalt, manganese, potentially rare earths and other metals.

And to do that, it would be very helpful to say, hey, TMC will be the center of the hub but perhaps 1 day, that could be a destination for some other entrants as they catch up to some of the offshore work that TMC has done. So we really have been in a unique position where the work that we've done has allowed us to be the one entrant so far, who's been able to apply for the consolidated application process because we've been prepared with that work over the last 15 years and about $700 million in cumulative lending.

So the answer, Matt, is we welcome the capital flowing in the space. We know some of the new players, and I think there will be future opportunities to work together.

Absolutely. Definitely demonstrates that there's increasing confidence in the space. So I think that's a positive. If I could ask just one other quick question, maybe a clarification. You are working on some pre-feasibility study was it for the Texas refinery processing refinery. Is that right? And is that -- is there going to be something released to the markets sort of end of year or something like that, just to get a sense of what that might look like?

Yes. I think our focus, Matt, is really on the feasible work, specifically for the potential plant for processing and refining in Texas. That feasibility work, really focused on our Tiers, the detail on everything that needs to go into the planning and construction and operation of that plant. And that is really the prerequisite to unlock some of the potential government capital that we know is sitting ready to fund major projects that can truly move the needle.

So I would say our focus is going to be on that onshore feasibility work. There may be opportunities to then say, right, we're working on the prefeasibility side for the plant expansion down the road, let's say, to 12 million tons or more. And then, of course, we put out the prefeasibility study for the NORI-D area in August of last year. And we had the benefit from several years of talking about potential commercial terms with our partner, Allseas.

So at some point, perhaps there might be an opportunity to provide some updates to that, but our focus in the near term is going to be the detailed feasibility work that might be to unlock access to government capital.

All right. Sounds good. We'll look for the government partnership perhaps in the future.

And our next question will be coming from the line of Dmitry Silversteyn of Water Tower Research.

I just have a couple of follow-up questions, if I may. We talked about reducing or the opportunity to reduce the operating costs or optimize the cost of offshore collection and transfer portion of your operating expenses. There's a lot of stuff in here like autonomy and going to nuclear that seem to be pretty far into the future. As you're ramping up your sort of first production of 3 million tonnes. How are you thinking about sort of more near term, more realistic abilities to lower the production and transport costs and lower your offshore operating expenses.

Yes. Thank you, Dmitry. That's a very good question. And as you rightfully indicated, there's a few items that are more future focused. But on the short term, optimizations in energy use and offshore logistics are definitely something that can be implemented within the short term. So we're talking about getting the first vessel operating and then start implementing some of those already.

Okay. And then to follow up on the previous question about bronze facility. You're looking at, I think, 12 million-ton processing complex. Your Phase 1 at least calls for about $3 million some the year of what modules going up to potentially $7 million as you expand Q3 collectors. Are you leaving that much room for sort of third-party processing? Or do you have expectations of filling that 12 million tonne capacity through the modules that you yourself collect pretty quickly after the start-up at the end of '27, early '28.

No, I think this is one of those industries where scale really flows through to the bottom line, Dmitry. And so it's our ambition to put as much of that 12 million tonnes of our own license areas. However, we also want to be really flexible because when you go and establish a processing facility, there is so much investment in civil engineering and securing the ground and putting the roads in and securing power supply that the marginal cost of adding another line for another operator can be very attractive.

And of course, we want to have the welcome mat to other operators. We see it as an opportunity to do deals that will be very beneficial for the industry and very beneficial for the TMC shareholders as well. And so there might be some operators who want to provide chunky capital to us to secure a certain amount of processing throughput. And so we'll have an open mind to that. And we are we are in some of those discussions as we speak now.

Understood, Gerard. And then final question. In your -- you're getting ready to execute your offshore CapEx program and get ready for production. If I remember correctly, originally, this was supposed to be funded 50-50 between you and all seats. You made a comment that Allseas will be funding a significant portion of that now? So should I -- should we take that it's going to be more than 50% of the expected CapEx that policies will be fully?

No, and you should continue to plan on us sharing that.

I'm going to hop over, Latonia, to the webcast questions to see if there are any other questions that are going to populate on the audio side in the meantime. We have a question from Ivan Schmidt.

Given that the expected -- given we're -- excuse me, expecting Q1 2027 permit timing, how should investors think about the political risk around 2026 midterms and potentially transition to new Congress in January 2027. And One of the nice things about this point, I'm happy for Gerard to expand on it. This isn't really a left versus right issue. Is it obvious that this current administration and Republicans have been very supportive of this industry, of course. But even going back to 2023, it was, I think, June of 2023, when there was first an announcement of the National Defense Authorization Act with President Biden that focused on doing more feasibility work on modules.

And of course, Gerard, we had quite a few conversations with many in the administration who saw the need for this new industry and to get there, frankly, before China does. But specifically, on any risk for midterm switch in the population of Congress. It's not going to affect this NOA process. This is based on regulations put in place in the 1980's. [indiscernible] was signed by President Carter implementing regulations from 1981 for exploration in 1989 for commercial recovery. It's been the law of the land across multiple Democratic and Republican administrations. So we're going through this in a methodical way, and we are not skipping over any steps.

It's why Gerard highlighted in our first slide, the public comment periods that are not going to be compressible when it comes to the permitting time line. that puts us in a good position to say, look, we've done the process exactly right, and we followed the letter of the law and the mandate given to NOA, who, by the way, is in the best position of anybody in the world to regulate this industry as the pioneers of the environmental science to the domes program in the late '70s and early '80s.

So we don't think that's going to have any impact on the potential grant or validity of a commercial recovery permit for TMC.

Another question and maybe for Gerard. I believe you touched on this in the last quarterly call from Tim Holl, Q4 2027 is the target for system commissioning. Is that the same as saying it's our hard for full production. So maybe just a little context on some of the timing taken for commissioning and leading to commercial production shortly thereafter.

Yes. Thanks, Craig. Look, conditionally means getting the equipment on board, making sure it works, making sure all the components come together nicely. And of course, what that points to is that early in the year after, we'll be out there testing, and we'll be out there making sure that we're in shape for commercial production. So commissioning is really getting everything on the board, putting it all together, making sure they all fit as they enter fit.

And the last question that we'll take from the webcast from Ryan Bowley. Will the September 2021 SPAC warrants be extended?

Ryan, this is a question we get, I'm sure, from a lot of holders. The terms of that warrant is expiration in September of 2026. Look, it's our ambition to fill this summer with a great amount of news flow, such that we might render that question. So we're going to keep doing everything we can. But any discussions with our Board are going to be announced publicly if and when there's anything to announce there.

But it would be our focus just to push the share price to a higher level well in advance of that exercise date. But nothing else I can say, no other comment I can make at this time.

And Latonia, if you want to reprompt the phone line to see if there are any final questions.

[Operator Instructions]. And I would now like to turn the conference back to Gerard Barron for closing remarks.

Yes. Thank you. Well, firstly, thanks, everyone, for turning up. And I know a lot of people listen to these reports live but even more listen to the transcript afterwards or read the transcript afterwards. Look, as you can tell, we've -- we turn up to these quarterly earnings reports full of enthusiasm because it's really quite exciting what we're doing, getting a new industry moving.

This administration has an absolute focus on reindustrialization. It's an honor to deal with the government agencies, which we deal with because they are filled with people from the private sector who know how to get things done. They just get -- you get a sense of optimism when you're dealing with this administration and these government agencies. And I hope what that is going to lead to is us getting this industry moving a whole lot faster, a whole lot more reliably and for the benefit of America becoming all independent and for the benefit of those people who supported us along this journey.

So thank you, and we look forward to being in communication, a lot with you in the coming months. And on that note, I wish you a good day.

And this concludes today's conference. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the metals company Fourth Quarter 2025 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would like to hand the conference over to your today, Craig Shesky, Please go ahead, sir.

Thank you very much. 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 statements. 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 joining us by phone. You can access it at any time at investors.metals.co. I'd now like to turn the call over to our Chairman and CEO, Gerard Barron. Jared, please go ahead. .

Thank you, Craig. And apologies to those on the line who we're a few minutes late, we're waiting for our light across the line. But welcome to you all. And before we get to the path forward, I'd like to take a moment to reflect on our journey over the last year, 1 year ago, to today in our fourth quarter in call, we announced a regulatory pivot that fundamentally changed our company's destiny, instead of the uncertainty in grid lock of the ISA, we chose the certainty and clarity of the U.S. regulatory regime built upon a long established legal framework under Desbro and catalyzed by the political will of this administration.

In April, this political will was made evident by the executives -- President Trump's Executive Order, I'm Lishen America's offshore Critical Minerals & Resources, which marked America's return to leadership in deep sea bed minerals. Some of the directors in this EO have already been delivered, including the modernization -- and of the Noa -- further evidenced by [Technical Difficulty]

Gerard, sorry to interrupt. Your line is cutting in and out.

[Technical Difficulty] into we focused on accelerated execution, starting with permitting. Our consolidated application submitted to Nova in January this year has been deemed substantially compliant and we expect our permit to be granted in less than 1 year from today. This permitting clarity also provides confidence to us and our partners to get building in anticipation of commercial production. Offshore, we have reached commercial agreement on key terms with our long-term strategic partner, Artis, and continue to progress the engineering work for the long lead items for our forthcoming production system, and we expect this agreement to be finalized in the coming days.

Onshore, it's also clear that the U.S. wants to dominate the onshore processing and refining polymetallic nodules, establishing accounted to Chinese stranglehold on the production of critical minerals. To do that, we'll require support from the government itself requisites for net at the Port of Texas, and have also reached agreement with our partner, Mariana Minerals to progress the feasibility work as part of the TMC owners team, but more on this shortly.

Since day 1, new success would depend on building a bench of exceptional has. And with the expertise to tackle complex challenges and the conviction to back in new industry, and as this chart shows, we've brought together a strong group of experienced partners across the value chain, each greening a unique skill set through our vision of reimagining the metals and mining sector.

What's changed and what matters is momentum. Many of our existing partners have deepened their commitments, reinforcing their belief in the long-term opportunity. We're also welcoming new partners who share our belief that this industry will be built in the United States. That growing alignment is a clear validation of where this industry is heading. And as I mentioned earlier, we've agreed key commercial terms with all fees to complete the development and operate the Hiddenjem offshore system, the first-ever commercial nodule collection system.

The continued strategic alliance which will be memorized in the coming days, brings together all these decades of offshore execution everis with our proven resource environmental and processing platform into a single integrated system designed for a nominal capacity of 3 million wet tonnes per annum using the hidden gem to collected vehicles and a vessel to transfer nodules to bulk carriers to ship them to shore.

And all these are currently working on key long lead items like the riser, our launch and recovery systems and the umbilical. We look forward to signing this definitive agreement in the coming days and continue to progress towards system commissioning still targeted for Q4 2027. We -- so one of the key actions outlined in last year's executive order was the directors of various government agencies to identify potential sources of financial support for this industry. And in order to unlock government support for onshore processing, there are a few boxes we must tick, including a site-specific plan and feasibility studies.

And to that end, back in December last year, we secured an exclusive right over a potential lease option in the Port of Brownell, Texas, where near ware plans have been recently announced by this administration is for the first new U.S. oil refinery in decades, underscoring the border momentum behind strengthening American industrial capacity.

We've developed a preliminary master plan and a pre-feasibility study is already underway for a 12 million tonne per annum nodule industrial park. Of course, existing capital-like tolling options are still available to us and we'll not be committing any capital at this time. But I'm certainly excited about what a domestic nodule processing hub can mean for both new partnerships and for our project economics.

