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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 209 added, 161 removed, 292 unchanged (56% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provide information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition.

The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our interim condensed consolidated results of operations and financial condition.

The discussion should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2025 contained in our 2025 Annual Report on Form 10-K.

This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Risk Factors” in Item 1A of Part I of the 2025 Annual Report on Form 10-K.

This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Risk Factors” in Item 1A of Part I of the 2025 Annual Report on Form 10-K, as updated and/or supplemented in subsequent filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and this Quarterly Report on Form 10-Q.

Actual results may differ materially from those contained in any forward-looking statements.

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and its consolidated subsidiaries.

The unaudited condensed consolidated interim financial statements for the three months ended March 31, 2026 and 2025, respectively, present the financial position and results of operations of TMC the metals company Inc.

The unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2026 and 2025, respectively, present the financial position and results of operations of TMC the metals company Inc.

and its consolidated subsidiaries.

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We believe significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rapidly rising demand.

The four metals and REEs contained in the polymetallic nodules are on the U.S.

The four base metals and REEs contained in the polymetallic nodules are on the U.S.

Department of Interior’s “2025 List of Critical Minerals”, with end-uses in strategic sectors including semiconductors and AI data centers, steel manufacturing, the defense and marine industrial base.

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Our resource definition work to date shows that nodules in our contract areas represent the world’s largest undeveloped resource of several of these critical metals.

If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to initially produce nickel, cobalt and copper-bearing intermediate and metal cathode products as well as a manganese silicate product of approximately 40% manganese comparable to medium-grade manganese ore.

If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to initially produce nickel, cobalt and copper-bearing intermediate and high-purity refined metal products as well as a manganese silicate product of approximately 40% manganese comparable to medium-grade manganese ore.

Once in production, we may explore expanding into other product formats including silicomanganese alloy, battery-grade sulfates and precursor Cathode Active Materials (“pCAM”), as well as extracting REEs contained in nodules.

We are now in the development stage following the release of the results of a pre-feasibility study on one of our development areas in a report titled S-K 1300 Prefeasibility Study for NORI Area D Technical Report Summary , dated August 4, 2025, prepared by AMC Consultants Pty Ltd.

We are now in the development stage following the release of the results of a pre-feasibility study on one of our development areas in a report titled S-K 1300 Technical Report Summary - Prefeasibility Study for NORI Area D , dated August 4, 2025, prepared by AMC Consultants Pty Ltd.

and other qualified persons (the “NORI-D PFS”), which declared the world’s first mineral reserves for a seafloor polymetallic nodule project demonstrating the project’s economic viability.

We also recently released an initial assessment of certain of our other resource areas in a report titled S-K 1300 Technical Report Summary—Initial Assessment of TOML and NORI Properties , Clarion-Clipperton Zone, dated August 4, 2025, prepared by AMC Consultants Pty Lt.

On the same date, we also recently released an initial assessment of certain of our other resource areas in a report titled S-K 1300 Technical Report Summary—Initial Assessment of TOML and NORI Properties , Clarion-Clipperton Zone, dated August 4, 2025, prepared by AMC Consultants Pty Lt.

and other qualified persons (the “TOML and NORI IA” together with the NORI-D PFS, the “Technical Reports”).

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NOAA implemented regulations for exploration licenses in 1981 and for commercial recovery permits in 1989 and amended these regulations introducing a consolidated exploration license and commercial recovery permit application process in 2026.

In parallel, the International Seabed Authority (“ISA”), comprised today of 171 Member States and the European Union was established in 1994, pursuant to the United Nations Convention on the Law of the Sea (“UNCLOS”) to regulate deep seabed exploration and exploitation activities of the nationals of Member States.

In parallel, the International Seabed Authority (“ISA”), which today comprises of 171 Member States and the European Union was established in 1994, pursuant to the United Nations Convention on the Law of the Sea (“UNCLOS”) to regulate deep seabed exploration and exploitation activities of the nationals of Member States.

The ISA adopted exploration regulations in 2000 (amended in 2013 and 2014) and issued 19 polymetallic nodule exploration contracts (17 of which are located in the CCZ) but has not completed its adoption of the exploitation regulations, standards and guidelines despite initiating work in 2014, and despite being under an obligation to do so by July 2023.

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On April 24, 2025, the Executive Order 14825, titled “Unleashing America’s Offshore Critical Minerals and Resources” directed the Secretary of Commerce to implement an expedited process for reviewing and issuing seabed mineral exploration licenses and commercial recovery permits under DSHMRA.

In addition to directing the International Development Finance Corporation, Export-Import Bank and Trade and Development Agency to identify tools to support this new industry, the Executive Order instructed the Departments of War and Energy to assess the use of the National Defense Stockpile for nodule-derived materials and of entering into offtake agreements for these minerals.

In addition to directing the International Development Finance Corporation, Export-Import Bank and Trade and Development Agency to identify tools to support this new industry, the Executive Order instructed the Departments of War and Energy to assess the use of the National Defense Stockpile for nodule-derived materials and entering into offtake agreements for these minerals.

These departments were also directed to review and support domestic processing capabilities for seabed mineral resources.

