Good afternoon, everyone, and thank you for participating in the metals company Fourth Quarter and Full Year 2023 Corporate Update Conference Call. Joining us today are the metals company's Chairman and Chief Executive Officer, Gerard Barron, and Chief Financial Officer, Craig Shesky. Following their remarks, we will open the call for your questions. Before we go further, I would like to turn the call over to CFO, Craig Shesky as he reads the Company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 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 the call, certain statements may be made which will be forward-looking and based on management's beliefs and assumptions from information available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Additionally, please note that the Company's actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking statement. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows, and additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call and you're welcome to follow along with our slide deck, or if joining by phone, you can access it any time at investors.metals.co. I'll now turn the call over to our Chairman and CEO, Gerard Barron. Gerard, please go ahead.

Thanks, Craig, and thanks to all of you for joining us today for our fourth quarter 2023 corporate update call. Firstly, I'd like to mention the great piece that ran last night on 60 Minutes regarding seafloor nodules and the United States' position on the Law of the Sea and reflect a bit on just how far we've come. Just over four years ago, we hosted Bill Whitaker and the 60 Minutes team on board the launch of vessel to provide what was, for many people, their first glimpse of this impending new industry. In fact, some of our team members and key investors have cited that piece as what originally put nodules and our company on their radar. And I'm amazed at just how much our team has accomplished in the four years since that original piece. In 2021, in advance of our transaction to go public, we put out two SEC-compliant resource statements and an initial assessment on the NORI-D contract area signed off by AMC consultants. NORI-D net present value at the time of $6.8 billion. In 2022 we completed the first successful integrated pilot system test in the CCZ since the 1970s lifting 3,000 wet tons of nodules and helping to derisk our future offshore operations alongside our partner Allseas in late 2021. And we completed our pyrometallurgical processing pilot, derisking our flow sheet in advance of future onshore operations. We've also now signed a binding MoU with PAMCO in Japan to initially process nodules at their existing RKEF facility, and we're also pleased to announce today that we successfully derived the first-ever nickel sulfate from seafloor nodules, but more on that in a bit. And finally, we wrapped up the last of our 22 pre-production offshore campaigns, including the completion in late February of our…

Thanks, Gerard. Speaking of PAMCO, we were pleased to announce in November of last year that we signed a binding MoU with PAMCO to process the first nodules when commercial production operations are expected to begin in 2026. PAMCO is planning a commercial-size pilot in the second quarter of 2024, and 2,000 tons of nodules that we collected during NORI's mining test will be processed through PAMCO's existing RKEF plant. We're also pleased to announce that we've demonstrated we can turn nodules into nickel sulfate, indicative of battery -- excuse me, there's been a bit of a change in the slide deck. There we go. We are also pleased to announce that we've demonstrated we can turn nodules into nickel sulfate, indicative of battery market suitability pending the confirmation of the preliminary assays. The sulfate was produced in a program testing our efficient flow sheet design that processes intermediate nickel mat, direct to nickel sulfate without making nickel metal, and produces fertilizer byproducts instead of waste. And for nickel sulfate, we'd just like to quickly remind everyone what a game changer that is to potentially produce nickel sulfate at a much smaller carbon footprint than all other nickel flow sheets analyzed in last year's benchmark lifecycle assessment. As noted on our last call, we're devoting a majority of our resources to our environmental impact statement and pre-feasibility work. And we'll start with the pre-feasibility work. For the offshore segment of the PFS together with Allseas, we've gone through several mine planning iterations, and design reviews of the Project Zero nodule collection and transport system. For the onshore segment of the PFS, we've made great progress in Japan, where PAMCO has done considerable work and has validated that seafloor nodules can be told through their current facility, producing intermediate products that…

Thank you, Craig. And as I said at the beginning, the time is now for this new industry. With our own research vessel back in port and the heaviest offshore pre-production spending in our rearview, our team's attention is now focused on analyzing the copious amounts of environmental data and putting together an application for an exploitation contract for the NORI area, expected to be submitted following the July 2024 ISA session. And after seeing the initial results following the conclusion of our latest environmental campaign, I'm confident there are no showstoppers and we're looking forward to continuing the release of all this data with stakeholders around the world. In the meantime, our executive team will continue the work of securing strategic partnerships and this is certainly where I'll be devoting nearly all of my time in the coming weeks. I would like to extend my sincere thanks to the TMC team, including our partners, our contractors, and of course our sponsoring states, and thanks to everyone who tuned in to our call today and for your attention. With that, I would like to hand it back to the operator for Q&A.