Processed domestically, our nodule resource could single-handedly solve the American supply chain dependency across 4 key metals. And as I mentioned, one of the requirements to unlocking funding is the preparation of a feasibility study for a processing plant at a specific site. To that end, we're adding a new strategic partner to our bench in Mariana Minerals; Mariana's CEO, Turner; Coldwell speaking at last year's Strategy Day, is someone we know well from his time at Tesla, where he headed up global battery metal supply. The Marrieta team are pioneers of AI and software approaches to project development. and metallurgical processing and have demonstrated their ability to fast-track project execution, which enabled Tesla to build its lithium plant in Texas in less than 2 years.

The Marietta team will be joining us start of the TMC earners team, and we already enjoy a good working relationship with their team. Mariana's approach is core to have cutting-edge businesses like SpaceX and others operate. With AI, we think they can move even faster and believe their innovative model offers a faster, more modern approach to reindustrialization.

And subject to further definitive agreements, we look forward to exploring how their systems could reduce permitting and construction time lines for a domestic plant while reducing OpEx and increasing recovery of payable metals. In fact, right after this call, our team -- executive team, will convene in Texas with the Mariana's team for the next week to progress this mission-critical work, which is also a prerequisite for a certain U.S. involvement.

I'm also pleased to share that in April, just days away, the metals royalty company will begin trading on the NASDAQ under the TMC A quick refresher formed with the goal of onshoring critical minerals production in the U.S., DMCI has a 2% gross royalty on our NOI area. -- resulting from an agreement we signed with low carbon royalties in 2023. And we retain the right to repurchase up to 75% of that royalty over time at a cap to return, which could potentially reduce the royalty to 1.5% to 1%.

The TMC also maintained a 25% equity stake in TCR. Many TMC or faces will be familiar to our followers, including the current and former Board members, Michael Hess and Brian Targa. And with their backing and a strong team behind them, we see TMCR as a strategic vehicle which can potentially provide future options for capital and sizable project finance. I'd now like to turn the call over to Craig to discuss some industry updates, our regulatory path ahead and our financials.

Thanks, Gerard. One quick note that we shared actually in recent weeks in our social accounts. We recently joined the defense industrial-based consortium, DIBC partnership within the Department of Board's expansion and investment prioritization director of our capabilities. .

The initiative gives the government the tools he needs to cloud commercial solutions that can help close supply chain vulnerabilities and strengthen the defense industrial base. And of course, critical minerals and seabed are focused for the U.S. and allies.

And over the past year, we've seen investors and operators effectively vote with their feet, gravitating toward regulatory frameworks that offer clarity and incredible path to merchandization. While the ISA remains in gridlock, the U.S. has emerged as a leading jurisdiction and certain allies are relying upon the U.S. and certain areas of expertise to develop sea bed resources.

This shift is being echoed at the government. While in March, the US and Japan announced a new critical minerals action plan with an explicit focus on accelerated cooperation on the commercial viable deep mining. And against this backdrop, we remain the only seabed mineral developer with SEC compliant mineral reserves, which is the clearest definition of commercial viability, positioning us at the forefront of this emerging industry.

In January, Nova finalized revisions to accelerate permitting under the Deep Seabed Hard Minerals Resources Act introducing a consolidated application process that meaningfully streamline the path to commercial recovery. And TMC moved quickly to take advantage of that clarity, submitting the first consolidated application under this new framework.

This application expands our expected commercial recovery area from 25,000 square kilometers to approximately 65,000 square kilometers and is designed to significantly reduce permitting time lines. Importantly, it reflects the strength of our technical readiness and our ability to meet no requirements for commercial scale operations. We see this as a clear signal that the U.S. regulatory path is active, predictable and capable and reporting responsible development.

And now with more than 10 applications in the system, it is evident that the broader industry is aligning around the U.S. framework. The last time we updated you, we are progressing systematically through the NOAA permitting pathway and that remains the case today, even under this new consolidated path. With the consolidated application now active under NOAA's new rule, we have agreed to clarity on the process ahead and a clear line of sight and the key milestones required for final approval.

Our experience over the last year, particularly through NOAA's review of our exploration licenses, has provided valuable insight into the process and expectations for both TMC USA and NOAA. We announced on March 9th that we passed the first of these milestones with no determining our application to be substantially compliant and the next potential milestone being full compliance.

Based on this progress and what we've learned, we now expect the grant of our commercial recovery permit within the next 12 months. Now to get to this point, it's taken over $700 million and hundreds of research days at sea, and we are now nearing the completion of our environmental impact statement and our EIA is complete. And informed by the largest environmental data set in history over a petabyte in size. This comprehensive document reflects 15 years of scientific research conducted alongside leading institutions and demonstrates our body to responsibly collect knowledges using modern systems designed to maximize efficiency while minimizing environmental impact.

Put simply, better science leads to better design and better design leads to better environmental impacts. For those with a keen eye on our social media, you may notice that we've begun sharing key findings from our EIA publicly during a new video series, highlighting how our data addresses environmental concerns and how innovation has reduced our environmental footprint.

I encourage you all to check this out. And you can click on the PDF of this posted on our website to get to those videos directly or we encourage you to follow TMC on our social accounts, including Twitter and LinkedIn. We look forward to our EIS being made available for public comments soon as Panos transparent and audible process.

And as many of you know, and there may be some on the call who are with us in the room, we published a pre-feasibility study and initial assessment alongside our Strategy Day in New York last August. Covering our first production area, the PFS documented World First Reserve for inaugural project, demonstrating clear commercial viability. Our initial assessments cover everything else that you see in Royal Blue amongst our contract areas on this page.

Keep in mind that neither of these comprehensive studies, which were signed off by multiple independent qualified persons covering additional ground over which we now have priority rights through the U.S. process. This is represented in the lighter gray on this page. Given the proximity of these areas to those covered in our published technical studies, we do believe that these areas support significant exploration upside.

So our current metal prices, shifting to project economics, including that these projects are incredibly valuable. And if you combine the $5.5 billion net present value of a prefeasibility study and the $18.1 billion NPV for the initial assessment you arrive at a total estimated resource of $23.6 billion.

Over the life of both projects on an undiscounted basis, the studies outlined revenue of approximately $369 billion EBITDA in excess of $200 billion and a position in the first quartile of the cost curve as laid out in our PFS. However, despite the clear value of this high quality and abundant resource and our expected low-cost positioning, our valuation does remain below of comparable peer developers and explorers.

On the left side of this page, you'll see the TMC valuation example, where we're trading at about 8% of our underlying net present value, well below peer averages for explorers and developers and certainly below the average of nearly 1x NAV for nickel and copper producers. So as we march toward a clear permitting and -- clear permitting path and commercial production, we are looking forward to significant rerating in this valuation story.

On to liquidity TMC reported year-end only 25% cash balance of $117.6 million, and we expect at month end for March 31, 2026, to report approximately $110 million in cash. TMC liquidity, defined as cash plus borrowing capacity on our unsecured credit facility stood at $162 million at year-end 2025 and is approximately $150 million more and is expected to be approximately $154 million around month end March 31, 2026. And this means we have no imminent need to raise funds in the public markets.

As discussed in our last several quarterly conference calls, however, we are filing a new Form S-3 shelf registration statement in conjunction with our upcoming 10-K as a matter of good corporate housekeeping, and we do intend at some point in the future to refresh our ATM. However, there has been ATM use by the company since April of 2025.

On to our financial results. In the fourth quarter of 2025, TMC reported a net loss of $40.4 million or $0.08 per share compared to a net loss of $16.1 million or $0.04 per share for the same period 2024. The -- the net loss for the fourth quarter of 2025 included exploration and valuation expenses of $10.6 million versus $8.3 million in the fourth quarter of 2024, and General and administrative expenses or G&A of $34.1 million versus $8.1 million G&A in the comparable quarter last year, and a credit of $4.3 million from other nonoperating items versus a credit of $0.3 million from other nonoperating items in Q4 2024.

Exploration and evaluation expenses increased by $2.3 million in the fourth quarter of 2025 compared to the same period in 2024 primarily resulting from an increase in share-based compensation due to accelerated amortization of awards granted in the third quarter of 2025, partially offset by lower mining, technological and process development costs resulting from decreased engineering work.

G&A expenses increased by $26 million in the fourth quarter of 2025 compared to the same period in 2024 reflecting an increase in share-based compensation due to the accelerated amortization of awards granted to directors and officers in the third quarter of 2025 and an increase in legal, consulting and personnel costs. Other nonoperating items that reduced the net loss in Q4 2025, included higher interest income generated from our increased cash balances and again, resulting from the dilution of our ownership interest in the metal royalty company, as it completed a private placement to 23rd parties at a price well in excess of book value.

On free cash flow, the free cash outflow for the fourth quarter of 2025 was -- excuse me, was $11.5 million compared to $13.8 million for the fourth quarter of 2024. The net cash used in operating activities was $11.4 million compared to $13.8 million for the fourth quarter of 2024, primarily due to lower personnel and environmental payments, coupled with the interest earned on a higher cash balance in 2025 and partially offset by higher legal payments.

Focusing on the full year basis for the cash flow. On a full year basis, free cash outflow for 2025 was $43.1 million compared to $44 million in 2024. A net cash used in operating activities was $42.9 million compared to $43.5 million in 2024, reflecting lower environmental and mining technological payments and interest earned on a higher cash balance in 2025, partially offset by higher underutilization fees paid on the unsecured credit facilities, timing of payment on regulatory fees and higher legal payments.

Free cash flow is a non-GAAP measure, and I would point you to the non-GAAP reconciliation included in the slide deck. We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from today.

Looking at the balance sheet over the course of 2025, there was a significant increase in the cash balance as the following funds were received $85.2 million from the Korea Zinc investment, $41.2 million from other registered direct offerings, including the Hess family investment, $14.8 million from ATM use and $27 million from the exercise of various stock options and warrants.

A portion of these proceeds was used to repay the $7.5 million Altis working capital loan, along with other outstanding interest thereon as well as a $4.3 million draw on the Arisperan unsecured credit facility. Our accounts payable and accrued liabilities as at December 31, 2025, was $46 million and includes $34 million O2 sees for various services provided, the majority of which can be settled in equity.

The $131 million increase in royalty liability was the result of the change in fair value following the company's release of 2 economic studies in August 2025, which increased the value of the Norway project. The significant increase in the warrant liability over 2025 was due to the increase in the fair value of private warrants, which reflected the increase -- significant increase in our share price. With that, operator, we'd now like to open the call up for some Q&A.

[Operator Instructions] Our first question will come from the line of Heiko Ihle with H.C. Wainwright.

Can you guys hear me already Heiko. Yes, we can. I'm very intrigued by those negotiations for the module processing and mining up in Brownsville, obviously, given recent geopolitical risk factors that have just been going up quite a bit and just in general uncertainties that are going on. I think this might be quite interesting. A couple of things on that. Can you walk us through what you see of an impact with the shipping expenses if this Brownville will hub goes ahead and maybe quantify it?

I think the -- look, there are many exciting options about bringing material straight to the U.S. and shipping is one of them. Energy costs, of course, is another because the biggest inputs into our cost base when we process modules is energy and we for this administration for realizing that abundant energy leads to prosperity.

And there's no better example of that than the U.S. compared to -- in some other markets, and it's it's our estimate that you can actually process nodules cheaper in the site where we've located Brownsville, Texas compared to China or Indonesia or Japan because of energy costs and so -- and -- but shipping is also better as well. And it does mean having to bring them through the Panama Canal.

And there will also -- the site was chosen those have some deepwater berths available to it. they won't take the biggest ships that are available and that we'd like to use. But in time, the we think they can. And -- but no firm numbers that improvements to be made.

