Prepared remarks
Good day, and thank you for standing by. Welcome to The Metals Company Second Quarter 2025 Corporate Update Conference Call. 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 representative said was one of the most enthusiastic and well-attended that they have ever had. And this moment gave me an opportunity to reflect on what's happened in the previous four years since we last rang that same bell. I keep coming back to our key TMC motto, adapt or die. It's not just that we've been able to adapt to a capital-light approach; it's that amidst all this adaptation, we've been able to keep the project moving forward, while so many others have been stuck at zero. 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. 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 over $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 just 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. 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 that we would not be making capital investments on the Hidden Gem until we had regulatory certainty. We're now excited to be ramping up this work again with our partner, Allseas. 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. This is due to the signals and tangible progress coming to us from D.C., not just to issue a permit but to do it in a way that can be legally defensible for many decades to come.
Today's agenda involves 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 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. I'm happy to 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 very beginning. These updated agreements reaffirm our shared commitment to a science rules-based approach to developing this new industry, setting a high bar for 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 toward 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 recognize 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. 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. The Hess Family is recognized as one of the great industrial giants in the United States. Alex Spiro, one of America's most prominent trial lawyers and strategic advisers, has represented some of the biggest names in business and technology, and his insight and network will be invaluable as we navigate the complex intersection of policy, markets, and innovation.
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. 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.
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 with a clear path ahead toward first production from NORI-D in Q4 2027. We are 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 deep seabed critical minerals. The public comment period on these amendments will conclude on September 5 this year. 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 continues to keep calling for regulations but doesn't seem to be particularly interested in delivering those regulations.
Keep in mind that NOAA pioneered deep-sea environmental research and put in place working regulations prior to the ISA ever being formed. 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 bandwidth of plus or minus 50% cost estimate accuracy; a feasibility study that describes what the project will be with even tighter cost accuracy; and lastly, a pre-feasibility study which narrows that accuracy to within 5%. 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.
Taking a step back and looking at the geographical areas that each study covers. The PFS covers NORI-D, while the IA encompasses everything else, but neither study covers the additional ground that we've applied for under U.S. law, where we know we have priority rights. Our management team estimates these areas to have approximately 300 million tons of exploration potential, given their proximity to NORI-D and TOML areas where we have quite a bit of exploration data. As of mid-2025, the total combined project comprised of an NPV of $5.5 billion, with an additional $18.1 billion on NPV for everything else. 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. The assumed production start date is Q4 2027 with the life of mine just over 18 years. Annual production in a steady state was modeled at 10.8 million tons of wet nodules, defined for the PFS as the years 2031 through 2043.
Offshore, this level of steady-state production will require four converted drillships. Onshore, we assume processing in existing RKEF, rotary kiln electric arc furnace in Asia, and building refining capacity in the United States. We expect to start relatively small towards the end of 2027, then gradually ramp-up capacity before adding a second vessel in 2030, ramping up to steady state with four vessels by 2031, hitting our nameplate capacity of 12 million tons per year in a few years of production. However, during that steady state, the average expected production is 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, so the revenue per dry ton will be a bit lower, approximately $500 per ton in 2032. 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 similar to what we shared with the market over the last several years, based on the initial assessment on NORI-D from 2021, with 45% of revenue coming from nickel products, 28% from manganese, 17% from copper, and 9% from cobalt being the smallest contributor to revenue. So where does all of that put TMC on the cost curve? Including 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, 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. Simply put, 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 accounts for corporate overhead and royalties, we arrive at an expected EBITDA margin per ton of about 43% or $254 per ton during the steady state years defined as 2031 to 2043.
During that time, we expect to transition from mainly selling matte from Asia to selling higher-value refined products like nickel sulfate, cobalt sulfate, and copper cathode in the United States. The early 2030s would see EBITDA margins in the low 30s; by 2040, that EBITDA margin should be closer to 50%. This anticipated ramp-up in profitability makes it worthwhile to spend on the onshore refinery CapEx after we begin production while also taking a substantial step toward helping the U.S. establish mineral independence. How are we going to develop these commercially viable operations? 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 pre-production number down to less than $500 million for the offshore component. Where possible, we've assumed contracting the services we need and deploying CapEx only where we wouldn't be able to secure the service without it.
Our development CapEx is about $4.4 billion onshore for constructing 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, including nickel sulfate and cobalt sulfate before any U.S. refineries are built. We can either provide offtake to Korea Zinc for alloy and matte on the condition that processed materials are returned to the U.S. or control the process through their facility and return processed materials to the U.S. ourselves. Since we haven't yet developed definitive agreements with Korea Zinc, some of the production is left at the alloy and matte level. As for the U.S. refining capacity, we're aiming to build that together. Many of the meetings that Gerard mentioned, and more expected in the coming months, are to that effect.