[Operator Instructions]

As we are waiting for that to compile, we are going to take a question from the web chat. Milo Amundsen has asked, is the 6% of share price on NORI assets or all assets. What percentage is it of all assets? It's a good question. Look, we've always laid out what the valuation is based on NORI-D, which is our most advanced project, on which we are spending close to $500 million already on that project to bring it to where it is now and being able to leverage that investment is something that's really starting to bear fruit now that the geopolitical tailwinds are blowing much stronger. NORI-D represents roughly 22% of the total estimated resource across NORI and TOML. Now, we did estimate when we went public that the full field net present value, if extrapolating the same assumptions from NORI-D, would be $31 billion of net present value. But again, we like just focusing on the $6.8 billion as calculated with AMC consultants in the NORI-D initial assessment as their valuation guidepost. And our market cap represents roughly 6% of the updated value of that NORI-D initial assessment if you just use current metal prices, roughly $8 billion. So, to answer your question, it's focused really just on NORI-D recognizing that there's significant upside from the other 78% of our total estimated resource.

Thank you. And I show -- we have a question on the phone line, and our question from the phone line comes from the line of Dmitry Silversteyn from Water Tower Research. Please go ahead.

Good afternoon. Thank you for taking my call. Just wanted to get maybe a little bit more detail. What were the main elements that resulted in the modest extension of the time to offshore production into the first quarter of 2026 versus the original date, which I think was given out as the fourth quarter of 2025?

Yeah. Hi, Dmitry. Look, there's one driving reason, and that is moving the production number of that boat from 1.3 million tons to 3 million tons. And it was a decision that we had to take at the time. But of course, the economics are so much better when we can be handling the bigger production capacity. But what that requires is an upgrade. It requires us to make a couple of modifications for material handling. It required a slightly different Riser configuration, all of which has been managed by Allseas. And so that put a little bit of a dampener in the supply chain, and that's what resulted in that later time frame.

Understood. And then if I can follow up on the March meetings that are going on right now with ISA. As you look at what will come out of it on the other end, what would be sort of the likely outcome that you're looking for that you would interpret as good news versus, let's say, disappointing outcome?

Look, this is the first time that a consolidated text has ever been presented to the council, and so it's a really important milestone. And what we are looking out of this session is continued progress. And that's what we're seeing. It was a productive week last week. This week we expect to see the same. And that is just making progress towards further refining that consolidated text. And what we are also noting is that there is a lot of intercessional work continuing to be done by the member states, and that is increasing. And we expect that the period between the end of the March session and the beginning of the July session is when we are going to see a lot of those loose ends tidied up. And so, as for bad news, look, we haven't seen any. You always see a bit of noise around at this time, of course. And, but fundamentally, the noise is very different to the reality, and of what's happening. You have 168 members who are working earnestly to put in place regulations because the one thing that everyone agrees is that regulating this industry is the best way of protecting the ocean environment. And so that's what people are doing. And of course, we are very close to those regulations because we're going to need to operate under them and we are not seeing anything that's keeping us up at night.

Got it. Got it. That's helpful. And then final question, if I may. The cash on hand and the liquidity that you have access to, typically you talk about lasting that for the next 12 months or something like that. I didn't hear that statement on this call. So how do you see your liquidity position right now? And how urgently is the need to find a strategic partner, let's say in 2024?

Sorry, Gerard, I can go first if you don't mind. Just quickly on that, Dmitry, I did say that. And we did include in our press release that. Yes, we do believe that cash on hand plus these credit facilities, totaling $45 million is sufficient to meet our working capital and CapEx requirements for at least the next 12 months. Keep in mind too, the last number that we provided which I still think is a good guy post, was $35 million to $45 million of additional cash needed to launch our application. And I think what you should keep in mind is while we continue to get many inbound proposals for financing, we have our three largest shareholders who care very much about minimizing dilution. In fact, if you look at our total shareholder base, in excess of 50% of TMC shares are held either by insiders or affiliates. So there's very much a desire internally to do the right deal. And that's why all of our focus is on the strategic side right now. And I think the confidence provided by not only the extension of the Allseas credit facility but the new credit facility from Gerard and Andrei, I think it just shows the confidence in those potential options.

Okay. Okay. Thank you.

Yeah. The easiest thing to do is to print equity. And -- but as Craig said, we really do care about that equity stack because that's where we care about our shareholders. We care about our employees, who, of course, are incentivized by the equity. And we have a very direct insight into, obviously, how those negotiations are going with interested parties. And we think this is the right course for the benefit of all shareholders.

Fair enough. Thank you, Gerard.

Thanks, Dimitry.

Thank you. And I show our next question comes from the line of Matthew O'Keefe from Cantor Fitzgerald. Please go ahead. Matthew O’Keefe: Yeah. Thanks for taking my question. Just wanted to touch on the -- if you could touch on the timing and maybe some of the scope of the upcoming feasibility study. Is that -- that's still on track for kind of mid-year? And maybe you could discuss a little bit about how it's going to differ from the one in hand?

