TMC the metals Co Inc. (TMC) Stock Analysis and Metrics

Sector: Basic Materials Industry: Other Industrial Metals & Mining CIK: 0001798562

Market Cap 85.50 Mn

P/E 7.12

Div. Yield 0.00

Total Debt (Qtr) 13.35 Mn

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About

TMC the metals Co Inc. is a deep seabed minerals developer focused on the collection, processing and refining of polymetallic nodules located in the Clarion Clipperton Zone of the Pacific Ocean. The company aims to produce nickel, copper, cobalt, manganese and rare earth elements from these nodules to supply critical metals for sectors such as batteries, stainless steel, aerospace and defense. It is currently in the development stage after completing a pre feasibility study that defined mineral reserves for one of its contract areas, and it is working...

TMC the metals Co Inc. is a deep seabed minerals developer focused on the collection, processing and refining of polymetallic nodules located in the Clarion Clipperton Zone of the Pacific Ocean. The company aims to produce nickel, copper, cobalt, manganese and rare earth elements from these nodules to supply critical metals for sectors such as batteries, stainless steel, aerospace and defense. It is currently in the development stage after completing a pre feasibility study that defined mineral reserves for one of its contract areas, and it is working to obtain the necessary U. S. and international permits to commence commercial production.

As a pre revenue company, TMC the metals Co Inc. does not currently generate sales. Its future revenue will depend on the successful extraction and sale of nickel, copper, cobalt, manganese and rare earth elements derived from polymetallic nodules. The company intends to sell these metals either directly to end users or through off take agreements, such as the arrangement with Glencore for half of its nickel and copper output.

TMC the metals Co Inc. positions itself as a leader in the emerging deep sea mining sector by controlling one of the largest known undeveloped resources of nickel, copper, cobalt and manganese. Its competitive advantages include the high grade of its nodules, a near zero waste processing flow sheet developed with partners Hatch and KPM, and strategic alliances with offshore contractor Allseas, Japanese smelter PAMCO, Korean refiner Korea Zinc, software partner Mariana and trading house Glencore. The company also benefits from pursuing a U. S. regulatory path under the Deep Seabed Hard Mineral Resources Act, which offers a potentially faster permitting route compared to the stalled International Seabed Authority framework. Compared with terrestrial miners, it argues that its operations avoid land disturbance, community displacement and the extensive waste streams associated with traditional ore processing. The company emphasizes that its production process is designed to minimize carbon emissions and avoid toxic tailings, positioning it as a lower impact alternative to land based mining.

The company intends to serve customers that require the critical metals contained in its nodules, including battery manufacturers, stainless steel producers, aerospace and defense contractors, and industrial users of copper. Glencore has secured an off take agreement to purchase 50 percent of the nickel and copper produced from the NORI contract area, providing a committed downstream buyer. Other potential purchasers are expected to include electric vehicle makers, steel mills and companies involved in renewable energy infrastructure. The firm anticipates entering into multi year supply agreements once commercial production begins.