And then I know it's early, but can you walk me -- and you may not have all these answers yet. But can you walk me through key permits and time lines you think we need to build all this infrastructure, please?

Yes. It's important to note, Heiko, too. I mean what we're beginning here is site-specific feasibility work. At the same time, what I can say is that the particular site we're looking at does have many permits -- we continue to have continued discussions, very positive discussions with Governor Abbott's office in Texas and other agencies there. But it's important to note, a lot of this is going to be for a prerequisite of us making plans and moving forward, going to be dependent on some of the score we get at a bender level.

So really, the key permit here is the grant of commercial recovery permit by NOAA. And certainly, when we're talking to various agencies and cabinet departments, it is that permit that would ock, we think a lot of the support and potential investment for a facility like this. And one of the reasons, I think, that you're seeing TMC engage in some of this work on feasibility as well as us alongside our partner, Allseas, progress engineering work and beginning to think about ordering these long lead time items is due to our confidence in the grant of that commercial recovery permit in a timely manner.

Our next question will come from the line of Matthew O'Keefe with Cantor Fitzgerald.

Yes, just a question I want to follow up on Heiko's Texas question there. You are working on a feasibility study there. It sounds like Mariana is going to be a part of that. What's the timing on getting that done? And will we get to see sort of the results of that?

Yes, sure. Well, certainly, Mariana will be playing an important role as part of our owners team. We really have hatch working on the refresh of that -- of the PFS, which is based on bringing all those numbers to a Brownsville site. But we anticipate -- and that will be ready very soon. But we also anticipate well before the end of the year, having a, I guess, in the old language of BFS on what we're planning to put on the ground in Texas.

And so the date that is being talked about is end of October, and so not far away. And we certainly expect hatch and others to be involved in that as well.

And that's a good group. And then is that going to be a hide facility? Or are you going to look at an option of doing sort of the RCAF front end like you're going to be doing in Japan?

Yes. That's the exciting part. For the last -- since in fact, since Dr. Jeffrey Donald joined our group and pivoted us back to more of a pyro front end. That's where we've been building lots of expertise on how we get raw nodules into those intermediate products. And the plan is to build the pyro in Brownsville. If we were to go down that pathway, we're very fortunate that we have an amazing technical partner in Japan that we continue to have a great working relationship with.

And the boy, a nickel refinery and nickel processing plant hasn't been built in 80 years yet here in America, yet the demand for nickel is going at an increasing clip. We know it's needed to make every ton of famous steel. We know it's used in super alloys. We know it's used across AI and data centers and military uses and electrification. And so the uses and the demand for it is going up, yet we import 100% of our nickel. So something is not kind of a fit there so there's an opportunity, I guess. And we just see that this might be that moment where the administration says, yes, we want to fix that problem.

Yes. No, for sure. That's why I was kind of asking, it seems like a pretty exciting turn and I would love to see the numbers on that. More on that, just switching off the processing back to the recovery. you said you're sort of getting along any time items, I'm assuming for hidden gem or the whole -- that whole process. So what would you anticipate, assuming your permit within 12 months what would you anticipate the timing to get Hinge back on the water? And do you foresee it being as is or additional collector capacity?

Yes. We are still standing by our guidance of commissioning Q4 next year. And it will -- we've elected to run with a 2 collector model. And so that is -- basically gives us the opportunity to get out on the water I guess that will be early '28. And we'll kick off with 1 colette in production, but we'll soon move to a second collecting in production as well. And so as you well know, we have a production boat that is production-ready now, just not a production number that's not high enough. And so we want to see a higher production number because the more tonnes you amortize over the cost of the floating steel above, the better the economics. And I think we proved in 2022 that we can do this providably at commercial scale. So now it's about making money.

It's important to note, Matt, to the connective tissue for the ramp-up offshore, but then also what the potential processing and refining plans might be onshore. Certainly, this administration wants to be able to say, if we can bring this back domestically, it's helpful to be able to do it during this administration. And the way you do that is ramp up in relatively bite-sized amounts starting, let's say, with production capacity that could handle nodules coming from a vessel like the hidden gem, which has 3 million tons per annum nominal capacity.

So kind of matching as best we can ramp up for both the offshore production and then having a home for the processing refining of those nodules is certainly part of the work that we and our team of engineers are doing in the coming months.

Right. And if I may just ask 1 more question. On the permitting process, not so much the process, you've made that pretty clear. One of the -- under the NOAA process, there is an additional piece of ground that wasn't covered by the PFS. It wasn't covered by the initial assessment that you've added. I'm just curious sort of why and what your plans are for that? I mean can you really do any work on that in the near term? And is it infringing on anyone else's claims that might be under the previous permit regime?

Yes. Look, it was just a natural fit. It was bidding between two blocks that we had hold over. And at the end of the day, we will -- while we're out there, continue to take observations of that. And I guess, what we'll aim to prove it's a continuous piece of ground, and it doesn't require any particular environmental work done on it. And so -- and we imagine that once production starts out there that there'll be more collaboration between some of the license holders as well.

And I think no doubt, there will be some people that end up being granted licenses who don't have production vessels and all who want help getting their applications through the permitting process. And as you know, we probably know more about that than anyone on this planet. And we're certainly getting a lot of inbound into how we might be willing to collaborate with some players. And I -- and we see this as preproduction. I think it's -- we want to see more people in production out there. But what I'm pretty certain no one is planning to do is to put plans for a processing plant on the ground anywhere.

I see a lot of applicants starting to talk about them being successful at moving to the first phase. We know from that journey, there's a lot of road left in front of them. and we'll be here to help them and maybe supply services to them along the way. And -- but in the meantime, to fully explore just how committed this administration is to bringing a processing plant so we can bring nodule straight to the USA.

I think we're going to -- Michelle take a few questions potentially from our chat. So there's a question from Jakob Stefanski. We mentioned government supports needed for the U.S.-based processing plant. And can we clarify we'll try to support this means financial permitting or otherwise. .

It's a good question, and I think the answer is all of the above. Certainly, as we noted earlier, progressing the commercial recovery permit is the most important prerequisite. We also, of course, would rely upon both at the federal state and local levels, what we think are very supportive administrations to help really make some of these plans a reality.

But again, the prerequisite for a lot of this work is site-specific feasibility work. So ensuring that we get that right and are doing it at a place like the Port Brownsville, where we have truly everything that we need to stand up a potential nodular ecosystem that's going to be critical in our decision to push forward on this.

And we do have really the unique ability with this resource of maintaining capital-light options for the processing. So it's not like most ore bodies where you have no choice but to build processing and refining close to where the ore body is. We have flexibility here in the nature of this natural resource and that you can collect them and ship them really north, south east or west. But it's the desire of this administration position to change the game and kind of release themselves from the stranglehold that China has had on the critical metals, and to do that, as Gerard noted, it's not just a TMC story. So we have the resource and we have the capability to help do this.

But we're making all of the decisions obviously, with the benefit of our shareholders in mind and making sure that we are not pushing forward on anything without a very nondilutive financing plan that we expect would be supported by the government, assuming that -- and I see 1 more question on the hidden gem. -- looking at sort of the investment or acquisition of the second vessel like the hidden gem, what would be planned before that, who might manufacture it? Who would the parts be on that front?

Well, taking a converted drillship and making it fit for picking up modules proved to be a pretty efficient move, and there's an abundance of those vessels. I saw Transocean recently scrapped four of them or for quite cheap money. And so that's an option.

And we are -- we do have inbound inquiries from people who have vessels who would like to to use them. Of course, the vessel is the first step. The operator is the important one. And just to be clear, Allseas want to operate more vessels in the CCZ, and we want them to operate more vessels for us in this area. And so -- and obviously, there are efficiencies in having similar type vessels from a part, from an administration perspective and so standby .

Operator, any other questions on the phone line? .

I'm showing no further questions on the phone lines.

Okay. Gerard, perhaps over to you. .

Yes, yes. Well, thank you, everyone. We've got a lot of very long-term shareholders who have been supporting us since go public in 2021. And of course, before that, when we were deepening. And it's exciting to see the direction the business is heading. It was exciting to report some of those updates today. It's frustrating not being able to give more regular updates that we have to be very sensitive in how we message that to the team and our partners. Thank you for an enormous heavy lift from everyone who works at TMC. It's a very dedicated, hard-working team, and it's an honor to work alongside you all.

And to our shareholders, thank you for being there and coming with us on this journey and look forward to keeping you updated as updates become available over.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Thank you for standing by, and welcome to The Metals Company's Third Quarter 2025 Earnings Conference Call. [Operator Instructions].

I would now like to hand the call over to Craig Shesky, CFO. Please go ahead.

Thank you very much. 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 the 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. And as always, 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.

Thanks, Craig, and thanks to everyone for joining this call today. I'd also like to start our quarterly calls with a small bit of reflection. After so much news this year, it's hard to believe that it's just over 7 months since we announced our pivot to the United States. And since then, we have seen President Trump's executive order to support this industry. We've launched 3 applications with NOAA including the first-ever application for a commercial recovery permit.

We've seen new investment flow in from Korea Zinc to Hess family and even more investment from our partner, Alsea. And as outlined during our Strategy Day in August, we have published 2 SEC compliant technical reports showing a total resource value of more than $23 billion. All the while, progress with our new regulator, NOAA has continued, and the tailwinds for critical minerals from both public and private capital providers have only become more clear. And yet, I'm sure many of you are chomping at the bit for more news. And I don't blame you.

Yes, we've been relatively quiet in our messaging over the last couple of months. but please don't take that as a sign that things are slow around here, like the contrary. And beneath the calm surface, our feeder pedaling faster than ever, and I am very eager to share more color when the time is right. But let me summarize where we are right now. We continue to feel confident that our U.S. pivot will lead to a commercial recovery permit in 2027.

And our regular discussions with NOAA and the U.S. government are productive, and we believe that the directors in April executive order will be delivered upon, including the recent reports of NOAA's streamlined application review process sent to the White House. And given our robust cash position, I can assure you that we have no need anytime soon to tap the public capital markets. We're in an excellent liquidity and capital position with approximately $165 million of liquidity today, inclusive of our recent warrant exercises and over $50 million of potential additional proceeds from in-the-money warrants.

This does in fact to the potential $48 million proceeds from the Korea Zinc warrants at a $7 strike bras, Nauru SOAC business combination warrants at 1150, Nauru warrants, hello sponsoring states -- we see a pathway for more than $400 million of incoming cash from warrant exercise. Certainly, we and our partners have plenty of work to do as we prepare for a commercial production targeted for the fourth quarter of 2027. And we have a strategy in place to ensure we can do so in a shareholder-friendly fashion. But let's start today by highlighting the problem that we're looking to solve for the United States and remind ourselves why this remains such a critical resource.

Today, America is critically dependent on foreign sources for the very metals that at once dominated in the late 19th through to the mid-20th centuries for manganese, cobalt and nickel, American now imports roughly 100%. Even copper is nearly half important. And just this month, copper joined the other 3 metals on the critical mineral list published by the U.S. Geological Survey. So this is a major strategic risk. We're not just talking about metals, we're talking about national security, energy independence and industrial resilience.

Our resource of 1 billion tonnes of nodules can fundamentally transform the United States, offering not just mineral independence but strategic dominance in 3 metals. Based on today's level of American consumption, it could supply 300 years of manganese and 200 years of Cobalt and almost a century of nickel. And through public-private partnerships, the administration is clearly taking steps to solve vulnerabilities in rare earths and lithium, base metals and beyond.