Sure. Do you want me to take that, Craig?

Sure. Happy to add color on it, too.

Yeah. Look, it'll be a pre-feas that is going to be completed by mid-year. And of course, normally when you move from pre-feas to feas, it's to do with tightening up the cost scope, and certainty around the budget. And it normally has to do know, large capital expenditure. Now, of course, we already have our first production asset. It's the Hidden Gem. It's owned by Allseas, and it's the vessel that we use for the collector test. And we are working earnestly with our onshore partner at the moment that's Pacific Metals up in Japan, who have an existing purpose-built nickel processing plant which we are able to tap directly into. And so that pre-feas is going to be really significant to just answer many of the technical issues and support our application. That's the main purpose of it because we have a good insight into how those numbers are looking. Matthew O’Keefe: Okay. Thanks. So will we get a sense from it as investors and analysts, sort of what the -- I mean you'll be paying PAMCO, you'll be paying Allseas to collect the nodules, PAMCO to process them. Will that kind of detail be available in that and because in my model, it shows some fairly robust potential for some fairly robust economics?

Absolutely.

Yeah, look, certainly, Matt, yes. We would anticipate that. As the pre-feasibility is coming out and we are preparing for the application, there's going to be a point where we're going to be able to provide guidance to the market and a viewpoint of what to expect from project economics, especially now that we're talking about a larger initial production system. So, absolutely. We know, frankly, we've had a lot of investors who have been waiting for that, and we want to make sure that we dot all the I's and cross the T's before we can release that. But, yeah, rest assured it's coming. And we agree with you, we believe the economics are going to be robust. Matthew O’Keefe: Okay. No, that's great. Thanks. Looking good so far. Appreciate it. Thank you.

Thanks, Matt.

Thank you. And I show, our next question comes from the line of Vasu Patel from Patel Holdings LLC. Please go ahead.

Hi. So one of the questions I have is for the application for the ISA that we are submitting for NORI-D. As said in the past, there's going to be costs attached to it. Is there approximate amount value to what the costs are? And will they be covered from the current cash assets, or do any of the credit facilities have to be tapped into?

Yeah. Look, I mean, the application itself, you're in the ballpark of the million dollar fee for the application, but the real cost of the application is all of the work that goes into analyzing and collating the data and putting forth document of many, many hundreds of pages. We've already finished now, our sort of offshore campaign following one year on from the collection test. And a lot of that information is now being analyzed. There is going to be a key tenet of the environmental impact statement. We're also talking about the pre-feasibility study that Gerard and I just mentioned. So the amount that we said, $35 million and $45 million of incremental funding, which does not include any tapping of our credit facilities, that is still a good number to keep in mind for what it's going to take to get the application over the line. So, yes, there is more work to be done and it'll cost some money, but we feel now very, very good about the liquidity options at our disposal.

Got it. And this question really refers to future mining around 2026. As of right now, there's one vessel. There's a Hidden Gem vessel. But looking forward, how will production be ramped up once the application for exploitation is approved?

Good question. One of the things we've established is that processing our nodules can happen through rotary kiln electric furnace. And what we know is that there are hundreds of those lines that have been built in China, in Japan, and more recently in Indonesia, and they've been built to process nickel laterite ore. And so it's a win-win. That industry has the capacity to take all of the production that will come off the NORI-D block and more into parties that we are currently in talks with. So we do not see the need to have to go and spend money building processing plants to handle the scale-up for the first phase and think of processing in two steps. One of it is known as the Pyrometallurgical process, and the other is the Hydrometallurgical process. And one of the things that I think the United States and Washington DC policymakers have clocked onto is that they could potentially import that intermediate product that we will produce from nodules into the United States for US battery makers to make battery cells. And of course, once you do that, it means the material is in the United States and it will stay here. It will be used to make batteries, but at end of life, it will be recycled. And recycling in decades to come will become a very important part of the supply chain. So the onshore side means there are no limitations to how we scale up the onshore processing. When it comes to the offshore, what we are already doing, as we announced in a previous release, is looking for a second production vessel. But as we get closer to production, we're also finding people knocking on our door saying, hey, we have one of those ships exactly like the Hidden Gem, and we'd like to see it busy or we'd like to explore. Could Allseas use it as their production vessel number two? And so think of it as a cookie-cutter approach. But, and that's how we are going to do the early scale-up towards the NORI-D block. In the future, I think what we'll have is bigger production platforms as we start to drive costs out of the business, better economics. And the simple math is that we just announced that we are moving the production platform to 3 million tons. There is the possibility of moving production well beyond that, but it would not be with a boat like we have now. But for the moment, it's cookie-cutter, put more boats on the water, and it's tapping into already built, permitted, and financed onshore processing plants in parts of Asia.

