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What changed in TMC the metals Co Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TMC the metals Co Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+683 added−640 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-25)

Top changes in TMC the metals Co Inc.'s 2024 10-K

683 paragraphs added · 640 removed · 442 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

177 edited+70 added−70 removed136 unchanged
Biggest changeThese surpluses, however, could be temporary and we believe potential shortages in nickel and cobalt supply could return in the 2027/2028 timeframe, subject to developments in Indonesia and responses by the U.S. and the European Union where regulators could impose measures to differentiate between sources of metal based on the environmental and social impacts of these sources.
Biggest changeAccording to several analysts, these surpluses, however, could be temporary and we believe potential shortages in nickel and cobalt supply could return in the 2027/2028 timeframe, subject to developments in Indonesia and responses by the U.S. and the European Union where regulators could impose measures to differentiate between sources of metal based on the environmental and social impacts of these sources ​ ​ Source: Benchmark Mineral Forecast presented at Benchmark Week 2023 on November 15 in Los Angeles ​ 9 Table of Contents Based on 2023 data, the U.S. is the second largest consumer of battery nickel based on EV end-use. ​ ​ 10 Table of Contents While the Trump Administration has rescinded EV mandates and suspended EV-related incentives under the Inflation Reduction Act of 2022 (the “IRA”), 92% of the $110 billion in EV value chain investments has been deployed in Republican states and the continuation of technical and supply chain leadership for batteries is recognized as central to broader energy independence. ​ ​ Increased Interest in Nodules from the United States ​ The U.S.
To manufacture battery cells, gigafactories will need critical battery metals like nickel, cobalt, manganese, and copper to meet rising battery demand.
To manufacture battery cells, gigafactories will need critical metals like nickel, cobalt, manganese, and copper to meet rising battery demand.
NORI our wholly-owned subsidiary, holds exploration rights to four blocks (NORI Area A, B, C, and D, the “NORI Contract Area”) covering 74,830 square kilometers in the CCZ that were granted by the ISA in July 2011. NORI is sponsored by Nauru pursuant to a certificate of sponsorship signed by the Government of Nauru on April 11, 2011.
NORI. NORI our wholly-owned subsidiary, holds exploration rights to four blocks (NORI Area A, B, C, and D, the “NORI Contract Area”) covering 74,830 square kilometers in the CCZ that were granted by the ISA in July 2011. NORI is sponsored by Nauru pursuant to a certificate of sponsorship signed by the Government of Nauru on April 11, 2011.
In October 2023 we entered into a services agreement with a third party in order for NORI to conduct an assessment of the benthic impact of the 2022 collector test in NORI Area D approximately 12 months post the collector test activities (“Campaign 8a”), which we believe will strengthen the quality of NORI’s EIS and Environmental Management and Monitoring Plan (“EMMP”) by providing additional information on the environmental regeneration of the collection test area.
In October 2023, we entered into a services agreement with a third party in order for NORI to conduct an assessment of the benthic impact of the 2022 collector test in NORI Area D approximately 12 months post the collector test activities (“Campaign 8A”), which we believe will strengthen the quality of NORI’s EIS and Environmental Management and Monitoring Plan (“EMMP”) by providing additional information on the environmental regeneration in the collection test area.
The toll treatment is expected to take place on a dedicated RKEF processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce Li-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
The toll treatment is expected to take place on a dedicated RKEF processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce Li-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
PAMCO successfully completed a pre-feasibility exercise pursuant to the non-binding MoU signed by the parties in November 2022.
PAMCO successfully completed a pre-feasibility exercise pursuant to the non-binding MoU signed by the parties in November 2022.
The toll treatment is expected to take place on a dedicated RKEF processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce Li-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
The toll treatment is expected to take place on a dedicated RKEF processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce Li-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
PAMCO’s Hachinohe facility is located on the coast in northern Japan and is equipped with port and processing infrastructure required to receive and process polymetallic nodules and to ship products to customers.
PAMCO’s Hachinohe facility is located on the coast in northern Japan and is equipped with port and processing infrastructure required to receive and process polymetallic nodules and to ship products to customers.
Such preference or priority may be withdrawn by the Council if the contractor has failed to comply with the requirements of its approved plan of work for exploration within the time period specified in a written notice or notices from the Council to the contractor indicating which requirements have not been complied with by the contractor.
Such preference or priority may be withdrawn by the Council if the contractor has failed to comply with the requirements of its approved plan of work for exploration within the time period specified in a written notice or notices from the Council to the contractor indicating which requirements have not been complied with by the contractor.
The ISA has issued Regulations on Prospecting and Exploration for Polymetallic Nodules (adopted on July 13, 2000, updated on July 25, 2013). The regulations are complemented by the LTC’s recommendations for the guidance of contractors on assessing the environmental impacts of exploration. The exploitation regulations on deep-seabed collection will be complemented by various standards and guidelines, and thresholds.
The ISA has issued Regulations on Prospecting and Exploration for Polymetallic Nodules (adopted on July 13, 2000, updated on July 25, 2013). The regulations are complemented by the LTC’s recommendations for the guidance of contractors on assessing the environmental impacts of exploration. The exploitation regulations on deep-seabed collection will be complemented by various standards and guidelines, and environmental thresholds.
(i) Resource definition and project economics: Having completed a total of nine offshore resource definition campaigns, collected samples and completed subsea surveys for resource evaluation, we have defined the size and quality of our resource in the NORI and TOML Areas, as described below, in our SEC Regulation S-K (subpart 1300) compliant Technical Report Summary - Initial Assessment of the NORI Property, Clarion Clipperton Zone, Pacific Ocean dated March 17, 2021 (“NORI Initial Assessment”) and Technical Report Summary - TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean dated March 26, 2021 (“TOML Mineral Resource Statement”), respectively, prepared by AMC.
(i) Resource definition and project economics: Having completed a total of nine offshore resource definition campaigns, collected samples and completed subsea surveys for resource evaluation, we defined the size and quality of our resource in the NORI and TOML Areas, as described below, in our SEC Regulation S-K (subpart 1300) compliant Technical Report Summary - Initial Assessment of the NORI Property, Clarion Clipperton Zone, Pacific Ocean dated March 17, 2021 (“NORI Initial Assessment”) and Technical Report Summary - TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean dated March 26, 2021 (“TOML Mineral Resource Statement”), respectively, prepared by AMC.
If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediary nickel-copper-cobalt matte, or nickel-copper-cobalt alloy) for electric vehicles (“EV”) and renewable energy storage markets, (ii) copper cathode for EV wiring, energy transmission and other applications, and (iii) manganese silicate for manganese alloy production required for steel production.
If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediary nickel-copper-cobalt matte, or nickel-copper-cobalt alloy) for electric vehicles (“EV”) and energy storage markets, (ii) copper cathode for EV wiring, energy transmission and other applications, and (iii) manganese silicate for manganese alloy production required for steel production.
To reach our objective and initiate commercial production, we are: (i) defining our resource and project economics, (ii) developing a commercial offshore nodule collection system, (iii) assessing the environmental and social impacts of offshore nodule collection, and (iv) developing onshore technology to process collected polymetallic nodules into a manganese silicate product, and an intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy product and/or end-products like nickel and cobalt sulfates, and copper cathode.
To reach our objective and initiate commercial production, we are: (i) defining our resource and project economics, (ii) developing a commercial offshore nodule collection system, (iii) assessing the environmental, social and cultural impacts of offshore nodule collection, and (iv) developing onshore technology to process collected polymetallic nodules into a manganese silicate product, and an intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy product and/or end-products like nickel and cobalt sulfates, and copper cathode.
Impact severity will depend on the depth of sediment disturbance (expected to be approximately 5 centimeters based on modelling, laboratory tests, and recent collector tests completed in the CCZ by our subsidiary NORI and two other nodule contract-holders, Belgium’s Global Sea Mineral Resources NV (GSR) and the German’s BGR) and the impact this disturbance has on benthic ecosystem function.
Impact severity will depend on the depth of sediment disturbance (expected to be approximately 3-5 centimeters based on modelling, laboratory tests, and recent collector tests completed in the CCZ by our subsidiary NORI and two other nodule contract-holders, Belgium’s Global Sea Mineral Resources NV (GSR) and the German’s BGR) and the impact this disturbance has on benthic ecosystem function.
This data is further supplemented by over one thousand core sub-samples for geochemical analysis. Researchers also conducted the fourth annual recovery and redeployment of three oceanographic moorings within NORI Area D. The sensor payload on the moorings provides insights into the soundscape, regional oceanographic currents, and particulate organic carbon flux in the Eastern CCZ regions.
This data is supplemented by over one thousand core sub-samples for geochemical analysis. Researchers also conducted the fourth annual recovery and redeployment of three oceanographic moorings within NORI Area D. The sensor payload on the moorings provides insights into the soundscape, regional oceanographic currents, and particulate organic carbon flux in the Eastern CCZ regions.
Although we believe that the ISA will adopt the exploitation regulations and any necessary rules, regulations and procedures to facilitate the approval of a plan of work for exploitation by the thirtieth session as the ISA has indicated, there can be no assurances that the adoption of these regulations will not be delayed or halted paused as a result of the actions of ISA member States.
Although we believe that the ISA will adopt the exploitation regulations and any necessary rules, regulations and procedures to facilitate the approval of a plan of work for exploitation by the thirtieth session as the ISA has indicated, there can be no assurances that the adoption of these regulations will not be delayed or paused as a result of the actions of ISA member States.
This initial assessment indicates that development of the NORI mineral resource is potentially technically and economically viable; however, due to the preliminary nature of project planning and design, and the untested nature of the specific seafloor production systems at a commercial scale, economic viability has not yet been demonstrated.
This initial assessment indicates that development of the NORI mineral resource is potentially technically viable; however, due to the preliminary nature of project planning and design, and the untested nature of the specific seafloor production systems at a commercial scale, economic viability has not yet been demonstrated.
While the rates of payments are yet to be set by the ISA, the 1994 Implementation Agreement (Section 8(1)(b)) prescribes that the rates of payments “shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage.” 41 Table of Contents An open-ended working group has been formed and has met numerous times to discuss potential ISA royalty and sponsoring State taxation regimes supported by modelling conducted by the Massachusetts Institute of Technology.
While the rates of payments are yet to be set by the ISA, the 1994 Implementation Agreement (Section 8(1)(b)) prescribes that the rates of payments “shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage.” 38 Table of Contents An open-ended working group has been formed and has met numerous times to discuss potential ISA royalty and sponsoring State taxation regimes supported by modelling conducted by the Massachusetts Institute of Technology.
AMC subsequently compiled the NORI Technical Report Summary, dated March 2021, which included an initial assessment and an economic analysis of NORI Area D prepared in accordance with the SEC Mining Rules. The NORI Technical Report Summary is filed as Exhibit 96.1 to this Annual Report. TOML.
AMC subsequently compiled the NORI Technical Report Summary, dated March 2021, which included an initial assessment and an economic analysis of NORI Area D prepared in accordance with the SEC Mining Rules. The NORI Technical Report Summary is filed as Exhibit 96.1 to this Annual Report.
(ii) Commercial offshore nodule collection system development: We are working with our strategic partner and investor, Allseas, to develop a system to collect, lift and transport nodules from the seafloor to shore. The offshore collection system consists of nodule collector vehicles on the seafloor, a riser and lift system, and a surface production support vessel.
(ii) Commercial offshore nodule collection system development: We are working with our strategic partner and investor, Allseas, to develop a system to collect, lift and transport nodules from the seafloor to shore. The offshore collection system consists of nodule collector vehicles on the seafloor, a riser and lift system, a surface production support vessel and a surface nodule transfer vessel.
Our mission is to build a carefully managed, shared stock of metal (a “metal commons”) that can be used, recovered and reused for generations to come. Significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rapidly rising demand.
Our mission is to build a carefully managed, shared stock of metal (a “metal commons”) that can be used, recovered and reused for generations to come. Significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rising demand.
Toxic levels of heavy elements often found in land orebodies typically need to be removed, stored, and maintained indefinitely; a real challenge on seismically active and wet tropical islands in countries like Indonesia that accounts for most of the growth in nickel supply. 13 Table of Contents As a result of a vigorous campaign by several non-governmental organizations, some participants in the EV supply chain have called for a general moratorium on all forms of deep seabed mining until there is more knowledge about marine impacts of nodule collection operations.
Toxic levels of heavy elements often found in land orebodies typically need to be removed, stored, and maintained indefinitely; a real challenge on seismically active and wet tropical islands in countries like Indonesia that accounts for most of the growth in nickel supply. 11 Table of Contents As a result of a vigorous campaign by several non-governmental organizations, some participants in the EV supply chain have called for a general moratorium on all forms of deep seabed mining until there is more knowledge about marine impacts of nodule collection operations.
Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves. Collection and Processing of Polymetallic Nodules Collection and Shipping We are planning a phased development for NORI Area D.
Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves. Collection and Processing of Polymetallic Nodules Collection, Transfer and Shipping We are planning a phased development for NORI Area D.
No commercial polymetallic nodule collection operations have started anywhere in the world. Currently, exploration activities undertaken are aimed at gathering the necessary information on the location, quality and quantity of the minerals of the seabed as well as collecting the necessary environmental baseline information.
No commercial polymetallic nodule collection operations have started anywhere in the world. Currently, exploration activities undertaken are aimed at gathering the necessary information on the location, quality and quantity of the minerals of the seabed as well as collecting the necessary environmental and social baseline information.
Environmental Regulation The ISA is mandated through UNCLOS to “preserve and protect the marine environment” while developing the resources within the Area. Given the location of the NORI Contract Area, the ISA is responsible for assessing any ESIA prepared by NORI and for granting the relevant permits.
Environmental Regulation The ISA is mandated through UNCLOS to “preserve and protect the marine environment” while developing the resources within the Area. Given the location of the NORI Contract Area, the ISA is responsible for assessing the ESIA prepared by NORI and for granting the relevant permits.
The experience from the development and testing program of the pilot system are now informing the design of upgrades and modifications into the initial smaller scale commercial production system which is expected to serve as the basis for the design of a full-scale commercial production system.
The experience from the development and testing program of the pilot system is now informing the design of upgrades and modifications into the initial smaller-scale commercial production system, which is expected to serve as the basis for the design of a full-scale commercial production system.
Both of these contract areas are in the exploration stage. ​ 26 Table of Contents Summary Mineral Resources, In-Situ, at end of the fiscal year ended December 31, 2023 at 4kg/m2 abundance cut-off and based on nickel metal $16,472/t; copper metal $6,872/t; cobalt metal $46,333/t; manganese in manganese silicate $4.50/dmtu Mn. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Measured + ​ ​ ​ ​ ​ ​ Measured mineral ​ Indicated mineral ​ indicated mineral ​ Inferred mineral ​ resources ​ resources ​ resources ​ resources ​ Million ​ Million ​ Million ​ Million ​ ​ ​ tonnes ​ Grades ​ tonnes ​ Grades ​ tonnes ​ Grades ​ tonnes ​ Grades ​ ​ (wet) ​ (%) ​ (wet) ​ (%) ​ (wet) ​ (%) ​ (wet) ​ (%) Ni ​ ​ ​ ​ ​ ​ ​ ​ NORI ​ ​ ​ ​ ​ ​ ​ ​ NORI Area A ​ — ​ — — — — — 72 1.35 NORI Area B ​ — ​ — — — — — 36 1.43 NORI Area C ​ — ​ — — — — — 402 1.26 NORI Area D 4 1.42 341 1.40 345 1.40 11 1.38 TOML (Areas A to F) 2.6 1.33 69.6 1.35 72.2 1.35 696 1.29 Total 6.6 1.38 410.6 1.39 417.2 1.39 1,217 1.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cu NORI NORI Area A ​ — ​ — — — — — 72 1.06 NORI Area B ​ — ​ — — — — — 36 1.13 NORI Area C ​ — ​ — — — — — 402 1.03 NORI Area D 4 1.16 341 1.14 345 1.14 11 1.14 TOML (Areas A to F) 2.6 1.05 69.6 1.18 72.2 1.18 696 1.14 Total 6.6 1.12 410.6 1.15 417.2 1.15 1,217 1.10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Co NORI NORI Area A ​ — ​ — — — — — 72 0.22 NORI Area B ​ — ​ — — — — — 36 0.25 NORI Area C ​ — ​ — — — — — 402 0.21 NORI Area D 4 0.13 341 0.14 345 0.14 11 0.12 TOML (Areas A to F) 2.6 0.23 69.6 0.21 72.2 0.21 696 0.20 Total 6.6 0.17 410.6 0.15 417.2 0.15 1,217 0.21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mn NORI NORI Area A ​ — ​ — — — — — 72 28.0 NORI Area B ​ — ​ — — — — — 36 28.9 NORI Area C ​ — ​ — — — — — 402 28.3 NORI Area D 4 32.2 341 31.2 345 31.2 11 31.0 TOML (Areas A to F) 2.6 27.6 69.6 30.3 72.2 30.2 402 29.0 Total 6.6 30.4 410.6 31.0 417.2 31.0 923 28.6 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
Both of these contract areas are in the exploration stage. ​ 25 Table of Contents Summary Mineral Resources, In-Situ, at end of the fiscal year ended December 31, 2024 at 4kg/m 2 abundance cut-off and based on nickel metal $16,472/t; copper metal $6,872/t; cobalt metal $46,333/t; manganese in manganese silicate $4.50/dmtu Mn. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Measured + ​ ​ ​ ​ ​ ​ Measured mineral ​ Indicated mineral ​ indicated mineral ​ Inferred mineral ​ resources ​ resources ​ resources ​ resources ​ Million ​ Million ​ Million ​ Million ​ ​ ​ tonnes ​ Grades ​ tonnes ​ Grades ​ tonnes ​ Grades ​ tonnes ​ Grades ​ ​ (wet) ​ (%) ​ (wet) ​ (%) ​ (wet) ​ (%) ​ (wet) ​ (%) Ni ​ ​ ​ ​ ​ ​ ​ ​ NORI ​ ​ ​ ​ ​ ​ ​ ​ NORI Area A ​ — ​ — — — — — 72 1.35 NORI Area B ​ — ​ — — — — — 36 1.43 NORI Area C ​ — ​ — — — — — 402 1.26 NORI Area D 4 1.42 341 1.40 345 1.40 11 1.38 TOML (Areas A to F) 2.6 1.33 69.6 1.35 72.2 1.35 696 1.29 Total 6.6 1.38 410.6 1.39 417.2 1.39 1,217 1.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cu NORI NORI Area A ​ — ​ — — — — — 72 1.06 NORI Area B ​ — ​ — — — — — 36 1.13 NORI Area C ​ — ​ — — — — — 402 1.03 NORI Area D 4 1.16 341 1.14 345 1.14 11 1.14 TOML (Areas A to F) 2.6 1.05 69.6 1.18 72.2 1.18 696 1.14 Total 6.6 1.12 410.6 1.15 417.2 1.15 1,217 1.10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Co NORI NORI Area A ​ — ​ — — — — — 72 0.22 NORI Area B ​ — ​ — — — — — 36 0.25 NORI Area C ​ — ​ — — — — — 402 0.21 NORI Area D 4 0.13 341 0.14 345 0.14 11 0.12 TOML (Areas A to F) 2.6 0.23 69.6 0.21 72.2 0.21 696 0.20 Total 6.6 0.17 410.6 0.15 417.2 0.15 1,217 0.21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mn NORI NORI Area A ​ — ​ — — — — — 72 28.0 NORI Area B ​ — ​ — — — — — 36 28.9 NORI Area C ​ — ​ — — — — — 402 28.3 NORI Area D 4 32.2 341 31.2 345 31.2 11 31.0 TOML (Areas A to F) 2.6 27.6 69.6 30.3 72.2 30.2 402 29.0 Total 6.6 30.4 410.6 31.0 417.2 31.0 923 28.6 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
During exploration, NORI is required to, among other things: ● submit an annual report to the ISA; ● meet certain performance and expenditure commitments; ● pay an annual overhead charge to cover the costs incurred by the ISA in administering and supervising the contract; ● implement training programs for personnel of the ISA and developing countries in accordance with an approved training program; ● take measures to prevent, reduce, and control pollution and other hazards to the marine environment arising from its activities in the CCZ; ● maintain appropriate insurance policies; ● establish environmental baselines against which to assess the likely effects of its program of activities on the marine environment; and ● establish and implement a program to monitor and report on such effects.
During exploration, NORI is required to, among other things: ● implement the agreed plan of work; ● submit an annual report to the ISA; ● meet certain performance and expenditure commitments; ● pay an annual overhead charge to cover the costs incurred by the ISA in administering and supervising the contract; ● implement training programs for personnel of the ISA and developing countries in accordance with an approved training program; ● take measures to prevent, reduce, and control pollution and other hazards to the marine environment arising from its activities in the CCZ; ● maintain appropriate insurance policies; ● establish environmental baselines against which to assess the likely effects of its program of activities on the marine environment; and ● establish and implement a program to monitor and report on such effects.
Environmental and social baseline studies are being conducted and NORI has engaged several leading deep-sea research institutions and scientists to contribute to our environmental and social impact assessment program, consisting of over 100 discrete studies. 42 Table of Contents NORI’s offshore exploration campaigns have included sampling to support environmental studies, collection of high-resolution imagery, full column physical and chemical oceanographic data and environmental baseline studies.
Environmental and social baseline studies are being conducted, and NORI has engaged several leading deep-sea research institutions and scientists to contribute to our environmental and social impact assessment program, consisting of over 100 discrete studies. 39 Table of Contents NORI’s offshore exploration campaigns have included sampling to support environmental studies, collection of high-resolution imagery, full column physical and chemical oceanographic data and environmental baseline studies.
Due to the resulting vegetation change, mining activities cause carbon sequestration services loss of 4.8 grams and 6.5 grams of CO 2 e respectively for nickel, and 9.3 grams of CO 2 e for cobalt per year. ​ ​ 16 Table of Contents As a precautionary environmental management and protection measure, the ISA has already set aside 43% of the CCZ as protected areas or 1.97 million square kilometers, or Areas of Particular Environmental Interest (APEIs) aiming to ensure that all types of habitats that could be impacted by exploitation are represented within APEIs.
Due to the resulting vegetation change, mining activities cause carbon sequestration services loss of 4.8 grams and 6.5 grams of CO 2 e respectively for nickel, and 9.3 grams of CO 2 e for cobalt per year. 13 Table of Contents ​ ​ As a precautionary environmental management and protection measure, the ISA has already set aside 43% of the CCZ or 1.97 million square kilometers as protected areas, or Areas of Particular Environmental Interest (APEIs), aiming to ensure that all types of habitats that could be impacted by exploitation are represented and preserved within APEIs.
Further to our non-binding term sheet entered into in March 2022 with Allseas, we continue discussions with Allseas regarding the specifics of these upgrades and the continued development of the Project Zero Offshore Nodule Collection System and anticipate reaching definitive agreements on commercial terms and key terms around continued development and commercial operations with Allseas before the submission of the NORI exploitation application in 2024.
Further to our non-binding term sheet entered into in March 2022 with Allseas, we continue discussions with Allseas regarding the specifics of these upgrades and the continued development of the Project Zero Offshore Nodule Collection System and anticipate reaching definitive agreements on commercial terms and key terms around continued development and commercial operations with Allseas before the submission of the NORI exploitation application in 2025.