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In April 2025, our wholly owned subsidiary, The Metals Company USA, LLC (“TMC USA”), submitted two exploration license applications (covering 187,017 square kilometers in the CCZ referred to as TMC USA-A and TMC USA-B) and one commercial recovery permit application (covering 25,160 square kilometers in the CCZ referred to as TMC USA-A) to NOAA.

Following the introduction of the consolidated application process by NOAA in January 2026, TMC USA submitted a consolidated exploration license and commercial recovery permit application covering approximately 65,000 km², representing a significant expansion from the approximately 25,160 km² commercial recovery area in the initial April 2025 application, with an estimated resource of 619 million wet tonnes (Mt) of polymetallic nodules and potential exploration upside.

On April 28, 2026, NOAA determined that the consolidated application is in full compliance with the applicable requirements under DSHMRA, and the application has advanced to the certification review stage.

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Together, the mineral resources are estimated to contain approximately 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese .

At the same time as we pursue the U.S.

While TMC USA pursues the U.S.

regulatory pathway, our wholly owned subsidiaries, Nauru Ocean Resources Inc.

(“NORI”) and Tonga Offshore Mining Limited (“TOML”), continue to maintain their ISA contracts and comply with all of their contractual obligations under the ISA system.

While the ISA does not have jurisdiction over activities conducted under the regulatory authority of the United States, NORI and TOML maintain two ISA exploration contracts in the CCZ.

NORI is sponsored by the Republic of Nauru (“Nauru”), and TOML is sponsored by the Kingdom of Tonga (“Tonga”).

The ISA has an ongoing inquiry into the possible non-compliance of NORI and TOML with their exploration contracts, which they dispute.

See “Legal Proceedings” in Item 1 of Part II of this Quarterly Report on Form 10-Q.

While the ISA does not have jurisdiction over activities conducted by U.S.

citizens under the regulatory authority of the United States, NORI and TOML maintain two ISA exploration contracts in the CCZ.

NORI is sponsored by the Republic of Naoero, formerly known as the Republic of Nauru (“Naoero” or “Nauru”) 2 , and TOML is sponsored by the Kingdom of Tonga (“Tonga”).

Operations of NORI and TOML in the CCZ are being conducted under their ISA exploration contracts.

1 Certification under DSHMRA and its implementing regulations is an intermediate determination by the NOAA Administrator confirming an applicant’s eligibility (based on financial responsibility, technological capability, prior obligations, and plan adequacy) for an exploration license or commercial recovery permit, but it is not the final issuance of that license or permit.

2 In July 2026, the Republic of Nauru officially changed its name to the Republic of Naoero, restoring the country’s traditional Indigenous name to more faithfully reflect its heritage, language and national identity.

We have key strategic partnerships with (i) Allseas, a leading global offshore engineering contractor, which developed and tested a pilot collection system, and is now modifying it into the first commercial production system, (ii) Pacific Metals Co.

(“PAMCO”), an experienced Japanese ferronickel producer, which is responsible for pre-feasibility and feasibility studies on nodule processing at their smelting facilities in Hachinohe, Japan, (iii) Korea Zinc, a world leader in non-ferrous metal refining and precursor Cathode Active Material (“pCAM”) technology, partnering to advance development in the U.S.

and (iv) Mariana Minerals, a software-first mineral developer and operator working as part of TMC USA’s owners’ team to accelerate the development of potential domestic onshore processing and refining facilities (“Mariana”) and (v) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from a TMC-owned or controlled facility.

(“PAMCO”), an experienced Japanese ferronickel producer, which has completed pre-feasibility and feasibility studies on nodule processing at their smelting facilities in Hachinohe, Japan, (iii) Korea Zinc, a world leader in non-ferrous metal refining and precursor Cathode Active Material (“pCAM”) technology, partnering to advance development in the U.S., (iv) Mariana Minerals, an American software-first mineral developer and operator working as part of TMC USA’s owners’ team to accelerate the development of potential domestic onshore processing and refining facilities (“Mariana”) and (v) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from a TMC-owned or controlled facility.

In addition, we are working with engineering firm Hatch Ltd.

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The near-zero solid waste flowsheet provides a design that is expected to serve as the basis for our onshore processing facilities.

In addition to the flowsheet scope, Hatch was engaged to conduct a PFS refresh for our potential onshore processing and refining in the United States.

On March 19, 2026, we signed a Strategic Partnership Agreement with Mariana focusing on the potential development of a nodule processing and refining facility in the Port of Brownsville, Texas as part of our owner’s team.

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onshore facilities to process collected polymetallic nodules into a manganese silicate product, an intermediate nickel-copper-cobalt matte product and end-products of nickel, cobalt and copper metal.

Developments in the First Quarter 2026

Below are some of the major developments that occurred in the first quarter of 2026:

TMC Subsidiaries Submit Extensive Deep-Sea Dataset to Public Database as Company Launches Video Series on Findings of Environmental Research

On April 15, 2026, we announced that our subsidiaries NORI and TOML submitted extensive datasets to the ISA’s DeepData, covering a decade of exploration in the Clarion Clipperton Zone.