Investment thesis

Bull case

The company’s resource base is arguably its most compelling catalyst, with the latest SEC‑compliant technical reports estimating a combined NPV of over $23 billion for the combined Initial Assessment and Prefeasibility Study. This valuation is grounded in an enormous 1 billion‑ton nodule deposit that, according to TMC’s own data, could theoretically satisfy 300 years of U.S. manganese demand, 200 years of cobalt, and almost a century of nickel. The sheer scale of the deposit, coupled with the company’s proven first‑in‑industry achievements in producing battery‑grade manganese sulfate, nickel sulfate, and cobalt sulfate, places TMC in a unique position to capture a rapidly expanding EV battery market. With a projected EBITDA margin of 43 % during steady‑state output from 2031 to 2043, the economics of the project are highly attractive, especially given the diversification of product revenue across nickel, manganese, copper, and cobalt. {bullet} Management’s narrative around regulatory momentum is grounded in tangible progress: NOAA’s confirmation that TMC’s exploration applications are fully compliant and now in the certification stage signals a near‑term path to a commercial recovery permit. The proposed amendments to NOAA’s regulatory framework, which allow a single consolidated application for both exploration and commercial recovery, could streamline permitting and reduce the time‑to‑market by several years. The company’s strategic pivot to the United States, bolstered by executive support and the President’s executive order, has opened new funding avenues, including investment from Korea Zinc and the Hess family, which reinforce confidence in the U.S. supply‑chain narrative. These developments suggest that the regulatory and capital‑raising environment will remain favorable, creating a clear pathway to production in Q4 2027. {bullet} TMC’s partnerships with Allseas and the planned Japanese nodule collection trial represent hidden catalysts that management has only lightly highlighted. Allseas’ Hidden Gem vessel will participate in pilot operations off Japan’s Minamotori Island in early 2027, providing a non‑dilutive revenue stream while testing the company’s collection technology in a different legal and environmental regime. The trial offers an opportunity to validate key equipment upgrades and data‑collection protocols that can be leveraged across future U.S. operations, thereby reducing technology risk and accelerating commercial deployment. Moreover, the Japanese partnership aligns with U.S. strategic objectives to reduce reliance on foreign critical metals, potentially generating policy‑driven demand for TMC’s products. {bullet} The company’s liquidity position, while currently modest, is bolstered by significant warrant‑exercise potential exceeding $400 million. Although the current cash balance of $165 million will only cover operational and capital needs for 12 months, the possibility of unlocking additional capital through warrant exercises presents a flexible funding mechanism that can be activated as the project approaches the capital‑intensive construction phase. Furthermore, the management’s statement that “no need to tap the public capital markets” reflects a disciplined approach to capital allocation and an intent to preserve shareholder value. If warrants are exercised in a coordinated manner, TMC could secure the necessary equity infusion without incurring excessive dilution, thereby maintaining a strong balance sheet through the critical ramp‑up period. {bullet} TMC’s ability to produce battery‑grade metal products at scale has already been proven in pilot operations, and the company plans to expand processing capacity to meet U.S. demand by year 10 of production. The Prefeasibility Study outlines a “Capital Light” approach that utilizes existing Eastern Hemisphere facilities, reducing upfront CAPEX while maintaining product quality. This strategy not only aligns with U.S. policy incentives for domestic battery supply chains but also positions TMC to capture a growing market for high‑purity sulfates used in next‑generation EV cathode materials. The company’s diverse revenue mix—45 % nickel, 28 % manganese, 17 % copper, and 9 % cobalt—provides resilience against commodity price swings and underscores the strategic importance of the project across multiple high‑growth sectors. {bullet} Finally, TMC’s track record of pioneering deep‑sea mining technologies—such as the Kawanda nozzles, differential flow cleaning systems, and advanced buoyancy controls—demonstrates a robust technical foundation that can be replicated across multiple sites. The company’s emphasis on environmental stewardship, evidenced by the comprehensive dataset shared with NOAA and the commitment to localized sediment plume management, addresses a critical regulatory hurdle that has historically stalled deep‑sea mining projects. By proactively engaging with regulatory agencies and establishing a transparent permitting process, TMC is mitigating environmental risk while fostering stakeholder confidence. These factors collectively suggest that TMC is positioned to accelerate commercialization, unlock significant value, and become a leading player in the emerging deep‑sea mining sector.