However, as I stated earlier this month during the Strategy Day, we're not going to overextend ourselves. We expect to be in production and generate significant revenue before 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, this second study shows the potential of the resource beyond NORI-D, effectively covering the rest of NORI and TOML. The estimated recoverable modules for the initial assessment amount to 670 million wet tons. The assumed production start date is 2037 with a 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. In closing, adding up the NPV of $18.1 billion for the IA and $5.5 billion for the pre-feasibility study brings us to a total estimated resource NPV of $23.6 billion.
Over the life of both projects, we anticipate an undiscounted revenue of about $369 billion and EBITDA in excess of $200 billion, positioning us in the first quartile of the cost curve, which makes this model very resilient across any commodity cycle. Despite the undeniable quality and size of this resource and our expected strong position in the first quartile of the cost curve, we believe we remain undervalued compared to peer developers and explorers. On the left side of this page, you'll see a TMC valuation example, which is purely illustrative. Using a slight premium to the upper end of the nickel developer and explorer valuations and applying that to the PFS NPV of $5.5 billion, we need to keep in mind that we expect to have a more defensible cost curve position and generally lower CapEx per ton than many peers. Then you add to that the average nickel developer or explorer valuation multiplied by the initial assessment NPV, arriving at an illustrative market value based on comps of approximately $10 billion, translating to over $20 per share.
The right side of this page shows what nickel or copper producers trade at as a multiple of net asset value, demonstrating the potential for multiple expansion as production approaches and begins. Moving on to our liquidity profile. At June 30, TMC had pro forma cash of about $120 million. The headline in our filings for both our press release and 10-Q was $115.8 million, but the $120 million includes final registered direct offering proceeds, warrant exercises, and unsecured credit facility payments made just a few days after the quarter's end. By July 4, it was $120 million. As disclosed last quarter, our S-3 shelf registration statement capacity has been used, and the current ATM expires in the fourth quarter of this year. TMC expects to refresh the S-3 and ATM before year-end as a matter of good corporate housekeeping. The ATM was last utilized on April 17, 2025, prior to the second quarter strategic capital raises.
Moving 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 in 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 and general and administrative expenses of $11.5 million versus $7.9 million in Q2 2024, with other items totaling $52.3 million compared to 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 compensation related 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 prior year, mainly due to an increase in share-based compensation resulting from the amortization of the fair value of RSUs and options granted to directors and officers in the second quarter of the previous year, along with an increase in consulting costs linked to the U.S. regulatory path and other financing activities. Other items significantly impacted the net loss in the second quarter of 2025, including the Nauru warrant costs, changes in the fair value of warrant liability, and foreign exchange movements. Addressing free cash flow, the second quarter of 2025 reported free cash flow of 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 quarter, primarily due to higher payments to campaign vendors in the comparative period, partially offset by an increase in environmental payments.
Free cash flow is a non-GAAP measure, and I encourage you to refer to the non-GAAP reconciliation table in the slide deck on our website. We believe that the cash on hand is sufficient to meet working capital and CapEx requirements for at least the next 12 months. In the first half of 2025, we saw a significant increase in the cash balance, following the receipt of $85.2 million from the Korea Zinc partnership, $35 million in net proceeds from the registered direct offering, $14.8 million from ATM use in the first half of the year, and $6.9 million from stock option and warrant exercises. A portion of these proceeds was utilized to repay the $7.5 million Allseas working capital loan, along with outstanding interest before its maturity. Our accounts payable and accrued liabilities balance as of June 30, 2025, was $47.1 million, which includes $32.4 million owed to Allseas for various services provided, the majority of which can be settled in equity at TMC's discretion. The significant increase in warrant liability is largely due to the increase in the fair value of private warrants, reflecting the considerable rise in the company's share price.
Questions and answers
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 timeline 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, particularly when the TMC valuation was much lower. But now that we see clarity, making sure that we provide sufficient ammunition not just to Allseas and ourselves, but also to our Board and 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. So I would say, Jake, that's probably the number one 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 being presented by the U.S. government. As you've probably seen, there are quite a few more funding opportunities from various departments, including the Department of Defense, DFC, EXIM Bank, and the 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 like Allseas, Korea Zinc, and potentially the U.S. government laying out what that timeline is going to be. But really focusing on that first vessel is priority number one.
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 and into 2026?