Dataset includes 777 equipment deployments and over 4,800 distinct environmental samples, generating 76,000 biological records and 69,185 geochemical data points, across the entire water column.

The submission builds on prior submissions (March 2023 and May 2024) that together comprise hundreds of thousands of records, over 12,000 seafloor images, and extensive deep-pelagic sampling below 4,000 meters, forming one of the most comprehensive deep-ocean monitoring programs.

TMC’s subsidiaries now contribute roughly one-third of all CCZ data in DeepData.

The data will also be published to the OBIS-ISA node, where TMC subsidiary data already account for 54% of all biological records, a share expected to increase significantly following publication.

Exclusivity on Lease Option for Site in Brownsville, Texas

On March 27, 2026, we announced that TMC USA currently holds an exclusive right of negotiation with the Port of Brownsville, Texas on a lease and / or lease option for land sufficient to develop a domestic nodule processing and refining ecosystem for TMC USA and other American nodule developers, with the ultimate decision conditional on U.S.

government support.

The option on a 50-year lease would cover a total of 1,466 acres of land at the Port of Brownsville, Texas, in two separate land parcels (735 acres on the Brownsville Texas Shipping Channel and an adjacent 731 acres).

There is currently no financial commitment required of TMC USA.

Strategic Partnership with Mariana Minerals

On March 19, 2026, we signed a Strategic Partnership Agreement with Mariana Minerals (“Mariana”) focusing on the potential development of a nodule processing and refining facility in the Port of Brownsville, Texas as part of our owner’s team.

Mariana brings an AI, software-first approach to the permitting, construction and operation of critical mineral projects:

fast-tracked capital project execution, which enabled Tesla to build its Lithium plant in Texas in less than 20 months and is core to how SpaceX and other cutting edge businesses operate, can be even further accelerated via a software-first approach and offers a faster, more modern pathway to re-industrialization.

TMC USA Files First Consolidated Deep-Seabed Mining Application, Increasing Expected Commercial Recovery Permit Area to 65,000 km 2 and Receives Substantial Compliance from NOAA

On January 22, 2026, we announced that TMC USA had submitted a consolidated application to NOAA for an exploration license and a commercial recovery permit for polymetallic nodules in international waters of the CCZ.

The application represents the first consolidated exploration license and commercial recovery permit application submitted under NOAA’s new consolidated application and review process and increases the applied for commercial recovery area from ~25,000 to ~65,000 km2, with an estimated resource of 619 million tonnes (Mt) of wet nodules and a potential exploration upside.

TMC USA was able to apply under NOAA’s new consolidated process because it can demonstrate the scientific, technical and financial capability to pursue commercial recovery activities expeditiously.

On March 9, 2026, we announced that NOAA determined that the consolidated application submitted by TMC USA for an exploration license and commercial recovery permit is in substantial compliance with the applicable requirements under DSHMRA and its implementing regulations.

This determination marks a key step in the U.S.

regulatory process for exploration and commercial recovery of polymetallic nodules in the CCZ under NOAA’s new rule establishing a consolidated application and review process.

The process enables a more efficient regulatory timeline by allowing exploration-phase environmental, geological, and engineering data to be incorporated directly into the commercial recovery review.

TMC Welcomes NOAA Rule Modernizing Deep-Seabed Mining Permits for U.S.

Companies in the High Seas

On January 21, 2026, we welcomed the new rule issued by the National Oceanic and Atmospheric Administration (NOAA) updating regulations governing deep seabed mineral exploration and commercial recovery under DSHMRA.

Final rule establishes a consolidated application and review process under DSHMRA, allowing companies that have completed the necessary exploration, environmental, and technological development work to rely on exploration-phase data in commercial recovery permit applications, reducing duplication and improving regulatory efficiency.

Developments Subsequent to March 31, 2026

Signing of Offshore System Development and Production Agreement with Allseas

On May 11, 2026, we signed a Contract for Development Work and Commercial Production with Allseas Deepsea Marine Contractors, a wholly owned subsidiary of Allseas, for the design, development, build, testing, commissioning and operation of an integrated offshore polymetallic nodule collection and production system in our license area, building on our prior Strategic Alliance Agreement and pilot system trials.

The Production System is designed for a steady-state production capacity of 3.0 million tonnes per annum (“Mtpa”) of wet nodules, with commissioning and commencement of commercial production subject to receipt of a commercial recovery permit from NOAA.

We expect system commissioning to begin in the fourth quarter of 2027, subject to receipt of required permits and regulatory approvals.

Operating costs during commercial production are reimbursable on a cost basis, with performance-linked incentives.

The Agreement also governs the settlement of amounts previously accrued by the Company in respect of development work and lay-up costs, including amounts owed to Allseas and its affiliates as at March 31, 2026 totaling $32.1 million:

these amounts invoiced by Allseas under the former agreement, represent 50% of the costs incurred by Allseas (the "Incurred Costs").

Upon executing the Agreement, the Company has agreed to pay an additional $2.3 million, related to certain initial costs and lay-up costs.

In settlement of these amounts (totaling $34.4 million) and pursuant to the Agreement, the Company will issue to Allseas Group S.A.