An LCA white paper examining a comprehensive set of impacts was commissioned by us and co-authored by certain of our executive officers in 2018 and reviewed by subject matter specialists and published on our website in April 2020; an LCA research paper focusing on climate change impacts was peer-reviewed and published in the Elsevier Journal of Cleaner Production in December 2020, an LCA research paper focusing on solid waste streams was peer-reviewed and published in the Yale Journal of Industrial Ecology in January 2022 and an independent LCA compliant with the International Organization for Standardization Standard 14040 on our NORI Area D project was conducted by Benchmark and released in March 2023.
An LCA white paper examining a comprehensive set of impacts was commissioned by us and co-authored by certain of our executive officers in 2018 and reviewed by subject matter specialists and published on our website in April 2020; an LCA research paper focusing on climate change impacts was peer-reviewed and published in the Elsevier Journal of Cleaner Production in December 2020; an LCA research paper focusing on solid waste streams was peer-reviewed and published in the Yale Journal of Industrial Ecology in January 2022 and an independent LCA compliant with the International Organization for Standardization Standard 14040 on our NORI Area D project was conducted by Benchmark Minerals Intelligence (“Benchmark”) and released in March 2023.
The key activities completed during campaign 8a were box cores, multicores, benthic and covariance lander works, and megafauna and sedimentation survey around the test field area. 25 Table of Contents Notwithstanding that Campaign 8a was subject to coordinated disruptive activities by Greenpeace International (“Greenpeace”) designed to prevent and obstruct the campaign, it was successfully completed on December 28, 2023.
The key activities completed during Campaign 8A were box cores, multicores, benthic and covariance lander works, and megafauna and sedimentation survey around the test field area. 23 Table of Contents Notwithstanding that Campaign 8A was subject to coordinated disruptive activities by Greenpeace International (“Greenpeace”) designed to prevent and obstruct the campaign, it was successfully completed on December 28, 2023.
The ISA has issued a total of 19 polymetallic nodule exploration contracts covering approximately 1.28 million square kilometers, or 0.4% of the global seafloor, 17 of which are in the CCZ. We hold exclusive exploration and commercial rights to three of the 17 polymetallic nodule contract areas in the CCZ through our subsidiaries Nauru Ocean Resources Inc.
The ISA has issued a total of 19 polymetallic nodule exploration contracts covering approximately 1.28 million square kilometers, or 0.4% of the global seafloor, 17 of which are in the CCZ. We hold exclusive exploration and commercial rights to two of the 17 polymetallic nodule contract areas in the CCZ through our subsidiaries Nauru Ocean Resources Inc.
We have chosen a capital-light approach to our operations and have focused on forming deep strategic partnerships with leading offshore and onshore companies. Our key strategic alliances include: Allseas: Allseas, a leading global offshore contractor, has developed and successfully tested the pilot nodule collection system in the NORI Area D, completed in the fourth quarter of 2022.
We have chosen a capital-light approach to our operations and have focused on forming deep strategic partnerships with leading offshore and onshore companies. Our key strategic alliances include: Allseas: Allseas, a leading global offshore contractor, developed and tested a pilot nodule collection system in the NORI Area D, completed in the fourth quarter of 2022.
Pursuant to the Amendment, the cash fee payable pursuant to the PMTA was amended such that we would pay to Allseas (i) $10,000,000 on June 30, 2021 (which we subsequently amended with Allseas to change to within 10 business days of the Closing of the Business Combination in a further amendment; this amount was paid on October 5, 2021), (ii) $10,000,000 on the later of January 1, 2022 and such time that confirmation is received with respect to the successful completion of the North Sea drive test, which was paid on April 25, 2022, and (iii) $10,000,000 upon successful completion of the pilot trials in the CCZ using the PMTS which was settled through the issuance of 10 million Common Shares in February 2023, along with additional costs owed Allseas under the PMTA in 850,000 Common Shares, in each case, priced at $1.00 per share under the fifth amendment to the PMTA.
Pursuant to the Amendment, the cash fee payable pursuant to the PMTA was amended such that we would pay to Allseas (i) $10,000,000 on June 30, 2021 (which we subsequently amended with Allseas to change to within 10 business days of September 9, 2021 in a further amendment; this amount was paid on October 5, 2021), (ii) $10,000,000 on the later of January 1, 2022 and such time that confirmation is received with respect to the successful completion of the North Sea drive test, which was paid on April 25, 2022, and (iii) $10,000,000 upon successful completion of the pilot trials in the CCZ using the PMTS which was settled through the issuance of 10 million Common Shares in February 2023, along with additional costs owed Allseas under the PMTA in 850,000 Common Shares, in each case, priced at $1.00 per share under the fifth amendment to the PMTA.
Metal production from nodules will reduce biomass at risk by over 90% compared to producing the same amount of metals from conventional land ores. In contrast, land-based mining for nickel and cobalt occurs in diverse countries as identified by Benchmark in a study commissioned by us and published in November 2023.
Metal production from nodules could reduce biomass at risk by over 90% compared to producing the same amount of metals from conventional land ores. ​ In contrast, land-based mining for nickel and cobalt occurs in diverse countries as identified by Benchmark in a study commissioned by us and published in November 2023.
If the Council does not take a decision on the Commission’s recommendation within 60 days, the recommendation shall be deemed to have been approved by the Council. In addition, the sponsoring State has a responsibility to put in place legislation to ensure the entity it has sponsored complies with UNCLOS and ISA rules and regulations.
If the Council does not take a decision on the LTC’s recommendation within 60 days, the recommendation shall be deemed to have been approved by the Council. In addition, the sponsoring State has a responsibility to put in place legislation to ensure the entity it has sponsored complies with UNCLOS and ISA rules and regulations.
In so doing, the ISA has the mandate to regulate all mineral related activities in the Area for the benefit of humankind and ensure the effective protection of the marine environment from harmful effects that may arise from deep-seabed related activities. The ISA is comprised of UNCLOS signatories, 168 Member States, and the European Union.
In so doing, the ISA has the mandate to regulate all mineral related activities in the Area for the benefit of humankind and ensure the effective protection of the marine environment from harmful effects that may arise from deep-seabed related activities. The ISA is comprised of UNCLOS signatories, 169 Member States, and the European Union.
Furthermore, metal production from land ores can release several toxic streams into the surrounding environment which can negatively impact the health of local communities and ecosystems. We believe using nodules to produce critical metals can help reduce several of these impacts associated with mining land ores.
Furthermore, metal production from land ores can release several toxic streams into the surrounding environment which can negatively impact the health of local communities and ecosystems. We believe using nodules to produce the critical metals contained therein can help reduce several of these impacts associated with mining land ores.
Pursuant to Article 165(2)(b) of the Convention and Paragraph 11(a) of the 1994 Agreement, an application for a Plan of Work is first reviewed by the LTC and a recommendation concerning the approval of the Plan of Work is submitted by the LTC to the Council. Rule 44 of the Commission’s Rules of Procedure requires decision making by consensus.
Pursuant to Article 165(2)(b) of the Convention and Paragraph 11(a) of the 1994 Agreement, an application for a Plan of Work is first reviewed by the LTC and a recommendation concerning the approval of the Plan of Work is submitted by the LTC to the Council. Rule 44 of the LTC’s Rules of Procedure requires decision making by consensus.
The CCZ is a geological submarine fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 kilometers (4,500 miles) that spans approximately 4,500,000 square kilometers (1,700,000 square miles).
The CCZ is a geological submarine fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 kilometers (4,500 miles) that spans approximately 4,500,000 square kilometers (1,737,000 square miles).
Additional standards and guidelines will be drafted as part of the development of Phase 2 and 3. Although the environmental impact review process has not yet been finalized, all contractors have been made aware that the ISA requires the completion of baseline studies and EIA, culminating in an EIS for proposed commercial operations, prior to collection.
Additional standards and guidelines will be drafted as part of the development of Phase 2 and 3. Although the environmental impact review process has not yet been finalized, all contractors have been made aware that the ISA requires the completion of baseline studies and Environmental Impact Assessment (“EIA”), culminating in an EIS for proposed commercial operations, prior to collection.
An extended pilot demonstration program utilizing existing kilns and furnaces at PAMCO’s Hachinohe, Japan facility is expected to treat a 2,000 tonne sample of polymetallic nodules collected during the successful pilot nodule collector test completed by Allseas in November 2022 on NORI Area D, with the goal of optimizing the furnace refractory selection and confirm commercial scale operating parameters such as tapping temperatures and dusting rates when treating nodules through the Hachinohe facility.
An extended pilot demonstration program utilizing existing kilns and furnaces at PAMCO’s Hachinohe, Japan facility is in progress, treating a 2,000-tonne sample of polymetallic nodules collected during the successful pilot nodule collector test completed by Allseas in November 2022 on NORI Area D, with the goal of optimizing the furnace refractory selection and confirm commercial scale operating parameters such as tapping temperatures and dusting rates when treating nodules through the Hachinohe facility.
An extended pilot demonstration program utilizing existing kilns and furnaces at PAMCO’s Hachinohe, Japan facility is expected to treat a 2,000 tonne sample of polymetallic nodules collected during the successful pilot nodule collector test completed by Allseas in November 2022 on the NORI Area D, with the goal of optimizing the furnace refractory selection and confirm commercial scale operating parameters such as tapping temperatures and dusting rates when treating nodules through the Hachinohe facility.
An extended pilot demonstration program utilizing existing kilns and furnaces at PAMCO’s Hachinohe, Japan facility is in progress, treating a 2,000 tonne sample of polymetallic nodules collected during the successful pilot nodule collector test completed by Allseas in November 2022 on the NORI Area D, with the goal of optimizing the furnace refractory selection and confirm commercial scale operating parameters such as tapping temperatures and dusting rates when treating nodules through the Hachinohe facility.
The Glencore Offtake Agreements only apply with respect to metals processed and developed from the NORI areas that are processed by a facility owned or controlled by DGE and do not apply to other projects (including for example Marawa or TOML). Concurrent with entering into the Glencore Offtake Agreements, Glencore made an equity investment of $5 million into our Company.
The Glencore Offtake Agreements only apply with respect to metals processed and developed from the NORI areas that are processed by a facility owned or controlled by DGE and do not apply to other projects (including TOML). Concurrent with entering into the Glencore Offtake Agreements, Glencore made an equity investment of $5 million into our Company.
The ISA Council may suspend or terminate the TOML Exploration Contract, without prejudice to any other rights that the ISA may have, if any of the following events occur: ● if, in spite of written warnings by the ISA, TOML has conducted its activities in such a way that results in serious persistent and willful violations of the fundamental terms of this contract, Part XI of UNCLOS, the 1994 Agreement and the rules, regulations and procedures of the ISA; ● if TOML has failed to comply with a final binding decision of the dispute settlement body applicable to it; ● if TOML becomes insolvent or commits an act of bankruptcy or enters into any agreement for composition with its creditors or goes into liquidation or receivership, whether compulsory or voluntary; or ● petitions or applies to any tribunal for the appointment of a receiver or a trustee for itself or commences any proceedings relating to bankruptcy, insolvency or readjustment of debt law, whether now or hereafter in effect, other than for the purpose of reconstruction.
The ISA Council may suspend or terminate the TOML Exploration Contract, without prejudice to any other rights that the ISA may have, if any of the following events occur: ● if, in spite of written warnings by the ISA, TOML has conducted its activities in such a way that results in serious persistent and willful violations of the fundamental terms of this contract, Part XI of UNCLOS, the 1994 Agreement and the rules, regulations and procedures of the ISA: to this point, TOML is compliant and has never received a written warning from the ISA; ● if TOML has failed to comply with a final binding decision of the dispute settlement body applicable to it; ● if TOML becomes insolvent or commits an act of bankruptcy or enters into any agreement for composition with its creditors or goes into liquidation or receivership, whether compulsory or voluntary; or ● petitions or applies to any tribunal for the appointment of a receiver or a trustee for itself or commences any proceedings relating to bankruptcy, insolvency or readjustment of debt law, whether now or hereafter in effect, other than for the purpose of reconstruction.
All parties to UNCLOS are members of the ISA. Two principal entities establish the policies and govern the work of the ISA: the Assembly, where all 169 members are represented (the “Assembly”), and a 36-member council elected by the Assembly (the “Council”).
All parties to UNCLOS are members of the ISA. Two principal entities establish the policies and govern the work of the ISA: the Assembly, where all 170 members are represented (the “Assembly”), and a 36-member council elected by the Assembly (the “Council”).
NORI is a Nauruan incorporated entity and is subject to applicable Nauruan legislation and regulations. 39 Table of Contents The TOML Exploration Contract In March 2020, we acquired TOML from Deep Sea Mining Finance Limited, providing us with exclusive rights to explore a 74,713 square kilometers area of the CCZ seabed.
NORI is a Nauruan incorporated entity and is subject to applicable Nauruan legislation and regulations. The TOML Exploration Contract In March 2020, we acquired TOML from Deep Sea Mining Finance Limited, providing us with exclusive rights to explore a 74,713 square kilometers area of the CCZ seabed.
The ISA requires that a contractor obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and that such nation maintains effective supervision and regulatory control over such sponsored contractor.
The ISA requires that a contractor obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and such nation must maintain effective supervision and regulatory control over such sponsored contractor.
If our nodules are to be processed and refined in the United States (“U.S.”), we can also compress the current supply chain that some materials need to travel before reaching the U.S. of 50,000 miles down to 1,500 miles, while reducing dependency on China which dominates refining for battery metals such as nickel, cobalt and manganese.
If our nodules are to be processed and refined in the United States (“U.S.”), we can also compress the current supply chain that some materials need to travel before reaching the U.S. from 50,000 miles down to 1,500 miles, while reducing dependency on China which dominates refining for critical metals such as nickel, cobalt and manganese.
The estimated mineral resources in these areas were determined in 2021 as of December 31, 2020, and also reflect the estimated mineral resources as of December 31, 2023, as none of the mineral resources in these areas were depleted by mining or any other activities.
The estimated mineral resources in these areas were determined in 2021 as of December 31, 2020, and also reflect the estimated mineral resources as of December 31, 2024, as none of the mineral resources in these areas were depleted by mining or any other activities.
The costs of processing polymetallic nodules will also be estimated to help finalize the definitive processing agreement. 33 Table of Contents In parallel, PAMCO is continuing to study the addition of a converting facility to process the intermediate alloy to nickel-copper-cobalt matte, which is an upgraded intermediate battery supply chain feedstock.
The costs of processing polymetallic nodules will also be estimated to help finalize the definitive processing agreement. In parallel, PAMCO is continuing to study the addition of a converting facility to process the intermediate alloy to nickel-copper-cobalt matte, which is an upgraded intermediate battery supply chain feedstock.
These all involve EHS systems incorporating thorough planning, risk assessment and disciplined implementation of controls as well as culturally-based safety observations systems like safe act observations and obligation of “stop work if it is unsafe to proceed”. 44 Table of Contents Available Information Our internet address is https://themetals.co , to which we regularly post copies of our press releases as well as additional information about us.
These all involve EHS systems incorporating thorough planning, risk assessment and disciplined implementation of controls as well as culturally-based safety observations systems like safe act observations and obligation of “stop work if it is unsafe to proceed”. 41 Table of Contents Available Information Our internet address is https:// metals.co , to which we regularly post copies of our press releases as well as additional information about us.
Additionally, we do not have the applicable environmental and/or other permits required to build and operate commercial-scale polymetallic nodule processing and refining plants on land. 4 Table of Contents Polymetallic Nodules Deep-sea polymetallic nodules form on and just below the sediment-covered seafloor of the abyssal plains.
Additionally, we do not have the applicable environmental and/or other permits required to build and operate commercial-scale polymetallic nodule processing and refining plants on land. Polymetallic Nodules Deep-sea polymetallic nodules form on and just below the sediment-covered seafloor of the abyssal plains.
While end-uses driven by the energy transition represent a small fraction of the total use of the four metals contained in polymetallic nodules today, we believe that the relative use of these four metals by EV’s and other energy transition is set to increase significantly over the next decades.
While end-uses driven by the energy transition represent a small fraction of the total use of the four metals contained in polymetallic nodules today, we believe that the relative use of these four metals by EVs and other energy transition systems is set to increase significantly over the next decades.
The monitoring was undertaken using the Island Pride, a vessel contracted from Ocean Infinity Group Limited, deploying 2 remotely operated vehicles (“ROVs”), 3 autonomous underwater vehicles (“AUVs”) and an array of more than 50 seafloor sensors, supervised by multiple teams of scientists and sediment plume expert consultants, DHI Water and Environment Inc. and HR Wallingford.
The monitoring was undertaken using the Island Pride , a vessel contracted from Ocean Infinity Group Limited, deploying 2 remotely operated vehicles (“ROVs”), 3 autonomous underwater vehicles (“AUVs”) and an array of more than 50 seafloor sensors, supervised by multiple teams of scientists and sediment plume expert consultants, DHI Water and Environment Inc. and HR Wallingford who conducted a sound assessment.
Additionally using a remotely operated vehicle, the research team deployed innovative seafloor lander systems that are capable of measuring seafloor oxygen fluxes using eddy covariance methods. This resulted in over 600 hours of data acquisition at a maximum deployment depth of 4,285 meters, which we believe is the first time these bespoke sensor suites have been deployed at abyssal depths.
Additionally, using a remotely operated vehicle, the research team deployed innovative seafloor lander systems capable of measuring seafloor oxygen fluxes using eddy covariance methods. This resulted in over 600 hours of data acquisition at a maximum deployment depth of 4,285 meters, which is the first time these bespoke sensor suites have been deployed at abyssal depths.
In 2022, we undertook the collector test monitoring campaigns which involved completion of pre-collector test baseline data collection, monitoring of the collector test to and completion of post collection surveys to determine the immediate collector impact to the environment.
In 2022, we undertook the collector test monitoring campaigns which included completion of pre-collector test baseline data collection, monitoring of the collector test and completion of post collection surveys to determine the immediate impact to the environment of the collector.
Given the wide range of environmental and social impacts associated with conventional land-based mining, we believe it is important to ensure that these large amounts of critical metals are sourced with the lowest environmental, social, and economic impacts possible.
Given the wide range of environmental and social impacts associated with conventional land-based mining, we believe it is important to ensure that these large amounts of critical metals contained in nodules are sourced with the lowest environmental, social, and economic impacts possible.
Item 1. BUSINESS Overview We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone (“CCZ”), about 1,300 nautical miles (1,500 miles or 2,400 kilometers) south-west of San Diego, California.
Item 1. BUSINESS Overview We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone (“CCZ”), approximately 1,500 miles (or 2,400 kilometers) south-west of San Diego, California.
These nodules contain significant amounts of metals, and their unique characteristic compared to terrestrial deposits is the presence of the four critical metals, nickel, copper, cobalt and manganese, in one deposit. ​ Source: TMC inaugural Impact Report 2021, filed May 2022 ​ 5 Table of Contents Additionally, polymetallic nodules in the CCZ possess the following characteristics: ​ Characteristic ​ What it means Far removed from human communities ​ No need for social displacement No vegetation or other obstructions covering access to nodules ​ No need to remove overburden, no rock cutting or blasting Unbound to the seafloor, 90% of nodule mass in the top 5 cm of seafloor ​ No need for destructive rock cutting and excavation High grades of four critical metals in a single ore ​ Less mass to process compared to land ores Low head-grade variability ​ Potentially easy to process 2-10 cm diameter ​ Potentially easy to handle Microporous ​ Potentially easy to smelt Very low concentrations of certain hazardous elements like arsenic, antimony and mercury ​ Potential to productize almost 100% of nodule mass and design a metallurgical flowsheet that generates no tailings and leaves almost no solid waste streams behind ​ The above characteristics of polymetallic nodules may provide an opportunity to compress lifecycle environmental and social impacts of producing critical metals as compared to land ores.
These nodules contain significant amounts of metals, and their unique characteristic compared to terrestrial deposits is the presence of the four critical metals, nickel, copper, cobalt and manganese, in one deposit. ​ 5 Table of Contents Polymetallic nodules in the CCZ possess the following characteristics: ​ Characteristic ​ What it means Far removed from human communities ​ No need for social displacement No vegetation or other obstructions covering access to nodules ​ No need to remove overburden, no rock cutting or blasting Unbound to the seafloor, 96% of nodule mass in the top 5 cm of seafloor ​ No need for destructive rock cutting and excavation High grades of four critical metals in a single ore ​ Less mass to process compared to land ores Low head-grade variability ​ Potentially easy to process 2-10 cm diameter ​ Potentially easy to handle Microporous ​ Potentially easy to smelt Very low concentrations of certain hazardous elements like arsenic, antimony and mercury ​ Potential to productize almost 100% of nodule mass and design a metallurgical flowsheet that generates no tailings and leaves almost no solid waste streams behind ​ The above characteristics of polymetallic nodules may provide an opportunity to compress lifecycle environmental and social impacts of producing the critical metals contained in nodules as compared to land ores.
While most of these reductions are attributable to the unique characteristics of the polymetallic nodule resource as described above, the elimination of solid processing waste streams onshore is due to our investment in a near-zero-waste flowsheet design and part of the low carbon emissions are due to our commitment to locate onshore processing facilities in places with access to low carbon power. ​ ​ Benchmark modeled the land-based processing routes with background ecoinvent data and foreground data from two expert chemical engineers in the nickel and cobalt industry.
While most of these reductions are attributable to the unique characteristics of the polymetallic nodule resource as described above, the elimination of solid processing waste streams onshore is due to our investment in a near-zero-waste flowsheet design and part of the low carbon emissions are due to our strong preference to locate onshore processing facilities in places with access to low-carbon power. 12 Table of Contents ​ ​ Benchmark modeled the land-based processing routes with background ecoinvent data and foreground data from two expert chemical engineers in the nickel and cobalt industry.
The Regulations state that a contractor who has an approved plan of work for exploration only shall have a preference and a priority among applicants submitting plans of work for collection of the same area and resources.
The Regulations state that a contractor who has an approved plan of work for exploration only shall have a preference and a priority among applicants submitting 37 Table of Contents plans of work for collection of the same area and resources.
This plan includes initially toll treating polymetallic nodules at existing RKEF plants, utilizing existing excess industry capacity. We believe that there is significant interest to deploy underutilized RKEF plants which may have become stranded as a result of the Indonesian government nickel laterite ore export ban restricting supply of the nickel laterite feedstock that they have previously utilized.
This plan includes initially toll treating polymetallic nodules at existing RKEF plants, utilizing existing excess industry capacity. We believe that there is significant interest to deploy underutilized RKEF plants which may now have increased capacity capabilities as a result of the Indonesian government nickel laterite ore export ban restricting supply of the nickel laterite feedstock that they have previously utilized.
Summary of Mineral Resources Below is a summary table of estimated mineral resources in NORI and TOML contract areas as of December 31, 2023.
Summary of Mineral Resources Below is a summary table of estimated mineral resources in NORI and TOML contract areas as of December 31, 2024.
Under the new binding MoU: ● PAMCO, with our support, expects to complete the feasibility study by the third quarter of 2024; ● We will provide PAMCO with the exclusive right to the first 1.3Mtpa of the expected 3Mtpa of wet nodule collection capacity of our first nodule collection system until completion of the feasibility study; ● The parties will enter into good faith negotiations to finalize definitive processing agreements on completion of the feasibility study.
Under the new binding MoU: ● PAMCO, with our support, expects to complete the feasibility study by mid-2025; ● We will provide PAMCO with the exclusive right to the first 1.3Mtpa of the expected 3Mtpa of wet nodule collection capacity of our first nodule collection system until completion of the feasibility study; ● The parties will enter into good faith negotiations to finalize definitive processing agreements on completion of the feasibility study.