Well, I guess, the closing of the comment period. I think the administration and NOAA have made it very clear that they have introduced changes to those regulations to fast track permitting. So what you should look forward to is good news coming from the regulator. I must say, considering this is the first live application they've had in many years, NOAA has been amazing. They seem motivated and excited about the work involved with this application. These rules of DSHMRA have been in place for decades, and the moment is finally here. You can expect to see those amended changes adopted, and you can expect us to have a regular cadence. I would say we are in daily contact with our regulator, probably yes—daily. Of course, the big part is permitting based on the environmental impact study. We've spent hundreds of millions of dollars and more than a decade gathering that compelling data. Expect to see more information shared not only with the regulator but with the broader public.
What I can tell you is, it's all good news there. From a NOAA perspective, expect more permitting certainty—they want to see this resource in production. You saw the critical minerals czar, David Copley, traveled to the Cook Islands recently. We had a tremendous reception at the White House where they received Korea Zinc's team, led by their Chairman, and the Republic of Nauru. The consistent message is that critical minerals are important and seabed minerals are super important, and the U.S. wants to lead that race. We're the most advanced in that category; it's a perfect convergence.
Our next question comes from Heiko Ihle with H.C. Wainwright.
Thanks for inviting me to your Investor Day earlier this month. I liked the karaoke session that came up during this call.
Hopefully, no photos or video, but thank you for attending, Heiko.
You're still calling for first production in Q4 of '27 in your prepared remarks here, and it was listed in the presentation as well. As you know from the reports we've written, we think this is a doable timeline. In your view, what main factors could either accelerate or slow down this progress? Are there societal or regulatory factors that may not be quite as obvious to outsiders like me who don't talk to the government and the communities on a daily, weekly basis? And is there anything you’d leave us with to build our models more accurately?
Look, I don't think the government will give us anything other than encouragement to that date. What we announced to the marketplace was that this timetable takes about two years, but we are receiving encouragement from the administration and the regulator for our Board of Directors to start deploying capital. With the appropriate governance in place, represented by our Board of Directors, especially individuals like Andy Greig, who has built over $500 billion worth of capital projects in the resources space, we have plenty of expertise that knows how to allocate capital carefully. Our Board supports deploying that capital, and we have a significant partner in Allseas who is also committed to getting that boat into production. Furthermore, we have an administration that wants us to get moving. I don't see any regulatory issues that should influence this timeline. There are supply chain issues, but managing those is our responsibility alongside our partner. Getting into production during this administration is crucial. The risks we face are typical business risks, and we're well-equipped to manage them with our partners.
Fair enough. Building on that last question just a little, earlier on this call, you mentioned adapt or die. I agree with your viewpoint of having a wide moat around the business. Given all the geopolitical risk factors and some of that discussed earlier this month as well, is there anything in particular that keeps you up at night or where things have come in substantially better than anticipated? A lot of things were discussed earlier about the administration's support being stronger than anyone envisioned, particularly with government representatives present with you.
Look, I think several positives have emerged. We knew some cabinet members from when they were in opposition; their entry into the administration was encouraging. It was heartening to see someone like Secretary Rubio take a prominent role, as he had written letters advocating for us. So, while we anticipated support from many individuals in the cabinet, finding ourselves frequently invited to the White House has been a pleasant surprise. At a recent meeting, we found a room filled with representatives from major departments that can contribute—strong leadership is saying, 'We want this to happen.' We also see Korea Zinc, who was initially skeptical about U.S. investment, now firmly believing they can play an important role in supporting critical mineral needs in this administration. The administration is mobilizing impressively, wanting to see this happen. So, yes, I'd say there have been many positive surprises about how the administration is tackling these initiatives.
Our next question comes from Matthew O'Keefe with Cantor Fitzgerald.
Just a question regarding the feasibility studies, particularly the PFS. It looked very good, and we had some discussions about it. I'm wondering, there's about a $492 million CapEx to get you into production outlined in the feasibility study. Do you have an idea of how that might be split among your partners? When might we get a sense of that?
Yes, sure, Matt. In terms of that $492 million and assumptions in the pre-feasibility study, there is an allowance for contingencies, some buffers as part of that. There are elements that may not ultimately need to be cash flowed out the door between now and commercial production, based on the conservative analysis at this point. We've had an understanding with Allseas for several years to split that preproduction CapEx, which we believe will ultimately be much smaller than was presented in the PFS. We're now focused on the details, especially since we have a pretty clear path from the U.S. regulatory front, which encourages us and Allseas to finalize those details. So it might still be premature to give a detailed breakdown, but suffice it to say it's a priority for both us and them.
