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TMC the metals Co Inc. (TMC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net loss improved to $16.1M with EPS of $0.05 as exploration and evaluation costs fell versus prior year; liquidity at filing stood at ~$43M, backed by expanded ERAS/Barron credit facility capacity .
  • Company pivoted permitting strategy: formally initiated a U.S. NOAA pre-application under DSHMRA, targeting applications in Q2 2025—potentially a material catalyst for regulatory clarity and financing optionality .
  • Operationally, PAMCO processed 450 tonnes of calcine to alloy and manganese silicate; management highlighted capital-light onshore processing and continued environmental dataset progress supporting permitting narratives .
  • Comparison vs prior quarters: Q4 net loss improved vs Q3/Q2 on lower environmental and transit/layup costs, partially offset by higher share-based comp and consulting/advisory costs .
  • Street estimates (S&P Global) for Q4 2024 were unavailable—investors should anchor on expense trajectory, liquidity runway, and permitting milestones rather than consensus beats/misses (consensus unavailable from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Pivot to U.S. permitting path: “We’ve formally initiated the process of applying for licenses and permits under the existing U.S. seabed mining code… we believe the United States offers a stable, transparent, and enforceable regulatory path” .
  • Expense discipline and quarterly loss improvement: Q4 exploration and evaluation expenses fell to $8.3M vs $26.7M in Q4 2023; net loss narrowed to $16.1M from $33.5M YoY .
  • Onshore processing progress: Commercial-scale PAMCO campaign produced Ni-Cu-Co alloy and Mn silicate products, building confidence in capital-light refining pathways .

What Went Wrong

  • Ongoing reliance on credit facilities/liquidity constraints: Year-end cash was ~$3.5M with short-term debt of $11.8M; payables included $25.8M owed to Allseas (mostly settleable in equity), underscoring financing sensitivity pre-permit .
  • Elevated share-based compensation increased G&A: Q4 G&A rose YoY due to amortization of RSUs/options and higher consulting/advisory costs .
  • No revenue and limited Street coverage: Pre-revenue status continues; S&P Global consensus estimates for Q4 2024 were unavailable (consensus unavailable from S&P Global), reducing typical beat/miss framing.

Financial Results

Quarterly P&L and EPS (Oldest → Newest)

MetricQ1 2024Q2 2024Q3 2024Q4 2024
Net Loss ($USD Millions)$25.2 $20.2 $20.5 $16.1
Diluted EPS ($USD)$0.08 $0.06 $0.06 $0.05
Exploration & Evaluation ($USD Millions)$18.1 $12.4 $11.8 $8.3
G&A ($USD Millions)$6.6 $7.9 $8.1 $8.0

Notes:

  • No revenue reported in the company materials for these quarters; margins metrics are not meaningful in pre-revenue status .

Cash Flow and Liquidity KPIs

KPIQ1 2024Q2 2024Q3 2024Q4 2024
Net Cash Used in Operations ($USD Millions)$11.9 $12.1 N/A$13.8
Liquidity at Filing (Cash + Credit Availability) ($USD Millions)N/AN/AN/A~$43
Cash Balance at Period End ($USD Millions)N/AN/AN/A$3.48
Short-term Debt at Period End ($USD Millions)N/AN/AN/A$11.78
Accounts Payable & Accrued Liabilities ($USD Millions)N/AN/AN/A$42.75 (incl. $25.8M owed to Allseas)

Guidance Changes

Metric/TopicPeriodPrevious Guidance/PositionCurrent Guidance/PositionChange
Permitting pathway2025 (applications)ISA exploitation application planned post-July 2024, with ~1-year review Initiated NOAA pre-application under DSHMRA; applications expected Q2 2025 Raised clarity (shifted regulator)
Liquidity sufficiencyNext 12 monthsLiquidity sufficient for 12+ months based on facilities and spending plan Management reiterates sufficient runway; ERAS/Barron facility increased to $44M; Allseas $25M facility terminated; working capital loan extended Maintained with facility amendments
Incremental spend to applicationPre-application phase$35–$45M incremental to launch application (ISA) No numeric update; spending focus shifted to U.S. applications, with similar prep work Maintained range context; pathway shift
Defense DoD feasibilityFY25House allocation to study domestic refining of nodule intermediates NDAA signed; DoD feasibility study mandated by end-2025 Formalized support