The company’s resource base is arguably its most compelling catalyst, with the latest SEC‑compliant technical reports estimating a combined NPV of over $23 billion for the combined Initial Assessment and Prefeasibility Study. This valuation is grounded in an enormous 1 billion‑ton nodule deposit that, according to TMC’s own data, could theoretically satisfy 300 years of U.S. manganese demand, 200 years of cobalt, and almost a century of nickel. The sheer scale of the deposit, coupled with the company’s proven first‑in‑industry achievements in producing battery‑grade manganese sulfate, nickel sulfate, and cobalt sulfate, places TMC in a unique position to capture a rapidly expanding EV battery market. With a projected EBITDA margin of 43 % during steady‑state output from 2031 to 2043, the economics of the project are highly attractive, especially given the diversification of product revenue across nickel, manganese, copper, and cobalt. {bullet} Management’s narrative around regulatory momentum is grounded in tangible progress: NOAA’s confirmation that TMC’s exploration applications are fully compliant and now in the certification stage signals a near‑term path to a commercial recovery permit. The proposed amendments to NOAA’s regulatory framework, which allow a single consolidated application for both exploration and commercial recovery, could streamline permitting and reduce the time‑to‑market by several years. The company’s strategic pivot to the United States, bolstered by executive support and the President’s executive order, has opened new funding avenues, including investment from Korea Zinc and the Hess family, which reinforce confidence in the U.S. supply‑chain narrative. These developments suggest that the regulatory and capital‑raising environment will remain favorable, creating a clear pathway to production in Q4 2027. {bullet} TMC’s partnerships with Allseas and the planned Japanese nodule collection trial represent hidden catalysts that management has only lightly highlighted. Allseas’ Hidden Gem vessel will participate in pilot operations off Japan’s Minamotori Island in early 2027, providing a non‑dilutive revenue stream while testing the company’s collection technology in a different legal and environmental regime. The trial offers an opportunity to validate key equipment upgrades and data‑collection protocols that can be leveraged across future U.S. operations, thereby reducing technology risk and accelerating commercial deployment. Moreover, the Japanese partnership aligns with U.S. strategic objectives to reduce reliance on foreign critical metals, potentially generating policy‑driven demand for TMC’s products. {bullet} The company’s liquidity position, while currently modest, is bolstered by significant warrant‑exercise potential exceeding $400 million. Although the current cash balance of $165 million will only cover operational and capital needs for 12 months, the possibility of unlocking additional capital through warrant exercises presents a flexible funding mechanism that can be activated as the project approaches the capital‑intensive construction phase. Furthermore, the management’s statement that “no need to tap the public capital markets” reflects a disciplined approach to capital allocation and an intent to preserve shareholder value. If warrants are exercised in a coordinated manner, TMC could secure the necessary equity infusion without incurring excessive dilution, thereby maintaining a strong balance sheet through the critical ramp‑up period. {bullet} TMC’s ability to produce battery‑grade metal products at scale has already been proven in pilot operations, and the company plans to expand processing capacity to meet U.S. demand by year 10 of production. The Prefeasibility Study outlines a “Capital Light” approach that utilizes existing Eastern Hemisphere facilities, reducing upfront CAPEX while maintaining product quality. This strategy not only aligns with U.S. policy incentives for domestic battery supply chains but also positions TMC to capture a growing market for high‑purity sulfates used in next‑generation EV cathode materials. The company’s diverse revenue mix—45 % nickel, 28 % manganese, 17 % copper, and 9 % cobalt—provides resilience against commodity price swings and underscores the strategic importance of the project across multiple high‑growth sectors. {bullet} Finally, TMC’s track record of pioneering deep‑sea mining technologies—such as the Kawanda nozzles, differential flow cleaning systems, and advanced buoyancy controls—demonstrates a robust technical foundation that can be replicated across multiple sites. The company’s emphasis on environmental stewardship, evidenced by the comprehensive dataset shared with NOAA and the commitment to localized sediment plume management, addresses a critical regulatory hurdle that has historically stalled deep‑sea mining projects. By proactively engaging with regulatory agencies and establishing a transparent permitting process, TMC is mitigating environmental risk while fostering stakeholder confidence. These factors collectively suggest that TMC is positioned to accelerate commercialization, unlock significant value, and become a leading player in the emerging deep‑sea mining sector.

