TMC the metals Q3 Earnings Call Highlights

Key Points

• TMC and Allseas scaled back the initial production plan to about 1 million tons annually, reducing estimated upfront capital to roughly $300 million from $800 million. Output could rise to 1.5 million tons in year two, with longer-term expansion still planned.
• NOAA is expected to decide by mid-December whether to certify TMC’s USA-A application. Certification would advance the project to environmental review but would not itself grant a commercial recovery permit.
• TMC reported a third-quarter net loss of $28.4 million, narrower than $185 million a year earlier, and had $123 million in liquidity at quarter-end. The company is also considering interim processing in Japan while its Brownsville facility is developed.

TMC the metals NASDAQ: TMC plans to start seabed nodule production at a smaller scale than previously proposed, reducing estimated upfront capital requirements as it awaits a U.S. regulatory decision on its application.

The company and offshore partner Allseas now intend to begin with a system targeting approximately 1 million tons annually, rather than deploying a full 3 million-ton system at the outset, Chairman and CEO Gerard Barron said on the company’s third-quarter earnings call. The revised plan reduces estimated capital needed to reach first production to roughly $300 million, shared between the parties, from approximately $800 million under the prior plan.

TMC reported a third-quarter 2026 net loss of $28.4 million, or $0.06 per share, compared with a loss of $185 million, or $0.46 per share, a year earlier. Liquidity stood at $123 million at Sept. 30, including $44 million available under an undrawn credit facility.

Permit Review Moves Toward December Decision

Barron said the National Oceanic and Atmospheric Administration, or NOAA, expects to decide by mid-December whether to certify TMC’s consolidated application for the USA-A area. The company had previously hoped for a decision in October.

Certification would be NOAA’s formal finding that TMC has the required finances, access to technology and a plan for commercial nodule collection, Barron said. It would also establish the size and location of the proposed activity area, but would not itself grant a commercial recovery permit.

If NOAA certifies the application, it would proceed to environmental review, including a draft environmental impact statement and further public comment periods before a final permit decision. Barron said NOAA had not identified issues or deficiencies in the application. The first public comment period closed Oct. 19.

Asked whether the revised offshore plan would require changes to the NOAA application, Barron said it would not. He also said TMC had been optimistic about the timing of a permit and a potential government financing arrangement for its proposed Brownsville, Texas, processing project. He cited supply-chain pressures as another factor behind the revised plan.

Smaller System Defers Major Spending

The initial production plan builds on equipment used in TMC’s 2022 offshore pilot. The company plans to upgrade its existing collector from six meters to nine meters wide, limit initial modifications to the Hidden Gem vessel and load nodules directly onto bulk carriers, eliminating the need for a dedicated transfer vessel during early operations.

Barron said the system could increase production to as much as 1.5 million tons in its second year. TMC’s longer-term objective remains 12 million tons annually across four production vessels.

In response to an analyst question, Chief Financial Officer Craig Shesky said expanding the Hidden Gem to 3 million tons would involve a short-term interruption to its production. Management expects to make those modifications after production begins and a second vessel enters service.

Japan Processing Option and Brownsville Plans

Shesky said TMC’s primary onshore objective remains a new processing and refining facility in Brownsville, but the plant may not be ready to receive the first nodules. As an interim option, the company is considering toll processing at partner PAMCO’s existing facility in Hachinohe, Japan, where the companies conducted an industrial-scale pilot in 2024 and 2025.

Barron said the Japanese government has a financing plan to cover up to half the cost of modifications needed at PAMCO’s plant. TMC and PAMCO are discussing how to cover the remainder; no agreement has been reached, he said.

In Brownsville, pre-feasibility engineering is nearly complete and feasibility-level engineering for the first smelting stage is underway with Mariana Minerals, Shesky said. TMC has not made an investment decision, and any future capital commitment remains contingent on U.S. government support.

Spending Rises as Company Advances Projects

Third-quarter exploration and evaluation expenses rose to $23.5 million from $9.6 million a year earlier, reflecting higher development, operating and vessel costs, among other expenses. General and administrative expenses fell to $9.5 million from $45.7 million, primarily because of lower share-based compensation and legal fees.

Net cash used in operating activities increased to $19.4 million from $11.5 million, including $7.7 million in cash payments to Allseas. Shesky said cash on hand was sufficient to meet working capital and capital expenditure commitments for at least the next 12 months.

On environmental research, Shesky said a recently published study modeled sediment plumes at commercial scale and found that most mobilized sediment settled within 10 meters of collector tracks. He said 46 peer-reviewed studies were based on the company’s dataset, including a paper in press.

About TMC the metals (NASDAQ:TMC)

TMC the metals company Inc. is a deep-sea minerals exploration and development company focused on polymetallic nodules found on the ocean floor. The nodules contain metals including nickel, copper, cobalt and manganese, which are used in batteries, stainless steel and other industrial applications. The company's exploration activities are centered in the Clarion-Clipperton Zone of the Pacific Ocean. Through subsidiaries sponsored by Pacific island nations, TMC holds exploration contracts with the International Seabed Authority.

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