Major financial institutions are also following suit. And we believe that for nickel, cobalt and manganese in particular, our nodule resource provides the most scalable and economically viable solution for our reindustrialization in the U.S. And it's clear that the U.S. sees seafloor resources as a key part of a broader solution. Just last week, the United States and Japan announced a landmark partnership to develop rare earth minerals from 3, 4months around Minimatory Island. A framework signed during President Trump's recent visit to Tokyo. And Japan will now begin preparations to test the feasibility of lifting rare earth models as early as January 2026.

And with larger-scale test many anticipated 1 year later. Separately, we're also pleased to announce that [ Altis ] hidden gem vessel will play a key part in Japanese nodule collection trials alongside the University of Tokyo. The hidden gem will head to Japan's exclusive economic zone near inventory Island to conduct a new nodule collection pilot in early January 2027. And this represents the perfect opportunity to test our own technical readiness and some of the planned upgrades to the mining equipment while also helping the Japanese advance their own industry.

Together with all [indiscernible], we also see this as a a very good commercial opportunity, whilst we await the NOAA payments to be issued. So the U.S. government shutdown slowed progress on NOAA's review of our applications over the course of several weeks. But with the government returning to work, our applications will once again continue to systematically move through no regulatory process. In fact, NOAA confirmed to us earlier today that they are back at work and again, focused on these applications. And as a reminder, NOAA has confirmed that both the exploration applications were fully compliant, and our exploration applications are currently in the certification stage, which involves an interagency review of the applications.

Following certification and Environmental Impact Statement, or EIS, is expected to be prepared under NEPA, and a public comment period will be provided and following the public comment period, NOAA will determine whether to issue the requested licenses and permit and if so, under what terms and conditions.

In July 2025, NOAA issued proposed amendments to its regulations on the dish. And the proposed regulation introduces a new consolidated application procedure allowing Africans to submit a single application for both an exploration license and a commercial recovery permit.

And these changes are intended to modernize and streamline the permitting process under DSHMRA implementing regulations. The public comment period closed on September 5, 2025. And on October 29, it was reported that NOAA had sent the proposed regulations to the White House for approval.

Over the past week, our regulatory and environmental teams attended the underwater Mineral Conference in Florida. And during this event, former long-time ISA Secretary General gave a tremendous speech, which provided some important context on the U.S. seabed mining regulations. Bottom line, in his eyes, the U.S. position has been legally consistent for decades and no regulations from the 1980s actually form the basis for the ISA exploration regulations.

And of course, this is firmly in line with the conclusions of TMC, our counsel and the United States government. DSHMRA and the NOAA implementing regulations are clear, effective sophisticated and enforceable.

Next week, Craig will be presenting at the Benchmark Week Conference in LA and Michael Lorena representative from the U.S. Department of Interior regarding seafloor Resources He'll also be meeting with automakers, battery makers and investors as our path to production has never been more clear.

On that note, I'll turn it over to Craig to walk through some project updates and the financials. Over to you, Craig.

Thanks, Gerard. So before getting into the economics and financials, it's worthwhile to take a step back and recognize the myriad world first that this company has already achieved alongside our partners. The TMC has now produced the first SEC and Canadian compliant resource statements, the first PFS for an agile project and the first reserves for a Nagel project.

We've achieved the first production of most of the metal products that we intend to produce with significant flexibility based on market conditions and customer needs. We built on decades of environmental research pioneered originally by our regulator, NOAA, including the largest DTC data set ever produced.

In 2022, we and our partner also achieved the first integrated pilot mining test since the 1970s, lifting over 3,000 tons of nodules to the surface. And of course, we're building on the work of many pioneering U.S. companies back in the 1970s. So nearly 50 years ago, when this industry first took shape, U.S. companies tested a range of technologies to collect nodules. These early pioneers understood the challenges and given the technology available at the time, their decisions were very sensible.

Lacking today's advanced buoyancy systems, engineers, feared heavy track vehicles might get bogged down in soft sediment. The Ocean Minerals Company, therefore, developed an Archimedes group of propelled miner that relied on deepsea sentiment sinkage for traction. It's rotating collector head with hooked teeth gathered nodules effectively, but without the height adjustment in ingested excess sentiment and struggle [indiscernible] uneven terrain.

Inside, crushing nodules proved very problematic. As sediment and fines repeatedly clogged the mechanism. And with only a nascent understanding of the Pelagic communities, sentiment Latin water was discharged at the surface into the ocean's most biologically productive zone.

Fast forward 50 years, and we can see clear benefits of partnering with the company that made its name pioneering the development of offshore oil and gas. With over 250 engineers working on the project, all sees based engineering decisions on decades' worth of environmental data, resulting in a system designed from the sea floor up to deliver minimize -- excuse me, to minimize impact while also delivering maximum pickup efficiency.

And that principle is evident in 5 key innovations. Our Coanda nozzle refined through modern modeling and real-time height adjustment dramatically reduced sentiment intake. Inside the vehicle, differential flow in countercurrent washing clear nearly all sediment from the nodules, while advanced derivative users keep the sediment plum localized and predictable. Where early Pioneer struggled to keep collectors from sinking.

Our challenge was the opposite. Advanced buoyancy allows our collector to move gently across the sea floor, spreading its weight evenly and leaving only paint centimeter ripples, not the 80-centimeter furrows of older systems. And rather than just discharging separated sentiment at the surface, we plan on returning it at 2,000 meters, following independent advice for researchers at the University of Hawaii, a decision that avoids overlap with most marine life.

Make no mistake, what was achieved by those early pioneers as monumental. But after decades of innovation, this is not the 1970s version of Deepsea mining. It's smarter, it's lighter impact and it's a more responsible approach. Let's move onshore. For over a decade, we've undertaken a rigorous onshore testing program to prove out the various processes to unlock the value and strategic potential of this enormous resource. From bench-scale lab testing of single-digit kilo samples to commercial scale processing on 2,000 ton batches on existing plant lines.

We now know that we can take our nodules from seafloor to high-value products in various formats to support a variety of industries. And recently, we delivered another industry first, the successful conversion of nodule derived manganese silicate into battery-grade manganese sulfate.

This is a very important milestone for 2 reasons: First, it demonstrates that our natural resource can produce 3 key metals in sulfate form, nickel, cobalt and now manganese, using an conventional hydrometallurgical route.

Second, with this achievement, TMC USA now is a clear pathway to produce every feedstock required for precursor cathode active materials or PCAM including for the manganese rich chemistries that major U.S. automakers are moving toward their next-generation EV platforms. This work was done using nodule derived manganese silicate refined at Kingston process Metallurgy's operating facility in Ontario, further validating the flow sheet we've designed and the scalability of our partner's technology.

And importantly, this now extends our track record of nodule derived first, nickel sulfate, cobalt sulfate, manganese sulfate reinforcing that the resource is real, the chemistry works and the technical risks continue to come down.

Now this hard one portfolio of innovation means that TMC is the world leader in nodule project development, and it leaves us in the pole position to kick-start an entire industrial ecosystem around this resource.

Our extensive investment in scientific research gives us the most comprehensive deep-sea data set ever compiled, making this data available to NOAA will enable updates to the programmatic environmental impact statement, which has not been refreshed since 1980 and will materially reduce the burden for every other U.S. company that might operate in the clearing Clipperton zone.

On the processing front, our proven flow sheet opens the door to take clearing Clipper and zone modules and turn them into high-value products. And this means real offtake potential and optionality for future American refining capacity as laid out in our prefeasibility study.

In collection technology, our scale positions us to accelerate a broader domestic supply chain from riser systems and dewatering units to subsea equipment and discrete nodule pickers. Operationally, we see clear opportunities to share vessels, assets and methodology with other players.

And finally, in survey technology, we're already working with U.S. AUV, ROV, buoy and subsea battery developers, and we've committed to NOAA that our offshore campaigns can support third-party tech testing. This is how you build a new industry by creating an ecosystem, not just a single project. And as many of you know, our Strategy Day in New York talks quite a bit about this first project, our pre-feasibility study and initial assessments, which had 2 documents including sign-off from qualified persons showing a combined project net present value of $23.6 billion, while also showing a clear capital-efficient path to first production.

And again, the PFS also included a world first, reserves for nonprofit. Just a quick reminder on the geographical areas that each study covers.

The PFS covers the area known as Nord here seen on this slide in dark blue and the initial assessment covers everything else. But keep in mind that neither study covers the additional ground that we've applied for under the U.S. law, where we now have priority right. Just a quick reminder of some of the economics, we expect to generate almost $600 per dry ton of nodules during steady-state production, defined as our average production from 2031 through 2043.

Overall, the revenue mix is expected to be very similar to what we shared with the market over the last several years, 45% of revenue from nickel products, 28% from manganese, 17% from copper and 9% cobalt being the smallest source of revenue. With our steady-state revenue per dry ton of nearly $600 and OpEx per ton of about $340, we arrived at our EBITDA margin per tonne expected to be about 43% or $250 per dry ton during steady-state years between 2031 and 2043. So again, adding up the NPV of the $18.1 billion for the initial assessment and $5.5 billion for the PFS. We arrived at a total estimated resource NPV of $23.6 billion.

And over the life of both projects on an undiscounted basis, revenue of approximately $369 billion EBITDA in excess of $200 billion and a position in the first quartile of the cost curve. And yet, despite the quality and size of the resource, we remain undervalued in our opinion compared to peer developers, explorers and significantly undervalued compared to producers.

On the left side of this page, this will be familiar to some of you who attended our Strategy Day and listened to our last quarterly call, we'll provide a TMC valuation example for illustrative purposes only. Using a slight premium to the upper end of the nickel developer and explorer valuations applied to our PFS NPV and then adding in the average of nickel developer and Explorer valuations for the initial assessment. We can see a path for a total illustrative market value based on comps of approximately $10 billion or over $20 a share.

So from there, you can see on the right side of the page, what a nickel or copper producer we trade that as a multiple of NAV, showing the potential for multiple expansion as our path to production approaches and begins.

So on to the financial results for the quarter. In the third quarter of 2025, TMC reported a net loss of $184.5 million or $0.46 per share compared to a net loss of $20.5 million or $0.06 per share for the same period in 2024. The net loss for the third quarter include exploration and evaluation expenses of $9.6 million versus $11.8 million in Q3 2024. G&A expenses of $45.7 million versus $8.1 million in Q3 2024 and other items of $129.2 million.

Exploration and evaluation expenses decreased by $2.2 million in the third quarter of 2025 compared to the same period in 2024. General and administration expenses increased by $37.6 million in the third quarter of 2025 compared to the third quarter of 2024, mainly due to an increase in share-based compensation of $35 million as a result of amortization of the fair value of retention grants, restricted stock units and options granted to directors and consultants in the third quarter, and an increase of $2 million in professional and consulting fees, primarily relating to the company pursuing our U.S. regulatory route.

Other significant items impacting the net loss in the third quarter and the most significant is the change in the fair value of the royalty liability plus Tonga warrant costs and the change in the fair value and gain on dilution of our investment in the LCR transaction. So a bit of additional context on those valuations. Following the company is filing of our PFS on the Nord project in August of 2025.

The fair value of the royalty liability for NORI-D was valued at $130 million as at September 30, using an income approach while for Nora Areas AC, a market approach was used resulting in a fair value of $15 million. The resulting royalty liability fair value of NORI-Area D totals $145 million, and therefore, an increase of $131 million in the third quarter of 2025, which is a nonoperating noncash expense.

The ton to warrant cost of $5 million represents the fair value of warrants issued to the Tonga Minerals Authority as part of a revised sponsorship agreement. The change in the fair value warrant liability resulted from a decrease in the price of the company's shares and the price of our public warrants during the third quarter of 2025.