Bear case

The company’s quarterly results reveal a widening net loss—$184.5 million in Q3 2025 versus $20.5 million a year earlier—largely driven by a $131 million non‑operating, non‑cash expense related to the revaluation of royalty liabilities. This one‑off charge is indicative of the complex and opaque nature of royalty accounting in the deep‑sea mining industry, and it underscores the potential for significant non‑cash volatility that could distort earnings and investor perception. The persistent negative free cash flow of $11.5 million, higher than the previous year’s $5.9 million, highlights ongoing cash burn from environmental, personnel, and corporate expenses. Without a clear path to positive cash flow, the company remains heavily reliant on external financing and warrants. {bullet} Regulatory uncertainty remains a salient risk, as evidenced by the Q&A where management admitted the lack of specific dates for NOAA’s commercial recovery permit. The company’s dependence on a single regulatory body—NOAA—introduces concentration risk, especially given the recent government shutdown that delayed review timelines. While the proposed consolidated application process could streamline permitting, it is still subject to interagency review, environmental impact statements, and public comment, all of which can introduce significant delays. Any postponement beyond the target Q4 2027 production date would erode the projected economics and potentially diminish investor confidence. {bullet} The company’s liquidity cushion of $165 million is modest relative to the capital required to transition from pilot to full‑scale production, which typically demands multi‑hundred‑million investments in exploration, infrastructure, and refining capacity. Although warrants offer a potential $432 million infusion, the associated equity dilution and the uncertainty of actual exercise timing add risk to the capital structure. The presence of a $32.9 million payable to Allseas, primarily to be settled in equity, further complicates the balance sheet and could dilute existing shareholders if not managed prudently. This reliance on future warrant exercise, rather than proven revenue streams, creates a fragile financial foundation that may strain the company during the most capital‑intensive phase of the project. {bullet} Market risk is amplified by the company’s exposure to commodity price volatility and the limited supply of critical metals in the near term. While TMC’s diversified product mix mitigates some risk, the underlying assumption of stable or rising demand for nickel, manganese, copper, and cobalt may prove overly optimistic if global supply chains shift toward alternative materials or if battery chemistry innovation reduces metal intensity. Additionally, the company’s first‑in‑industry status does not guarantee competitive pricing; other deep‑sea mining operators may achieve economies of scale that erode TMC’s projected 43 % EBITDA margin. The company’s current lack of an operating revenue stream beyond pilot testing places it at a disadvantage compared to established surface miners and metallurgical producers. {bullet} The strategic partnership with Allseas, while providing access to heavy‑lift vessels, also introduces operational complexity and potential liability. The Hidden Gem’s scheduled Japanese pilot is described as a non‑dilutive opportunity, but management’s responses in the Q&A suggested that the financial benefit is modest and contingent on contract negotiations that are not yet finalized. The absence of a definitive commercial contract with the Japanese foundation, coupled with the company’s statement that it will “get some financial benefit,” reflects an uncertainty that could delay revenue generation. Moreover, operating in international waters and under foreign regulatory regimes may expose the company to geopolitical tensions and differing environmental standards that could disrupt operations. {bullet} Finally, the company’s aggressive timeline to production in Q4 2027 may be overly optimistic, given the substantial technical and regulatory milestones that remain uncompleted. The projected steady‑state economics hinge on a 10‑year ramp‑up period that assumes seamless transition from pilot to commercial scale, yet deep‑sea mining is still an emerging technology with numerous operational uncertainties. The reliance on a single major vessel for collection, the need to bring refining capacity to the United States by year 10, and the potential for unforeseen equipment failures collectively pose significant execution risks. Any delay or cost overrun could compress margins, extend the time to profitability, and diminish the projected NPV of the project, thereby undermining the company’s value proposition.