If a positive recommendation is submitted by the Commission to the Council concerning the approval of a Plan of Work, the Council is required to approve the Commission’s recommendation unless a two-thirds majority of its members present and voting, including a majority of members present and voting in each of the chambers of the Council, decides to disapprove the Plan of Work.
If a positive recommendation is submitted by the LTC to the Council concerning the approval of a Plan of Work, the Council is required to approve the LTC’s recommendation unless a two-thirds majority of its members present and voting, including a majority of members present and voting in each of the chambers of the Council, decides to disapprove the Plan of Work.
Under the binding MoU signed in November 2023: ● PAMCO, with our support, expects to complete the feasibility study by the third quarter of 2024. ● We will provide PAMCO with the exclusive right to the first 1.3Mtpa of the expected 3Mtpa of wet nodule collection capacity our first nodule collection system until completion of the feasibility study. ● The parties will enter into good faith negotiations to finalize definitive processing agreements on completion of the feasibility study.
Under the binding MoU signed in November 2023: ● PAMCO, with our support, expects to complete the feasibility study by mid-2025. ● We will provide PAMCO with the exclusive right to the first 1.3Mtpa of the expected 3Mtpa of wet nodule collection capacity from our first nodule collection system until completion of the feasibility study. ● The parties will enter into good faith negotiations to finalize definitive processing agreements on completion of the feasibility study.
NORI commissioned AMC Consulting Ltd, a leading mining consulting firm (AMC), to undertake a preliminary economic assessment (“PEA”) of the mineral resource contained in NORI Area D and to compile a technical report compliant with Canadian National Instrument (NI 43-101), which was completed in March 2021.
NORI commissioned AMC Consulting Ltd (“AMC”), a leading mining consulting firm, to undertake an Initial Economic Assessment of the mineral resource contained in NORI Area D and to compile a technical report compliant with Canadian National Instrument (NI 43-101), which was completed in March 2021.
In 2023, we relied on the EHS programs of our partners Allseas and a new offshore support service provider to conduct our operations in a safe manner and in compliance with applicable safety laws, rules and regulations.
In 2024, we relied on the EHS programs of our partners Allseas and an offshore support service provider to conduct our operations in a safe manner and in compliance with applicable safety laws, rules and regulations.
If we obtain an exploitation contract, we then plan to commence production offshore (“Project Zero”) at the end of the first quarter of 2026 using the Hidden Gem vessel which, subject to further modifications, is expected to be upgraded to a maximum capacity of 3.0 Mtpa of wet nodules.
If we obtain an exploitation contract, we then plan to commence production offshore (“Project Zero”) using the Hidden Gem vessel which, subject to further modifications, is expected to be upgraded to a maximum capacity of 3.0 Mtpa of wet nodules.
Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped source of critical battery metals.
Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped resource of these critical metals.
Please see the section entitled “ Risk Factors ” for additional information on the risks associated with our intellectual property strategy and portfolio. Human Capital As of December 31, 2023, we employed forty-six (46) employees and contractors. None of our staff are covered by collective bargaining agreements. Attracting Talent .
Please see the section entitled “ Risk Factors ” for additional information on the risks associated with our intellectual property strategy and portfolio. Human Capital As of December 31, 2024, we employed forty-seven (47) employees and contractors. None of our staff are covered by collective bargaining agreements. Attracting Talent .
Information contained in our website does not constitute a part of this Annual Report or our other filings with the SEC. Corporate Information TMC is a corporation existing under the laws of British Columbia, Canada.
Information contained in our website does not constitute a part of this Annual Report or our other filings with the SEC. Corporate Information We are a corporation existing under the laws of British Columbia, Canada.
While our Environmental & Social Impact Assessment (ESIA) for offshore nodule collection segment of the NORI Area D Nodule Project is still ongoing, based on already completed research into lifecycle impacts of battery metal production specifically from deep-sea polymetallic nodules, we identified how nodules can potentially provide an opportunity to significantly compress most lifecycle environmental, social and governance (ESG) impacts associated with conventional metal production from land-based ores. ​ ​ 14 Table of Contents To quantify environmental footprints of metal production from nodules as compared to conventional land ores, we commissioned several lifecycle assessments (“LCAs”) looking at the cradle-to-gate impacts of producing nickel, copper, cobalt and manganese products from polymetallic nodules and how it compares to land-based routes.
While our Environmental and Social Impact Assessment (“ESIA”) and Cultural Heritage Impact Assessment (“CHIA”) for offshore nodule collection segment of the NORI Area D project is still ongoing, based on already completed research into lifecycle impacts of critical metal production specifically from deep-sea polymetallic nodules, we identified how nodules can potentially provide an opportunity to significantly compress most lifecycle ESG impacts associated with conventional metal production from land ores. ​ ​ To quantify environmental footprints of metal production from nodules as compared to conventional land ores, we commissioned several lifecycle assessments (“LCAs”) looking at the cradle-to-gate impacts of producing nickel, copper, cobalt and manganese products from polymetallic nodules and how it compares to land-based routes.
In consideration of the exclusivity term, we have issued 4.15 million Common Shares (valued at $6.5 million) to Allseas on August 14, 2023. We expect that the definitive agreement with Allseas discussed above will extend the exclusive use of the Hidden Gem.
In consideration of the exclusivity term, we issued 4.15 million Common Shares to Allseas on August 14, 2023. We expect that the definitive agreement with Allseas discussed above will extend the exclusive use of the Hidden Gem .
The principal policy documents governing the Area, including the CCZ, include: ● the UNCLOS, of 10 December 1982; and ● the 1994 Implementation Agreement. 34 Table of Contents UNCLOS deals with, among other things, navigational rights, territorial sea limits, exclusive economic zone jurisdiction, the continental shelf, freedom of the high seas, legal status of resources on the seabed beyond the limits of national jurisdiction, passage of ships through narrow straits, conservation and management of living marine resources in the high seas, protection of the marine environment, marine scientific research, and settlement of disputes. ​ ​ Part XI of UNCLOS and the 1994 Implementation Agreement deal with mineral exploration and collection in the international seabed, known as the Area, providing a framework for entities to obtain legal title to areas of the seafloor from the ISA for the purpose of exploration and eventually collection of resources.
UNCLOS deals with, among other things, navigational rights, territorial sea limits, exclusive economic zone jurisdiction, the continental shelf, freedom of the high seas, legal status of resources on the seabed beyond the limits of national jurisdiction, passage of ships through narrow straits, conservation and management of living marine resources in the high seas, protection of the marine environment, marine scientific research, and settlement of disputes. ​ ​ Part XI of UNCLOS and the 1994 Implementation Agreement deal with mineral exploration and collection in the international seabed, known as the Area, providing a framework for entities to obtain legal title to areas of the seafloor from the ISA for the purpose of exploration and eventually collection of resources.
Prior research indicates that the density, diversity and function of fauna representing most of the resident biomass (including mobile, pelagic and microbial life) are expected to recover naturally over years to decades. However, a high level of uncertainty exists around recovery of fauna that requires the hard substrate of nodules for critical life function.
Prior research indicates that the density, diversity and function of fauna representing most of the resident biomass (including mobile, pelagic and microbial life) are expected to recover naturally over years to decades. Some uncertainty still exists around the recovery rate of fauna that requires the hard substrate of nodules for critical life function.
Nauru implemented the Nauru International Seabed Minerals Act in 2015 which NORI is required to comply with. NORI’s assessment is that it is in compliance with existing exploration permits and contracts.
Nauru implemented the Nauru International Seabed Minerals Act in 2015, which was amended and renamed to Nauru Seabed Minerals Authority Act in 2024, that NORI is required to comply with. NORI’s assessment is that it is in compliance with existing exploration permits and contracts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSummary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: ● Our business is subject to numerous regulatory uncertainties which, if not resolved in our favor, would have a material adverse impact on our business. ● Our resource development activities are subject to changes in government regulation and political instability. ● Changes to any of the laws, rules, regulations or policies to which we are subject could have a significant impact on our business. ● Our exploration, collecting, shipping, processing and refining activities are subject to extensive and costly environmental requirements, and current and future laws, regulations, and permits may impose significant costs, liabilities, or obligations, or could limit or prevent our ability to continue our operations as currently contemplated or to undertake new operations. ● There can be no assurance that the Environmental Impact Assessment Post Collector Test will be successful. ● We may become subject to environmental liabilities as a result of noncompliance or newly imposed regulations. ● The grade and quality of the polymetallic nodule deposits that we intend to develop are estimates, and there are no guarantees that such deposits will be suitable for collecting or commercialization. ● No seafloor polymetallic nodule deposit has ever been commercially collected, and our offshore collection technology and development plans and processes may not be sufficient to accomplish our objectives. ● Mineral resource estimates from the contract areas of NORI and TOML are only estimates. ● Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations. ● Uncertainty in our estimates of polymetallic nodule deposits could result in lower-than-expected revenues and higher costs. ● We operate in a highly competitive industry, and there are no assurances that our efforts will be successful. ● The prevailing market prices of nickel, manganese, copper, cobalt, and other commodities will have a material impact on our ability to achieve commercial success. ● We may be adversely affected by fluctuations in demand for nickel, manganese, copper, cobalt, and other commodities. ● We may experience difficulty in creating market acceptance for a novel manganese product. ● Negative perceptions related to the collection of polymetallic nodules could have a material adverse effect on our business. 45 Table of Contents ● Offshore nodule collection, shipping and onshore processing and refining operations pose inherent risks and costs that may negatively impact our business. ● Our business is contingent on our ability to successfully identify, collect, ship and process polymetallic nodules, and in doing so, we will need to rely on certain existing and future strategic relationships, some of which we may be unable to maintain and/or develop. ● Some of the offshore equipment that we will need to accomplish our objectives has not been manufactured and/or tested. ● Our business is substantially dependent on our strategic relationship with Allseas. ● The polymetallic nodules that we may recover will require specialized treatment and processing, and there is no certainty that such processes will result in a recovery of metals that is consistent with our expectations, or that we will be able to develop or otherwise access processing plants that are suitable for our purposes. ● Our exploration and polymetallic nodule collecting activities may be affected by natural hazards, which could have a material adverse effect on our business. ● Actual capital costs, financing strategies, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable metal production operations. ● We have a limited operating history, and there can be no assurance that we will be able to commercially develop our resource areas or achieve profitability in the future. ● We depend on key personnel for the success of our business.
Biggest changeSummary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: ● Our business is subject to numerous regulatory uncertainties which, if not resolved in our favor, would have a material adverse impact on our business. ● Our resource development activities are subject to changes in government regulation and political instability. ● Changes to any of the laws, rules, regulations or policies to which we are subject could have a significant impact on our business. ● Our exploration, collecting, shipping, processing and refining activities are subject to extensive and costly environmental requirements, and current and future laws, regulations, and permits may impose significant costs, liabilities, or obligations, or could limit or prevent our ability to continue our operations as currently contemplated or to undertake new operations. ● The grade and quality of the polymetallic nodule deposits that we intend to develop are estimates, and there are no guarantees that such deposits will be suitable for collecting or commercialization. ● No seafloor polymetallic nodule deposit has ever been commercially collected, and our offshore collection technology and development plans and processes may not be sufficient to accomplish our objectives. ● Mineral resource estimates from the contract areas of NORI and TOML are only estimates. ● Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations. 42 Table of Contents ● Uncertainty in our estimates of polymetallic nodule deposits could result in lower-than-expected revenues and higher costs. ● We operate in a highly competitive industry, and there are no assurances that our efforts will be successful. ● The prevailing market prices of nickel, manganese, copper, cobalt, and other commodities will have a material impact on our ability to achieve commercial success. ● We may be adversely affected by fluctuations in demand for nickel, manganese, copper, cobalt, and other commodities. ● Negative perceptions related to the offshore collection of polymetallic nodules could have a material adverse effect on our business. ● We, our partners and our shareholders may be adversely impacted by pressure and lobbying from non - governmental organizations. ● Offshore collection and onshore processing and refining operations pose inherent risks and costs that may negatively impact our business. ● Our business is contingent on our ability to successfully identify, collect, ship and process polymetallic nodules profitably, and in doing so, we will need to rely on certain existing and future strategic relationships, some of which we may be unable to maintain and/or develop. ● Some of the offshore equipment that we will need to accomplish our objectives has not been manufactured and/or tested. ● Our business is substantially dependent on our strategic relationship with Allseas.
It is also currently not definitively known whether the risk of biodiversity loss in the CCZ could be eliminated through setting aside large representative areas of CCZ under protection (13 areas currently set aside by ISA covering 43% of the CCZ) or reduced through mitigation strategies inside operating areas or how long it will take for disturbed seabed areas to recover naturally.
It is also currently not definitively known whether the risk of biodiversity loss in the CCZ could be eliminated through setting aside large representative areas of CCZ under protection (13 areas currently set aside by the ISA covering 43% of the CCZ) or reduced through mitigation strategies inside operating areas or how long it will take for disturbed seabed areas to recover naturally.
There are no guarantees that the ISA will evaluate any exploitation contract application by our subsidiaries in a timely manner, and even if the ISA does timely evaluate such applications(s), such subsidiary may be required to submit a supplementary EIS before being approved. This may result in delays that could impact our projected timeframe.
There are no guarantees that the ISA will evaluate any exploitation contract application by our subsidiaries in a timely manner, and even if the ISA does timely evaluate such applications(s), our subsidiary may be required to submit a supplementary EIS before being approved. This may result in delays that could impact our projected timeframe.
Sponsoring State approvals and permits are currently and may in future be required in connection with our operations. To the extent such approvals are required and not obtained, our subsidiaries may be curtailed or prohibited from proceeding with planned exploration or development of mineral properties.
Sponsoring State approvals and permits are currently and may in the future be required in connection with our operations. To the extent such approvals are required and not obtained, our subsidiaries may be curtailed or prohibited from proceeding with planned exploration or development of mineral properties.
We have identified potential tolling facilities to process nodules into two products, manganese silicate and copper-nickel-cobalt alloy, or matte and developed a marketing strategy to place the latter products into existing smelting and refining facilities.
We have identified potential tolling facilities to process nodules into two products, manganese silicate and nickel-copper-cobalt alloy, or matte and developed a marketing strategy to place the latter products into existing smelting and refining facilities.
Offshore collection and onshore processing and refining operations involve many hazards and uncertainties, including, among others: ● technical and operational challenges in the offshore collection operations and scaling up of such operations; 56 Table of Contents ● challenges in and delays caused by transferring nodules to transport vessels and delivering nodules to port (including limited availability of and cost to secure the equipment to allow the activity); ● industrial accidents; ● unusual and unexpected maritime conditions; ● unexpected seafloor conditions; ● onshore metallurgical or other processing problems; ● unexpected environmental conditions, including contamination or leakage; ● periodic interruptions due to inclement or hazardous weather conditions or other acts of nature; ● fire; ● piracy and disruptive action by non-governmental actors opposed to deep-sea mineral extraction; ● organized labor disputes or work slowdowns; ● mechanical equipment failure and facility performance problems; ● the availability of financing, market demand, critical technology and equipment, and skilled labor; and ● the inability of suppliers to provide key process inputs like electricity, gas, coal and processing reagents on a timely basis at the prices that have been forecast. ​ These occurrences could result in damage to, or destruction of, production facilities, personal injury or death, environmental damage, delays in processing, increased production costs, asset write downs, monetary losses and legal liability, any of which could have an adverse effect on our results of operations and financial condition and adversely affect our projected development and production estimates.
Offshore collection and onshore processing and refining operations involve many hazards and uncertainties, including, among others: ● technical and operational challenges in the offshore collection operations and scaling up of such operations; ● challenges in and delays caused by transferring nodules to transport vessels and delivering nodules to port (including limited availability of and cost to secure the equipment to allow the activity); ● industrial accidents; ● unusual and unexpected maritime conditions; ● unexpected seafloor conditions; ● onshore metallurgical or other processing problems; ● unexpected environmental conditions, including contamination or leakage; ● periodic interruptions due to inclement or hazardous weather conditions or other acts of nature; ● fire; ● piracy and disruptive action by non-governmental actors opposed to deep-sea mineral extraction; ● organized labor disputes or work slowdowns; 55 Table of Contents ● mechanical equipment failure and facility performance problems; ● the availability of financing, market demand, critical technology and equipment, and skilled labor; and ● the inability of suppliers to provide key process inputs like electricity, gas, coal and processing reagents on a timely basis at the prices that have been forecast. ​ These occurrences could result in damage to, or destruction of, production facilities, personal injury or death, environmental damage, delays in processing, increased production costs, asset write downs, monetary losses and legal liability, any of which could have an adverse effect on our results of operations and financial condition and adversely affect our projected development and production estimates.
We cannot provide any assurance with respect to the success of our continued relationship with Allseas, that we will be able to enter into additional binding agreements with Allseas on commercially reasonable terms, or at all, that Allseas will continue to devote its resources to its relationship with us or otherwise perform its obligations under its current and future arrangements with us as expected, as a result of its limited experience in the collection and transportation of seafloor polymetallic nodules or otherwise, the result of any of which would have a material adverse effect on our business, financial condition, liquidity, and results of operations.
We cannot provide any assurance with respect to the success of our continued relationship with Allseas, that we will be able to enter into additional binding agreements with Allseas on commercially reasonable terms, or at all, that Allseas will continue to devote its resources to its relationship with us, continue to provide us financial support or otherwise perform its obligations under its current and future arrangements with us as expected, as a result of its limited experience in the collection and transportation of seafloor polymetallic nodules or otherwise, the result of any of which would have a material adverse effect on our business, financial condition, liquidity, and results of operations.
Labor disputes, embargos, sanctions, government restrictions, work stoppages, pandemics, derailments, damage or loss events, adverse weather conditions, vessel groundings inhibiting access to key navigation routes, other environmental events, changes to rail or ocean freight systems, availability of appropriate equipment or processes for transfer of nodules to transport vessels or other events and activities beyond our control could interrupt or limit available transport services, which could result in customer dissatisfaction and loss of sales potential and could materially adversely affect our results of operations. 60 Table of Contents Actual capital costs, financing strategies, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable metal production operations.
Labor disputes, embargos, sanctions, government restrictions, work stoppages, pandemics, derailments, damage or loss events, adverse weather conditions, vessel groundings inhibiting access to key navigation routes, other environmental events, changes to rail or ocean freight systems, availability of appropriate equipment or processes for transfer of nodules to transport vessels or other events and activities beyond our control could interrupt or limit available transport services, which could result in customer dissatisfaction and loss of sales potential and could materially adversely affect our results of operations. 58 Table of Contents Actual capital costs, financing strategies, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable metal production operations.
The TMC Notice of Articles and Articles also permit us to issue an unlimited number of preferred shares, issuable in series and, subject to the requirements of the BCBCA, having such designations, rights, privileges, restrictions and conditions, including dividend and voting rights, as our board of directors may determine, and which may be superior to those of the Common Shares.
Our Notice of Articles and Articles also permit us to issue an unlimited number of preferred shares, issuable in series and, subject to the requirements of the BCBCA, having such designations, rights, privileges, restrictions and conditions, including dividend and voting rights, as our board of directors may determine, and which may be superior to those of the Common Shares.
Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. 64 Table of Contents Furthermore, the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or an escalation in conflict between Russia and Ukraine, or the ongoing conflict in Israel and Gaza, including any resulting sanctions, export controls or other restrictive actions, could also lead to disruption, instability and volatility in the global markets, which may have an impact on our ability to obtain additional funding.
Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. 62 Table of Contents Furthermore, the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or an escalation in conflict between Russia and Ukraine, or the ongoing conflict in Israel and Gaza, including any resulting sanctions, export controls or other restrictive actions, could also lead to disruption, instability and volatility in the global markets, which may have an impact on our ability to obtain additional funding.
Moreover, despite the release by the ISA of the Draft Regulations on Exploitation of Mineral Resources (the “Draft Regulations”), finalization of such regulations remains subject to approval and adoption by the ISA. Once adopted, these regulations will add to the legal and technical framework for exploitation of the polymetallic nodules in the NORI, TOML and Marawa contract areas.
Moreover, despite the release by the ISA of the Draft Regulations on Exploitation of Mineral Resources (the “Draft Regulations”), finalization of such regulations remains subject to approval and adoption by the ISA. Once adopted, these regulations will add to the legal and technical framework for exploitation of the polymetallic nodules in the NORI and TOML contract areas.
The continuing exploration and development of the NORI, TOML and Marawa contract areas, however, will depend upon our ability to obtain dilutive and/or non-dilutive financing through stake sales in our assets, offtakes with prepayments, debt financing, equity financing, joint ventures, project-based or asset-based financing or other means.
The continuing exploration and development of the NORI and TOML contract areas, however, will depend upon our ability to obtain dilutive and/or non-dilutive financing through stake sales in our assets, offtakes with prepayments, debt financing, equity financing, joint ventures, project-based or asset-based financing or other means.
As a result, we received written notices from the Nasdaq in 2022 and 2023 notifying us that the closing bid price of the Common Shares over 30 consecutive trading days had fallen below the minimum $1.00 per share.
As a result, we received written notices from the Nasdaq in 2022, 2023 and 2024 notifying us that the closing bid price of the Common Shares over 30 consecutive trading days had fallen below the minimum $1.00 per share.
We operate in a competitive industry, and there are no assurances that our efforts will be successful. The battery metals production industry is capital intensive and competitive. Production of battery materials and manganese alloys is largely dominated by Chinese competitors.
We operate in a competitive industry, and there are no assurances that our efforts will be successful. The critical metals production industry is capital intensive and competitive. Production of battery materials and manganese alloys is largely dominated by Chinese competitors.
No seafloor polymetallic nodule deposit has been developed commercially, and it is not clear what environmental parameters may need to be measured to satisfy regulatory authorities for an ISA Exploitation Contract to be granted.
No seafloor polymetallic nodule deposit has been developed commercially to date, and it is not clear what environmental parameters may need to be measured to satisfy regulatory authorities for an ISA Exploitation Contract to be granted.
There can be no assurances, however, that we will enter into the binding Heads of Terms and definitive agreements with Allseas in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into by us that the proposed commercial systems and second production vessel will be successfully developed or operated in a particular time period, or at all and hence, we may be delayed in obtaining offshore collection equipment in the event we do not reach agreement with Allseas and have to develop such equipment on our own or through new third-party contractual relationships.
There can be no assurances, however, that we will enter into the binding Heads of Terms and definitive agreements with Allseas in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into by us that the proposed commercial systems and second production vessel 50 Table of Contents will be successfully developed or operated in a particular time period, or at all and hence, we may be delayed in obtaining offshore collection equipment in the event we do not reach agreement with Allseas and have to develop such equipment on our own or through new third-party contractual relationships.
Based on our initial assessment, we do not believe that we were classified as a PFIC for U.S. federal income tax purposes for the taxable year ending December 31, 2023. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you the U.S. Internal Revenue Service will not take a contrary position.
Based on our initial assessment, we do not believe that we were classified as a PFIC for U.S. federal income tax purposes for the taxable year ending December 31, 2024. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you the U.S. Internal Revenue Service will not take a contrary position.
A work stoppage by any of the third parties providing services in connection with our operations or those of our strategic partners (such as for onshore or offshore operations) could significantly disrupt our activities, reduce our future revenues and materially adversely affect our results of operations. 61 Table of Contents A shortage of skilled technicians and engineers may further increase operating costs, which could materially adversely affect our results of operations.