Sounds good. Thank you so much.

Pleasure.

And we're going to move from the phone line to some questions in the chat. Gerard, there's a question for you specifically the current influence from China on deep-sea mining, as well as the further new five-year agreement between Russia and the ISA. Maybe if you want to comment at all on what you're seeing from China in terms of on-the-ground negotiations with the International Seabed Authority.

Sure. Look, China is, I guess, the most powerful voice at the ISA. And if you listen to Bill Whitaker's 60 Minute show on, the reason for that is the United States are not there. And what China are doing, which we appreciate, is saying all of the member states have signed on to the convention of the Law of the Sea, and that came with it legal obligations to put in place the exploration and exploitation regulations to allow the development of this industry. No matter which way you look at it, China has the absolute market leadership when it comes to these base metals. And the reason for that is they are very forward-looking, and we could learn a lot from how they deploy capital and how they see demand into the future and do things about it. And so I think that we are encouraged to see China in the industry. We know they have five contracts. Two of them are in the CCZ, which is where we operate. China wants regulations to be established to protect the environment, and we want them as well. And I think that's one of the great gifts that come from this legal framework to have a central regulator that represents 168 member countries plus the European Union means that you have a chance of getting it right, because when you outsource mining to developing countries, you are also outsourcing the environmental oversight, and that doesn't always work out so well. So I think there's no doubt China already has a position at the table. They are obviously a strong advocate for environmental regulations, and I think we should embrace that and appreciate that they are there supporting the establishment of this industry.

Thanks. There's a question from Tyler MacNeil. Any updates to the DPA Department of Defense Title III grant? Yes, we've been in communication. We've also been looking very closely at the DoD grant program, and there was nearly $400 million of new funds allocated to it earlier this year. So that process is ongoing. I would say stay tuned on that front. These processes always tend to take a little bit longer than one anticipates, and I think that applies too to the direction from the House Armed Services Committee to the Pentagon to deliver a report on the potential processing and refining of nodules. But frankly, that report, we think is going to be very important to underscore our national security relevance for the United States. And I think we're also seeing that it's really not just about the Department of Defense, DPA Title III program, but increasing focus on nodules from the United States. It also means that there are other more direct forms of potentially getting funding to do similar feasibility work. So rest assured, the TMC is aggressively pursuing all potential opportunities on that front. And it's really have to do with the fact that I think now there is a growing momentum from the military, political, and intelligence communities. And when you're talking about hundreds of these former leaders signing on to something that's really a momentum of its own and showing that a lot of the education frankly, that we've been doing, along with other contractors about what this resource is, has been fruitful, and we expect more of it this year. Also, Gerard a question for you from [Sean Dre] (ph). Certainly, we have a strong partnership with NORI-D. Do we have any other plans in the near future to develop further partnerships with countries? Any other expectations of countries who might want to become sponsoring states? Any focus on us on that front?

Look, we are frequently contacted by countries, particularly developing countries, who would like our help or our partnership to help them get into this industry. And at the moment our hands are pretty full. However, we are exploring how we can help some of those nations participate because particularly developing countries who would otherwise not have access to any economic opportunities like this, now is the time for them to participate. So nothing to report. And we do have a laser focus inside the business on our NORI contract area at the moment, of course, and -- but there might be something in the future.

And the last question that we have time for, from [Tim Panetti] (ph). Do we have any updates in terms of discussions with auto OEMs? And any news on their focus on this new industry?

Well, I can confirm that we continue to talk to them, but I don't think the auto OEMs are going to move until we are closer to production. And quite frankly, our job at the moment is to keep them informed, keep them up to date on the environmental evidence that is coming to hand, and at the right time, we will be a great partner for them, because in the future, of course, between carbon equalization measures and battery passport initiatives, the CO2 footprint is going to be really important. And we know what our CO2 footprint is going to look like. We also know through our lifecycle analysis, what our impacts on other areas will be as well, whether it's sequestered carbon or water usage, freshwater systems, and so on. And I think that those matters are going to be really important to measure because when you compare them to alternative supply in the marketplace, they're going to look really low impact at the bottom end of the scale. And that means that customers will be rewarded for choosing those products over materials that come with a higher impact. So our job is to continue to develop those systems, continue to provide that environmental evidence, which, of course, will make available to the world, but help put it into context as it becomes available for those OEMs. And we've got a cordial, respectful relationship, some better than others. But when the time is right, I'm confident that they will be there.

Thanks. Look, thanks to everybody for taking the time to join us on the call today, and we are certainly looking forward to sharing more progress on our next quarterly call, which is just right around the corner. And we'll turn that back over to the operator for any final comments and disconnection.

Thank you, sir. This concludes today's conference call. Thank you all for participating. You may all disconnect.