7,377,835 common shares, with a final settlement of costs up to the signing of this agreement to be completed in accordance with the terms of the Agreement.

As prescribed in the Agreement, the settlement in shares is calculated using a volume-weighted average price (VWAP) over the 20 days preceding the effective date as stipulated in the Agreement, less a discount of 10%.

Pursuant to the Agreement, Incurred Costs up to the signing of this agreement, not yet invoiced by Allseas, will be payable in any event, which the Company expects to settle in cash through production revenues, in accordance with the terms of the Agreement.

The Agreement has an initial term of five years commencing on the start of commercial production, with provision for extension on terms to be agreed.

The contract is governed by the laws of England and Wales, with disputes subject to ICC arbitration in London.

Allseas is a related party of the Company.

NOAA Confirms Full Compliance of TMC USA’s Consolidated Application

On April 28, 2026, TMC USA received notice of full compliance from NOAA on its consolidated application.

This determination of full compliance is a procedural milestone confirming that the application satisfies the applicable requirements under DSHMRA and its implementing regulations;

it does not constitute and should not be construed as an approval, grant, or issuance of the requested

exploration license or commercial recovery permit.

TMC USA formally submitted a consolidated application to NOAA for an exploration license and a commercial recovery permit for polymetallic nodules in the CCZ on January 22, 2026.

The application is now in the certification review stage.

Developments in the Second Quarter 2026

Below are some of the major developments that occurred in the second quarter of 2026:

NOAA Certifies TMC USA’s USA-B Exploration License Application

On May 28, 2026, NOAA formally certified the USA-B exploration license application submitted by our U.S.

subsidiary, TMC USA, representing another key milestone in the regulatory approval process.

Following certification, NOAA will begin preparation of an Environmental Impact Statement (EIS) for TMC USA’s planned exploration activities in the USA-B area.

The USA-B application area covers ~122,000 km2 of seafloor and hosts an estimated 1.02 billion tonnes of polymetallic nodules based upon TMC’s Technical Report Summary for the Initial Assessment published in August 2025.

TMC and Allseas Sign Commercial Agreement for the First Offshore Nodule Recovery Operation

On May 11, 2026, we announced that we had signed a Contract for Development Work and Commercial Production with our strategic partner and investor Allseas, a global leader in offshore pipeline installation, heavy lift and subsea construction, for the development, commissioning and operation of the first commercial polymetallic nodule collection system.

The agreement establishes the commercial framework for advancing offshore nodule recovery operations and builds on the successful pilot collection test completed in 2022.

The commercial system is expected to have a nameplate production capacity of 3.0 million wet tonnes of nodules per annum, with commissioning targeted to begin in the fourth quarter of 2027, subject to regulatory approvals.

NOAA Determines TMC USA’s Consolidated Deep-Seabed Mining Application for USA-A Area is in Full Compliance

On April 28, 2026, NOAA determined that the consolidated application by our subsidiary, TMC USA, for an exploration license and commercial recovery permit for the USA-A area under DSHMRA is in full compliance with the requirements of the Act and its implementing regulations, marking a key step in the U.S.

regulatory and permitting process.

The news follows the earlier determination of substantial compliance on March 6, 2026, and represents another step along the path of regulatory milestones.

TMC Subsidiaries Submit Massive Deep-Sea Dataset to Public Database as Company Launches Video Series on Findings of Environmental Research

On April 15, 2026, we announced that our subsidiaries, NORI and TOML, had submitted extensive environmental datasets to the ISA’s DeepData database, covering a decade of exploration activities in the Clarion Clipperton Zone (CCZ).

The submission includes data from 777 equipment deployments and more than 4,800 distinct environmental samples, generating approximately 76,000 biological records and 69,185 geochemical data points across the full water column and seafloor environment.

Key findings are showcased in a new video series demonstrating how the data addresses environmental concerns and how innovation has reduced the impact footprint of TMC’s collection system versus legacy technology.

The Metals Royalty Co.

TMCR) Begins Public Trading

On April 8, 2026, The Metals Royalty Co.

began public trading (Nasdaq:

TMCR has a 2.0% Gross Overriding Royalty (GORR) on the NORI area from a 2023 transaction which was previously announced.

As part of the agreement, TMC was granted an equity stake in TMCR, which at that time represented approximately 25% of TMCR’s outstanding equity.

TMC retains the right to repurchase up to 75% of the NORI Royalty at an agreed capped return, exercisable in two transactions, between the second and the tenth anniversary of the agreement.

If both repurchase transactions are executed, TMCR’s remaining gross overriding royalty on the NORI project revenue will be 0.5%.

Developments Subsequent to June 30, 2026

International Tribunal for the Law of the Sea Unanimously Orders ISA to Respect NORI and TOML’s Due Process Rights

On July 18, 2026, the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea prescribed provisional measures in the proceedings brought by our subsidiaries NORI and TOML against the ISA.

In the first contentious case ever decided by the Chamber under Part XI of UNCLOS, the Chamber unanimously found that it has jurisdiction on a prima facie basis, that the rights asserted by NORI and TOML to due process and fair treatment are plausible, and that those rights are at real and imminent risk of irreparable prejudice.