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Regulatory path (ISA vs NOAA)Progress on consolidated ISA text; planned ISA application post-July 2024 Limited direct Q3 call; comparative press comments onlyPivot to U.S. DSHMRA/NOAA; pre-application initiated; Q2 2025 applications targeted Shift to U.S. path
Environmental data & scienceLargest deep-sea dataset; plume stays near seabed; recovery evidence N/AEmphasis on NOAA’s historical EIS and unbiased site-specific EIS model; continued recovery findings Reinforced/evolving
Onshore processing & partnersSGS pilot making battery-grade sulfates; capital-light model N/APAMCO commercial-scale trial (alloy + Mn silicate) Advancing
Geopolitics & supply chainU.S./Japan/Norway moves; House support for study; critical minerals focus N/AU.S. NDAA feasibility mandate; management cites national security drivers Intensifying U.S. engagement
Liquidity & facilitiesLiquidity ~$40M (June); ATM usage; facility upsizes N/ALiquidity ~$43M (filing date); ERAS/Barron facility to $44M; Allseas facility terminated; WC loan extended Reshaped but adequate

Management Commentary

  • “We’ve formally initiated the process of applying for licenses and permits under the existing U.S. seabed mining code… we believe the United States offers a stable, transparent, and enforceable regulatory path.” – Gerard Barron .
  • “We believe that our cash on hand and the undrawn amount of $41.5 million from our unsecured credit facility… will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.” – Craig Shesky .
  • “PAMCO had successfully smelted 450 tonnes of calcine into 35 tonnes of Ni-Cu-Co alloy and 320 tonnes of Mn silicate products… during a commercial-scale campaign.” – Press release .
  • “Exploration and evaluation expenses during the quarter… decreased… due to the decrease in environmental studies costs… and reduced transit and layup costs…” – Q4 2024 release .

Q&A Highlights

  • NOAA vs ISA pathway: Management framed U.S. DSHMRA/NOAA as an “incremental path forward” with better probability and political appetite; applications expected in Q2 2025 .
  • Asset participation under U.S. regime: Allseas can participate; production vessel must be U.S.-flagged—“a pretty straightforward process” .
  • Scope/location of applications: Potential overlap with existing areas; consultations ongoing with sponsoring states and NOAA .
  • Financial posture: No heavy pre-production capital until regulatory certainty; facilities amended to extend maturities and right-size runway .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS, revenue, EBITDA was unavailable despite attempted retrieval; as such, beat/miss analysis vs Street cannot be determined for this quarter (consensus unavailable from S&P Global).

Key Takeaways for Investors

  • Regulatory pivot is the core catalyst: The NOAA/DHSMRA path could unlock permitting clarity and de-risk financing; monitor Q2 2025 application timing and subsequent milestones .
  • Expense trajectory improving: Q4 net loss narrowed on lower environmental and transit/layup costs; sustainment of expense discipline is key until revenue generation .
  • Liquidity adequate but tight: Filing-date liquidity ~$43M with ERAS/Barron facility upsized; planned spend should remain controlled pending permit decisions .
  • Onshore processing validation: PAMCO commercial-scale outputs validate capital-light approach; supports eventual ramp once offshore permitting is secured .
  • Geopolitical tailwinds: NDAA feasibility study and broader U.S. critical minerals focus strengthen the strategic case—policy momentum may aid regulatory acceptance and funding access .
  • Balance sheet sensitivities: Year-end cash of $3.48M, short-term debt $11.78M, and sizable payables to Allseas (equity-settleable) highlight the importance of timely permitting and facility support .
  • Trading setup: Near-term stock narrative will hinge on U.S. permitting updates and facility/cash developments; absent Street consensus, focus on milestone execution and cost control .

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