The free cash flow for the third quarter of 2025 was negative 11.5 million compared to negative $5.9 million in the third quarter of 2024, primarily due to higher environmental personnel and corporate payments. This is partially offset by interest earned on a higher cash balance in 2025 and and higher payments to campaign 8 vendors made in the comparative period.

Free cash flow is a non-GAAP measure, and I would encourage you to look at the appendix for that non-GAAP reconciliation table. We believe, as Gerard stated, that our cash on hand is more than sufficient to meet our working capital and CapEx requirements for at least the next 12 months from today. And our accounts payable and accrued liability balance at September 30 was $46.8 million, which includes 32.9 million [indiscernible] for various services provided, the majority of which could be settled in equity at TMC's election.

So operator, we'd now like to open up the call for Q&A.

[Operator Instructions] Our first question comes from the line of Dmitry Silversteyn of Water Tower Research.

I just want to clarify 1 thing. I think I missed it when Gary was talking about potential incoming cash if all of the warrants are exercised. Can you repeat what that number was?

Yes. Well, I'll leave you, Craig.

Yes. So the total potential proceeds, excluding some that were exercised over the course of Q3 and in October total potential additional proceeds would be over $432 million, the majority of which would be the $11.50 strike price public and private warrants from the SOC deep green business combination, and those have an expiration date of September 2026.

There's also some nuance to metro because there are certain warrants and there's half a dozen categories outstanding certain warrants where they may have cash flows exercise. But overall, there's a very significant potential inflow of cash and what we would view to be interesting exercise prices. So the point being, we do have a very strong liquidity position today at $165 million.

There's over $50 million of warrant proceeds that could come from in the money warrants and then quite a bit more beyond that.

Understood. And then I was excited to hear you guys are sending hidden gem off to Japan. Understanding international relationships and helping out with diplomacy, is this a pro bono work for you? Or are you going to be getting paid for the exploration that you help the Japanese do.

Certainly not proven. And -- but all seas, we didn't step in the middle of that. All sees will have a direct contract with the foundation that is funding that program. TMC will also get some financial benefit out of that as well. But yes, certainly not proven.

Understood, Gerard. And then final question. You mentioned that NOAA is adjusting -- it's streamlining its regulation process in combining exploration and commercial exploitation licenses. How exactly would that work? In other words, does gating and exploration license basically, you have to have a commercial project in place? I mean why would you combine those 2 license? And how would that work in your case specifically?

Well, that's -- today, if you read the regulations, you have to have an exploration license before they'll consider a commercial recovery comment. That's impractical in our case because we are slightly unique case. And in fact, I'd say we're the only company in the world who has an already prepared commercial recovery permit application with all of the substantiating data.

And so that meant that from NOAA perspective, like we've already got an exploration license, it's with the ISA. So we'd like you to sell work on the commercial recovery permit straight away. And they're like, yes, we want to start work on that as well. but we do need to change the regs to allow for that. And so it's a little bit of tidy up because it was never anticipated when they put these rigs in place in 1980, that an applicant would have already done that work -- so they're just making good with the current circumstances. So it's a very good opportunity for us.

[Operator Instructions].

I think in the [indiscernible] we'll take 1 from the webcast from Jakob Stefanski. Will the exploration permit be granted at the same time as the production permit. If not, when is the exploration permit anticipated to be approved. Without getting into specific dates, I think it's worth noting that implicit in our Q4 2027 production start time, the granted this permit, the commercial recovery permit, is no longer the critical path, given that TMC and Allseas agree that there is sufficient regulatory certainty provided by the U.S. process that we can get ourselves ready to go on the Hinge vessel and even begin soon ordering some longer lead time items.

So while there is a possibility of the streamlined and consolidated exploration license and commercial recovery permit process, accelerating the potential grant of both, even if this path were to be sequential first exploration license than commercial recovery permit, that is all still consistent with the Q4 2027 production start date. So we'll provide more data as we continue down the NOAA path. But again, as noted, it was very heartening to see that they were working during the shutdown on the consolidated process and now back at their desks full time.

Thank you. As I show no further questions. I would now like to turn the conference back to Gerard Barron for closing remarks.

You know what, we'll see if we might take another couple if you populate the webcast. So if others have questions, feel free to drop in the chat. There is a question about why do we call it mining instead of the more potable word harvesting, Duly noted John Alman, sometimes we refer to it as collection as opposed to mining, but we feel very confident that the terminology here, when people actually look at what's being done on the sea floor is certainly very different than traditional land-based mining. So we'll take that on board.

We also see a question from James Silke. The PFS explains an approach of processing that product through capital light at existing facilities in the Eastern Hemisphere. But it also assumes that by year 10 of production, we are bringing some refining capacity to the United States. So Gerard, just kind of an overall question, what opportunities do we see available for funding and permitting and construction of such facilities at scale within the United States.

A little comment for you, James, too. I mean, we do note the refining capacity that's implicit in the prefeasibility study and then additional assumptions made for the initial assessment, most of that is focused on spending in the 2030s and beyond. But obviously, look, the U.S. has a major gap when it comes to certain metals and TMC is fortunate to have not only the expertise here, but the ability to be flexible on what product formats might be.

And I think we've demonstrated that with the world first production of manganese sulfate from the nodule derived intermediate manganese silica product. So I think our overall message is we've put out our PFS and our initial assessment and those assumptions are quite clear in those documents. But there is flexibility that we have through this unique nodule resource and -- that puts us in a very good position when talking about capital providers, whether it's through the U.S. government or the private markets.

And I still show no questions from the phone lines.

Well, thank you, everyone, for attending today's call. And we have an exciting run in to the end of the year. Craig is off to benchmark conference. I'm off to D.C. and we're happy the government's back to work, and we'll be sure to keep you updated on exciting developments. If not, we'll chat to you on our next quarter.

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

Ladies and gentlemen, welcome to the Special Meeting of Shareholders of TMC the metals company Inc. Please note, the meeting is being recorded.

I would like to introduce Mr. Gerard Barron, Chairman and CEO of the company. Mr. Barron, the floor is yours.

Good morning, ladies and gentlemen. My name is Gerard Barron. I'm the Chairman and CEO of the metals company Inc., and I'm pleased to welcome you to this Special Meeting of Shareholders of the company. The meeting is being held virtually as we believe hosting a virtual meeting enables greater shareholder attendance and participation from any location around the world, improves the meeting efficiency and our ability to communicate effectively with our shareholders and reduces the cost and environmental impact of our meeting.

In accordance with the articles of the company, I will act as Chairman of the meeting and preside over the proceedings. I have appointed Whitney Forrest to act as the recording secretary and Maria Vaz of Continental Stock Transfer & Trust to act as the scrutineer and Inspector of Elections. Notice of this special meeting, together with the proxy statement, was mailed or otherwise made available to all shareholders of record as of July 9, 2025, and an affidavit to this effect has been provided to me by Continental Stock Transfer & Trust.

At the meeting, registered shareholders and duly appointed proxy holders will have an opportunity to participate, ask questions and vote all in real time through a web-based platform. I would like to remind you that only registered shareholders that have logged into the meeting with their previously obtained 12-digit control number or duly appointed proxy holders are entitled to vote at the meeting, ask questions or take an active part in the meeting on the web-based platform. And if during the meeting, we encounter any technical difficulties, please remain logged on and we will resume as soon as practical.

I remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve risks and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission, the SEC, which are available on the website of the SEC at www.sec.gov or in the Investors SEC Filings section of our website at www.metals.co.

I now call the meeting to order. And as the Chair of the meeting, I have asked our General Counsel, Ryan Coombes, to read the remainder of the formal script on my behalf, and I remain Chair and will step in as needed. Ryan, take it away.

Thanks, Gerard. Before we proceed with the business of the meeting, I would like to note that for the matters being considered here today, you may ask questions through the virtual meeting platform. If you are a registered shareholder or duly appointed proxy holder and have a question that is relevant to the business of this meeting, you are welcome to ask it through the web portal. The notice calling the meeting of shareholders and describing the matters to be considered today was mailed on or about July 18, 2025, to shareholders of record of the company as of July 9, 2025.

The declaration with respect to such mailing is available for inspection by any shareholder and will be retained with the records of the company. Voting today will proceed as follows. I will ask for a shareholder to make a formal motion at the appropriate time. Voting on the platform will be conducted through the virtual meeting platform, and voting on the item of business will be conducted by electronic ballot.

Polling is now open for the matter presented in the management information circular or proxy statement. We will announce when voting is about to close in order to allow you time to submit your final ballots. If you have submitted a proxy, you do not need to vote today. You would only vote today if you are changing the vote you submitted by proxy.

In order to ensure this meeting covers the required business in an efficient manner, I will dispense with the seconding of motions. This procedure is merely a way to expedite the proceeding. Once the balloting closes, the scrutineer will tabulate the results of the vote. Official results of the vote will be announced closer to the end of the meeting and within 4 days of the meeting, the company will file a current report on Form 8-K with the SEC reporting the results of voting at the meeting.

The scrutineer has advised me that prior to the meeting, shareholders are present and proxies were received from the holders of a sufficient number of common shares to constitute a quorum. Maria?

There are more than 2 shareholders in person or represented by proxy for an aggregate of at least 164,666,977 common shares.

Thank you, Maria. I adopt the scrutineers' report and declare that a quorum is present. Please keep the scrutineer's report with an annex to the minutes of the meeting. Notice has been given in accordance with the articles of the company and as a quorum is present, I declare that this meeting is properly constituted for the transaction of business. The sole item of business before this special meeting is the proposal to adopt an ordinary resolution approving an amendment to the company's 2021 incentive equity plan to increase the share pool for equity incentive grants under the plan by 40 million common shares.

The proposed resolution is as follows: be it resolved as an ordinary resolution that the 2021 incentive equity plan of TMC the metals company Inc., the company, as amended in the form attached as Appendix A to the proxy statement dated July 18, 2025, of the company be and is hereby authorized and approved; and any one director or officer of the company be and is hereby authorized and directed to perform all such acts, deeds and things and execute all such documents and other instruments as may be required to give effect to the intent of this resolution.

The full text of the proposed amendment to the 2021 incentive equity plan and the Board's recommendation are set forth in the proxy statement provided to shareholders in connection with this meeting. The Board of Directors believes that the proposed amendment is in the best interest of the company as it will enable the company to continue to attract, retain and motivate key employees, directors and consultants.

May I have a motion that the resolution to approve the amendment to the company's 2021 incentive equity plan be approved?

So moved.

Is there any discussion on the motion? There being no discussion, I will now call for a vote. As a reminder, if you have already submitted a proxy, there is no need to vote today. All shareholders who have not already voted by proxy are now requested to cast their vote.

[Voting]

That concludes the placement before the meeting of all planned business. We will proceed with announcing the results of the meeting shortly. You have heard the motion to adopt the proposed resolution and have had the opportunity to cast your ballots in respect thereof on the virtual meeting platform. Balloting will be closing momentarily, so please submit your final ballots now. Once the electronic balloting closes, your ballots will be automatically submitted.

[Voting]

I would ask the scrutineer to please close the polling. Thank you, and voting is now closed.

I now declare the polls closed. The scrutineer will provide me with the report of the voting results.

I confirm the voting results.

The scrutineer has provided me with the report of voting results. I am pleased to announce that the ordinary resolution approving the amendment to the company's 2021 incentive equity plan to increase the share pool for equity incentive grants under the plan by 40 million common shares has been duly approved by the required majority of shareholders present in person or represented by proxy at this meeting.

The final voting results will be filed with the Securities and Exchange Commission and made available on the company's website following this meeting.

There being no further business, I will entertain a motion to conclude the meeting.

So moved.