You definitely have a lot of support from both your partners and your growing investor base. Just to follow on that, you mentioned the Department of Energy, the Department of Defense, and other U.S. institutions that have significant funding allocated for critical metals. Are you applying for any of those funds, and could any of that money be available for the initial ramp-up, or would it all have to go toward U.S. processing capability?
Indeed, that's a great question. The answer is, funding isn't just for the onshore component, as there are programs with cash available for the offshore side as well. While some programs are more complex, our situation has markedly improved. The process is less about filling applications and not hearing back for nine months; it's more coordinated now, and we can reach key contacts faster. In fact, certain programs won't have their decision-makers confirmed until September or October. So while we’re pursuing potential funding options for both offshore and onshore, we don’t want to disclose too much about it, since we've been pursuing this path for a while. However, the current environment is more favorable.
That sounds promising. Just one last question: you cited the mid-2030s or early 2030s for a processing plant. If funding were available, could you accelerate this process? Do you still have a lot of work to do regarding engineering and development for your process plant?
No, we could absolutely go quicker. The significance of Korea Zinc's involvement is crucial. They've recently built a state-of-the-art facility in Korea, and they would like to replicate that here in the United States. From our perspective, we want to see it operational here, provided the right terms for financing are available from those agencies Craig mentioned. This would certainly support the U.S. reindustrialization efforts. As you know, if it isn’t grown, it’s mined. While AI has everyone’s attention, we need to focus on atoms as well. Infrastructure must be built, requiring metals. The question remains: where will they come from? Although we may not be as glamorous as the AI sector, our time is coming, as more focus is being placed on this aspect of the conversation.
Our next question comes from Dmitry Silversteyn with Water Tower Research.
Just a quick follow-up or maybe clarification. You didn't include it in these slides, but during your Investor Day, you had a more detailed timeline, showing something called provisional approval expected by year-end, and final approval by Q4 of 2026, to permit production in Q4 of '27. Can you explain the difference between provisional and final approval? Will getting provisional approval expedite the decision-making process for your initial capital expenditures?
The administration has been transparent on this topic. While there are some requirements we need to fulfill, we understand granting a permit today would lead to legal complications, possibly hampering the objectives set out in the executive order for fast-tracked permitting. Legal opinions clearly indicate the necessity for certain procedures. However, we value the likelihood that receiving provisional approval will instill confidence. Our Board and investors wish to begin spending based on confidence stemming from signals from the administration regarding timely permits. The dates discussed during Strategy Day still hold; we anticipate sharing this information by year-end. Provisional approval would indeed provide a confidence boost.
That’s helpful, Gerard. Could you elaborate on the new regulations that NOAA has published and how they may help expedite approval for your project?
The principal change allows for concurrent applications for exploration and commercial recovery permits; previously, you needed an exploration application approved first. This amendment will considerably reduce the permitting timeframe. We submitted two applications for exploration licenses alongside one commercial recovery permit. The changes will confirm that NOAA can process those applications together, significantly speeding up the overall timeline.
To clarify further, in reviewing DSHMRA's plain language and implementing regulations, it was always anticipated that while exploration license grants come first, the review process could occur concurrently. What's happening with the amendments is essentially a confirmation of what logically makes sense, particularly for applicants like TMC—those having completed considerable environmental work on the exploration side already. It's impressive; when comparing DSHMRA legislation and implementing regulations to the ISA's work since the 1990s, we're effectively enhancing the existing framework. I believe we have no more questions in the queue. One question was asked on the webcast by Nelson Sellers: Can the administration halt mining operations? This returns to why it’s crucial to adhere to a robust legal process, ensuring the permit is defensible for decades. Just like any land-based operation, as long as the process followed the necessary permits granted by regulatory authorities, a change in administration shouldn't impact the legal validity of that permit.
We do not see this matter as a partisan issue. Regardless of the upcoming administration, critical minerals represent a bipartisan concern. Our dependency on various sources for critical minerals remains constant, and TMC could eliminate three dependencies based exclusively on the NORI-D project. This mineral independence issue is significant, and we believe the legal process we’re undertaking will support it. Liz, is there anything else on the line? Any other questions?
No phone line questions at this time.
Gerard, I might turn it back over to you for some closing comments.
Thank you, Craig. Thank you all for attending today. Thank you to my team for their incredible efforts to produce these results over recent months. It's truly admirable what we've accomplished with a tight team. Thanks to our strategic partners and sponsoring states as well, and importantly, to all of our shareholders. Until next time.
This concludes today's conference call. Thank you for participating. You may now disconnect.