The measures require the ISA to act in accordance with the applicable legal framework, including rules of due process, and to provide NORI and TOML the information they need to respond meaningfully.

The Chamber did not order the suspension of the inquiries that NORI and TOML had requested.

The orders do not prejudge the merits which remain to be determined.

For a description of these proceedings, see Note 17 to our unaudited condensed consolidated interim financial statements and “Legal Proceedings” in Item 1 of Part II of this Quarterly Report on Form 10-Q.

NORI Obtains Exploration Contract Extension from the ISA

On July 20, 2026, the Council of the ISA approved a five-year extension of NORI’s exploration contract, effective July 22, 2026 and expiring July 21, 2031.

The approval is without prejudice to any findings or recommendations arising from the ISA’s inquiry into possible non-compliance.

TOML Applies to the ISA for an Extension of its Exploration Contract

On July 10, 2026, TOML applied to the ISA for a five-year extension of its exploration contract, which is due to expire on January 11, 2027.

The ISA’s Legal and Technical Commission (“LTC”) is scheduled to consider the application in February and March 2027.

Because that is after the contract’s expiry date, TOML expects the contract to be deemed extended from January 12, 2027 under the transitional provision of the ISA’s extension procedures until the Council is able to act on the Commission’s recommendation.

TMC USA Executes a Master Services Agreement with Mariana Minerals Co.

On July 21, 2026, TMC USA entered into a Master Services Agreement (“MSA”) with Mariana Minerals Co.

for project development services for a phased program commencing with mobilization and concept development, for the proposed development of a U.S.-based polymetallic nodule processing and refining industry park.

The parties are finalizing the first work release under this MSA for the technical design activities required to establish plant feasibility, design basis and a tradeoff and opportunity assessment program for Phase 1, Stage 1 of the proposed onshore nodule processing facility in the Port of Brownsville, Texas.

Regulation of Mining of Deep-Sea Polymetallic Nodules by the United States

The Deep Seabed Hard Mineral Resources Act

The Deep Seabed Hard Mineral Resources Act of 1980 (“DSHMRA”)

DSHMRA establishes a domestic legal regime for U.S.

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However, the Executive Order signed by President Trump on April 24, 2025, directs the Secretary of Commerce to implement an expedited process for reviewing and issuing licenses and permits under DSHMRA.

DSHMRA’s implementing regulations for commercial recovery permits requires that all mining vessels and at least one transport vessel are U.S.

flagged (15 C.F.R.

DSHMRA’s implementing regulations for commercial recovery permits requires that all mining vessels and at least one transport vessel be U.S.-flagged (15 C.F.R.

TMC USA will ensure all vessels contracted for commercial recovery comply with relevant laws pertaining to vessel standards and crew safety.

to provide assurances that processed materials are returned to the United States (15 C.F.R.

DSHMRA’s implementing regulations for commercial recovery permits also require that recovered minerals be processed in the United States unless a waiver is granted, in which case the permittee is required to provide assurances that processed materials are returned to the United States (15 C.F.R.

We are currently evaluating U.S.-based vessel and processing options to satisfy this requirement as well as working with Japan and South Korea-based supply chains to ensure processed materials can be returned to the United States in the event the permit to process outside the United States is granted for an initial period.

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Existing ISA Exploration Contracts

NORI and TOML currently hold exploration rights to certain polymetallic nodule areas in the CCZ, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively.

NORI and TOML currently hold exploration rights to certain polymetallic nodule areas in the CCZ, sponsored by the Republic of Naoero and the Kingdom of Tonga, respectively.

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 September 2017, Nauru and NORI entered into a sponsorship agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules in the NORI Contract Area, which was revised in May 2025.

That contract was concluded on July 22, 2011 for an initial term of 15 years and, following Council approval on July 20, 2026, has been extended to July 21, 2031.

NORI is sponsored by Naoero pursuant to a certificate of sponsorship signed by the Government of Naoero on April 11, 2011.

In September 2017, Naoero and NORI entered into a sponsorship agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules in the NORI Contract Area, which was revised in May 2025.

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”).

That contract was concluded on January 11, 2012 for an initial term of 15 years and is due to expire on January 11, 2027.

TOML has applied for a five-year extension, which the ISA’s LTC is scheduled to consider in February and March 2027.

On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential collection of nodules in the TOML Contract Area, which was most recently revised in August 2025.

The ISA has an ongoing inquiry into the possible non-compliance of NORI and TOML with their respective exploration contracts.

NORI and TOML maintain that they have complied and have commenced proceedings before the Seabed Disputes Chamber challenging the process of that inquiry.

An adverse outcome could affect their exploration contracts and their ability to obtain contracts for exploitation from the ISA.

See Note 17 to our unaudited condensed consolidated interim financial statements and “Risk Factors” in Item 1A of Part II of this Quarterly Report on Form 10-Q.

Key Trends, Opportunities and Uncertainties

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Actual timelines for certification, environmental review and potential issuance of licenses or permits may differ materially from management’s current expectations.