All those in favor, please say aye. All those opposed, please say nay.

[Voting]

The motion is carried. This special meeting of shareholders is now concluded. Thank you for your attendance and continued support of TMC the metals company Inc.

Good day, and thank you for standing by. Welcome to The Metals Company Second Quarter 2025 Corporate Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to turn the conference over to Craig Shesky, CFO of The Metals Company. Please go ahead.

Thank you, Liz. 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 these non-GAAP financial measures, including reconciliations to the most recent directly comparable GAAP financial measures can be found in our slide deck being used with this call. You are welcome to follow along with our slide deck or if joining us by phone, you can access it at any time at investors.metals.co.

And I'd now like to turn the call over to our Chairman and CEO, Gerard Barron. Gerard, please go ahead.

Thanks, Craig, and thanks to all of you for attending. So firstly, I want to acknowledge everyone who made the pilgrimage to New York for our first-ever Strategy Day on August 4 last week. And that includes my leadership team, the Board of Directors, our new and long-time strategic partners, our sponsoring states, our research analysts, institutional investors and a select group from our army of retail investors. I believe this experiment was a resounding success, probably the single most exciting workday that I've ever experienced. And if you were not part of it this year, fear not, we intend to repeat this on an annual basis, getting bigger and better each time and as our coalition of investors and partners continues to grow. Just make sure you hold enough TMC shares when the invites go up.

So the day was passed with meaningful conversations, including a deep dive into our partnerships with an exciting panel, including Edward and Stephanie Heerema of Allseas and Korea Zinc Chairman, Yun B. Choi. And in true TMC style, the evening ended on a high note quite literally with a spirited karaoke party. The Strategy Day also featured the ringing of the NASDAQ closing bell, which our NASDAQ rep said was one of the most enthusiastic and well attended that they have ever had. And this movement gave me an opportunity to reflect on what's happened in the previous 4 years since we last rang that same bell.

And I keep coming back to our key TMC motto, adapt or die. And it's not just that we've been able to adapt to a capital-light approach, it's not that we've been able to adapt to a new regulator. It's that amidst all of this adoption, we've been able to keep the project moving forward, while so many others have been stuck at 0. And this now puts us in a unique position where we have a wide moat around the business, due in part to all of the project spending and historic milestones over the last 14 years, but also because we're one of the unique companies with competency in this new industry that can actually take the path offered by the existing U.S. seabed mining code.

Many others have no choice but to wait for the long promised and never delivered ISA mining code. And I believe that the pace of our progress is only going to accelerate from here with a PFS in hand as the only commercially viable deep seabed resource opportunity in the next several years, for any potential customers, commercial partners and of course, public shareholders. Make no mistake, TMC is here to stay, and we are just getting started.

Another highlight of August 4 was the release of our PFS and initial assessment. Two documents with sign-off from qualified persons showing a combined project net present value of more than $23 billion while also showing a clear capital-efficient path to first production. The PFS also included a world first reserves for a nodule project.

Now I do know that there are some who may have been hoping for production sooner than Q4 2027 expected start date. Well, first of all, as anyone familiar with resource investing will tell you, Q4 2027 is right around the corner when talking about a multi-decade project of this scale and value. It's also important to keep in mind that there has always been an anticipated ramp-up period post permitting, where modifications and mobilization with the Hidden Gem would be required prior to beginning commercial production. And this anticipated ramp-up period has always been expected by the research analysts who cover our stock.

In fact, last year in November when the share price was below $1, we discussed the fact that we would not be making capital investment on the Hidden Gem until we had regulatory certainty. We're now excited to be ramping up this work again and with our partner, the Allseas. And instead of a sequence where that work begins after the grant of a permit, we and the Board soon expect to have the confidence to get moving. And this is due to the signals and tangible progress coming to us from D.C., not just to issue a permit but do it in a way that can be legally defensible for many decades to come.

So today's agenda. First, we'll take you through a summary of all the amazing things that have happened in the last few months, including the strategic investment from Korea Zinc. We've also renewed our partnerships with Nauru and Tonga, reaffirming our shared science and rules-based approach to delivering lasting benefits for the Pacific nations, while building the secure, critical mineral supply chains underpinning reindustrialization, good jobs and resilient economies. I will then discuss our cadence of regular predictable progress at NOAA, including our notice this week of full compliance on our exploration applications. And I'll then turn it over to Craig to discuss the PFS, DIA and our financials.

Well, I'm happy to again report that we have renewed and strengthened our agreements with both the Republic of Nauru and the Kingdom of Tonga, our long-standing sponsoring states who have led from the front since the beginning. And these updated agreements reaffirm our shared commitment to a science rules-based approach to developing this new industry, setting a high bar for an environmental stewardship, transparency, and community benefit.

For Nauru and Tonga, these partnerships are designed to deliver durable economic opportunities, capacity building and long-term revenues that can support generations to come. They provide the stable collaborative partnerships we need to responsibly advance towards first production while also contributing to U.S. and allied efforts to secure resilient supplies of critical minerals. On a personal note, I very much enjoyed our meetings in D.C. with the Nauruan delegation on August 6, and it was great to see the U.S. State Department recognized the strategic importance of our sponsoring state.

In June, we announced a landmark strategic investment of $85 million from Korea Zinc, the world's largest smelter of nonferrous metals. Korea Zinc is positioned to use TMC's USA nodule derived materials to produce refined metals, copper foil and pCAM in their existing facilities in South Korea and potentially build new facilities here in the U.S.A. To further that ambition in August, I traveled to D.C. with Chairman Choi. Among others, we met with David Copley, the President's critical minerals czar to discuss securing domestic supply chains and advancing U.S. mineral independence. And I look forward to another visit with Korea Zinc on their home turf this September as we push on bringing additional investment into the United States.

This quarter, we welcomed Michael Hess and Alex Spiro to the TMC Board, two highly connected leaders whose experience spans global energy, finance, law and high stakes negotiation. Michael has spent time at Goldman Sachs and KKR and now heads the Hess Family Corporation and brings deep relationships across government and industry that will help accelerate our access to capital and strategic partnerships. And of course, the Hess Family are recognized as one of the great industrial giants in the United States.

Alex Spiro, one of the America's most prominent trial lawyers and strategic advisers has represented some of the biggest names in the business and technology, and his insight and network will be invaluable as we navigate the complex intersection of policy, markets and innovation. And together, this board combines unmatched vision, credibility and connections, giving TMC the strategic edge we need to move NORI-D into production.

This quarter, we continued methodically moving the regulatory ball forward under the U.S. Deep Seabed Hard Mineral Resources Act, a clear enforceable framework that gives us visibility and confidence in our path to production. I know it's not always quick enough for everyone, but just take a step back on how fast these milestones have been achieved since the initial applications were submitted just a few months ago.

In April, application submissions. In May, substantial compliance on the exploration license applications. And in July, proposed amendments to DSHMRA to expedite the process. And on August 12, NOAA confirmed full compliance for our exploration license applications, another important milestone that validates the thoroughness of our submission and moves us to the next stage in the process. And I'm pleased to say that NOAA has begun the process of certifying these applications, a 100-day process that started on July 27 and July 28.

Each regulatory milestone derisks the project and strengthens the investment case, and we are systematically progressing through a transparent U.S. regulatory process and with a clear path ahead toward first production from NORI-D in Q4 2027. So we're also looking forward to this administration's proposed amendments to streamline permitting and supportive guidance from senior officials underscoring the U.S. government's intent to lead in the production and processing of the deep seabed critical minerals. The public comment period on these amendments will be concluded on September 5 this year.

And in contrast to NOAA's great progress in the last several months, I'd like to acknowledge that the ISA finished their 30th session this July. The ISA calls -- continues to keep calling for regulations, but doesn't seem to be particularly interested in delivering those regulations. Keep in mind that NOAA had pioneered deep sea environmental research and they've put in place working regulations prior to the ISA ever being formed.

So on that note, I would like to turn the call over to our Chief Financial Officer, Craig Shesky.

Thank you, Gerard. For those in attendance or for those who have reviewed the presentation during Strategy Day, a lot of this is going to be familiar, but there was quite a bit of detail. So I'm now happy to go through some of the key points in our historic landmark pre-feasibility study and initial assessment in deeper detail.

Project economic studies come with three levels of increasing confidence, an initial assessment, which gives you a sense of what the product could be within a broadband of plus or minus 50% cost estimate accuracy. We produced an IA in March 2021 over the NORI-D area. A prefeasibility study gives you a sense of what the project should be and then narrows that accuracy to within 5%. And last is the feasibility study that describes what the project will be with an even tighter cost accuracy band, and that's often the basis for project finance.

So on August 4, we published two new studies, a PFS for NORI-D and a new IA that covers the rest of the resource in NORI and TOML. Together, these two studies should give you a good sense of what our first project should be in the NORI-D area and what the rest of the resource can be in terms of economics.

So taking a step back and looking at the geographical areas that each study covers. The PFS covers NORI-D, the IA covers everything else, but neither study covers the additional ground that we've applied for under the U.S. law, where we know we have priority right. And our management team estimates these areas to have approximately 300 million tons of exploration potential, given the proximity to NORI-D and TOML A-F areas where we do have quite a bit of exploration data.

So the results as of the middle of 2025, a total combined project [Technical Difficulty] comprised of an NPV of $5.5 [Technical Difficulty] of that, an additional $18.1 billion on NPV for everything else. So let me zoom in a little bit on the feasibility study, or PFS. The estimated amount of recoverable modules for the study is 164 million wet tons. Assumed production start date is Q4 2027 with the life of mine just over 18 years. Annual production in steady state was modeled at 10.8 million tons of wet nodules and steady state for the PFS is defined as the year's 2031 through 2043.

Offshore, this level of steady-state production is going to require four converted drillships. In onshore, we assume processing in existing RKEF, rotary kiln electric arc furnace in Asia, and then building refining capacity in the United States. We expect to start relatively small towards the end of 2027, then gradually renameplate capacity [Technical Difficulty] before adding a second vessel in 2030 and then ramping up to steady state with four vessels by 2031, hitting our nameplate capacity of 12 million tons per year in a few of years of production. But again, on average, during that steady state, 10.8 million tonnes per annum.

We expect to generate almost $600 per dry ton of nodules during steady-state production. As one might expect, it's not a smooth line prior to the construction of U.S. refineries, the revenue per dry tonne will be a bit lower, a bit less than $500 per ton in 2032, for example. And then by the end of the 2030s, with two U.S. refineries running, expected revenue per ton is approximately $640. Overall, the revenue mix is expected to be quite similar to what we shared with the market over the last several years based on the initial assessment on NORI-D from 2021. 45% of revenue coming from nickel products, 28% from manganese, 17% from copper and a 9% cobalt is the smallest contributor to revenue.

So where does all of that put TMC on the cost curve? Well, including the valuable byproducts, which are estimated to account for about 55% of total revenue, our C1 nickel cash costs are just over $1,000 per ton, and that's lower than nearly all producers outside of Russia, including most Indonesian producers. Even on an all-in sustaining cost basis, our nickel costs, including byproduct credits, would be just over $2,500 per ton. Said simply, we will be profitable in nearly any nickel price environment.

With steady state revenue per dry ton of just under $600 and OpEx per ton of $340, which also accounts for corporate overhead and royalties, we arrive at our EBITDA margin per ton expected to be about 43% or $254 per ton during the steady state years defined as 2031 to 2043. During that time, of course, we expect to transition from mainly selling matte from Asia to then selling higher-value refined products like nickel sulfate, cobalt sulfate and copper cathode in the United States.