A work stoppage by any of the third parties providing services in connection with our operations or those of our strategic partners (such as for onshore or offshore operations) could significantly disrupt our activities, reduce our future revenues and materially adversely affect our results of operations. 59 Table of Contents A shortage of skilled technicians and engineers may further increase operating costs, which could materially adversely affect our results of operations.
The EIS would be accompanied by an EMMP, which will be required as part of the application for an ISA Exploitation Contract within the contract areas of NORI, TOML and Marawa.
The EIS would be accompanied by an EMMP, which will be required as part of the application for an ISA Exploitation Contract within the NORI and TOML contract areas.
There is a risk that a State sponsoring activities in a project area ceases to be a sponsor, or is not permitted to be a sponsor, or that NORI and TOML cease to remain as sponsored contractors by such State; and if an agreement cannot be reached with a substitute sponsoring State, or if we are unable to transfer our sponsorship to another State, such subsidiary could be forced to cease activities in the CCZ.
There is a risk that a State sponsoring activities in a project area ceases to be a sponsor, or is not permitted to be a sponsor, or that NORI and TOML cease to remain as sponsored contractors by such State; and if an agreement cannot be reached with a substitute sponsoring State, or if we are unable to transfer our sponsorship to another State, such subsidiary could be forced under UNCLOS to cease activities in the CCZ.
Estimates of economically recoverable minerals necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as: ● environmental, geological, geotechnical, collecting and processing conditions that may not be fully identified by available data or that may differ from experience; ● changes to the strategic approach to collecting and processing, which will depend in large part on market demand, corporate strategy and other prevailing economic and financial conditions; ● assumptions concerning future prices of products (including, most notably, battery metals and manganese ore) foreign exchange rates, production rates, process recovery rates, transportation costs, operating costs, capital costs and reclamation costs; and ● assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies and foreign government policies relating to our collecting of the mineral resources from our contract areas. ​ Uncertainty in estimates related to the availability of polymetallic nodules could result in lower-than-expected revenues and higher than expected costs or a shortened estimated life for our projects.
Estimates of economically recoverable minerals necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as: ● environmental, geological, geotechnical, collecting and processing conditions that may not be fully identified by available data or that may differ from experience; ● changes to the strategic approach to collecting and processing, which will depend in large part on market demand, corporate strategy and other prevailing economic and financial conditions; ● assumptions concerning future prices of products (including, most notably, critical metals and manganese ore) foreign exchange rates, production rates, process recovery rates, transportation costs, operating costs, capital costs and reclamation costs; and 52 Table of Contents ● assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies and foreign government policies relating to our collecting of the mineral resources from our contract areas. ​ Uncertainty in estimates related to the availability of polymetallic nodules could result in lower-than-expected revenues and higher than expected costs or a shortened estimated life for our projects.
The extent to which planned measures, such as leaving behind partial nodule cover and setting aside no-take zones, would aid recruitment and recovery of nodule-dependent species in impacted areas will depend on factors like habitat connectivity, which is an area that is still under study.
The extent to which planned measures, such as leaving behind partial nodule cover and setting aside no-take zones, would aid recruitment and recovery of any potential nodule-dependent species in impacted areas will depend on factors like habitat connectivity, which is an area that is still under study.
In addition, our products and processes may infringe existing patents. 63 Table of Contents Defending ourselves against third-party claims, including litigation in particular, would be costly and time consuming and would divert management’s attention from our business, which could lead to delays in our exploration, collecting, processing, and commercialization efforts.
In addition, our products and processes may infringe existing patents. 61 Table of Contents Defending ourselves against third-party claims, including litigation in particular, would be costly and time consuming and would divert management’s attention from our business, which could lead to delays in our exploration, collecting, processing, and commercialization efforts.
While we expect research analyst coverage, if no analysts commence coverage of us, the market price and volume for our Common Shares could be adversely affected. 70 Table of Contents As we are not a reporting issuer in Canada, our Common Shares and Special Shares may be subject to restrictions on resale in Canada.
While we expect research 69 Table of Contents analyst coverage, if no analysts commence coverage of us, the market price and volume for our Common Shares could be adversely affected. As we are not a reporting issuer in Canada, our Common Shares and Special Shares may be subject to restrictions on resale in Canada.
Under pressure from non-governmental organizations, some governments and companies in the EV supply chain have expressed reservations about using battery metals derived from deep-sea minerals (including polymetallic nodules), pending more research on the impacts of deep-sea mineral extraction operations on marine biodiversity and ecosystem function.
Under pressure from non-governmental organizations, some governments and companies in the EV supply chain have expressed reservations about using critical metals derived from deep-sea minerals (including polymetallic nodules), pending more research on the impacts of deep-sea mineral extraction operations on marine biodiversity and ecosystem function.
We cannot be certain that insurance for some or all of these risks will be available on acceptable terms or conditions, if at all, and in some cases, coverage may not be acceptable or may be considered too expensive relative to the perceived risk. 62 Table of Contents V. Intellectual Property Risks.
We cannot be certain that insurance for some or all of these risks will be available on acceptable terms or conditions, if at all, and in some cases, coverage may not be acceptable or may be considered too expensive relative to the perceived risk. 60 Table of Contents V. Intellectual Property Risks.
Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition. 69 Table of Contents The market price of our securities may be volatile, which could cause the value of your investment to decline.
Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition. 68 Table of Contents The market price of our securities may be volatile, which could cause the value of your investment to decline.
The profitability of our nodule collection operations is significantly affected by changes in the market price of battery metals (nickel, copper and cobalt) and manganese ores and the cost of power, natural gas, coal, marine fuels, among other commodities and supply requirements.
The profitability of our nodule collection operations is significantly affected by changes in the market price of critical metals (nickel, copper and cobalt) and manganese ores and the cost of power, natural gas, coal, marine fuels, among other commodities and supply requirements.
NORI currently intends to explore and collect mineral resources in the NORI areas identified in the exploration contract executed by NORI with the ISA, and we hope to expand such operations if viable in certain other parts of the CCZ, including by TOML in the TOML areas identified in the exploration contract executed between TOML and the ISA and DGE in the Marawa areas identified in the exploration contract executed by Marawa with the ISA.
NORI currently intends to explore and collect mineral resources in the NORI areas identified in the exploration contract executed by NORI with the ISA, and we hope to expand such operations if viable in certain other parts of the CCZ, including by TOML in the TOML areas identified in the exploration contract executed between TOML and the ISA.
Should we incur debt, including through the drawdown of our credit facility with Allseas and/or our credit facility with ERAS Capital LLC and Gerard Barron, our ability to satisfy any resulting debt obligations and to reduce our level of indebtedness will depend on future performance.
Should we incur debt, including through the drawdown of our credit facility with ERAS Capital LLC and Gerard Barron, our ability to satisfy any resulting debt obligations and to reduce our level of indebtedness will depend on future performance.
The EIS would be accompanied by an EMMP which is expected to specify the objectives and purpose of all monitoring requirements, the components to be monitored, frequency of monitoring, methods of monitoring, analysis required in each monitoring component, monitoring data management and reporting.
The EIS would be accompanied by an Environmental Monitoring and Management Plan (EMMP) which is expected to specify the objectives and purpose of all monitoring requirements, the components to be monitored, frequency of monitoring, methods of monitoring, analysis required in each monitoring component, monitoring data management and reporting.
Section 1, paragraph 15 of the 1994 Agreement relating to the Implementation of Part XI of UNCLOS allows a member state whose national intends to apply for approval of a plan of work for exploitation to notify the ISA of such intention.
Section 1, paragraph 15 of the 1994 Agreement Relating to the Implementation of Part XI of UNCLOS (the “1994 Agreement”) allows a member state whose national intends to apply for approval of a plan of work for exploitation to notify the ISA of such intention.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. 67 Table of Contents We may incur debt in the future, and our ability to satisfy our obligations thereunder remains subject to a variety of factors, many of which are not within our control.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. We may incur debt in the future, and our ability to satisfy our obligations thereunder remains subject to a variety of factors, many of which are not within our control.
Although we regained compliance with the Nasdaq’s minimum closing bid price, we may not be able to continue to meet this Nasdaq listing requirement. If the closing bid price of our Common Shares falls below $1.00 per share for another consecutive 30 trading days, we expect to receive another notification from the Nasdaq to that effect.
Although we regained compliance with the Nasdaq’s minimum closing bid price on each occurrence, we may not be able to continue to meet this Nasdaq listing requirement. If the closing bid price of our Common Shares falls below $1.00 per share for another consecutive 30 trading days, we expect to receive another notification from the Nasdaq to that effect.
Holders of our Common Shares and Public Warrants are urged to consult their tax advisors regarding the application of the PFIC rules to them. Canadian law and our Notice and Articles contain certain provisions, including anti-takeover provisions that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.
Holders of our Common Shares and Public Warrants are urged to consult their tax advisors regarding the application of the PFIC rules to them. 70 Table of Contents Canadian law and our Notice and Articles contain certain provisions, including anti-takeover provisions that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.
Given that we have focused part of our operating plan on the sale of nodule-derived battery metals into the EV supply chain, our growth may be affected by the consumer adoption of EVs.
Given that we have focused part of our operating plan on the sale of nodule-derived critical metals into the EV supply chain, our growth may be affected by the consumer adoption of EVs.
Metallurgical testwork, market studies by CRU International Limited, value-in-use studies by SINTEF and initial engagement with customers indicate that this manganese silicate product will be a premium product with high value in use as an input into silicomanganese alloy production that we believe will receive strong market acceptance.
Metallurgical test work, market studies by CRU International Limited, value-in-use studies by SINTEF and initial engagement with customers indicate that this manganese silicate product will be a premium product with high value in use as an input into silicomanganese alloy production that we believe will receive strong market acceptance.
Our future needs with respect to such processing plants have yet to be fully determined, and as such, the capital costs, performance, reliability, and maintenance of such plants is currently uncertain.
Our future needs with respect to such processing plants have yet to be fully determined, and as such, the capital costs, performance, reliability, and maintenance of such plants are currently uncertain.
We have the ability to redeem outstanding Public Warrants and Private Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Common Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met.
We have the ability to redeem outstanding Public Warrants and Private Warrants prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Common Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met.
While the metallurgical recovery estimates have been derived from commercial operation benchmarking, benchscale and pilot scale testwork, the commercial metal recoveries to products could vary significantly from these estimates. Should our offshore nodule collection plans become successful, we intend to partner with existing onshore processing partners to produce and develop new build onshore processing plants as we scale up production.
While the metallurgical recovery estimates have been derived from commercial operation benchmarking, benchscale and pilot scale testwork, the commercial metal recoveries to products could vary significantly from these estimates. 57 Table of Contents Should our offshore nodule collection plans become successful, we intend to partner with existing onshore processing partners to produce and develop new build onshore processing plants as we scale up production.
Failure to maintain sponsorship, or secure new state sponsorship, will have a material impact on such subsidiary and on our overall business and operations. 48 Table of Contents While the rates of payments are yet to be set by the ISA, the 1994 Agreement relating to the Implementation of Part XI of the UNCLOS prescribes a relevant framework that the rates of payments “shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage.” The ISA has held workshops with stakeholders to discuss and seek comments on the potential financial regime for the collecting of polymetallic nodules in the CCZ.
Failure to maintain sponsorship, or secure new state sponsorship, will have a material impact on such subsidiary and on our overall business and operations. 46 Table of Contents While the rates of payments are yet to be set by the ISA, the 1994 Agreement prescribes a relevant framework that the rates of payments “shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage.” The ISA has held workshops with stakeholders to discuss and seek comments on the potential financial regime for the collecting of polymetallic nodules in the CCZ.
As a result of higher capital and operating costs, our financing ability may be impacted, and this may be further affected by lower commodity prices in the international markets that could impact production or economic returns which may differ significantly from those set forth in the NORI Initial Assessment and TOML Mineral Resource Statement and there can be no assurance that any of our development activities will result in profitable operations.
As a result of higher capital and operating costs, our financing ability may be impacted, and this may be further affected by lower commodity prices in the international markets that could impact production or economic returns which may differ significantly from those set forth in the NORI Initial Assessment and TOML Mineral Resource Statement or that we otherwise estimate from time to time and there can be no assurance that any of our development activities will result in profitable operations.
Currently 97% of the NORI Area D resource is classified into indicated and measured categories. Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations.
Currently 97% of the NORI Area D resource is classified into indicated and measured categories. 51 Table of Contents Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations.
There can be no assurance that we will generate any revenues or achieve profitability, or that the assumed levels of expense associated with our exploration, development, and commercialization processes will prove to be accurate. Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our results of operations.
There can be no assurance that we will generate any revenues or achieve profitability, or that the assumed level of expenses associated with our exploration, development, and commercialization processes will prove to be accurate. Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our results of operations.
As a result, and in light of some ISA members States calling for a ban, moratorium or precautionary pause on the commercialization of seafloor mineral resources, there can be no assurance that the ISA will provisionally approve our plan of work for exploitation, within one year from submission thereof, or at all, or that such provisional approval would lead to the issuance of an exploitation contract with the ISA.
In light of some ISA Member States calling for a ban, moratorium or precautionary pause on the commercialization of seafloor mineral resources, there can be no assurance that the ISA will provisionally approve our plan of work for exploitation, within one year from submission thereof, or at all, or that such provisional approval would lead to the issuance of an exploitation contract with the ISA.
In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for a plan of work for exploitation for NORI Area D, and by negotiating the settlement of program expenditures with our equity whenever possible in order to preserve our cash.
In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for a plan of work for exploitation for NORI Area D, by negotiating the settlement of program expenditures with our equity whenever possible in order to preserve our cash, and by utilizing existing assets for offshore and onshore production.
While we believe that seafloor polymetallic nodules in the contract areas of our subsidiaries account for some of the world’s largest aggregated estimated deposits of battery metals, no assurance can be given that minerals will be discovered in sufficient grade or quantities to justify commercial operations.
While we believe that seafloor polymetallic nodules in the contract areas of our subsidiaries account for some of the world’s largest aggregated estimated deposits of the four critical metals contained in nodules, no assurance can be given that minerals will be discovered in sufficient grade or quantities to justify commercial operations.
Valid estimates made at a given time may significantly change when new information becomes available. 52 Table of Contents Estimated mineral reserves and mineral resources may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience.
Valid estimates made at a given time may significantly change when new information becomes available. Estimated mineral reserves and mineral resources may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience.
Although we believe the ISA will accept and consider an application for a plan of work for exploitation in the absence of the final Mining Code, there is no consensus within the ISA as to the process to be followed for its consideration of such an application, including the involvement of the ISA’s Legal and Technical Commission and whether and how long the ISA could delay its consideration of an application past the proscribed 60-day period.
Although we believe the ISA will accept and consider an application for a plan of work for exploitation in the absence of the final Mining Code, there is no consensus within the ISA as to the process to be followed for its consideration of such an application, including the involvement of the LTC and whether and how long the ISA could delay its consideration of an application past the proscribed 60-day period.
If this position gains broad traction by governments and commercial customers alike in relation to battery metals sourced from polymetallic nodules, it could have a material impact on our business and operations. Reduced growth in the adoption of electric vehicles by consumers may change our strategy and our business and operating results may be impacted.
If this position gains broad traction by governments and commercial customers alike in relation to critical metals sourced from polymetallic nodules, it could have a material impact on our business and operations. 54 Table of Contents Reduced growth in the adoption of electric vehicles by consumers may change our strategy and our business and operating results may be impacted.
As a result, even if the ISA timely reviews and approves our expected application for an exploitation contract, which will include a plan of work for exploitation, for NORI Area D, there are no assurances that we will have successfully completed all development and pre-production work necessary to start commercial production at the end of the first quarter of 2026.
As a result, even if the ISA timely reviews and approves our expected application for an exploitation contract, which will include a plan of work for exploitation, for NORI Area D, there are no assurances that we will have successfully completed all development and pre-production work necessary to start commercial production.
Prices of such metals are affected by numerous factors beyond our control, including: military conflict; prevailing interest rates and returns on other asset classes; expectations regarding inflation, monetary policy and currency values; speculation; governmental and exchange decisions regarding the disposal of metal stockpiles; political and economic conditions; available supplies of battery metals from mine production, inventories and recycled metal; sales by holders and producers of battery metals; and demand for products containing nickel, manganese, copper and cobalt.
Prices of such metals are affected by numerous factors beyond our control, including: military conflict; prevailing interest rates and returns on other asset classes; expectations regarding inflation, monetary policy and currency values; speculation; governmental and exchange decisions regarding the disposal of metal stockpiles; political and economic conditions; available supplies of the four critical metals contained in nodules from mine production, inventories and recycled metal; sales by holders and producers of these critical metals; and demand for products containing nickel, manganese, copper and cobalt.
If the ISA has not adopted the final Mining Code by the time NORI submits this application, we believe that the ISA will review and provisionally approve the plan of work for exploitation included therein pursuant to Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement relating to the implementation of Part XI of UNCLOS discussed above.
If the ISA has not adopted the final Mining Code by the time NORI submits this application, we believe that the ISA will review and provisionally approve the plan of work for exploitation included therein pursuant to Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement discussed above.
As part of the application for an ISA Exploitation Contract, all contractors are required to complete baseline studies and an ESIA, culminating in an EIS, prior to collecting nodules at a commercial scale.
As part of the application for an ISA Exploitation Contract, all contractors are required to complete baseline studies and an Environment and Social Impact Assessment (ESIA), culminating in an EIS, prior to collecting nodules at a commercial scale.
Until mineral resources are actually collected and processed, the quantity of metal and nodule abundance must be considered as estimates only and no assurance can be given that the indicated levels of metals will be produced.
Until mineral resources are actually collected and processed on a commercial scale, the quantity of metal and nodule abundance must be considered as estimates only and no assurance can be given that the indicated levels of metals will be produced.
In order to move our exploration projects into commercial production, our wholly-owned subsidiaries, NORI and TOML will each need to conclude an exploitation contract with the ISA, as will our partner, Marawa, in addition to obtaining related permits that may be required by our commercial partners.
In order to move our exploration projects into commercial production, our wholly owned subsidiaries, NORI and TOML will each need to receive an exploitation contract with the ISA, in addition to obtaining related permits that may be required by our commercial partners.
There is a risk that such analyses, reviews, reports, advice, opinions, and projects are incorrect, in particular with respect to resource estimation, process development, and recommendations for products to be produced, as well as with respect to economic assessments, including estimating the capital and operating costs of our project and forecasting potential future revenue streams.
There is a risk that such analyses, reviews, reports, advice, opinions, and projects are incorrect or become outdated over time or as our plans change, in particular with respect to resource estimation, process development, and recommendations for products to be produced, as well as with respect to economic assessments, including estimating the capital and operating costs of our project and forecasting potential future revenue streams.
Due to any of these or other factors, our capital and operating costs may be significantly higher than those set forth in the NORI Initial Assessment and TOML Mineral Resource Statement prepared by AMC and filed as exhibits to this Annual Report.
Due to any of these or other factors, our capital and operating costs may be significantly higher than those set forth in the NORI Initial Assessment and TOML Mineral Resource Statement prepared by AMC and filed as exhibits to this Annual Report or that we otherwise estimate from time to time.
In addition to three contracts held by our subsidiaries and partners, 16 other entities (ISA Member States and private companies sponsored by ISA Member States) currently hold ISA Exploration Contracts for polymetallic nodules.
In addition to two contracts held by our subsidiaries and partners, 15 other entities (ISA Member States and private companies sponsored by ISA Member States) currently hold ISA Exploration Contracts for polymetallic nodules.
The parties intend to detail and revise these cost estimates in three definitive agreements for the engineering, build and operations phases which the parties expect to enter into before the submission of our exploitation application in 2024.
The parties intend to detail and revise these cost estimates in three definitive agreements for the engineering, build and operations phases which the parties expect to enter into before the submission of our exploitation application on June 27, 2025.
There can be no assurance that any future securities offered to Canadian Owners will be freely transferable by the Canadian Owners. We are exposed to risks in our international operations, which could adversely affect our business.
There can be no assurance that any future securities offered to Canadian Owners will be freely transferable by the Canadian Owners. We are exposed to risks vis-à-vis our multi-national operations, which could adversely affect our business.
Additionally, as we launch exploration, collection, and development initiatives, our subsidiaries may need to compete for the availability of suitable vessels and equipment, even though we have a close commercial relationship with our partners, there is a risk that certain vessels and equipment will be under long-term charter and will thus not be available to them when needed, if at all. 58 Table of Contents Our business is substantially dependent on our strategic relationship with Allseas.
Additionally, as we launch exploration, collection, and development initiatives, our subsidiaries may need to compete for the availability of suitable vessels and equipment, even though we have a close commercial relationship with our partners, there is a risk that certain vessels and equipment will be under long-term charter and will thus not be available to them when needed, if at all.
In addition, there can be no assurances that the ISA will come to a consensus as to the interpretation of Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement relating to the implementation of Part XI of UNCLOS.
In addition, there can be no assurances that the ISA will come to a consensus as to the interpretation of Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement.
As a result, we may need to engage and depend on other third parties for the services and funding Allseas currently and is expected to provide us.
As a result, we may need to engage and depend on other third parties for the services and funding Allseas currently provides to us and is expected to continue doing so.
As the ISA Council did not complete the adoption and elaboration of the Mining Code by the prescribed deadline of July 9, 2023, pursuant to Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement relating to the implementation of Part XI of UNCLOS, if an application for a plan of work for exploitation is now submitted to the ISA, the ISA is nonetheless required to consider and provisionally approve such a plan of work based on: (i) the provisions of the UNCLOS; (ii) any rules, regulations and procedures that the ISA may have adopted provisionally, (iii) the basis of the norms contained in the UNCLOS and (iv) the terms and principles contained in the 1994 Agreement relating to the Implementation of Part XI, including the principle of non-discrimination among contractors. 47 Table of Contents NORI intends to submit an application to the ISA for an exploitation contract, which will include a plan of work for exploitation for NORI Area D following the conclusion of the July 2024 meeting of the ISA’s 29th session.
As the ISA Council did not complete the adoption and elaboration of the Mining Code by the prescribed deadline of July 9, 2023, pursuant to Section 1, Paragraph 15(c) of the Annex to the 1994 Agreement, if an application for a plan of work for exploitation is now submitted to the ISA, the ISA is nonetheless required to consider and provisionally approve such a plan of work based on: (i) the provisions of the UNCLOS; (ii) any rules, regulations and procedures that the ISA may have adopted provisionally, (iii) the basis of the norms contained in the UNCLOS and (iv) the terms and principles contained in the 1994 Agreement, including the principle of non-discrimination among contractors. 45 Table of Contents NORI intends to submit an application to the ISA for an exploitation contract, which will include a plan of work for exploitation for the NORI contract area, expected to be filed on June 27, 2025.
There can be no assurance that the ISA will put in place a Mining Code in a timely manner or at all. Such regulations may also impose burdensome obligations or restrictions on us, and/or may contain terms that do not enable us to develop our projects. Our resource development activities are subject to changes in government regulation and political instability.
There can be no assurance that the ISA will put in place a Mining Code in a timely manner or at all. Such regulations may also impose burdensome obligations or restrictions on us, and/or may contain terms that do not enable us to develop our projects.
There is no assurance that we will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action.
There is no assurance that we will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated.
For example, 21 ISA member States out of the 169 ISA members have expressed reservations about the commercialization of seafloor mineral resources and have called for a ban, moratorium, or precautionary pause on the commercialization of these resources.