The company’s quarterly results reveal a widening net loss—$184.5 million in Q3 2025 versus $20.5 million a year earlier—largely driven by a $131 million non‑operating, non‑cash expense related to the revaluation of royalty liabilities. This one‑off charge is indicative of the complex and opaque nature of royalty accounting in the deep‑sea mining industry, and it underscores the potential for significant non‑cash volatility that could distort earnings and investor perception. The persistent negative free cash flow of $11.5 million, higher than the previous year’s $5.9 million, highlights ongoing cash burn from environmental, personnel, and corporate expenses. Without a clear path to positive cash flow, the company remains heavily reliant on external financing and warrants. {bullet} Regulatory uncertainty remains a salient risk, as evidenced by the Q&A where management admitted the lack of specific dates for NOAA’s commercial recovery permit. The company’s dependence on a single regulatory body—NOAA—introduces concentration risk, especially given the recent government shutdown that delayed review timelines. While the proposed consolidated application process could streamline permitting, it is still subject to interagency review, environmental impact statements, and public comment, all of which can introduce significant delays. Any postponement beyond the target Q4 2027 production date would erode the projected economics and potentially diminish investor confidence. {bullet} The company’s liquidity cushion of $165 million is modest relative to the capital required to transition from pilot to full‑scale production, which typically demands multi‑hundred‑million investments in exploration, infrastructure, and refining capacity. Although warrants offer a potential $432 million infusion, the associated equity dilution and the uncertainty of actual exercise timing add risk to the capital structure. The presence of a $32.9 million payable to Allseas, primarily to be settled in equity, further complicates the balance sheet and could dilute existing shareholders if not managed prudently. This reliance on future warrant exercise, rather than proven revenue streams, creates a fragile financial foundation that may strain the company during the most capital‑intensive phase of the project. {bullet} Market risk is amplified by the company’s exposure to commodity price volatility and the limited supply of critical metals in the near term. While TMC’s diversified product mix mitigates some risk, the underlying assumption of stable or rising demand for nickel, manganese, copper, and cobalt may prove overly optimistic if global supply chains shift toward alternative materials or if battery chemistry innovation reduces metal intensity. Additionally, the company’s first‑in‑industry status does not guarantee competitive pricing; other deep‑sea mining operators may achieve economies of scale that erode TMC’s projected 43 % EBITDA margin. The company’s current lack of an operating revenue stream beyond pilot testing places it at a disadvantage compared to established surface miners and metallurgical producers. {bullet} The strategic partnership with Allseas, while providing access to heavy‑lift vessels, also introduces operational complexity and potential liability. The Hidden Gem’s scheduled Japanese pilot is described as a non‑dilutive opportunity, but management’s responses in the Q&A suggested that the financial benefit is modest and contingent on contract negotiations that are not yet finalized. The absence of a definitive commercial contract with the Japanese foundation, coupled with the company’s statement that it will “get some financial benefit,” reflects an uncertainty that could delay revenue generation. Moreover, operating in international waters and under foreign regulatory regimes may expose the company to geopolitical tensions and differing environmental standards that could disrupt operations. {bullet} Finally, the company’s aggressive timeline to production in Q4 2027 may be overly optimistic, given the substantial technical and regulatory milestones that remain uncompleted. The projected steady‑state economics hinge on a 10‑year ramp‑up period that assumes seamless transition from pilot to commercial scale, yet deep‑sea mining is still an emerging technology with numerous operational uncertainties. The reliance on a single major vessel for collection, the need to bring refining capacity to the United States by year 10, and the potential for unforeseen equipment failures collectively pose significant execution risks. Any delay or cost overrun could compress margins, extend the time to profitability, and diminish the projected NPV of the project, thereby undermining the company’s value proposition.

Peer comparison

Companies in the Other Industrial Metals & Mining

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BHP	BHP Group Ltd	451.65 Bn	50.07	8.81	3.38 Bn
2	SKE	Skeena Resources Ltd	22.02 Bn	0.00	-	-
3	MP	MP Materials Corp. / DE	10.77 Bn	-151.27	42.36	1.00 Bn
4	SGML	Sigma Lithium Corp	5.86 Bn	-77.52	-	0.14 Bn
5	USAS	Americas Gold & Silver Corp	5.81 Bn	-114.64	49.23	0.05 Bn
6	MTRN	MATERION Corp	4.39 Bn	57.32	2.29	0.49 Bn
7	CRML	Critical Metals Corp.	4.10 Bn	-	-	-
8	USAR	USA Rare Earth, Inc.	2.43 Bn	-8.50	1,515.65	-

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TMC the metals Co Inc. (NASDAQ: TMC)

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Investment thesis

Bull case

Bear case

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TMC the metals Co Inc. (NASDAQ: TMC)

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Investment thesis

Bull case

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