So the early 2030s would see EBITDA margins in the low 30s. But by 2040, that EBITDA margin is closer to 50%. And this anticipated ramp-up in profitability makes it worthwhile to spend on the onshore refinery CapEx after we begin production, while also taking a huge step towards helping the U.S. establish mineral independence.

So how are we going to develop these commercially viable operations? Well, the March 2021 initial assessment for NORI-D envisioned $7 billion of upfront CapEx, of which $2.2 billion was for offshore vessel CapEx. For the prefeasibility study, we've been able to bring that offshore preproduction number down to less than $500 million for the offshore component. And where possible, we've assumed contracting the services we need and only deploying CapEx where without deploying CapEx ourselves, we wouldn't be able to get the service. And as a result, our development CapEx assumes for $4.4 billion onshore for construction of the refining capacity to match the offshore production. This approach ensures that we can deliver critical products to the U.S. as contemplated by NOAA regulations while significantly increasing our payables by producing a higher-value product, again, nickel sulfate, cobalt sulfate before any U.S. refineries are built.

We have an opportunity to either give offtake to Korea Zinc for alloy and matte on the condition that processed materials are returned to the U.S. or we control through their facility and return processed materials to the U.S. ourselves. Because we've not yet developed the definitive agreements with Korea Zinc, some of the production is left at the alloy and matte level. And as far as the U.S. refining capacity, well, we're aiming to build that together. And many of the meetings that Gerard talked about and many that we expect to occur in the coming months are to give that effect.

But as I said earlier this month during the Strategy Day, we're not going to bite off more than we can chew. And we do expect to be in production and producing significant revenue prior to green lighting any such onshore spending. In fact, approximately $4.2 billion of this $4.4 billion onshore CapEx estimate is assumed to be spent in the 2030s, well after we've been in production for some time, generating significant revenue.

Moving on to the initial assessment. That second study shows the potential of the resource beyond NORI-D, effectively the rest of NORI and TOML. And the estimated amount of recoverable modules for the initial assessment is 670 million tons wet. Assumed production start date is 2037 with the life of mine of 23 years. This initial assessment assumes contracted services offshore with eight production vessels, each equipped with three collectors at 20 meters each. So putting it all together, adding up the NPV of $18.1 billion for the IA and $5.5 billion for the pre-feasibility study, we arrived at the total estimated resource NPV of $23.6 billion.

And over the life of both projects, on an undiscounted basis, revenue of approximately $369 billion and EBITDA in excess of $200 billion and a position in the first quartile of the cost curve that makes this model very difficult to break across any commodity cycle. And yet, despite the undeniable quality and size of this resource and our expected position in the first quartile of the cost curve, we feel we remain undervalued compared to peer developers and explorers.

On the left side of this page, you'll see a TMC valuation example, which again is purely for illustrative purposes. Using a slight premium to the upper end of the nickel developer and explore valuations and you apply that to the PFS NPV of $5.5 billion, which keep in mind, in that PFS, we expect to have a more defensible cost curve position and generally lower CapEx per ton than many of those peers. And then you add to that the average nickel developer or explorer valuation multiplied by the initial assessment NPV, you get to a total illustrative market value based on comps of approximately $10 billion, which would be over $20 per share. From there, you can see on the right side of this page, what nickel or copper producers trade at as a multiple of net asset value. And this shows the potential for multiple expansion as production approaches and then begins.

So moving on to our liquidity profile. At June 30, TMC had pro forma cash of approximately $120 million. Now the headline in our filings for both our press release and our 10-Q was $115.8 million, but that $120 million includes the final registered direct offering proceeds, warrant exercises and unsecured credit facility payments made just a few days after quarter end. So by July 4, it was $120 million. And as we disclosed last quarter, our S-3 shelf registration statement capacity has been used and current ATM expires in the fourth quarter of this year. So again, TMC expects to refresh the S-3 and ATM before year-end as a matter of good corporate housekeeping. The ATM was last used on April 17, 2025, and this was prior to the second quarter strategic capital raises.

On to the financial results. In the second quarter of 2025, TMC reported a net loss of $74.3 million or $0.20 per share compared to a net loss of $20.2 million or $0.06 per share for the same period 2024. The net loss for the second quarter of 2025 included exploration and evaluation expenses of $10.5 million versus $12.4 million in Q2 2024. General and administrative expenses of $11.5 million versus $7.9 million in Q2 2024, and other items totaling $52.3 million versus a slight gain in Q2 2024.

Exploration and evaluation expenses decreased by $1.9 million in the second quarter of 2025 compared to the same period in 2024, primarily due to a decrease in mining, technological and process development activities partially offset by an increase in share-based comp due to the amortization of the fair value of restricted stock units and options granted to officers in the second quarter of 2024.

G&A expenses increased by $3.6 million in the second quarter of 2025 compared to the second quarter of 2024, mainly due to an increase in share-based compensation as a result of the amortization of the fair value of RSUs and options granted to directors and officers in the second quarter of last year as well as an increase in consulting costs pursuant to the U.S. regulatory path and other financing activities. Other items significantly impacted the net loss in the second quarter of 2025, include the Nauru warrant costs, change in the fair value of warrant liability and foreign exchange movements.

Moving on to free cash flow. Free cash flow for the second quarter of 2025 was negative $10.7 million compared to negative $12.2 million in the second quarter of 2024. Net cash used in operating activities was $10.7 million for the second quarter, primarily due to higher payments to campaign eight vendors in the comparative period, and this was partially offset by an increase in environmental payments. Free cash flow is a non-GAAP measure, and I would like to point you to the non-GAAP reconciliation table included in the slide deck on our website.

We do believe that the cash on hand is going to be more than sufficient to meet working capital and CapEx requirements for at least the next 12 months from today. In the first half of 2025, of course, we had a significant increase in the cash balance following the receipt of funds of $85.2 million from the Korea Zinc partnership, $35 million net proceeds from the registered direct offering, $14.8 million from the ATM use in the first half of the year, and $6.9 million from various stock option and warrant exercises.

A portion of these proceeds was used to repay the $7.5 million Allseas working capital loan, along with outstanding interest prior to its maturity. Our accounts payable and accrued liabilities balance as at June 30, 2025, was $47.1 million, and this includes $32.4 million owed to Allseas for various services provided, again, the majority of which can be settled in equity at TMC's discretion. The significant increase in warrant liability is due to the increase in the fair value of private warrants reflecting the significant increase in the company's share price.

So with that, operator, we'll turn it back over to you and take some questions from those on the line.

[Operator Instructions] Our first question comes from Jake Sekelsky with Alliance Global Partners.

So now that the PFS is out, can you just comment or provide some color on what work needs to be done in order to get through the feasibility level and maybe the time line there?

Yes. Look, I think the biggest thing that we're going to focus on is getting to our final agreement with our partner, Allseas. Now that we see a clear regulatory path through the United States, the next step is really not just focusing on feasibility, but getting ourselves to the FID, the investment decision to begin ordering some of the longer lead time items to allow us to hit our target of Q4 2027 production date. So it's been this interesting dance, this balance between not wanting to spend too early, certainly when the TMC valuation was much lower. But now that we see clarity, making sure that we give sufficient ammo not just to Allseas, not just to ourselves, not just to the Board, but also to the market to make clear that we expect the permit to be coming, and therefore, it makes sense to begin spending a little bit to get that production system ready to go.

So I would say, Jake, that's probably the #1 important point. We also intend, of course, over the coming months to think through the financing mix of going beyond this first vessel and ensuring that we explore every opportunity that is now being presented by the U.S. government. As you've probably seen, there's quite a bit more in terms of funding opportunities from various departments, whether it's within Department of Defense, DFC, EXIM Bank, Department of Energy. There was $1 billion allocated for critical minerals just this week.

So we're going to be very busy again with partners such as Allseas, Korea Zinc and potentially the U.S. government laying out what that time line is going to be. But really focusing on that first vessel is priority #1.

Okay. That's helpful. And then on the permitting side of things under NOAA. Now that you're in a certification stage, what are the next major steps or milestones that we should keep an eye out for as we head into the second half of the year in 2026?

Well, I guess, the closing of the comment period. And I think the administration and NOAA have made it very clear that they have introduced changes to those regulations to allow fast tracking of permitting. And so I think what you should look forward to is good news coming out of the regulator. And I must say considering this is the first live application that they've had in many years or first new application, NOAA had been amazing. I think they are motivated and excited about. The work that comes with this application. And of course, these rules of DSHMRA have been around for decades. And finally, the moment is here.

And so I think what you can expect to see is those amended changes adopted. And you can expect us to be having a regular cadence. Would I say we are in daily contact with our regulator? Probably, yes. Probably daily. And so of course, the big part is permitting based on the environmental impact study. And of course, we've spent hundreds of millions of dollars and more than a decade gathering that data, which is amazingly compelling. And so look, we expect to have more information to be sharing with not only the regulator, but the broader public as we make that information available because what I can tell you is it's all good news there. So I guess from a NOAA perspective, just more permanent certainty.

And they want to see this resource in production. You saw the critical minerals are, David Copley, traveled to the Cook Islands recently. We had a tremendous reception at the White House where they received not only Korea Zinc and their team led by their Chairman, but also the Republic of Nauru. And the message that they are consistently saying is critical minerals are important and seabed minerals are super important, and the United States want to lead that race. And obviously, we are the most advanced in that category. So it's a perfect coming together.

Our next question comes from Heiko Ihle with H.C. Wainwright.

Thanks for inviting me to your Investor Day earlier this month. I like the karaoke session came up on this call.

Hopefully, no photos or video, but thank you for attending Heiko.

Allegedly. You're still calling for first production in Q4 of '27 in your prepared remarks here, it was listed in the presentation. As you know from the reports we've written, we think this is a doable time line. In your view, what main factors could either accelerate or slow down this progress in your view, like some societal regulatory factors that may not be quite as obvious to outsiders like me that don't talk to the government and the communities on a daily, weekly basis? And is there maybe anything that you would leave us with on how to build our models a little bit more accurately?

Look, I don't think the government will give us anything other than encouragement to that date. And what we announced to the marketplace was that, that timetable will take about 2 years, but you can -- clearly, we are receiving enough encouragement from the administration and the regulator for our Board of Directors to start deploying that capital. And I must say, with the right rigors in place and for those people that were able to review our very qualified Board of Directors around these topics, people like Andy Greig, who built more than $500 billion worth of capital projects in the resources space over his career at Bechtel. We have a lot of expertise on that Board that understands how to allocate capital and how to provide governance around that.

So what I can tell you is that we've got a very supportive Board of spending that money carefully, and we've got an amazing partner in Allseas who are equally committed to getting that boat into production. And we've also got an administration who want us to get moving. And so I think I don't see anything on the regulatory side that should influence that. Of course, there are supply chain issues, but that's what our job at Allseas as our partner there, that's our job to manage that. And getting into production during the 47th administration is super important. So I think all of the risks are just normal business risks, Heiko, and I think we're well equipped to be able to handle those along with our partners.

Fair enough. Building on that last question just a little bit. Earlier on this call, you were talking about adapt or die. And I agree with your viewpoint of having a wide moat around the business, and you alluded to that as well earlier on this call. Just thinking out loud here, given all the geopolitical risk factors and some of that was discussed earlier this month as well, is there anything in particular that keeps you up at night or anything in particular where things have just come in substantially better than you anticipated? I mean, because from the way we look at it, a lot of things were discussed earlier this month where the support was substantially stronger than what anyone would have envisioned. I mean you literally had some of the government representatives present with you at the hotel.

Look, I think there's been a lot of surprises to the upside, Heiko. And I think we knew some of the cabinet when they were in opposition, of course. And so when the Trump administration came into being, it was very encouraging for us to find people like Secretary Rubio take such a prominent role in the cabinet because he had written letters and opined on this topic on both -- on our behalf while in opposition as had many others in the cabinet.