For example, at least 32 ISA member States out of the 170 ISA members have expressed reservations about the timing of commercialization of seafloor mineral resources and have called for a ban, moratorium, or precautionary pause on the commercialization of these resources.
Since the closing of the Business Combination through March 11, 2024, the price of our Common Shares has ranged from a high of $10.38 to a low of $0.55 and as of March 15, 2024, the closing price of our Common Shares was $1.67.
Since the closing of the Business Combination through March 20, 2025, the price of our Common Shares has ranged from a high of $10.38 to a low of $0.55 and as of March 21, 2025, the closing price of our Common Shares was $1.82.
If in the future Nasdaq delists our Common Shares from trading on its exchange for failure to meet the listing standards, we and our securityholders could face significant material adverse consequences including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that our Common Shares are “penny stock” which will require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future. 68 Table of Contents The closing bid price of our Common Shares has been below the Nasdaq’s minimum $1.00 per share for extended periods of time in 2022 and into 2023.
If in the future Nasdaq delists our Common Shares from trading on its exchange for failure to meet the listing standards, we and our securityholders could face significant material adverse consequences including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that our Common Shares are “penny stock” which will require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
Given the significant volume of deep water and the difficulty of sampling and retrieving biological specimens, a complete biological inventory might never be established. Accordingly, impacts on CCZ biodiversity may never be, completely and definitively known.
Given the significant volume of deep water and the difficulty of sampling and retrieving biological specimens, a complete biological inventory might never be established as is the case in terrestrial environments. Accordingly, impacts on CCZ biodiversity may never be, completely and 48 Table of Contents definitively known.
Alternatively, if a court were to find the choice of forum provision contained in our Notice and Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. 72 Table of Contents Our Notice and Articles permit us to issue an unlimited number of Common Shares and preferred shares without seeking approval of the holders of our Common Shares.
Alternatively, 71 Table of Contents if a court were to find the choice of forum provision contained in our Notice and Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Therefore, as of December 31, 2023, if we assume that each outstanding whole warrant is exercised and one common share is issued as a result of such exercise, with payment of the exercise price ranging from $3.00 to $11.50 per share, our fully-diluted share capital would increase by a total of 28,480,770 shares, with approximately $293.7 million paid to us to exercise the warrants.
Therefore, as of December 31, 2024, if we assume that each outstanding whole warrant is exercised and one common share is issued as a result of such exercise, with payment of the exercise price ranging from $2.00 to $11.50 per share, our fully-diluted share capital would increase by a total of 38,180,770 shares, with approximately $309.1 million paid to us to exercise the warrants assuming the warrants are not cashless exercised.
If we and Allseas are unable to successfully maintain and expand this relationship, our business may be materially harmed.
Our business is substantially dependent on our strategic relationship with Allseas. If we and Allseas are unable to successfully maintain and expand this relationship, our business may be materially harmed.
On December 7, 2023, the Court granted our motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied our motion to dismiss the breach of the Subscription Agreement claim. We filed a notice of appeal regarding the Court’s denial of our motion to dismiss the breach of the Subscription Agreement claim.
On December 7, 2023, the Court granted our motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied our motion to dismiss the breach of the Subscription Agreement claim.
Provisions in our Notice of Articles and Articles, as well as certain provisions under the BCBCA and applicable Canadian laws, may discourage, delay or prevent a merger, acquisition or other change in control of TMC that shareholders may consider favorable, including transactions in which they might otherwise receive a premium for their Common Shares. 71 Table of Contents For instance, our Notice of Articles and Articles contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders’ meetings.
Provisions in our Notice of Articles and Articles, as well as certain provisions under the BCBCA and applicable Canadian laws, may discourage, delay or prevent a merger, acquisition or other change in control of TMC that shareholders may consider favorable, including transactions in which they might otherwise receive a premium for their Common Shares.
Any Common Shares issued, including in connection with the August 2023 registered direct financing, upon exercise of warrants, upon conversion of the Special Shares or under the TMC Incentive Equity Plan, the ESPP or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by you.
Any Common Shares issued upon exercise of warrants, upon conversion of the Special Shares or under the 2018 Plan, 2021 Incentive Equity Plan, the ESPP or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by you.
While we and our subsidiaries will evaluate the political and economic factors in determining an exploration strategy, there can be no assurance that significant restrictions will not be placed on intended development areas.
While we and our subsidiaries will evaluate the political and economic factors in determining an exploration strategy, there can be no assurance that significant restrictions will not be placed on intended development areas. Such restrictions may have a material adverse effect on our business and results of operation.
The exercise price for the outstanding Public Warrants and Private Warrants is $11.50 per Common Share. There can be no assurance that such warrants will be in the money prior to their expiration, and as such, such warrants may expire worthless.
There can be no assurance that the Public Warrants, Private Warrants, Class A Warrants and Class B Warrants will be in the money, and they may expire worthless. The exercise price for the outstanding Public Warrants and Private Warrants is $11.50 per Common Share.
Parties carrying out exploration and collection operations in the CCZ must be sponsored by a State that is a member of the ISA. The Sponsoring States of our subsidiaries NORI and TOML are Nauru and Tonga, respectively.
Our resource development activities are subject to changes in government regulation and political instability. Under UNCLOS, parties carrying out exploration and collection operations in the CCZ must be sponsored by a State that is a member of the ISA. The Sponsoring States of our subsidiaries NORI and TOML are Nauru and Tonga, respectively.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+3 added−0 removed10 unchanged
Biggest changeAs part of the above processes, we regularly engage with consultants, auditors and other third parties, including annually having a third-party review our cybersecurity program to help identify areas for continued focus, improvement and compliance. 74 Table of Contents Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers and manufacturers or who have access to patient and employee data or our systems.
Biggest changeAs part of the above processes, we regularly engage with consultants, auditors and other third parties, including annually having a third-party review our cybersecurity program to help identify areas for continued focus, improvement and compliance.
To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: ● monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; ● through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; ● employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence; ● provide regular, mandatory training for our employees and contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; ● conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats; ● dark web scanning to determine any leaked credentials both corporate and personal for key employees. ● leverage the NIST incident handling framework and our MSPs to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; ● carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident; and Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.
To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: ● monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; ● through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; ● employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence; ● provide regular, mandatory training for our employees and contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; ● conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats; ● dark web scanning to determine any leaked credentials both corporate and personal for key employees. ● leverage the NIST incident handling framework and our MSPs to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; ● carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident; and 73 Table of Contents Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.
To identify and assess material risks from cybersecurity threats, we maintain a comprehensive cybersecurity program to ensure our systems are effective and prepared for information security risks, including regular oversight of our programs for security monitoring for internal and external threats to ensure the confidentiality and integrity of our information assets.
To identify and assess material risks from cybersecurity threats, we maintain a comprehensive cybersecurity program to ensure our systems are effective and prepared for information security risks, including regular oversight of our programs for 72 Table of Contents security monitoring for internal and external threats to ensure the confidentiality and integrity of our information assets.
Our board of directors is involved in oversight of our risk management activities, and cybersecurity represents an important element of our overall approach to risk management. Our cybersecurity policies, standards, processes and practices are based on recognized frameworks established by the National Institute of Standards and Technology (NIST) and the International Organization for Standardization (ISO).
Our board of directors is involved in oversight of our risk management activities, and cybersecurity represents an important element of our overall approach to risk management. Our cybersecurity policies, standards, processes and practices are based on recognized frameworks established by the National Institute of Standards and Technology (“NIST”) and the International Organization for Standardization (“ISO”).
We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process. 73 Table of Contents To mitigate these risks, we have implemented technology solutions that are designed to recognize anomalous activity and behavior on systems used by TMC employees, alongside other technical safeguards including: ● Web Application Firewalls (WAF) ● Intrusion detection systems ● Antivirus ● Endpoint protection and response ● Security Event and Incident Management (SIEM) ● Identity and Access management (IAM) ● Multi-factor authentication We utilize a third-party consultancy to provide services including security audits, CISO, risk management and response strategies.
To mitigate these risks, we have implemented technology solutions that are designed to recognize anomalous activity and behavior on systems used by our employees, alongside other technical safeguards including: ● Web Application Firewalls (WAF) ● Intrusion detection systems ● Antivirus ● Endpoint protection and response ● Security Event and Incident Management (SIEM) ● Identity and Access management (IAM) ● Multi-factor authentication We utilize a third-party consultancy to provide services including security audits, CISO, risk management and response strategies.
In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence.
We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence.
In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none. Cybersecurity Governance; Management Cybersecurity is an important part of our risk management processes and an area of focus for our management.
This includes penalties and settlements, of which there were none. ​ 74 Table of Contents Cybersecurity Governance; Management Cybersecurity is an important part of our risk management processes and an area of focus for our management.
Added
We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process.
Added
Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers and manufacturers or who have access to employee data or our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
Added
In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.

Item 2. Properties

Properties — owned and leased real estate

33 edited+10 added−41 removed226 unchanged
Biggest changeIt is also reasonable to infer that the pioneer investor data are of sufficient quality for resource estimation because the ISA is an independent agency with significant accountability under the UNCLOS. Part of its mandate is the receipt and storage of seafloor sampling data suitable for the estimation of nodule resources and the legally binding award of licenses.
Biggest changePart of its mandate is the receipt and storage of seafloor sampling data suitable for the estimation of nodule resources and the legally binding award of licenses. It is reasonable to assume that a reasonable level of care was applied by the ISA. Data collected by NORI is well-documented and was subject to satisfactory quality assurance/quality control processes.
Under SEC standards, mineralization, such as mineral resources, may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time of the reserve determination.
Under SEC standards, mineralization, such as mineral resources, may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time of the reserve determination.
As used in this Annual Report, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” are defined and used in accordance with the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.
As used in this Annual Report, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” are defined and used in accordance with the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.
You are specifically cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves, as defined by the SEC. You are cautioned that mineral resources do not have demonstrated economic value.
You are specifically cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves, as defined by the SEC. You are cautioned that mineral resources do not have demonstrated economic value.
Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category.
Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category.
The commonality between the polymetallic nodule deposits in NORI Area D and the TOML Contract Area indicates that the methods proposed for the development of NORI Area D can reasonably be assumed to be equally relevant for future development in the TOML Contract Area.
The commonality between the polymetallic nodule deposits in NORI Area D and the TOML Contract Area indicates that the methods proposed for the development of NORI Area D can reasonably be assumed to be equally relevant for future development in the TOML Contract Area.
The TOML Contract Area comprises six separate blocks (A through F) in the CCZ with a combined area of 74,713 square kilometers. ​ ​ TOML Contract Area extents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Maximum Minimum Maximum Minimum Maximum Minimum Maximum ​ ​ ​ Latitude ​ Latitude ​ Longitude ​ Longitude ​ UTM X ​ UTM X ​ UTM Y ​ UTM Y ​ UTM Area ​ (DD) ​ (DD) ​ (DD) ​ (DD) ​ (m) ​ (m) ​ (m) ​ (m) ​ Zone A ​ 7.167 N ​ 8.167 N ​ 151.667 W ​ 152.510 W ​ 553972 ​ 647187 ​ 792205 ​ 902968 ​ 05N B ​ 13.580 N ​ 14.667 N ​ 132.000 W ​ 133.200 W ​ 694518 ​ 824685 ​ 1502009 ​ 1623605 ​ 08P C 15.000 N 15.800 N 128.583 W 131.000 W 284947 544791 1658371 1747847 09P D 13.125 N 14.083 N 123.583 W 125.333 W 247293 437022 1451031 1557860 10P E 12.750 N 13.083 N 123.583 W 125.333 W 246693 436796 1409563 1447513 10P F 9.895 N 11.083 N 117.817 W 118.917 W 289835 410804 1093917 1225828 11P ​ DD — Decimal degrees, UTM — Universal Transverse Mercator map projection 93 Table of Contents The CCZ lies between Hawaii and Mexico and is accessible by ship from various ports in the U.S. and South America.
The TOML Contract Area comprises six separate blocks (A through F) in the CCZ with a combined area of 74,713 square kilometers. ​ ​ TOML Contract Area extents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Maximum Minimum Maximum Minimum Maximum Minimum Maximum ​ ​ ​ Latitude ​ Latitude ​ Longitude ​ Longitude ​ UTM X ​ UTM X ​ UTM Y ​ UTM Y ​ UTM Area ​ (DD) ​ (DD) ​ (DD) ​ (DD) ​ (m) ​ (m) ​ (m) ​ (m) ​ Zone A ​ 7.167 N ​ 8.167 N ​ 151.667 W ​ 152.510 W ​ 553972 ​ 647187 ​ 792205 ​ 902968 ​ 05N B ​ 13.580 N ​ 14.667 N ​ 132.000 W ​ 133.200 W ​ 694518 ​ 824685 ​ 1502009 ​ 1623605 ​ 08P C 15.000 N 15.800 N 128.583 W 131.000 W 284947 544791 1658371 1747847 09P D 13.125 N 14.083 N 123.583 W 125.333 W 247293 437022 1451031 1557860 10P E 12.750 N 13.083 N 123.583 W 125.333 W 246693 436796 1409563 1447513 10P F 9.895 N 11.083 N 117.817 W 118.917 W 289835 410804 1093917 1225828 11P ​ DD — Decimal degrees, UTM — Universal Transverse Mercator map projection 87 Table of Contents The CCZ lies between Hawaii and Mexico and is accessible by ship from various ports in the U.S. and South America.
The Qualified Person considered that the combination of the TOML historical nodule sample data (physical samples and photo based long axis estimates) combined with detailed backscatter, photo profiling and geological interpretation is sufficient to estimate polymetallic nodule indicated mineral resources and, in one small especially data rich area, measured mineral resources. 101 Table of Contents The primary characteristic of the polymetallic nodule deposit that separates this deposit from typical terrestrial manganese, nickel and copper deposits is that the nodules themselves can be accurately mapped through photo-profiles and backscatter acoustic response.
The Qualified Person considered that the combination of the TOML historical nodule sample data (physical samples and photo based long axis estimates) combined with detailed backscatter, photo profiling and geological interpretation is sufficient to estimate polymetallic nodule indicated mineral resources and, in one small especially data rich area, measured mineral resources. 95 Table of Contents The primary characteristic of the polymetallic nodule deposit that separates this deposit from typical terrestrial manganese, nickel and copper deposits is that the nodules themselves can be accurately mapped through photo-profiles and backscatter acoustic response.
NORI Area A, B and C December 31, 2023 In-Situ Mineral Resource estimate at 4 kg/m 2 abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nodule tonnage ​ Abundance ​ Ni ​ Cu ​ Co ​ Mn NORI Area Category (Mt (wet)) (wet kg/m 2 ) (%) (%) (%) (%) A Inferred 72 9.4 1.35 1.06 0.22 28.0 B Inferred 36 11 1.43 1.13 0.25 28.9 C Inferred 402 11 1.26 1.03 0.21 28.3 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
NORI Area A, B and C December 31, 2024 In-Situ Mineral Resource estimate at 4 kg/m 2 abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nodule tonnage ​ Abundance ​ Ni ​ Cu ​ Co ​ Mn NORI Area Category (Mt (wet)) (wet kg/m 2 ) (%) (%) (%) (%) A Inferred 72 9.4 1.35 1.06 0.22 28.0 B Inferred 36 11 1.43 1.13 0.25 28.9 C Inferred 402 11 1.26 1.03 0.21 28.3 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
Battery grade nickel and cobalt sulfate are expected to then be crystallized from the purified solutions. 99 Table of Contents The pyrometallurgical process is expected to form two byproducts as well as the matte for the hydrometallurgical refinery: ● an electric furnace slag containing silica and 53% MnO that is intended to be sold as feed to the Si-Mn industry; and ● a converter aisle slag that could be used for aggregate in road construction or other applications.
Battery grade nickel and cobalt sulfate are expected to then be crystallized from the purified solutions. 93 Table of Contents The pyrometallurgical process is expected to form two byproducts as well as the matte for the hydrometallurgical refinery: ● an electric furnace slag containing silica and 53% MnO that is intended to be sold as feed to the Si-Mn industry; and ● a converter aisle slag that could be used for aggregate in road construction or other applications.
These changes show that it is reasonable to expect that the majority of inferred mineral resources could be upgraded to indicated or measured resources with further exploration. 97 Table of Contents Information concerning our mineral properties in the TOML Technical Report Summary and in this Annual Report includes information that has been prepared in accordance with the requirements of the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.
These changes show that it is reasonable to expect that the majority of inferred mineral resources could be upgraded to indicated or measured resources with further exploration. 91 Table of Contents Information concerning our mineral properties in the TOML Technical Report Summary and in this Annual Report includes information that has been prepared in accordance with the requirements of the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.
TOML also present the results of field, submitted and laboratory duplicates of nodule samples. 95 Table of Contents Analysis of the data revealed that, as a consequence of their origin, nodule grades vary only slightly across the CCZ, with spatial continuity of the abundance, Mn, Ni, Co, and Cu grades often ranging from the order of several kilometers up to several tens of kilometers.
TOML also present the results of field, submitted and laboratory duplicates of nodule samples. 89 Table of Contents Analysis of the data revealed that, as a consequence of their origin, nodule grades vary only slightly across the CCZ, with spatial continuity of the abundance, Mn, Ni, Co, and Cu grades often ranging from the order of several kilometers up to several tens of kilometers.
This is discussed further in Section 11.9.4 of the TOML Technical Report Summary, which assessed the collection methods. The main items of offshore infrastructure are the nodule collector vehicles, the riser, and three production support vessels (PSV). 98 Table of Contents The nodules are expected to be collected from the seafloor by self-propelled, tracked, collector vehicles.
This is discussed further in Section 11.9.4 of the TOML Technical Report Summary, which assessed the collection methods. The main items of offshore infrastructure are the nodule collector vehicles, the riser, and three production support vessels (PSV). 92 Table of Contents The nodules are expected to be collected from the seafloor by self-propelled, tracked, collector vehicles.
The project is expected to provide a source of revenue to the sponsor country, Tonga, and to the ISA. 100 Table of Contents The onshore environmental and social impacts have not yet been assessed because the process plant has not been designed in detail, and the location and host country (and hence regulatory regime) not confirmed.
The project is expected to provide a source of revenue to the sponsor country, Tonga, and to the ISA. 94 Table of Contents The onshore environmental and social impacts have not yet been assessed because the process plant has not been designed in detail, and the location and host country (and hence regulatory regime) not confirmed.
See Section 5 of the TOML Technical Report Summary for further specific information of the history of previous exploration of the TOML Contract Area. 94 Table of Contents Geology and sampling Seafloor polymetallic nodules occur in all oceans but the CCZ hosts a relatively high abundance of nodules.
See Section 5 of the TOML Technical Report Summary for further specific information of the history of previous exploration of the TOML Contract Area. 88 Table of Contents Geology and sampling Seafloor polymetallic nodules occur in all oceans but the CCZ hosts a relatively high abundance of nodules.
During these campaigns a variety of data was collected including: ● bathymetric mapping of most of NORI Areas A, B and C and all of NORI Area D using a hull-mounted Kongsberg Simrad EM120 12 kHz, full-ocean depth multibeam echo-sounding system (MBES).
During these campaigns a variety of data was collected including: ● bathymetric mapping of most of NORI Areas A, B and C and all of NORI Area D using a hull-mounted Kongsberg Simrad EM120 12 kHz, full-ocean depth multibeam echo-sounding system (“MBES”).
The long-axis estimation (LAE) method is the most accurate and preferred method but comes at a cost in the time to manually process each photo — limiting the number of photos that can be used for estimating abundance. The benefit of using photographs is being able to demonstrate continuity between physical sample location and accurately quantify nodule abundance.
The LAE method is the most accurate and preferred method but comes at a cost in the time to manually process each photo — limiting the number of photos that can be used for estimating abundance. The benefit of using photographs is being able to demonstrate continuity between physical sample location and accurately quantify nodule abundance.
The estimated mineral resources were determined in 2021 as of December 31, 2020 and also reflect the estimated mineral resources as of December 31, 2023, as none of the mineral resources in these areas were depleted by mining or any other activities.
The estimated mineral resources were determined in 2021 as of December 31, 2020 and also reflect the estimated mineral resources as of December 31, 2024, as none of the mineral resources in these areas were depleted by mining or any other activities.
The estimate of dewatering recovery used in the NORI Technical Report Summary is higher than indicated by the 1970s test work because data that has come to light recently suggests the amount of breakup during lifting the nodules up the RALS may be significantly less than previously assumed (Kennecott (1978), DRT (2015)).
The estimate of dewatering recovery used in the NORI Technical Report Summary is higher than indicated by the 1970s test work because data that has come to light recently suggests the amount of breakup during lifting the nodules up the RALS may be significantly less than previously assumed (Kennecott (1978), Deep Reach Technology (“DRT”) (2015)).
The exploration methods used to explore and delineate the mineral resources in the TOML and NORI areas were essentially the same. Multibeam echo-sounding system (MBES) was used to determine the depth of water (bathymetry) and the acoustic reflectance (backscatter) of the seabed. Nodule coverage was interpreted using the backscatter data.
The exploration methods used to explore and delineate the mineral resources in the TOML and NORI areas were essentially the same. MBES was used to determine the depth of water (bathymetry) and the acoustic reflectance (backscatter) of the seabed. Nodule coverage was interpreted using the backscatter data.
NORI has commenced the ESIA process in support of an application for an exploitation contract for the commercial collection of deep-sea polymetallic nodules. A comprehensive program of metocean and biological data acquisition is largely complete, required to characterize the baseline conditions at a designated Collector Test site and control sites in the NORI Contract Area.
NORI has commenced the ESIA process in support of an application for an exploitation contract for the commercial collection of deep-sea polymetallic nodules. A comprehensive program of metocean and biological data acquisition was completed, which required to characterize the baseline conditions at a designated Collector Test site and control sites in the NORI Contract Area.
For more information on environmental studies, permitting and social or community impact, see Section 17 of the NORI Technical Report Summary. Economic analysis We developed in-house a financial model based on estimates of future cash flows derived from extraction of nodules from the NORI Area D project. AMC reviewed the logic, input assumptions and integrity of the calculations and forecasts.
For more information on environmental studies, permitting and social or community impact, see Section 17 of the NORI Technical Report Summary. 2021 economic analysis and non-reliance thereon In connection with the preparation of the NORI Technical Report Summary, we developed in-house a point-in-time financial model based on estimates of future cash flows derived from extraction of nodules from the NORI Area D project, which AMC reviewed the logic, input assumptions and integrity of the calculations and forecasts.
From here, the CCZ extends over 4,500 kilometers east-northeast, in an approximately 600 kilomeers wide trend, with the eastern limits approximately 2,000 kilometers west of southern Mexico. The region is well-located to ship nodules to the American continent or across the Pacific to Asian markets.
The western-end of the CCZ is approximately 1,000 kilometers south of the Hawaiian island group. From here, the CCZ extends over 4,500 kilometers east-northeast, in an approximately 600 kilometers wide trend, with the eastern limits approximately 2,000 kilometers west of southern Mexico. The region is well-located to ship nodules to the American continent or across the Pacific to Asian markets.