These risks, as well as other risks, are discussed in the section entitled “ Risk Factors ” in Item 1A of Part I of the 2025 Annual Report on Form 10-K, as filed with the SEC.

In addition, an adverse outcome in the ISA’s inquiry into NORI’s and TOML’s possible non-compliance with their exploration contracts, or a failure by the ISA to extend TOML’s exploration contract, could adversely affect our rights under the ISA regime.

These risks, as well as other risks, are discussed in the section entitled “ Risk Factors ” in Item 1A of Part I of the 2025 Annual Report on Form 10-K, as filed with the SEC, and in Item 1A of Part II of this Quarterly Report on Form 10-Q.

Basis of Presentation

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Components of Results of Operations

We are in the development stage with no revenue to date and a net loss of $20.6 million for the three months ended March 31, 2026, compared to a net loss of $20.6 million in the same period of 2025.

We have an accumulated deficit of approximately $971.9 million from inception through March 31, 2026.

We are in the development stage with no revenue to date and a net loss of $60.1 million and $80.7 million for the three and six months ended June 30, 2026, compared to a net loss of $74.3 million and $94.9 million in the same periods of 2025.

We have an accumulated deficit of approximately $1,032 million from inception through June 30, 2026.

Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate.

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Exploration and Evaluation Expenses

We expense all costs relating to exploration and development of mineral claims.

We expense as incurred all costs relating to exploration and development of mineral claims.

Such exploration and development costs include, but are not limited to, regulatory approvals, exploration mineral title management, geological, geochemical and geophysical studies, environmental baseline studies and process development activities.

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The foreign exchange income or loss for the periods reported primarily relates to unrealized gain or loss due to revaluation of foreign-denominated accounts payable and accrued liabilities.

Change in Fair Value of Warrants Liability

The change in fair value of warrants liabilities primarily consists of the change in the fair value of the 9,500,000 Private Warrants issued to Sustainable Opportunities Holdings LLC concurrently with Sustainable Opportunities Acquisition Corp.’s (“SOAC”) initial

public offering (the “Private Warrants”).

Change in Fair Value of Warrant Liability

The change in fair value of warrant liability primarily consists of the change in the fair value of the 9,500,000 Private Warrants issued to Sustainable Opportunities Holdings LLC concurrently with Sustainable Opportunities Acquisition Corp.’s (“SOAC”) initial public offering (the “Private Warrants”).

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.

Results of Operations

The following is a discussion of our results of operations for the three months ended March 31, 2026 and 2025.

The following is a discussion of our results of operations for the three and six months ended June 30, 2026 and 2025.

Our accounting policies are described in Note 3 “Significant Accounting Policies” in our financial statements filed as part of the 2025 Annual Report on Form 10-K.

Comparison of the Three Ended March 31, 2026 and 2025

Comparison of the Three and Six Ended June 30, 2026 and 2025

For the Three Months Ended

For the Six Months Ended

(Dollar amounts in thousands, except as noted)

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General and administrative expenses

Equity-accounted investment loss

Nauru warrant cost

Charge on Allseas settlement

Equity-accounted investment loss (income)

Gain on dilution of investment

Change in fair value of warrants liability

Change in fair value of warrant liability

Foreign exchange loss (gain)

Interest income

Fees and interest on borrowings and credit facility

Fees and interest on borrowings and credit facilities

Loss for the period after tax

Three Months ended March 31, 2026 compared to Three Months ended March 31, 2025

We reported a net loss of approximately $20.6 million in the first quarter of 2026, compared to a net loss of $20.6 million in the same period of 2025.

The following explains the major reasons for the decrease in the net loss in the first quarter of 2026.

Three Months ended June 30, 2026 compared to Three Months ended June 30, 2025

We reported a net loss of approximately $60.1 million in the second quarter of 2026, compared to a net loss of $74.3 million in the same period of 2025.

The following explains the major reasons for the decrease in the net loss in the second quarter of 2026.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the three months ended March 31, 2026 were $13.3 million, compared to $9.5 million for the same period in 2025.

The increase of $3.8 million is primarily due to an higher share-based compensation expense of $3.6 million due to the amortization of the fair value of RSUs granted to the officers in the third quarter of 2025, increase of $1.8 million in prefeasibility study costs related to the expanded scope of the prefeasibility study refresh, partially offset by a decrease in mining, technological and process development of $1.6 million and a decrease of $1.0 million in environmental cost.

Exploration and evaluation expenses for the three months ended June 30, 2026 were $56.1 million, compared to $10.5 million for the same period in 2025.

The increase of $45.6 million includes a total of $37.2 million for charges owed to Allseas recorded in the second quarter of 2026 following the signing of a development and operating agreement, which consists of $32.8 million for the settlement of initial costs and $4.4 million for other negotiated costs.

The increase also reflects $3.9 million of higher ongoing development and operating costs to recognize the full charge of ongoing development, operating and vessel costs as compared to the same period in 2025.

The remaining $4.5 million increase is due primarily to higher share-based compensation expense of $3.0 million due to the amortization of the fair value of RSUs granted to the officers in the third quarter of 2025 and an increase of $1.8 million in prefeasibility study costs related to the expanded scope of the prefeasibility study refresh.