And so we knew the support was there, but sometimes you just -- sometimes you get surprised. And then we have -- we turn up at the White House, and we're invited to the White House very regularly. And you turn up there like we did last week and you find a room filled with all of the major departments that have the ability to contribute because the strong leadership coming out of the White House is saying, we want this to happen. And by the way, you'll notice every agency that can help you make it happen is in the room. What do we need to do?

And then, of course, a surprise to the upside is to find Korea Zinc, who when I first met their Chairman, was not convinced about the U.S.A. investment opportunity, but was very keen to get our material to supply his Korean facility. But over time, has become absolutely convinced that he can play such an important role in supporting the critical mineral needs of this administration in the United States. And he also produces some critical minerals that the U.S. administration really wants like antimony and gallium.

And so I'd say there are pleasant surprises on the upside, just how the administration is mobilizing, how they want this to happen. And I took the -- when I had the Chairman with me last week from Korea Zinc, we asked the administration, are you at all worried about some of the criticism, and they're like not at all. Like it's clear we need to secure the supplies of these critical minerals for decades to come.

And of course, they have experts who have been appointed. And that's, I think, one of the encouraging things about this administration is that they have experts throughout that administration, the political appointees that are taking the reins are moving. I've never seen a group of people other than my own team work as hard. And Senior Director Copley had just returned from a quick visit to the Cook Islands, 2 days to get there, 2 days back, he reminded me in the back of the bus for a day on the ground, just so he could express the administration's support for this new industry. And so yes, I'd say they're all really positive surprises for the upside, Heiko.

Our next question comes from Matthew O'Keefe with Cantor Fitzgerald.

Just a question here on the feasibility studies, particularly for the PFS there. Looked very good, and we had some discussions on it. But I was just wondering, there is a capital -- sorry, there's about a $492 million CapEx to get you into the production that was outlined in the feasibility study. So I'm just wondering I know in the past and you've had Allseas because they're taking care of most of the ships and such, have taken a big part of that. Do you have an idea of how that might be split among your partners? And when we might get a sense of that?

Yes. Sure, Matt. In terms of that $492 million and sort of the assumptions that go into it in a pre-feasibility study, there is allowance for contingencies, some buffers, specific growth. There are elements in there that for a point in time, relatively conservative analysis. May not ultimately end up being something that has to be cash flow out the door between now and commercial production. What I would say in terms of bridging to, here's the breakdown of what's TMC, what's Allseas. We've had the assumption now with our partner Allseas for several years of splitting that preproduction CapEx, which we do believe is going to be much smaller ultimately than what was in the PFS.

But this is what we're all drawing our eyes to now with our PFS and IA release with the Strategy Day behind us, with the applications over the line. And now with a pretty clear path from the U.S. regulatory front, that gives confidence to us on Allseas to sharpen the pencils again and make sure that we hammer out those details.

So I think it would still be a little bit premature to give a more detailed breakdown on it, but suffice it to say that it's a priority for us and for them as well. And I think that's evidenced by the fact that the Allseas Founder, Edward Heerema and Stephanie Heerema came over for the Strategy Day and spent a lot of time talking to analysts and investors on that panel, kind of laying out why they've stuck with TMC through what have been some difficult times and have been key participants in nearly every major equity raise that we've done as a public company and even before that.

Yes. No, you definitely got a lot of support in the -- both with your partners and with your investor base, which seems to be growing. Just to follow on that, though, you mentioned earlier in the call about the Department of Energy, Department of Defense, other U.S. institutions that do have a lot of money now allocated for critical metals. Are you -- have you looked at -- I'm assuming you've looked at those programs, but are you actually applying for any -- and would any of those monies be available or at least applicable to this first part of like the ramp-up? Or would that all have to go towards sort of U.S. processing capability?

I'm glad you asked that, and it's a great clarification. The answer is it's not just necessarily for funding the onshore component, but there are certain programs that can have cash available for the offshore side as well. Now some of those programs, it's really -- it's not quite the same as it was in the Biden administration where a lot of focus was downstream, but there were various programs that you go through a long application process and you might not hear for 9 months. Here, it's a lot more all hands on deck and perhaps it can be chaotic sometimes, but you get to the right answer, at least you get to the right people a lot quicker.

The reality is that even beyond DoD and DOE, there are certain programs where the folks who would be controlling the purse strings aren't yet even confirmed. And that confirmation is likely to occur in September or October. So a lot of these conversations are going to ripen, but the answer is absolutely yes. We are pursuing potential dollars that could be made available for the offshore side as well. So we don't want to say too much on that because, obviously, this is a path we've been pursuing for a long time. But I would say it's less now about just, hey, let's fill up the application. This is one of the reasons, frankly, that it perhaps wasn't as noticed over the course of summer, but I believe it was late June that there was an adjustment to the way funding is done within the U.S. government.

And it's not just one applicant goes to DOE and DoD or DFC and EXIM and you do it all separately. Rather, there's a coordination among the National Energy Dominance Council, which, of course, David Copley was one of the key people in for a long time and now is in the National Security Council. The same people are really overseeing all of the programs. So it's less about sort of a very dogmatic which program you're applying to and fingers crossed, you get some response many months later. Here, it's much more coordinated and I think much more intentional. So the answer is yes, both offshore and onshore. And yes, we're pursuing all of these concurrently.

That sounds promising. And if I may, just one last little one here, just to follow on that. I know you've got a lot to do between now and ramping up. But just you did cite like in the mid-2030s or early 2030s to get a processing plant. If monies were available because it would be quite a boom for the U.S. to have some processing capability of the [ hydromet ] nature that you guys are looking at. What would sort of be -- could you go quicker on that? I mean -- or do you still have a lot of work to do vis-a-vis engineering and development for your process plant?

No, we could absolutely go quicker. And that's the significance of having Korea Zinc's involvement. They have just built a state-of-the-art facility in Korea. And so they'd like to come and build that here in the United States. And from our perspective, we'd like to see that on the ground, providing the money was -- the right terms were available from those agencies that Craig has mentioned. And we think it would be a boom to support the reindustrialization ambitions for the United States.

And Matt, you know better than anyone. If it isn't grown, it's mined. And we're all talking about bits, of course, because AI has everyone's attention, but we need to be thinking about atoms as well. We need to build the infrastructure. And for that, you need metals. And the question is where are they going to come from? And I wish we were as sexy as the AI industry. But our time is coming because people are starting to talk about this and as being the part of the equation that has been a little bit overlooked. And of course, it's become a very hot geopolitical issue, and we're starting to see smart money move into it. And of course, the administration is going to lead that pathway. We saw them do a very interesting deal with MP recently, MP Materials. And I think we're going to be seeing them do a lot more like that.

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

Just a quick follow-up or maybe not a follow-up, clarification. You didn't include it in these slides, but in your Investor Day slides, you had a more detailed time line and you had something called provisional approval, which you expect to get by the end of this year, if I remember correctly, the slide, and then the final approval kind of by the fourth quarter of 2026 to let you get into production in fourth quarter of '27. What's sort of the difference between provisional approval and final approval? And does getting provisional approval do anything for you in terms of expediting the decision-making process on funding the first batch of capital expenditures? Or how should we think about that milestone approaching?

Look, the administration had been very open on this topic and because there are some hoops we need to hop through. And what has been made very clear to us is that if the administration came and just gave us a permit today, then we'd be tied up in legal nuts. And we may not achieve the objective that was set out in the executive order, and that is to fast track the permitting. And so the legal minds have opined on this, and it makes sense.

And so what we've said, though, is it would be nice if we could have something and hence, that word provisional, that would give all of us the confidence. However, I think it's fair to say that our Board, and as you know, we've raised quite a bit of money in the last quarter. And our Board and our investors want to see us spend that money because they feel there is enough confidence coming out of the signals we have from the administration to get that permit in fine time. But the dates we mentioned at Strategy Day still stick. We think we'll have that in a form to share by the end of the year. But it will be a confidence booster, you might say, Dmitry.

Understood. Okay. That's helpful, Gerard. Can you talk a little bit about -- you mentioned it a couple of times during the call about the changing regulations that NOAA has written and has published and now they're in the comment period, I guess, that's closing. What -- you talk about it being helpful in expediting approval processes. But specific to your project, what do you think that these new regulations can do in terms of getting you on the line in getting the approval?

Well, the main one is that the way the regulations stood, you needed to submit an exploration application. And then once that was granted, they would start working on your commercial recovery permit. But the key driver will be to be able to do those two things in tandem because, as you know, we submitted two applications for exploration licenses, and we submitted one application for a commercial recovery permit. And so whilst that application is with the agency, the changes will just put in stone the fact that they can do those things in tandem and they will massively shrink the permitting time frame.

Yes. And just to clarify, too, Dmitry, in reading the plain language of DSHMRA and the implementing regulations, it was always a read that, yes, the exploration license grants would have to come prior to the grant of the CRP. But the plain language is clear that the applications or at least the review process could be concurrent. So what we think is ongoing with the public comment period and the proposed amendments is really a confirmation of something that really -- already made pure common sense, especially for some applicants like TMC, where much of the environmental work for the exploration side has already been done.

Beyond that, too, there's some helpful amendments in terms of just modernizing these rules that were put in place in the 1980s in terms of delivery of physical copies, in terms of ensuring that the contractor who's done much of the environmental work is able to write that environmental impact statement as opposed to sort of putting that work on a silver platter and then having the writing being done, let's say, by NOAA. In fact, that was actually a clarification that came through the NEPA process even before this in 2023.

So it's really just -- as they say on sort of the federal register, which is compiling these comments, it's a modernization of a lot of that great work that was done. But it is pretty amazing. When you look at the DSHMRA legislation and then the implementing regulations and then you compare it to what the ISA had begun working on in the 1990s and beyond, they're really taking a lot of the great work and great ideas that came originally from this U.S. seabed mining code. So it was in very good shape. And now we're just kind of tidying it up or NOAA is tidying it up around the edges to make sure that it can be more modern, more commercial and clarifying the concurrent review process that Gerard laid out.

We have nothing else in the phone queue. There was one question on the webcast from Nelson Sellers. Can the administration halt mining operations?

Well, I think that goes back to one of the reasons that we are going through this very robust and clear legal process to make sure that we're not skipping over any steps to ensure that this permit is legally defensible for decades to come. Very similar to any land-based mining operation where so long as the process itself was followed and all of the necessary permits were granted under the authorities actually provided to whoever that particular regulator was, it's a situation where you can ensure that just a change in administration isn't going to somehow alter the legal validity of that permit.

Of course, we don't view this as a left versus right issue. No matter who the next administration is going to be, critical minerals is bipartisan. And it's not even the U.S. versus China, it's really a recognition that the U.S. is dependent on a lot of different sources for critical minerals and TMC can take three of those dependencies off the table just from the NORI-D project. So this mineral independence issue is not something where we expect any future administration is going to somehow decide, you know what, we're okay with being dependent on Chinese or Chinese-funded sources for some of these metals. So we anticipate that this legal process is going to be very robust, and that's one of the reasons that it's important to let it play out.

Liz, is there anything else on the phone line? Any other questions that we have?

No phone line questions at this time.

Gerard, I might turn it back over to you for some closing comments.

Yes. Thank you, Craig. Well, I guess, thank you, everyone, for turning up today. Thank you to my team for the amazing efforts to be able to produce these results over recent months. It's truly admirable what we achieved with a tight small team. And of course, thank you to our strategic partners and our sponsoring states. And thanks importantly, to all of our shareholders and until next time.

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