The estimated mineral resources were determined in 2021 as of December 31, 2020 and also reflect the estimated mineral resources as of December 31, 2023, as none of the mineral resources in these areas were depleted by mining or any other activities. 79 Table of Contents NORI December 31, 2023 In-Situ Mineral Resource estimate for NORI Area D at 4 kg/m 2 abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tonnes ​ Abundance ​ Nickel ​ Copper ​ Cobalt ​ Manganese ​ Silicon NORI Area Category (Mt (wet)) (wet kg/m 2 ) (%) (%) (%) (%) (%) D Measured 4 18.6 1.42 1.16 0.13 32.2 5.13 D Indicated 341 17.1 1.40 1.14 0.14 31.2 5.46 D Measured + Indicated 345 17.1 1.40 1.14 0.14 31.2 5.46 D Inferred 11 15.6 1.38 1.14 0.12 31.0 5.50 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
We do not believe there have been any other material changes to the estimated mineral resources since the 2021 determination thereof. 79 Table of Contents NORI Area D December 31, 2024 In-Situ Mineral Resource estimate at 4 kg/m 2 abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tonnes ​ Abundance ​ Nickel ​ Copper ​ Cobalt ​ Manganese ​ Silicon NORI Area Category (Mt (wet)) (wet kg/m 2 ) (%) (%) (%) (%) (%) D Measured 4 18.6 1.42 1.16 0.13 32.2 5.13 D Indicated 341 17.1 1.40 1.14 0.14 31.2 5.46 D Measured + Indicated 345 17.1 1.40 1.14 0.14 31.2 5.46 D Inferred 11 15.6 1.38 1.14 0.12 31.0 5.50 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
The estimated mineral resources were determined in 2021, as of December 31, 2020, and also reflect the estimated mineral resources as of December 31, 2023, as none of the mineral resources in these areas were depleted by mining or any other activities. 96 Table of Contents Mineral Resource Estimate December 31, 2023, In-Situ, for the TOML Contract Area within the CCZ at a 4 kg/m 2 nodule abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tonnes Abundance Ni Cu Co Mn Mineral Resource Classification ​ (x10 6 wet t)* ​ (wet kg/m 2 ) ​ (%) ​ (%) ​ (%) ​ (%) Measured ​ 2.6 ​ 11.8 ​ 1.33 ​ 1.05 ​ 0.23 ​ 27.6 Indicated 69.6 11.8 1.35 1.18 0.21 30.3 Measured + Indicated 72.2 11.8 1.35 1.18 0.21 30.2 Inferred 696 11.3 1.29 1.14 0.20 29.0 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
We do not believe there have been any other material changes to the estimated mineral resources since the 2021 determination thereof. 90 Table of Contents Mineral Resource Estimate December 31, 2024, In-Situ, for the TOML Contract Area within the CCZ at a 4 kg/m 2 nodule abundance cut-off ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tonnes Abundance Ni Cu Co Mn Mineral Resource Classification ​ (x10 6 wet t)* ​ (wet kg/m 2 ) ​ (%) ​ (%) ​ (%) ​ (%) Measured ​ 2.6 ​ 11.8 ​ 1.33 ​ 1.05 ​ 0.23 ​ 27.6 Indicated 69.6 11.8 1.35 1.18 0.21 30.3 Measured + Indicated 72.2 11.8 1.35 1.18 0.21 30.2 Inferred 696 11.3 1.29 1.14 0.20 29.0 Note: Tonnes are quoted on a wet basis and grades are quoted on a dry basis, which is common practice for bulk commodities.
The TOML Contract Area is an exploration stage property. 92 Table of Contents Location of the TOML Contract Area and access The TOML Area is located within the CCZ of the northeast Pacific Ocean. The CCZ is located in international waters between Hawaii and Mexico. The western-end of the CCZ is approximately 1,000 kilometers south of the Hawaiian island group.
The TOML Contract Area is an exploration stage property. 86 Table of Contents Location of the TOML Contract Area and access The TOML Contract Area is located within the CCZ of the northeast Pacific Ocean. The CCZ is located in international waters between Hawaii and Mexico.
The PSVs are intended to be equipped with controllable thrusters and to be capable of dynamic positioning (DP), which should allow the vessels and risers to track the collectors.
All power for offshore equipment, including the nodule collecting vehicles, is intended to be generated on the PSVs. The PSVs are intended to be equipped with controllable thrusters and to be capable of dynamic positioning (DP), which should allow the vessels and risers to track the collectors.
The Qualified Person recommended that further data gathering, analysis, design and cost estimation be undertaken to advance the project. Internal controls and data verification The original assay sheets for the individual samples collected by the pioneer investors from within the NORI Area are not available for auditing against the values in the database.
Internal controls and data verification The original assay sheets for the individual samples collected by the pioneer investors from within the NORI Area are not available for auditing against the values in the database.
The energy to achieve the lift is planned to be supplied by compressors housed on the PSV, which are planned to be capable of generating very high air pressures — up to 15 MPa.
The energy to achieve the lift is planned to be supplied by compressors housed on the PSV, which are planned to be capable of generating very high air pressures, up to 15 MPa. The PSVs are planned to each support a RALS and its handling equipment, and to house the airlift compressors, collector vehicle control stations, and material handling equipment.
In the opinion of the Qualified Person, the NORI data was of high quality and suitable for estimation of measured mineral resources.
Documentation verified by the Qualified Person includes photographs, daily exploration reports, digital logging sheets and original assay reports. In the opinion of the Qualified Person, the NORI data was of high quality and suitable for estimation of measured mineral resources.
However, the consistency between the abundance and grade data collected by the pioneer investors, as presented in Section 9.1 of the NORI Technical Report Summary, supports the contention that the quality of the pioneer investor data is satisfactory.
However, the consistency between the abundance and grade data collected by the pioneer investors, as presented in Section 9.1 of the NORI Technical Report Summary, supports the contention that the quality of the pioneer investor data is satisfactory. 85 Table of Contents It is also reasonable to infer that the pioneer investor data are of sufficient quality for resource estimation because the ISA is an independent agency with significant accountability under the UNCLOS.
These RKEF plants were originally built to convert nickel laterite to nickel pig iron and could be converted to smelt polymetallic nodules with minor modifications. 81 Table of Contents ● In Project One, a purpose-built process plant would be constructed, including pyrometallurgical (~50% of Project One production, with the other ~50% tolled through existing RKEF facilities) and hydrometallurgical circuits (100% of Project One production).
PAMCO’s Hachinohe facility is located on the coast in northern Japan and is equipped with port and processing infrastructure required to receive and process polymetallic nodules and to ship products to customers. 81 Table of Contents ● In Project One, a purpose-built process plant may be constructed, including pyrometallurgical (~50% of Project One production, with the other ~50% tolled through existing RKEF facilities) and hydrometallurgical circuits (100% of Project One production).
Cash flows analysis The economic analysis set forth in Section 19 of the NORI Technical Report Summary presents a post-tax, real (uninflated) cash flows analysis. The valuation date is January 1, 2021. The analysis was performed on a 100% ownership basis and excludes consideration of financing costs and forward metal sales. The initial assessment indicates a positive economic outcome.
This preliminary point-in-time economic analysis set forth in Section 19 of the NORI Technical Report Summary presented a post-tax, real (uninflated) cash flows analysis as of a valuation date of January 1, 2021 based in part on the estimated capital and operating costs set forth in Section 18 of the NORI Technical Report Summary.
Removed
The PSVs are planned to each support a RALS and its handling equipment, and to house the airlift compressors, collector vehicle control stations, and material handling equipment. All power for offshore equipment, including the nodule collecting vehicles, is intended to be generated on the PSVs.
Added
The estimated mineral resources were determined in 2021 as of December 31, 2020 and also reflect the estimated mineral resources as of December 31, 2024, as none of the mineral resources in these areas were depleted by mining or any other activities.
Removed
The financial model is for NORI Area D only, which is at a preliminary level of planning and design. We do not believe there have been any material changes to this model since AMC’s review.
Added
We do not believe there have been any other material changes to the estimated mineral resources since the 2021 determination thereof.
Removed
For the initial assessment, the offshore cost estimates were developed based upon the guidelines of the AACE (Association for the Advancement of Cost Engineering) International Recommended Practice No. 18R-97.
Added
These RKEF plants were originally built to convert nickel laterite to nickel pig iron and could be converted to smelt polymetallic nodules with minor modifications.
Removed
Based on engineering studies performed previously by Deep Reach Technology (DRT) for Deep Green Resources and the experience in trial mining of deep-sea nodules by DRT personnel, the cost estimate was considered to be a class 4. Offshore capital costs were estimated to accuracy levels of -30% +40%.
Added
Furthermore, in November 2023, we entered into a binding MoU with PAMCO whereby they must complete a feasibility study (anticipated to be completed in mid-2025) to toll treat 1.3 million tonnes of wet polymetallic nodules per year at its Hachinohe, Japan smelting facility.
Removed
Onshore capital costs were estimated according to an AACE Class 5 level of accuracy (–35% +50%). A contingency of 25% was applied to the offshore and onshore capital cost estimates. The collection plan considered in the NORI Technical Report Summary contemplates a 23-year production period.
Added
As part of its review of the economic analysis, AMC cautioned that a pre-feasibility study had not been undertaken and recommended that further data gathering, analysis, design and cost estimation be undertaken to advance the project.
Removed
The expected production period is within the expected duration of a NORI Area D ISA Exploitation Contract which would be thirty (30) years (with possible extensions by periods of ten (10) years) as outlined in the current draft of the regulations for exploitation of mineral resources in the CCZ (ISBA/25/C/WP.1).
Added
We have continued to define our resource in the NORI area, with the goal to develop project economics to pre-feasibility level and are working towards a pre-feasibility study, which is nearing completion.
Removed
After the initial 23-year period, substantial resources will remain in the other NORI Areas that could support future collection (combined inferred mineral resource in NORI Areas A, B and C of 510 Mt (wet) at 1.28% Ni, 0.21% Co, 1.04% Cu, 28.3% Mn, at an average abundance of 11 kg (wet)/m 2 ).
Added
As part of our ongoing refinement of our business plans and resource definition work, we are now pursuing a low-CAPEX approach to our development and commercialization of operations for our NORI Area D project where we reuse existing production assets opposed to the high-CAPEX approach where the majority of offshore and onshore production assets would be newly built by us as assumed in the 2021 economic analysis included in the NORI Technical Report Summary.
Removed
The proposed project schedule is shown in the Gantt chart in Figure 19.1 of the NORI Technical Report Summary. In Project Zero, NORI expects to toll treat the nodules in third-party pyrometallurgical plants and sell the RKEF products into the alloy market. This will be expected to generate revenue while the pyrometallurgical and hydrometallurgical facilities are planned to be built.
Added
As a result of these changes and the general passage of time since the valuation date of January 1, 2021, the 2021 point-in-time economic analysis included in Section 19 of the NORI Technical Report Summary and the estimated capital and operating costs set forth in Section 18 of the NORI Technical Report Summary, including any references thereto throughout the NORI Technical Report Summary, should no longer be relied upon or used by investors for any reason.
Removed
In Project One, NORI expects to stage the construction of its multiple pyrometallurgical and hydrometallurgical lines to flatten out capital expenditure requirements. Nodule production is expected to be directed preferentially to the NORI pyrometallurgical plants as this is expected to be the lowest operating cost option.
Added
We note that we do not believe that there have been any material changes to the abundance cut-off grades used throughout the NORI Technical Report Summary or the Qualified Person’s opinion that the mineral resources included in the NORI Technical Report Summary have reasonable prospects of economic extraction.
Removed
Whenever these facilities are at maximum capacity (particularly during the ramp-up phase), the surplus nodules are expected to be sent for toll treatment. 85 Table of Contents NORI expects that it will ensure that its own hydrometallurgical refineries are filled up to maximum capacity, as this is expected to produce the highest value products.
Added
The estimated mineral resources were determined in 2021, as of December 31, 2020, and also reflect the estimated mineral resources as of December 31, 2024, as none of the mineral resources in these areas were depleted by mining or any other activities.
Removed
Whenever its own hydrometallurgical refineries are at full capacity, NORI expects to sell the surplus product from its pyrometallurgical plant directly to the matte market.
Removed
While the matte is not as valuable as the refined products from the hydrometallurgical plant (nickel sulfate, cobalt sulfate, and copper cathode), it still provides a consistent revenue stream and assists for periods when the refineries are at full capacity.
Removed
Some of the alloy production from toll treatment of NORI nodules are expected to be shipped to the NORI hydrometallurgical plants to make use of spare capacity. This will require the alloy from the third-party RKEF to be sulphidized prior to hydrometallurgical treatment.
Removed
Based on preliminary discussions with potential buyers, NORI believes that there is sufficient demand for the alloy and matte over the life of the project. The analysis was performed on a 100% ownership basis and excludes consideration of financing costs and forward metal sales. The analysis assumes the economic parameters listed in the table below.
Removed
Assumed Economic Inputs ​ ​ ​ ​ ​ ​ Parameters Units Values Hydrometallurgical plant Ni recovery ​ % ​ 94.6 % Mn recovery % ​ 98.9 % Hydrometallurgical plant Cu recovery % ​ 86.2 % Hydrometallurgical plant Co recovery % ​ 77.2 % Pyrometallurgical plant Ni recovery % ​ 96.8 % Pyrometallurgical plant Cu recovery % ​ 93.3 % Pyrometallurgical plant Co recovery % ​ 92.7 % Mn silicate grade % ​ 40.0 % Cu cathode grade % ​ 99.9 % Payability of Cu content in cathode % ​ 100 % Nodule moisture content % ​ 24 % Onshore tax rate % of taxable income 20 % Average offshore tax (to ISA) % of taxable income 6.7 % ​ Commodity Prices Project revenues will come from the following sources: ● a nickel sulfate product; ● a copper cathode product; ● a cobalt sulfate product; ● a manganese silicate product; ● an ammonium sulfate product; ● a nickel alloy product containing copper and cobalt; and ● a matte product from the NORI pyrometallurgical plants containing nickel, copper and cobalt, which would be sold to the matte market. 86 Table of Contents NORI has used the following payable percentages for the alloy: ● Nickel: 80% of in-situ value in the alloy; ● Copper: 40% of in-situ value in the alloy; and ● Cobalt: 80% of in-situ value in the alloy.
Removed
The following estimates for treatment charges and refining charges for the alloy product were used in the NORI financial model: ● a refining charge of $1,697/tonne of contained nickel in the alloy; ● a refining charge of $800/tonne of contained nickel in the alloy; ● a refining charge of $6,700/tonne of contained nickel in the alloy; and ● a treatment charge $300/tonne of alloy.
Removed
For the matte product, NORI has used a payables figure of 83% of the market metal price of nickel, copper and cobalt. The metal recoveries for the matte and alloy are those from the pyrometallurgical plant, whilst the refined products (nickel sulfate, copper cathode and cobalt sulfate) are from the hydrometallurgical refinery metal recoveries.
Removed
The prices forecast by CRU and adopted for use in the economic analysis were derived from a report prepared by CRU dated October 23, 2020 and are listed in the table below. The Qualified Person considered the metal price assumptions underpinning the analysis to be reasonable.
Removed
Commodity prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 – 2046 ​ ($) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($) Ni metal, LME cash (/t) 14,067 14,467 14,868 15,269 15,670 16,071 16,472 16,472 16,472 16,472 16,472 Ni Sulfate (/t) 15,610 16,027 16,443 16,860 17,269 17,678 18,087 18,087 18,087 18,087 18,807 SiMn, China import, 44% Mn (/dmtu) 4.80 4.70 4.70 4.60 4.60 4.50 4.50 4.50 4.50 4.50 4.50 Cu, Grade A cathode – LME cash (/t) 6,435 6,497 6,557 6,615 6,673 6,730 6,787 6,805 6,822 6,839 6,872 Co, EU Co 99.8% min (EXW) (/t) 52,881 39,914 38,204 41,526 45,137 49,062 51,106 50,600 49,126 47,695 46,333 Co Sulfate premium over Co metal (ex-China) (/t) 64,250 49,035 46,933 51,014 55,450 60,272 62,784 62,162 60,351 58,594 56,920 ​ Production schedule The production schedule on which the economic analysis is based was developed on an annual basis.
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The Qualified Person cautioned that a prefeasibility study has not been undertaken and that the seafloor production schedule is preliminary in nature and should not be interpreted as a mineral reserve. Approximately 96% of the mineral resource within NORI Area D is classified as indicated and a further 1% is classified as measured resource.
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The life of mine (“LOM”) production sequence includes 6 Mt (wet) of nodules that are classified as inferred mineral resources.
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This is approximately 2% of the total LOM production. 87 Table of Contents The production schedule assumes staged operation initially of the Hidden Gem , then Drill Ship 2 and finally Collector Vessel 1, as outlined in Section 16.1 of the NORI Technical Report Summary. The nodule metal grades and nodule abundance varying annually according to the LOM schedule.
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The grades and nodule abundance for the mine plan were derived from a preliminary production schedule developed by AMC as outlined in Section 16.7 of the NORI Technical Report Summary. The higher abundance areas were targeted by the production schedule.
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The metal grades and abundance used in the schedule (the “IA”) are compared to the averages (of all mineral resource categories) for NORI Area D in the table below.
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Comparison of IA mine plan to Mineral Resource for NORI Area D ​ ​ ​ ​ ​ ​ ​ ​ ​ Mineral ​ ​ ​ ​ ​ ​ Resource in ​ Seafloor ​ ​ ​ ​ NORI Area D ​ production ​ Difference ​ ​ (all categories) plan (%) Tonnage (Mt wet) 356 254 71 % Nodule abundance (kg/m 2 ) 17.0 16.9 99 % Ni grade (%) 1.40 1.4 100 % Mn grade (%) 31.2 31.0 99 % Cu grade (%) 1.14 1.1 100 % Co grade (%) 0.14 0.14 98 % ​ The production ramp-up discussed in Section 17 of the NORI Technical Report Summary was adopted for the production schedule.
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The Qualified Person considered the assumptions underpinning the initial assessment and economic analysis to be reasonable. Capital and operating costs The capital cost estimates for the Project are summarized below. Pre-project items include data gathering and studies that will occur prior to construction.
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Offshore project costs include the procurement and integration of the PSVs, the collector support vessel, the fabrication of the collectors, and the RALS. Onshore project costs consist principally of the construction of the minerals processing pyrometallurgical plant and hydrometallurgical refinery.
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Sustaining costs are for both onshore and offshore assets, and closure costs are principally for rehabilitation of the onshore minerals processing site. ​ ​ ​ ​ Cost estimate Section ($ million) Pre-project costs 237 Project costs ​ Offshore project costs ​ Project Zero 204 Project One 2,244 Total 2,448 Onshore project costs ​ Project One 4,786 Total 4,786 Total project costs 7,234 Sustaining capital costs (onshore and offshore) 2,637 Closure costs 500 Total 10,608 ​ Operating costs have been estimated at $1.8 billion per annum during steady state production (from 2030 onwards).
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Expenditures of a total of $37.5 billion over the life of the project on operating costs is expected.
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Onshore processing is the most significant operating cost. 88 Table of Contents Average operating cost estimates during steady state operation (from 2030 onwards) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Operating Cost ​ Average Unit ​ Average Unit ​ over Life of Cost (/t – wet Cost (/t – dry ​ ​ Mine ​ tonne nodules ​ tonne Section ​ ($ million pa) ​ recovered) ​ processed) Offshore ​ $ 240.74 ​ $ 19.31 ​ $ 25.40 Shipping ​ $ 254.37 ​ $ 20.40 ​ $ 26.84 Onshore ​ $ 1,286.19 ​ $ 103.14 ​ $ 135.71 Other ​ $ 25.00 ​ $ 2.00 ​ $ 2.64 Total ​ $ 1,806.30 ​ $ 144.85 ​ $ 190.59 ​ For more information on capital and operating costs, see Section 18 of the NORI Technical Report Summary.
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Undiscounted post-tax net cash flows of $30.6 billion is expected. An internal rate of return of 27% has been estimated from the financial model.
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Discounted cash flow analysis of unleveraged real cash flows, discounting at 9% per annum, indicates a pre-tax project net present value (NPV) of $11.2 billion and a post-tax project NPV of $6.8 billion, which includes the LOM production of polymetallic nodules that are presently classified as inferred mineral resources, representing approximately 2% of the total LOM production.
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Excluding the inferred mineral resources from the economic analysis, the post-tax project NPV is estimated at $6.7 billion, which is not a significant difference from the economic analysis that includes the inferred mineral resources. The project reaches its lowest cumulative undiscounted cash flow figure of $4.0 billion in 2026. Undiscounted payback period is 6.6 years after commencement of production.
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The total cash flows are summarized below: ​ ​ ​ ​ ​ Value ​ ($ million) Cash flow item ​ ​ ​ Ni revenue $ 44,106 Mn revenue $ 26,785 Cu revenue $ 12,685 Co revenue $ 11,075 Ammonium sulfate revenue $ 439 Total revenue $ 95,090 Pre-project capital $ 237 Offshore construction $ 2,448 Onshore construction $ 4,786 Offshore sustaining capital $ 1,418 Onshore sustaining capital $ 1,219 Closure costs $ 500 Total capital $ 10,608 Offshore operating costs $ 5,154 Shipping costs $ 5,266 Onshore operating costs $ 26,544 Corporate costs $ 560 Total operating costs $ 37,524 Royalties $ 7,195 Onshore tax $ 9,123 Taxes and royalties $ 16,318 Net undiscounted cash flow $ 30,640 89 Table of Contents Project revenues are expected to come from the following sources: (a) a nickel sulfate product; (b) a copper cathode product; (c) a cobalt sulfate product; (d) a manganese silicate product; (e) an ammonium sulfate product; (f) a nickel alloy product containing copper and cobalt; and (g) a matte product from the NORI pyrometallurgical plants containing nickel, copper and cobalt which would be sold to the matte market.
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The discounted cash flows and progressive NPVs are shown below: ​ ​ The date of the investment decision, as outlined in the initial assessment contained in the NORI Technical Report Summary was expected to be on or around June 30, 2023.
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The analysis assumes NORI spending of $237 million on pre-project activities between 2021 (which were progressed in 2021) and 2024.
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The future value of the project on June 30, 2023 (after the pre-project expenditure is sunk and time has elapsed) is expected to be $8.6 billion and the initial rate of return from that point is expected to be 29%. 90 Table of Contents The sensitivity of project economics to changes in the main variables was tested by selecting high and low values that represent a likely range of potential operating conditions.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint alleges that all defendants violated Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about our operations and prospects during the period from March 4, 2021 and October 5, 2021.
Biggest changeBarron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about our operations and prospects during the period from March 4, 2021 and October 5, 2021. On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc.
There is no assurance that we will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated. Item 4.
There is no assurance that we will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated.
MINE SAFETY DISCLOSURES Not applicable. ​ 103 Table of Contents PART II ​
MINE SAFETY DISCLOSURES Not applicable. ​ 97 Table of Contents PART II ​
On October 28, 2021, a shareholder filed a putative class action against us, one of our executive and former director in federal district court for the Eastern District of New York, captioned Caper v. TMC The Metals Company Inc. F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard.
Item 3. LEGAL PROCEEDINGS Except as set forth below, we are not currently a party to any material legal proceedings. On October 28, 2021, a shareholder filed a putative class action against us, one of our executive and former director in federal district court for the Eastern District of New York, captioned Caper v. TMC The Metals Company Inc.
The Company is continuing to cooperate with the investigation and respond voluntarily to the SEC’s requests. On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against us in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v.
A resolution of this lawsuit adverse to us or the other defendants, however, could have a material effect on our financial position and results of operations in the period in which the lawsuit is resolved. ​ 96 Table of Contents On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against us in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v.
On July 12, 2023, an oral hearing on the motion to dismiss was held. The parties are currently awaiting a ruling.
We deny any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit. On July 12, 2023, an oral hearing on the motion to dismiss was held. The parties are currently awaiting a ruling.
