The Metals Company (TMC), a battery metals explorer focusing on seafloor polymetallic nodules, has unveiled a $27-million capital raise with the potential to upsize to $38-million.
The Nasdaq-listed company on Monday announced a registered direct offering at a price of $2.00, which is an 82% premium to the TMC closing share price on August 11.
The direct offering is led by TMC’s biggest shareholder, ERAS Capital, strategic partner Allseas and several institutional investors. Chairperson and CEO Gerard Barron and CFO Craig Shesky, along with several TMC board members, also participated in the transaction.
“Raising capital in volatile markets is not an easy task. However, the size, the quality and the value of our resource portfolio combined with the determination of our team to responsibly develop this resource have helped us attract a diverse range of shareholders who recognise the significant upside of this asset,” commented Barron.
The transaction includes warrant coverage of 50%, with a warrant strike price of $3.00 a share. Warrants contain a call provision which forces exercise if the 30-day volume weighted-average price of TMC shares exceeds $6.50, as well as an anti-dilution mechanism in which the exercise price resets lower if the company were to issue equity below $2.00 a share.
Two institutional investors and their designees can elect to increase commitments for an aggregate additional amount of $11-million, if the closing TMC share price on trading day immediately prior to such notice is $3.00 a share or less.
Shesky added that, in the current market, most follow-on offerings were issued at discounts to the current share price. “We believe a premium is warranted given that the asset we are developing is world-class, needle-moving and transformational. This transaction is an important step on the path to unlocking the asset’s true value as we approach potential first production.”
TMC last week released its project development timeline for its nodule project in the Pacific Ocean, following the recent International Seabed Authority (ISA) Council decisions on a roadmap to deliver final rules, regulations and procedures, also known as the Mining Code.
TMC subsidiary Nauru Ocean Resources Inc (NORI) intends to submit an application to the ISA for an exploitation contract for NORI Area D. Assuming a one-year review process, NORI expects to be in commercial production in the fourth quarter of 2025 if the application is approved.
NORI and Allseas plan for an increased production capacity for the Project Zero Offshore System, using the Hidden Gem vessel, from an estimated 1.3-million wet tonnes to an estimated 3.0-million wet tonnes a year – a potential increase of 130%.