TMC targets Q4 2027 production start and $23.6B resource NPV amid regulatory progress and Korea Zinc investment

Earnings Call Insights: TMC the metals company Inc. (TMC) Q2 2025

MANAGEMENT VIEW

* CEO Gerard Barron highlighted the company’s first-ever Strategy Day, emphasizing renewed partnerships and strategic investments: “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.”
* Barron discussed the company’s position: “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.”
* The CEO announced strengthened agreements with the Republic of Nauru and the Kingdom of Tonga and described the $85 million strategic investment from Korea Zinc as a “landmark.”
* Additions to the Board include Michael Hess and Alex Spiro, described as bringing “deep relationships across government and industry.”
* Progress on U.S. regulatory milestones was underscored, with Barron stating: “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.”
* CFO Craig Shesky explained the PFS and initial assessment, noting: “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.”
* Shesky also remarked on the cost structure: “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.”

OUTLOOK

* Management reiterated the Q4 2027 production target, with Barron stating: “Q4 2027 is right around the corner when talking about a multi-decade project of this scale and value.”
* Shesky emphasized capital discipline: “We do expect to be in production and producing significant revenue prior to green lighting any such onshore spending.”
* The company expects regulatory certainty and “regular cadence” in permitting, with Barron forecasting more progress: “I think what you should look forward to is good news coming out of the regulator.”

FINANCIAL RESULTS

* TMC reported a net loss of $74.3 million or ($0.20) per share for Q2 2025, compared to a net loss of $20.2 million or ($0.06) per share for Q2 2024.
* Exploration and evaluation expenses were $10.5 million, down from $12.4 million in the prior year’s quarter; G&A expenses increased to $11.5 million from $7.9 million.
* Free cash flow for Q2 2025 was negative $10.7 million, compared to negative $12.2 million in Q2 2024.
* Pro forma cash as of June 30 stood at approximately $120 million.

Q&A

* Jacob G. Sekelsky, Alliance Global Partners: Asked about steps to move from PFS to feasibility and the timeline. Shesky responded that the priority is “getting to our final agreement with our partner, Allseas...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.”
* Sekelsky also inquired about permitting milestones. Barron answered that after the comment period, fast-tracking of permitting is expected: “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.”
* Heiko Felix Ihle, H.C. Wainwright: Asked about factors influencing the 2027 production timeline. Barron said, “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.”
* Matthew Dennis O'Keefe, Cantor Fitzgerald: Questioned CapEx split with Allseas. Shesky said, “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.”
* Dmitry Silversteyn, Water Tower Research: Asked about regulatory milestones and provisional approval. Barron clarified that provisional approval is intended to boost confidence, and “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.”

SENTIMENT ANALYSIS

* Analysts asked detailed questions on feasibility, regulatory milestones, and capital allocation, reflecting a neutral to slightly positive tone, with curiosity about risk factors and execution.
* Management conveyed confidence, particularly in regulatory progress and project economics, frequently highlighting support from partners and the U.S. government. Phrases like “we are just getting started” and “regular cadence” were prominent.
* Compared to the previous quarter, management displayed greater optimism, while analysts maintained a measured, informed approach.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter featured the publication of the PFS and resource assessment, with a defined $23.6 billion NPV and Q4 2027 production target, compared to the previous quarter’s focus on regulatory application submissions and pending PFS.
* Partnership announcements and Board expansions were new in Q2 2025.
* The regulatory path has advanced, with NOAA confirming exploration application compliance, contrasting with last quarter’s anticipation of regulatory milestones.
* Management tone shifted from cautious optimism to more assertive confidence, supported by tangible progress and new investment. Analysts remained focused on timelines and execution risk across both periods.

RISKS AND CONCERNS

* Barron acknowledged supply chain issues but expressed confidence in Allseas as a partner to manage them.
* Regulatory uncertainty remains a consideration, but management referenced robust legal processes and bipartisan U.S. support as mitigation.
* Major non-cash items, such as warrant liabilities and share-based compensation, contributed to the reported net loss, as explained by Shesky.

FINAL TAKEAWAY

Management emphasized significant progress in regulatory milestones and partnerships, with the release of the PFS and initial assessment marking a major step toward first production. The Q4 2027 production target and a $23.6 billion resource NPV underpin a confident outlook, backed by new investment, renewed strategic alliances, and strengthened governance. The company maintains a disciplined approach to capital deployment, with regulatory developments and partnership execution central to advancing toward commercial production.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/tmc/earnings/transcripts]

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