An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings. We deny any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit.
These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected. An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings.
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Item 3. LEGAL PROCEEDINGS Except as set forth below, we are not currently a party to any material legal proceedings. On September 20, 2021, we commenced litigation in the New York Supreme Court, New York County against two investors who failed to fund their investment commitments in connection with the closing of the Business Combination.
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F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Messrs.
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These actions are captioned Sustainable Opportunities Acquisition Corp. n/k/a TMC the metals company Inc. v. Ethos Fund I, LP, Ethos GP, LLC, Ethos DeepGreen PIPE, LLC, and Ethos Manager, LLC, Index No. 655527/2021 (N.Y. Sup. Ct.) and Sustainable Opportunities Acquisition Corp. n/k/a TMC the metals company Inc. v.
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The appeal was heard on November 8, 2024. The NY Appellate Division upheld the lower court’s ruling in December 2024, moving the case into the discovery phase.
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Ramas Capital Management, LLC, Ramas Energy Opportunities I, LP, Ramas Energy Opportunities I GP, LLC, and Ganesh Betanabhatla, Index No. 655528/2021 (N.Y. Sup. Ct.). The operative complaints allege that the investors breached the relevant subscription agreement and that the investors’ affiliates tortiously interfered with the subscription agreements by causing the investor not to fund its contractual obligations.
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On November 8, 2024, a shareholder filed a putative class action against us and certain executives in federal district court for the Central District of California, captioned Lin v. TMC The Metals Company Inc., Gerard Barron, and Craig Shesky. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Messrs.
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We are seeking compensatory damages (plus interest), equitable relief, expenses, costs, and attorneys’ fees. On December 17, 2021, the defendants at Ethos moved to dismiss the complaint which was unsuccessful. The matter is proceeding into the discovery phase. There can be no assurances, however, that we will be successful in our efforts against these investors.
Added
Barron and Shesky violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information regarding the classification of the non-financial asset received from our partnership with Low Carbon Royalties Inc. and the derecognition of the capitalized exploration contract related to NORI.
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On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc. These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected.
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The alleged misstatements and omissions pertain to our initial classification of this non-financial asset as a gain on disposition (being a sale of future revenue) and subsequent reclassification thereof as a royalty liability (and re-capitalization of the exploration contract) and the restatement of our previously issued financial statements as a result thereof for the three months ended March 31, 2023, the six months ended June 30, 2023 and the nine months ended September 30, 2023 in March 2024.
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A resolution of this lawsuit adverse to us or the other defendants, however, could have a material effect on our financial position and results of operations in the period in which the lawsuit is resolved. 102 Table of Contents In February 2022, we received letters from the SEC notifying us of an investigation and requesting the voluntary production of documents and information regarding our 2020 acquisition of Tonga Offshore Mining Limited from Deep Sea Mining Finance Ltd. and our Business Combination with SOAC.
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The complaint purports to represent a class of shareholders who acquired our securities between May 12, 2023, and March 25, 2024, and seeks to recover compensable damages caused by the alleged wrongdoings. On February 6, 2025, the Court appointed a lead plaintiff. An amended complaint was filed on March 6, 2025.
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Pursuant to court-approved scheduling, we are expected to serve a motion to dismiss by April 10, 2025, the lead plaintiff is expected to file an opposition by May 15, 2025, and we are expected to reply by June 5, 2025. We intend to defend against the lawsuit.
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There can be no assurance, however, that we will be successful in our defense, or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Due to the early stage of this litigation, such losses or range of possible losses cannot be reliably estimated. Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSuch numbers do not include beneficial owners holding our securities through nominee names. Unregistered Sales of Securities None Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the quarter ended December 31, 2023. Item 6. [RESERVED] ​
Biggest changeSuch numbers do not include beneficial owners holding our securities through nominee names. Unregistered Sales of Securities None Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the quarter ended December 31, 2024.
Shareholders and Holders of Public Warrants As of March 22, 2024, there were approximately 318,249,878 Common Shares issued and outstanding held of record by 106 holders, approximately 15,000,000 Public Warrants held of record by one holder exercisable for one Common Share at a price of $11.50 per share.
Shareholders and Holders of Public Warrants As of March 20, 2025, there were approximately 347,910,742 Common Shares issued and outstanding held of record by 79 holders, approximately 15,000,000 Public Warrants held of record by one holder exercisable for one Common Share at a price of $11.50 per share.
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Ownership and Exchange Controls See Exhibit 4.1 to this Annual Report for a summary of certain ownership and exchange controls imposed by Canadian law or by our Notice of Articles and Articles on the right of a non-resident of Canada to hold or vote Common Shares or restricts the export or import of capital, or that would affect the remittance of dividends (if any) or other payments by us to a non-resident of Canada holder of Common Shares.
Added
Material U.S. and Canadian Federal Income Tax Considerations See Exhibit 4.1 to this Annual Report for summaries of the material U.S. federal income tax considerations applicable to you if you are a U.S.
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Holder (as defined below) of our Common Shares and/or Public Warrants and the material Canadian federal income tax considerations pursuant to the Income Tax Act (Canada) and the regulations thereunder (the “Tax Act”) that generally apply to the acquisition, holding and disposition of Common Shares and Public Warrants by a person who is neither resident nor deemed to be resident in Canada for purposes of the Tax Act and acquires a beneficial interest in Common Shares or Public Warrants.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIf these financing or other financing sources are not available, or if the terms of financing are less desirable than we expect, or if in insufficient amounts, we may be forced to delay our exploration and/or exploitation activities or further scale back our operations, which could have a material adverse impact on our business and financial prospects. 114 Table of Contents We continue to expect that we will require approximately $35 to $45 million of cash in addition to the $6.8 million cash on hand as of December 31, 2023 and the committed funding from an affiliated investor of $9 million which was received on January 31, 2024 as part of our previously announced Registered Direct Offering, assuming no exercise of the Class A warrants issued in the offering (but not including potential drawdown on our credit facility with Allseas or our credit facility with ERAS Capital LLC and Gerard Barron) to submit a high-quality application for an exploitation contract for NORI Area D following the July 2024 meeting of the ISA.
Biggest changeIf these financing or other financing sources are not available, or if the terms of financing are less desirable than we expect, or if in insufficient amounts, we may be forced to delay our exploration and/or exploitation activities or further scale back our operations, which could have a material adverse impact on our business and financial prospects.
Polymetallic nodules are discrete rocks that sit unattached to the seafloor, occur in significant quantities in the CCZ and have high concentrations of nickel, manganese, cobalt and copper in a single rock. These four metals contained in the polymetallic nodules are critical for the transition to low carbon energy.
Polymetallic nodules are discrete rocks that sit unattached to the seafloor, occur in significant quantities in the CCZ and have high concentrations of nickel, copper, cobalt and manganese in a single rock. These four metals contained in the polymetallic nodules are critical for the transition to low carbon energy.
The ISA requires that a contractor must obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and such nation must maintain effective supervision and regulatory control over such sponsored contractor.
The ISA requires that a contractor obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and such nation must maintain effective supervision and regulatory control over such sponsored contractor.
We are an exploration-stage company and the recovery of our investment in mineral exploration contracts and attainment of profitable operations is dependent upon many factors including, among other things, the development of commercial production system for collecting polymetallic nodules from the seafloor as well as the development of our processing technology for the metallurgical treatment of such nodules, the establishment of mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing ISA exploitation contracts or provisional approvals.
We are an exploration-stage company and the recovery of our investment in mineral exploration contracts and attainment of profitable operations is dependent upon many factors including, among other things, the development of a commercial production system for collecting polymetallic nodules from the seafloor as well as the development of our processing technology for the metallurgical treatment of such nodules, the establishment of mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing ISA exploitation contracts or provisional approvals.
In addition, we have worked with an engineering firm Hatch and consultants KPM to develop a near-zero solid waste flowsheet. The primary processing stages of the flowsheet from nodule to NiCuCo matte intermediate were demonstrated as part of our pilot plant program at FLSmidth and XPS’ facilities. The matte refining stages are being tested at SGS Lakefield.
In addition, we have worked with engineering firm Hatch and consultants KPM to develop a near-zero solid waste flowsheet. The primary processing stages of the flowsheet from nodule to NiCuCo matte intermediate were demonstrated as part of our pilot plant program at FLSmidth and XPS’ facilities. The matte refining stages are being tested at SGS Lakefield.
The expected volatility was estimated using a binomial model based on consideration of the implied volatility from the Company’s Public Warrants, adjusted to account for the call feature of the Public Warrants at prices above $18.00 during 20 trading days within any 30-trading-day period and historical volatility of the share price of our Common Shares.
The expected volatility was estimated using a binomial model based on consideration of the implied volatility from our Public Warrants, adjusted to account for the call feature of the Public Warrants at prices above $18.00 during 20 trading days within any 30-trading-day period and historical volatility of the share price of our Common Shares.
Based on our cash balance and availability of borrowing under our credit facility with Allseas and credit facility with ERAS Capital LLC and Gerard Barron, when compared with our forecasted cash expenditures, we believe we will have sufficient funds to meet our obligations that become due within the next twelve months.
Based on our cash balance and availability of borrowing under our credit facility with ERAS Capital LLC and Gerard Barron, when compared with our forecasted cash expenditures, we believe we will have sufficient funds to meet our obligations that become due within the next twelve months.
If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock for battery cathode precursors (nickel, and cobalt sulfates, or intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy) for EV and renewable energy storage markets, (ii) copper cathode for EV wiring, energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production.
If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock for battery cathode precursors (nickel, and cobalt sulfates, or intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy) for EV and energy storage markets, (ii) copper cathode for electric wiring, energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production.
All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.
All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (“SOFR”), 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.
We are still in the exploration phase and have not yet declared mineral reserves. In addition, we do not have the applicable environmental and other permits required to build and/or operate commercial scale polymetallic nodule processing and refining plants on land. 2023 Highlights Below are a few of the developments that occurred in 2023.
We are still in the exploration phase and have not yet declared mineral reserves. In addition, we do not have the applicable environmental and other permits required to build and/or operate commercial scale polymetallic nodule processing and refining plants on land. 2024 Highlights Below are a few of the developments that occurred in 2024.
Following the closing of the Business Combination, we expect to remain an emerging growth company at least through the end of the 2024 fiscal year and we expect to continue to take advantage of the benefits of the extended transition period at least through the end of the 2024 fiscal year, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.
Following the closing of the Business Combination, we expect to remain an emerging growth company at least through the end of the 2025 fiscal year and we expect to continue to take advantage of the benefits of the extended transition period at least through the end of the 2025 fiscal year, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.
The fair value of the Private Warrants is estimated using a Black-Scholes option pricing model whereby the expected volatility is estimated by using a blended volatility calculated by assigning equal weights to both implied volatility of the Company’s Public Warrants and the historical volatility of the Company’s common share price.
The fair value of the Private Warrants is estimated using a Black-Scholes option pricing model whereby the expected volatility is estimated by using a blended volatility calculated by assigning equal weights to both implied volatility of our Public Warrants and the historical volatility of our common share price.
In addition, the exercise price to purchase one Common Share under the outstanding Class A Warrants is $3.00 (subject to customary adjustments) and there can be no assurance that such warrants will be exercised prior to their expiration, and as such, such warrants may expire and we will not receive any proceeds from the excise thereof.
In addition, the exercise price to purchase one Common Share under the outstanding Class A Warrants and Class B Warrants is $2.00 (subject to customary adjustments) and there can be no assurance that such warrants will be exercised prior to their expiration, and as such, such warrants may expire and we will not receive any proceeds from the excise thereof.
In furtherance of this agreement, on July 8, 2019, we entered into a Pilot Mining Test Agreement with Allseas (“PMTA”), which was amended on five occasions through February 2023, to develop and deploy a PMTS, successful completion of which is a prerequisite for our application for an exploitation contract with the ISA.
In furtherance of this agreement, on July 8, 2019, we entered into a Pilot Mining Test Agreement with Allseas (“PMTA”), which was amended on five 112 Table of Contents occasions through February 2023, to develop and deploy a PMTS, successful completion of which is a prerequisite for our application for an exploitation contract with the ISA.
The five-year estimated expenditure is indicative and subject to change, TOML will review the program regularly and TOML will inform the ISA of any changes through its annual reports. 117 Table of Contents Regulatory Obligations Relating to Exploration Contracts Both TOML and NORI require sponsorship from their host sponsoring nations, Tonga and Nauru, respectively.
The five-year estimated expenditure is indicative and subject to change, TOML will review the program regularly and TOML will inform the ISA of any changes through its annual reports. Regulatory Obligations Relating to Exploration Contracts Both TOML and NORI require sponsorship from their host sponsoring nations, Tonga and Nauru, respectively.
The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if we or any of our subsidiaries raise at least USD $50,000,000 in the aggregate (i) through the issuance of any of our or our subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.
The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if we or any of our subsidiaries raise at least $50 million in the aggregate (i) through the issuance of any of our or our subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.
The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if we or any of our subsidiaries raise at least USD $50,000,000 in the aggregate (i) through the issuance of any of our or our subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.
The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if we or any of our subsidiaries raise at least $50 million in the aggregate (i) through the issuance of any of our or our subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.
These risks, as well as other risks, are discussed in Item 7A entitled “ Quantitative and Qualitative Disclosures About Market Risk ” and Item 1A entitled “ Risk Factors ” included in this Annual Report. 110 Table of Contents Impact of Climate Change We are committed to adopting the Task Force on Climate-Related Financial Disclosures recommendations.
These risks, as well as other risks, are discussed in Item 7A entitled “ Quantitative and Qualitative Disclosures About Market Risk ” and Item 1A entitled “ Risk Factors ” included in this Annual Report. Impact of Climate Change We are committed to adopting the Task Force on Climate-Related Financial Disclosures recommendations.
This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. ​
This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. ​ 116 Table of Contents
All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.
All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month SOFR, 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.
Cash Flows Summary Comparison of the Periods Ended December 31, 2023 and December 31, 2022 The following table summarizes our sources and uses of cash for the three and twelve months ended December 31, 2023 and December 31, 2022.
Cash Flows Summary Comparison of the Periods Ended December 31, 2024 and December 31, 2023 The following table summarizes our sources and uses of cash for the three and twelve months ended December 31, 2024 and December 31, 2023.
On March 22, 2023, we entered into a Credit Facility with Argentum Credit Virtuti GCV, the parent of Allseas Investments S.A. and an affiliate of Allseas, which was amended on July 31, 2023 and March 22, 2024, pursuant to which, we may borrow from the Lender up to $25 million in the aggregate, from time to time, subject to certain conditions.
On March 22, 2023, we entered into the 2023 Credit Facility with Argentum Cedit Virtuti GCV, the parent of Allseas Investments S.A. and an affiliate of Allseas, which was amended on July 31, 2023 and March 22, 2024, pursuant to which, we were able to borrow from the Lender up to $25 million in the aggregate, from time to time, subject to certain conditions.
We will pay an underutilization fee equal to 4.0% per annum payable semi-annually for any amounts that remain undrawn under the 2024 Credit Facility. We have the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of September 22, 2025.
We will pay an underutilization fee equal to 4.0% per annum payable semi-annually for any amounts that remain undrawn under the 2024 Credit Facility. We have the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of December 31, 2025.
For accounting purposes, the Company was considered to have issued the Private Warrants as part of the Business Combination, and we are required to re-measure the fair value of our Private Warrants at the end of each reporting period.
For accounting purposes, we were considered to have issued the Private Warrants as part of the Business Combination, and we are required to re-measure the fair value of our Private Warrants at the end of each reporting period.
NORI commissioned AMC Consulting Ltd, a leading mining consulting firm (AMC), to undertake a preliminary economic assessment (“PEA”) of the mineral resource contained in NORI Area D and to compile a technical report compliant with Canadian National Instrument (NI 43-101), which was completed in March 2021.
NORI commissioned AMC Consulting Ltd, a leading mining consulting firm, to undertake an Initial Economic Assessment of the mineral resource contained in NORI Area D and to compile a technical report compliant with Canadian National Instrument (NI 43-101), which was completed in March 2021.
The pilot nodule collection system developed and tested by Allseas is expected to be upgraded to a commercial system with an expanded targeted production capacity of up to an estimated 3.0 million tonnes of wet nodules per year, to be delivered in stepped increments, with expected production readiness in the first quarter of 2026.
The pilot nodule collection system developed and tested by Allseas is expected to be upgraded to a commercial system with an expanded targeted production capacity of up to an estimated 3.0 million tonnes of wet nodules per year, to be delivered in stepped increments.
In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for an exploitation contract for the NORI Area D, and by negotiating the settlement of program expenditures with our equity whenever possible.
In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for an exploitation contract for the NORI Area D, and by negotiating the settlement of program expenditures with our equity whenever possible, and by utilizing existing assets for offshore and onshore production.
Our results are reported under Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) and in U.S. dollars. Components of Results of Operations We are an exploration-stage company with no revenue to date and a net loss of $73.8 million for the year ended December 31, 2023, compared to a net loss of $171 million in the prior year.
Our results are reported under Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) and in U.S. dollars. Components of Results of Operations We are an exploration-stage company with no revenue to date and a net loss of $81.9 million for the year ended December 31, 2024, compared to a net loss of $73.8 million in the prior year.
Furthermore, even if the warrants will be in the money, the holders of the warrants are not obligated to exercise their warrants, and we cannot predict whether holders of the warrants will choose to exercise all or any of their warrants.
Furthermore, 110 Table of Contents even if the warrants will be in the money, the holders of the warrants are not obligated to exercise their warrants, and we cannot predict whether holders of the warrants will choose to exercise all or any of their warrants.
All amounts drawn under the Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, our election) on the first business day of each of June and January.
All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month SOFR, 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.
Evaluation of Going Concern We assess quarterly whether the Company has the ability to meets its committed cash requirements for the next twelve months and continue to operate as a going concern. This assessment requires the use of forecasts of our business activities and related estimates of future cost obligations which can be subject to change.
Evaluation of Going Concern We assess quarterly whether we have the ability to meet its committed cash requirements for the next twelve months and continue to operate as a going concern. This assessment requires the use of forecasts of our business activities and related estimates of future cost obligations which can be subject to change.
Credit Facility with Allseas Affiliate As described above, on March 22, 2023 we entered into the Credit Facility with Argentum Credit Virtuti GCV, an affiliate of Allseas, under which we may borrow up to $25 million pursuant to the terms and conditions of the Credit Facility, which as amended has a maturity date of August 31, 2025.
Borrowing with Company Related to Allseas 2023 Credit Facility As described above, on March 22, 2023, we entered into the 2023 Credit Facility with Argentum Cedit Virtuti GCV, an affiliate of Allseas, under which we may borrow up to $25.0 million pursuant to the terms and conditions of the 2023 Credit Facility, as amended, which has a maturity date of August 31, 2025.
We recognize that climate change may have a meaningful impact on our financial performance over time, and we have begun the process of consolidating key risks and corresponding action plans to mitigate their negative impact of climate change on our operations.
We recognize that climate change may have a meaningful impact on our financial performance over time, and we continue the process of assessing key risks and corresponding action plans to mitigate their negative impact of climate change on our operations.
Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped source of critical battery metals.
Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped source of the four critical metals contained in nodules.
Off-balance sheet arrangements We are not party to any off-balance sheet arrangements. Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with U.S. GAAP.
Off-balance sheet arrangements We are not party to any off-balance sheet arrangements. 114 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our financial statements have been prepared in accordance with U.S. GAAP.
There can be no assurance that we will enter into such definitive strategic alliance in a particular time period, or at all, or on terms similar to those set forth in the binding MoU, or that if such definitive strategic alliance is entered into by us or that the existing facility will be able to successfully process nodules in a particular time period, or at all.
There can be no assurance that we will enter into such definitive strategic alliance in a particular time period, or at all, or on terms similar to those set 99 Table of Contents forth in the binding MoU, or that if such definitive tolling agreement is entered into by us or that the existing facility will be able to successfully process nodules in a particular time period, or at all.
Change in Fair Value of Warrants Liability The change in fair value of warrants liability primarily consists of the change in the fair value of the 9,500,000 Private Warrants. The credit recorded in both years reflects the decrease in the market price of our warrants.
Change in Fair Value of Warrants Liability The change in fair value of warrants liability primarily consists of the change in the fair value of the 9,500,000 Private Warrants. The credit recorded in 2024 reflects the decrease in the market price of our warrants.
Liquidity and Capital Resources Our primary sources of financing have come from private placements and public offerings of Common Shares and warrants, and the issuance of convertible debentures. As of December 31, 2023, we had cash on hand of $6.8 million.
Liquidity and Capital Resources Our primary sources of financing have come from private placements and public offerings of Common Shares and warrants, and the issuance of convertible debentures. As of December 31, 2024, we had cash on hand of $3.5 million.
Cash flows used in/provided by Investing Activities Net cash used in investing activities in the year ended December 31, 2023 was $0.6 million, representing the purchase of equipment. In the comparative year ended December 31, 2022, cash used in investing activities was $1.2 million for the purchase of equipment.
Cash flows used in/provided by Investing Activities Net cash used in investing activities in the year ended December 31, 2024 was $0.5 million, representing the purchase of equipment. In the comparative year ended December 31, 2023, cash used in investing activities was $0.6 million for the purchase of equipment.
Additionally, we are experiencing higher offshore labor costs through our contractors. As a pre-revenue company, persistent inflation may affect our ultimate cash requirements prior to our ability to begin commercial production. Basis of Presentation We currently conduct our business through one operating segment. As a pre-revenue company with no commercial operations, our activities to date have been limited.
As a pre-revenue company, persistent inflation may affect our ultimate cash requirements prior to our ability to begin commercial production. Basis of Presentation We currently conduct our business through one operating segment. As a pre-revenue company with no commercial operations, our activities to date have been limited.
We have an accumulated deficit of approximately $548.9 million from inception through December 31, 2023. Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate.
We have an accumulated deficit of approximately $631.4 million from inception through December 31, 2024. Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate.
The toll treatment is intended to take place on a dedicated RKEF processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce Li-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
The toll treatment is intended to take place on a dedicated Rotary Kiln Electric Arc Furnace (“RKEF”) processing line and produce two products: nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce lithium-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.
Accordingly, actual results could differ from these estimates and resulting variances may result in our need for additional funding in an amount greater or earlier than expected, due to changes in business conditions or other developments, including, but not limited to, deferral of approvals, capital and operating cost escalation, currently unrecognized technical and development challenges, our ability to pay certain vendors or suppliers in our Common Shares or changes in external business environment.
Accordingly, actual results could differ from these estimates and resulting variances may result in our need for additional funding in an amount greater or earlier than expected, due to changes in business conditions or other developments, including, but not limited to, deferral of approvals, capital and operating cost escalation, currently unrecognized technical and development challenges, our ability to pay certain vendors or suppliers in our Common Shares or changes in external business environment. 108 Table of Contents In addition, we will however need and are seeking additional financing to fund our continued operations over time.
We may receive up to approximately $281.8 million in aggregate gross proceeds from cash exercises of the Public Warrants and the Private Warrants, based on the per share exercise price of such warrants.
We may receive up to approximately $309.1 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants and the Class B Warrants, based on the per share exercise price of such warrants.