The increase was partially offset by lower environmental costs, as the scope of activities related to Campaign 8 was completed in the prior year.

General and Administrative Expenses

G&A expenses for the three months ended March 31, 2026 were $20.7 million compared to $8.5 million for the same period in 2025.

The increase of $12.2 million in G&A expenses was mainly due to the result of an increase in share-based compensation of $11.1 million due to the amortization of the fair value of RSUs granted to the directors and officers in the third quarter of 2025 and increase in payroll costs, partially offset by a decrease in legal costs in the first quarter of 2026.

G&A expenses for the three months ended June 30, 2026 were $15.6 million compared to $11.5 million for the same period in 2025.

The increase of $4.1 million in G&A expenses was mainly due to the result of an increase in share-based compensation of $5.9 million due to the amortization of the fair value of RSUs granted to the directors and officers in the third quarter of 2025, higher amortization of the grant-date fair value of LTIP awards granted in 2026 and an increase in payroll costs.

Nauru Warrant cost

In the three months ended June 30, 2025 and as part of the signing of a revised Sponsorship Agreement with the Government of the Republic of Naoero on May 29, 2025, we issued 9,146,268 warrants to the Republic to purchase common shares of the Company.

We recorded the fair value of the Nauru Warrants, calculated using a Black-Scholes valuation model, which valued each warrant at $3.62 for a total value of $33.1 million.

For further details on this non-recurring item, refer to Note 12 in the Company’s second quarter 2025 interim financial statements.

Charge on Allseas settlement

In the three months ended June 30, 2026 and as a result of the execution of the Agreement with Allseas (Note 6), we remeasured the share-settled obligation based on the contractual pricing mechanism, resulting in a $7.9 million charge representing the difference between the carrying amount of the obligation and the remeasured share-settled obligation.

Gain on Dilution of Investment

During the three months ended March 31, 2026, The Metals Royalty Company issued 1,000,000 common shares as compensation expenses and 3,134,481 common shares on the release of subscription receipts resulting in gross proceed of $15.7 million.

The Company did not participate in the offering, which resulted in a decrease of its ownership interest from 27.2% to 25.15% (December 31, 2025:

As the shares were issued at a price higher than The Metals Royalty Company’s book value per share, the Company recorded a dilution gain of $4.6 million.

Change in Fair Value of Warrants Liability

The fair value of the 9,500,000 Private Warrants liability at March 31, 2026 of $2.7 million, represents a decrease of $10.7 million in the first quarter of 2026, results from the decrease in the price of the Company’s shares and the price of our public warrants over this same period (-24% and -74% respectively).

Refer to Note 12 in the Company’s first quarter of 2026 interim financial statements for further details on this non-operating, non-cash decrease.

During the three months ended June 30, 2026, The Metals Royalty Company issued a total of approximately 7 million common shares in relation to a financing offering, compensation expenses and a royalty purchase.

The Company participated in the offering, acquiring 77,889 shares, resulting in a net decrease of its ownership interest from 27.2% to 22.4% (December 31, 2025:

As the shares were issued at a price higher than The Metals Royalty Company’s book value per share, the Company recorded a non-operating, non-cash dilution gain of $18.5 million.

Change in Fair Value of Warrant Liability

The fair value of the 9,500,000 Private Warrants liability at June 30, 2026 of $0.5 million, represents a decrease of $2.2 million in the second quarter of 2026, results from the decrease in the price of the Company’s shares and the price of our public warrants over this same period (-24% and -57% respectively).

Refer to Note 12 in the Company’s second quarter of 2026 interim financial statements for further details on this non-operating, non-cash decrease.

Fees and Interest on Borrowings and Credit Facilities

There were no outstanding drawn amounts under the Company’s credit facilities during the three months ended March 31, 2026, and no interest expense was incurred compared to $0.1 million interest expense in the same period of 2025.

Underutilization fees on these facilities were $0.7 million for the first quarter of 2026, remaining unchanged from the same period in 2025.

The first quarter of 2025 also included interest of $0.2 million on the Company’s short term debt borrowings which were terminated in 2025.

There were no outstanding drawn amounts under the Company’s credit facilities during the three months ended June 30, 2026, and no interest expense was incurred compared to $0.1 million interest expense in the same period of 2025.

Underutilization fees on these facilities were $0.7 million for the second quarter of 2026, remaining unchanged from the same period in 2025.

The second quarter of 2025 also included interest of $0.1 million on the Company’s short-term debt borrowings which were terminated in 2025.

Interest Income

The operating loss was offset by interest income of $1.0 million reflecting higher cash balances beginning in the second quarter of 2025.

Six Months ended June 30, 2026 compared to Six Months ended June 30, 2025

We reported a net loss of $80.7 million in the first half of 2026, compared to a net loss of $94.9 million in the same period of 2025.

The following explains the major reasons for the decrease in the net loss in the first half of 2026.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the six months ended June 30, 2026 were $69.3 million, compared to $20.0 million for the same period in 2025.

