TMC raises $17.5 million in registered direct offering

NEW YORK - TMC the metals company Inc. (NASDAQ: NASDAQ:TMC), a company engaged in the exploration of battery metals from seafloor polymetallic nodules, has secured approximately $17.5 million through a securities purchase agreement with certain institutional investors. The agreement, announced today, involves the sale of 17.5 million common shares and accompanying Class B warrants to purchase additional shares.

The offering price for each common share, paired with a Class B Warrant to purchase half a common share, is set at $1.00. These Class B Warrants are exercisable immediately at $2.00 per share and will expire five years from the date of issuance. They also include standard anti-dilution protections, and the company has the option to repurchase the warrants if certain price conditions are met.

TMC expects to close the offering by or before November 22, 2024. The net proceeds are intended for working capital and general corporate purposes. A.G.P./Alliance Global Partners (NYSE:GLP) served as the placement agent, while Cantor Fitzgerald & Co. and EAS Advisors, via Odeon Capital Group, LLC, are acting as financial advisors for TMC.

The securities are being offered pursuant to a shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) on November 30, 2023, and declared effective on December 8, 2023. A prospectus supplement detailing the offering terms will be filed with the SEC and made available on their website.

TMC's mission includes supplying metals for the global energy transition with minimal negative impacts and establishing a cycle of tracing, recovering, and recycling the metals they supply. The company holds exploration and commercial rights to three polymetallic nodule contract areas in the Pacific Ocean's Clarion Clipperton Zone, regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati, and the Kingdom (TADAWUL:4280) of Tonga.

This press release contains forward-looking statements regarding the offering's completion and the anticipated use of proceeds, which are subject to various factors including regulatory and legal requirements and market conditions. The information in this article is based on a press release statement.

In other recent news, TMC the Metals Co Inc. has secured additional funding and made strategic plans for growth. The company has amended its Working Capital Loan Agreement with Allseas Investments SA, increasing the loan amount from $5 million to $7.5 million, and expanded its credit agreement with Argentum Credit Virtuti GCV to $27.5 million. These moves are part of TMC's efforts to secure necessary capital for its operations in the metal mining sector.

TMC has also announced plans to submit an application for an exploitation contract with the International Seabed Authority by March 2025, aligning with the company's initiative to diversify supply chains and match the mineral content of nodules with EV battery cathodes. Additionally, the company has been actively addressing false claims about "dark oxygen," underscoring its commitment to transparency and factual reporting.

Despite a negative free cash flow in Q2 2024, TMC's current financial resources, including a strengthened liquidity position with $40 million in cash at the end of June, are projected to support its operations over the next year. These recent developments highlight TMC's ongoing efforts to navigate the capital-intensive mining industry and secure its position in the market.

InvestingPro Insights

TMC's recent $17.5 million securities offering comes at a crucial time for the company, as InvestingPro data reveals some challenging financial metrics. With a market capitalization of $308.77 million, TMC is currently operating at a loss, reflected in its negative P/E ratio of -3.39 for the last twelve months as of Q2 2024. This aligns with one of the InvestingPro Tips, which notes that the company is "not profitable over the last twelve months."

The company's decision to raise capital through this offering may be partly explained by another InvestingPro Tip, which indicates that TMC is "quickly burning through cash." This cash burn rate, coupled with the fact that "short-term obligations exceed liquid assets," underscores the importance of the recent funding round for the company's ongoing operations and exploration activities.

Investors should note that TMC's stock has experienced significant volatility, with the price taking "a big hit over the last six months," as highlighted by InvestingPro. The 6-month price total return of -34.49% corroborates this observation. Despite these challenges, the company's focus on supplying metals for the global energy transition could position it favorably if it can overcome its current financial hurdles.

For those interested in a deeper analysis, InvestingPro offers 9 additional tips that could provide further insights into TMC's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.