Net cash used in operating activities in the year ended December 31, 2023 amounted to $59.6 million, and consisted mainly of $32.2 million on various environmental work, $2.8 million spent on engineering and pre-feasibility studies, $9.3 million on personnel costs, $4.4 million on legal costs, $3.2 million for sponsorship, training, and stakeholder engagement support, $1.9 million on communication and business development and additional payments of $5.8 million for various expenses. 116 Table of Contents For the year ended December 31, 2022, operating activities focused mainly on the preparation and execution of the NORI integrated collector test which concluded in November 2022.
Net cash used in operating activities in the year ended December 31, 2023, amounted to $59.6 million, and consisted mainly of $32.2 million on various environmental work, $9.3 million on personnel costs, $4.4 million on legal costs, $3.2 million for sponsorship, training, and stakeholder engagement support, $2.8 million spent on engineering and pre-feasibility studies, $1.9 million on communication and business development and additional payments of $5.8 million for various expenses.
In our inaugural Impact Report published in May 2022, we provided climate-related disclosure and shared how we believe our mission is aligned with supporting the global energy transition and contributing to a circular metals economy.
In our Impact Report, we provided climate-related disclosure and shared how our vision is aligned with supporting the global energy transition and contributing to a circular metals economy.
We will pay an underutilization fee equal to 4.0% per annum payable semi-annually for any amounts that remain undrawn under the Credit Facility. We have the right to pre-pay the entire amount outstanding under the Credit Facility at any time, before the Credit Facility’s maturity of August 31, 2025. The Credit Facility also contains customary events of default.
We agreed to pay an underutilization fee equal to 4.0% per annum payable semi-annually for any amounts that remain undrawn under the 2023 Credit Facility. We had the right to pre-pay the entire amount outstanding under the 2023 Credit Facility at any time, before the 2023 Credit Facility’s stated maturity of August 31, 2025.
We do not expect to generate revenue until at least 2026 and only if NORI receives an exploitation contract from the ISA and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale. Any revenue from initial production is difficult to predict.
We do not expect to generate revenue (other than potential service revenue) until NORI receives an exploitation contract and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale. Any revenue from initial production is difficult to predict.
Exploration Contracts We currently hold exclusive exploration rights to certain polymetallic nodule areas in the CCZ through our subsidiaries NORI and TOML, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively, and exclusive commercial rights through our subsidiary’s (DGE), arrangement with Marawa, a company owned and sponsored by the Republic of Kiribati. NORI.
Exploration Contracts We currently hold exclusive exploration rights to certain polymetallic nodule areas in the CCZ through our subsidiaries NORI and TOML, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively. NORI.
The NORI Technical Report Summary is filed as Exhibit 96.1 to this Annual Report. TOML. TOML our wholly-owned subsidiary which we acquired in March 2020, holds exploration rights to an area covering 74,713 square kilometers in the CCZ that were granted by the ISA in January 2012 (the “TOML Contract Area”).
TOML our wholly-owned subsidiary which we acquired in March 2020, holds exploration rights to an area covering 74,713 square kilometers in the CCZ that were granted by the ISA in January 2012 (the “TOML Contract Area”).
In November 2023, we entered into a binding MoU with PAMCO whereby they must complete a feasibility study (expected to be completed during the third quarter of 2024) to toll treat 1.3 million tonnes of wet polymetallic nodules per year at its Hachinohe, Japan smelting facility expected to start in the second quarter of 2026, if we timely obtain an exploitation contract from the ISA.
In November 2023, we entered into a binding MoU with PAMCO whereby they committed to completing a feasibility study (expected to be completed by mid-2025) to toll treat 1.3 million tonnes of wet polymetallic nodules per year at its Hachinohe, Japan smelting facility, provided we obtain an exploitation contract from the ISA.
Under the Credit Facility, we may borrow from the Lender up to $25,000,000 in the aggregate through August 31, 2025. 109 Table of Contents Credit Facility with ERAS Capital LLC and Gerard Barron On March 22, 2024, we entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (collectively, the “2024 Lenders”), pursuant to which, we may borrow from the 2024 Lenders up to $20,000,000 in the aggregate ($10,000,000 from each of the 2024 Lenders), from time to time, subject to certain conditions.
On March 22, 2024, we entered into the 2024 Credit Facility with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar, pursuant to which, we may borrow from the 2024 Lenders up to $25 million in the aggregate ($12.5 million from each of the 2024 Lenders), from time to time (was initially $20 million in the aggregate ($10 million from each of the 2024 Lenders), subject to certain conditions.
We have the critical accounting policies and estimates which are described below. 119 Table of Contents Value of Common Share-Based Payments We recognize the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards.
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements included in this Annual Report. We have the critical accounting policies and estimates which are described below. Value of Common Share-Based Payments We recognize the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards.
We hold exclusive exploration and commercial rights to three of the 17 polymetallic nodule contract areas in the CCZ; two based on ISA exploration contracts through our subsidiaries NORI and TOML, sponsored by Nauru and Tonga, respectively, and exclusive commercial rights through our subsidiary, DGE, and its arrangement with Marawa, a company owned and sponsored by Kiribati.
We hold exclusive exploration and commercial rights to two of the 17 polymetallic nodule contract areas in the CCZ through our subsidiaries NORI and TOML, sponsored by Nauru and Tonga, respectively.
We received the remaining $9 million of gross proceeds on January 31, 2024, from an investor affiliated with us. 115 Table of Contents On March 22, 2024, we entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (collectively, the “2024 Lenders”), pursuant to which, we may borrow from the 2024 Lenders up to $20,000,000 in the aggregate ($10,000,000 from each of the 2024 Lenders), from time to time, subject to certain conditions.
On November 14, 2024, as a result of the 2024 Registered Direct Offering the borrowing limit of the 2023 Credit Facility was returned to $25 million. 2024 Credit Facility with ERAS Capital LLC and Gerard Barron On March 22, 2024, we entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (collectively, the “2024 Lenders”), pursuant to which, we may borrow from the 2024 Lenders up to $20 million in the aggregate ($10 million from each of the 2024 Lenders), from time to time, subject to certain conditions.
Presented below is a summary of our operating, investing and financing cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Year Ended ​ ​ December 31, ​ December 31, (thousands) 2023 2022 2023 2022 Net cash (used in) operating activities ​ $ (15,214) ​ $ (19,843) ​ $ (59,573) ​ $ (66,603) Net cash (used in) provided by investing activities ​ $ (403) ​ $ (210) ​ $ (578) ​ $ (1,169) Net cash (used in) provided by financing activities ​ $ (150) ​ $ (52) ​ $ 20,066 ​ $ 29,722 Increase (decrease) in cash ​ $ (15,767) ​ $ (20,105) ​ $ (40,085) ​ $ (38,050) ​ Full Year 2023 compared to Full Year 2022 Cash flows used in Operating Activities For the year ended December 31, 2023, major operating activities over this period involved the continuation of environmental work following the NORI integrated collector test which was concluded in November 2022, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for an exploitation contract and prepare for potential future commercial production.
Presented below is a summary of our operating, investing and financing cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Year Ended (thousands) ​ December 31, ​ December 31, ​ 2024 2023 2024 2023 Net cash (used in) operating activities ​ $ (13,791) ​ $ (15,214) ​ $ (43,468) ​ $ (59,573) Net cash (used in) investing activities ​ $ (50) ​ $ (403) ​ $ (515) ​ $ (578) Net cash (used in) provided by financing activities ​ $ 17,373 ​ $ (150) ​ $ 40,686 ​ $ 20,066 Increase (decrease) in cash ​ $ 3,532 ​ $ (15,767) ​ $ (3,297) ​ $ (40,085) ​ Full Year 2024 compared to Full Year 2023 Cash flows used in Operating Activities For the year ended December 31, 2024, major operating activities over this period involved Campaign 8, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for a NORI exploitation contract and prepare for potential future commercial production.
Technology risks The timing and deployment of technologies to support the transition to a lower carbon economy can be uncertain. Investments in assets with long lifespans require the selection of not only the proper technology, but also the proper timing to retain the ability to adapt to future developments.
Investments in assets with long lifespans require the selection of not only the proper technology, but also the proper timing to retain the ability to adapt to future developments. There are also risks associated with the additional costs of lower emissions technology and transition to renewables.
Net cash used in operating activities in the year ended December 31, 2022 amounted to $66.6 million, consisting mainly of $33.2 million on various environmental work, $10.3 million for work on the PMTS, $8.1 million on personnel costs, $8.5 million on legal costs and other corporate activities, $2.0 million for communication and business development, $1.4 million for sponsorship, training, and stakeholder engagement support and additional payments of $3.1 million for various expenses.
Net cash used in operating activities in the year ended December 31, 2024, amounted to $43.5 million, and consisted mainly of $14.7 million on Campaign 8 and various environmental work, $11.7 million on personnel costs, $9.2 million on legal, advisory and consulting, $2.4 million for sponsorship, training and stakeholder engagement support, $1.9 million spent on engineering and pre-feasibility studies, $1.7 million on communication and business development expenses, $0.9 million on and additional payments of $1.8 million for various expenses.
We expect this partnership to progress to a strategic alliance before the end of 2024, subject to successful evaluation study outcomes and agreement to mutually acceptable commercial terms.
We expect this partnership to progress to a definitive tolling agreement in 2025, subject to successful evaluation study outcomes and agreement to mutually acceptable commercial terms.
To support the EV and battery storage value chain, we are seeking to close the emerging supply gap of critical battery metals needed for the transition to renewable energy and adoption of EVs. We plan to take advantage of this opportunity to supply lower carbon battery metals, avoid deforestation, and help reduce the cost of batteries.
To support the EV and battery storage value chain, we are seeking to close the emerging supply gap of the critical metals contained in nodules needed for the transition to renewable energy and adoption of EVs.
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of compensation for employees, consultants and directors, including wages and salaries, share-based compensation, consulting fees, investor relations expenses, expenses related to advertising and marketing functions, insurance costs, office and sundry expenses, professional fees (including legal, audit and tax fees), travel expenses and transfer and filing fees.
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of compensation for employees, consultants and directors, including wages and salaries, share-based compensation, consulting fees, investor relations expenses, expenses related to advertising and marketing functions, insurance costs, office and sundry expenses, professional fees (including legal, audit and tax fees), travel expenses and transfer and filing fees. 106 Table of Contents Share-based compensation costs from the issuance of stock options and restricted share units (“RSUs”) is measured at the grant date based on the fair value of the award and is recognized over the related service period.
In addition, we will however need and are seeking additional financing to fund our continued operations over time. These financings could include additional public or private equity, debt financings, equity-linked financings or other sources of financing, including through non-dilutive asset, royalty or project-based and/or asset-based financings.
These financings could include additional public or private equity, debt financings, equity-linked financings or other sources of financing, including through non-dilutive asset, royalty or project-based and/or asset-based financings.
Developments Subsequent to December 31, 2023 Amendment to Credit Facility with Allseas Affiliate On March 22, 2024, we entered into the Second Amendment to the Unsecured Credit Facility with the Lender, an affiliate of Allseas, to further extend the Credit Facility to August 31, 2025 and to provide that the underutilization fee thereunder shall cease to be payable after the date on which we or the Lender gives notice of termination of the agreement (as amended by this amendment and the July 2023 amendment, the “Credit Facility”).
On March 22, 2024, we entered into the Second Amendment to the Unsecured Credit Facility with Argentum Cedit Virtuti GCV to further extend the 2023 Credit Facility to August 31, 2025 and to provide that the underutilization fee thereunder shall cease to be payable after the date on which we or the Lender gives notice of termination of the agreement On August 16, 2024, the Company entered into the Third Amendment to the 2023 Credit Facility, to increase the borrowing limit of the 2023 Credit Facility to $27.5 million.
We have key strategic alliances with (i) Allseas, a leading global offshore contractor, which developed and tested a pilot collection system, which is expected to be modified into an initial smaller scale commercial production system and serve as the basis for the design of a full-scale commercial production system and (ii) Glencore which holds offtake rights to 50% of the NORI nickel and copper production.
We have key strategic alliances with (i) Allseas, a leading global offshore contractor, which developed and tested a pilot collection system, and is now working to modify it into the first commercial production system and (ii) Glencore which holds offtake rights to 50% of the NORI nickel and copper production if produced from a DGE-owned or controlled facility.
The results for the year ended December 31, 2023 represent the net proceeds received from the Registered Direct Offering announced in August 2023 and cash received of $5 million on the closing of our investment in Low Carbon Royalties, while the year ended December 31, 2022 results represent the net proceeds from the PIPE financing announced in August 2022.
The year ended December 31, 2023 represents 111 Table of Contents mainly cash received from the Registered Direct Offering of $14.7 million and cash received of $5 million on closing of our investment in Low Carbon Royalties.
This decrease was partially offset by higher G&A expenses in the first quarter of 2023, reflecting an increase in personnel, legal, and other expenses. Interest Income During 2023, we earned interest of $1.3 million, as compared to $1.1 million in 2022, mainly from the investment of our cash on hand.
This increase was partially offset by decreased travel and insurance costs incurred in 2024 compared to the same period in 2023. Interest Income During 2024, we earned interest of $0.2 million, as compared to $1.3 million in 2023, mainly from the investment of our cash on hand.
Contractual Obligations and Commitments NORI Exploration Contract As part of the NORI Exploration Contract with the ISA, NORI submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period.
Contractual Obligations and Commitments NORI Exploration Contract As part of the NORI Exploration Contract with the ISA, NORI submitted a periodic review report to the ISA which included a five-year plan covering 2022 to 2026: NORI is currently implementing its approved five-year plan.
Overview We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, about 1,500 miles south-west of San Diego, California. 104 Table of Contents The CCZ is a geological submarine fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 kilometers (4,500 miles) that spans approximately 4,500,000 square kilometers (1,700,000 square miles).
Overview We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, about 1,500 miles south-west of San Diego, California.
There can be no assurances, however, that we will enter into a definitive agreement(s) with Allseas in a particular time period, or at all, or on terms similar to those currently expected, or that if such definitive agreement(s) is entered into that the Project Zero Offshore Nodule Collection System will be successfully developed or operated.
There can be no assurances, however, that we will enter into definitive agreements with Allseas contemplated by the non-binding term sheet in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into by us that the proposed commercial systems and second production vessel will be successfully developed or operated in a particular time period, or at all.
There can be no assurances, however, that we will enter into definitive agreements with Allseas contemplated by the non-binding term sheet in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into by us that the proposed commercial systems and second production vessel will be successfully developed or operated in a particular time period, or at all. 118 Table of Contents Through December 31, 2023, we have made the following payments to Allseas under the PMTA: (a) $10 million in cash in February 2020, (b) $10 million through the issuance of 3.2 million Common Shares valued at $3.11 per share in February 2020, (c) issued Allseas a warrant to purchase 11.6 million Common Shares at a nominal exercise price per share in March 2021, (d) $10 million in cash in October 2021, following the closing of the Business Combination and meeting certain progress targets on the PMTS and (e) on February 23, 2023 issued 10.85 million Common Shares to Allseas, as described below.
Through December 31, 2024, we have made the following payments to Allseas under the PMTA: (a) $10 million in cash in February 2020, (b) $10 million through the issuance of 3.2 million Common Shares valued at $3.11 per share in February 2020, (c) issued Allseas a warrant to purchase 11.6 million Common Shares at a nominal exercise price per share in March 2021, (d) $10 million in cash in October 2021, following the closing of the Business Combination and meeting certain progress targets on the PMTS and (e) on February 23, 2023 issued 10.85 million Common Shares to Allseas.
There are also risks associated with the additional costs of lower emissions technology and transition to renewables. To mitigate this risk, we based our flowsheet development on existing proven technology, while retaining sufficient flexibility to be able to retrofit processes with new lower carbon technology as they become available.
To mitigate this risk, we based our flowsheet development on existing proven technology, while retaining sufficient flexibility to be able to retrofit processes with new lower carbon technology as they become available. 105 Table of Contents Physical risks Our main activity currently consists of offshore exploration campaigns for research and testing purposes, and technology development at partner facilities.
Results of Operations Comparison of the periods ended December 31, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Year Ended (Dollar amounts in thousands, ​ December 31, ​ December 31, ​ except as noted) 2023 2022 % Change 2023 2022 % Change ​ Exploration and evaluation expenses ​ $ 26,677 $ 104,259 (74) % $ 49,849 $ 144,599 (66) % General and administrative expenses ​ 6,582 ​ 7,016 (6) % ​ 22,540 ​ 29,518 (24) % Equity-accounted investment loss ​ ​ 96 ​ ​ — ​ N/A ​ ​ 571 ​ ​ — ​ N/A ​ Change in fair value of warrants liability ​ (228) ​ (1,251) 82 % ​ 986 ​ (2,143) 146 % Foreign exchange loss ​ 244 ​ 35 597 % ​ 310 ​ 24 1,192 % Interest income ​ ​ (205) ​ ​ (567) ​ (64) % ​ (1,297) ​ ​ (1,111) ​ 17 % Fees and interest on credit facility ​ 252 ​ — N/A ​ 781 ​ — N/A ​ Tax expense ​ ​ 41 ​ ​ 77 ​ (47) % ​ 41 ​ ​ 77 ​ (47) % Loss for the period, after tax ​ $ 33,459 ​ $ 109,569 (69) % $ 73,781 ​ $ 170,964 (57) % ​ Full Year 2023 compared to Full Year 2022 Exploration and Evaluation Expenses Exploration and evaluation expenses for the year ended December 31, 2023 were $49.8 million, compared to $144.6 million for the same period in 2022.
Results of Operations Comparison of the periods ended December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Year Ended (Dollar amounts in thousands, ​ December 31, ​ December 31, ​ except as noted) 2024 2023 % Change 2024 2023 % Change ​ Exploration and evaluation expenses ​ $ 8,304 $ 26,677 (69) % $ 50,643 $ 49,849 2 % General and administrative expenses ​ 8,044 ​ 6,582 22 % ​ 30,644 ​ 22,540 36 % Equity-accounted investment loss ​ ​ 29 ​ ​ 96 ​ (70) % ​ 226 ​ ​ 571 ​ (60) % Loss on termination of contract ​ 199 ​ — N/A ​ ​ 199 ​ — N/A ​ Change in fair value of warrants liability ​ 46 ​ (228) 120 % ​ (1,057) ​ 986 (207) % Foreign exchange (loss) gain ​ ​ (1,782) ​ ​ 244 ​ (830) % ​ (1,186) ​ ​ 310 ​ (483) % Interest income ​ (51) ​ (205) (75) % ​ (176) ​ (1,297) (86) % Fees and interest on borrowings and credit facilities ​ ​ 1,224 ​ ​ 252 ​ 386 % ​ 2,602 ​ ​ 781 ​ 233 % Tax expense ​ ​ 48 ​ ​ 41 ​ 17 % ​ 48 ​ ​ 41 ​ 17 % Loss for the year, after tax ​ $ 16,061 ​ $ 33,459 (52) % $ 81,943 ​ $ 73,781 11 % ​ Full Year 2024 compared to Full Year 2023 Exploration and Evaluation Expenses Exploration and evaluation expenses for the year ended December 31, 2024 were $50.6 million, or $0.8 million higher than the same period in 2023.
Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area. Work plans are reviewed annually by us, agreed with the ISA and may be subject to change depending on our progress to date.
The cost of the estimated work plan for 2025 onwards is dependent on the ISA’s approval of the NORI Area D exploitation application. Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area.
In instances where an award is issued for financing related services, the costs are included within equity as part of the financing costs. We recognize forfeiture of any awards as they occur. 112 Table of Contents Interest Income/Expense Interest income consists primarily of interest income earned on our cash and cash equivalents.
Share-based compensation costs are charged to exploration expenses and general and administrative expenses depending on the function fulfilled by the holder of the award. In instances where an award is issued for financing related services, the costs are included within equity as part of the financing costs. We recognize forfeiture of any awards as they occur.
Recent Accounting Pronouncements See Note 3 to the audited consolidated financial statements included in this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations and cash flows. 120 Table of Contents Emerging Growth Company Status Section 102(b)(1) of the Jumpstart Our Business Startups (“JOBS”) Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.
Changes in these assumptions could have a material impact on our assessment and related disclosures. 115 Table of Contents Recent Accounting Pronouncements See Note 5 to the audited consolidated financial statements included in this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations and cash flows.
No investor elected to exercise its right to purchase additional Common Shares and accompanying Class A Warrants on or before September 15, 2023 under the terms of the securities purchase agreement. As of December 31, 2023, we had received gross proceeds of $15.9 million (approximately $14.6 million net of transaction fees) in the Registered Direct Offering.
The exercise price to purchase one Common Share under the Class A Warrants is $3.00, subject to adjustment as provided in the warrant agreement. No investor elected to exercise its right to purchase additional Common Shares and accompanying Class A Warrants on or before September 15, 2023 under the terms of the securities purchase agreement.
Key Trends, Opportunities and Uncertainties We are currently a pre-revenue company and we do not anticipate earning revenues until at least 2026 and only if NORI receives an exploitation contract from the ISA and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.
TOML commissioned a Technical Report Summary by AMC, dated March 2021, which is filed as Exhibit 96.2 to this Annual Report. 104 Table of Contents Key Trends, Opportunities and Uncertainties We are currently a pre-revenue company, and we do not anticipate earning revenues (other than potential service revenue) until NORI receives an exploitation contract and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.
Extensive Deep-sea Environmental Data Submission to the ISA In March 2023, we announced that NORI had begun the process of submitting data collected during 17 offshore resource definition and environmental baseline campaigns in NORI Area D to the DeepData platform, an open database of contractor data managed by the ISA.
Extensive Submission of Deep-Sea Environmental Data to the ISA In May 2024, we announced that our subsidiary NORI had made a second submission of key environmental data from all prior environmental baseline campaigns conducted in the NORI Area D exploration area up to January 2022 to DeepData, an open database of contractor data managed by the ISA.
The purchase price for each Common Share and Class A Warrant to purchase 0.5 Common Shares was $2.00 per unit. The exercise price to purchase one Common Share under the Class A Warrants is $3.00, subject to adjustment as provided in the warrant agreement.
On August 14, 2023, we entered into a securities purchase agreement for a Registered Direct Offering of our Common Shares and Class A Warrants (the “2023 Offering”). The purchase price for each Common Share and Class A Warrant to purchase 0.5 Common Shares was $2.00 per unit.
However, once a location is selected for our onshore metallurgical plant, we will assess the risks associated with hurricanes, floods, and extreme weather. 111 Table of Contents Impact of Global Inflation The global inflation rate rose sharply in 2021 and 2022, and though inflation softened in 2023, marine fuel prices and vessel day rates remained high and have increased our exploration expenses beyond what was originally expected.
Impact of Global Inflation The global inflation rate rose sharply in 2022, and stayed relatively high in 2023 and 2024, marine fuel prices and vessel day rates remained high and have increased our exploration expenses beyond what was originally expected. Additionally, we are experiencing higher offshore labor costs through our contractors.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA significant and sustained decrease in the price of these metals from current levels could have a material and negative impact on our business, financial condition and results of operations. 121 Table of Contents
Biggest changeA significant and sustained decrease in the price of these metals from current levels could have a material and negative impact on our business, financial condition and results of operations. ​ 117 Table of Contents
Due to the current high cash need of our operating plan, we have kept our funds readily available, placed in secure, highly liquid interest-bearing investments, as at December 31, 2023. Credit risk is a risk of loss that may arise on outstanding financial instruments should a counter party default on its obligation.
Due to the current high cash need of our operating plan, we have kept our funds readily available, placed in secure, highly liquid interest-bearing investments, as at December 31, 2024. Credit risk is a risk of loss that may arise on outstanding financial instruments should a counter party default on its obligation.

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