The increase of $49.3 million includes a total of $37.2 million for charges owed to Allseas recorded in the second quarter of 2026 following the signing of a development and operating agreement, and an increase of $2.1 million to recognize the full charge of ongoing development, operating and vessel costs as compared to the comparative period in 2025.

The remaining $10.0 million increase is due primarily to higher share-based compensation expense of $6.6 million due to the amortization of the fair value of RSUs granted to the officers in the third quarter of 2025, higher amortization of the grant-date fair value of LTIP awards granted in 2026, reflecting their higher grant-date fair value compared to LTIP awards granted during the same period in 2025, an increase of $3.7 million in prefeasibility study costs related to the expanded scope of the prefeasibility study refresh and higher payroll cost, partially offset by a decrease of $2.4 million on environmental studies as the scope of activities related to Campaign 8 were completed in the prior year and, accordingly, the associated costs did not recur in the current period.

General and Administrative Expenses

G&A expenses for the six months ended June 30, 2026, were $36.3 million, compared to $19.9 million for the same period in 2025.

The increase of $16.4 million in G&A expenses in the first half of 2026 was mainly the result of an increase in share-based compensation of $17.1 million due to amortization of the fair value of RSUs and options granted to the directors and officers in the third quarter of 2025, higher amortization of the grant-date fair value of LTIP awards granted in 2026, reflecting their higher grant-date fair value compared to LTIP awards granted during the same period in 2025 and an increase in payroll costs, partially offset by a decrease in professional and consulting costs of $1.8 million.

Nauru Warrant cost

In the first six months ended June 30, 2025, we recorded $33.1 million representing the fair value of common shares issued to the Government of the Republic of Naoero, as part of the signing of a revised Sponsorship Agreement on May 29, 2025.

For further details on this non-recurring item, refer to Note 12 in the Company’s second quarter 2025 interim financial statements.

Charge on Allseas settlement

In the first six months ended June 30, 2026 and as a result of the execution of the Agreement with Allseas (Note 6), we remeasured the share-settled obligation based on the contractual pricing mechanism, resulting in a $7.9 million charge representing the difference between the carrying amount of the obligation and the remeasured share-settled obligation.

Gain on Dilution of Investment

During the six months ended June 30, 2026, The Metals Royalty Company issued a total of approximately 11.1 million common shares primarily related to a financing offering, compensation expenses and a royalty purchase in the second quarter of 2026.

The Company’s limited participation in the second quarter 2026 offering, resulted in a net decrease in its ownership interest from 27.2% to 22.4% (December 31, 2025:

27.2%) and the recording of a non-operating, non-cash dilution gain of $23.1 million, as the shares were issued at a price higher than The Metals Royalty Company’s book value per share.

Change in F air V alue of W arrant L iability

The significant movements in the fair value of the 9,500,000 Private Warrants liability in the first half of 2026 (decrease of $12.8 million) and 2025 (increase of $16.7 million), results from the significant movements in the price of the Company’s shares and the price of our public warrants, mainly over the same periods.

Refer to Note 12 in the Company’s second quarter 2026 interim financial statements for further details on this non-operating, non-cash increase.

Interest Income

The Company recorded interest income of $2.2 million in the first half of 2026 reflecting higher cash balances beginning in the second quarter of 2025.

In the same period of 2025, interest income of $0.2 million was recorded.

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 March 31, 2026, we had cash on hand of $119.7 million, including $9 million of tax withholdings remitted to authorities in early April 2026.

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 then the applications of exploration licenses and commercial recovery permits with NOAA under DHMRA, and by negotiating the settlement of program expenditures with our equity whenever possible, and by utilizing existing assets for offshore and onshore production.

As of June 30, 2026, we had cash on hand of $98.7 million.

The decrease in our cash balance of $21.0 million in the second quarter of 2026 included $9 million of withholdings related to equity awards collected at the end of March 2026 and remitted in early April 2026.

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 then the applications of exploration licenses and commercial recovery permits with NOAA under DSHMRA, and by negotiating the settlement of program expenditures with our equity whenever possible, and by utilizing existing assets for offshore and onshore production.

We have yet to generate any revenue from our business operations.

We are a development 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 additional mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing approvals under the U.S.

We are a development company and the recovery of our investment in mineral exploration contracts and attainment of profitable operations are 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 additional mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing approvals under the U.S.

regulatory regime or ISA exploitation contracts or provisional approvals.

While we have obtained financing in the past, there is no assurance that such financing will continue to be available on favorable terms, in sufficient amounts, or at all.

We expect to incur significant expenses and operating losses for the foreseeable future, particularly as we advance our application to NOAA for a commercial recovery permit and preparation for potential commercialization.

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.

Our estimates used in reaching this conclusion are based on information available as at the date of filing this Annual Report.

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.

In addition, we will, however, need and are seeking additional financing to fund our continued operations over time.

Our forecasted cash expenditures include amounts payable to Allseas under the Agreement, under which we are required to reimburse 50% of eligible development work costs as they are incurred, payable within ten business days of receipt of an invoice for amounts we have approved, with the remaining 50% deferred and repaid based on future production volumes.

The Agreement permits us to defer or withhold approval of a work plan and budget to the extent we do not have sufficient financing or liquidity to fund the relevant work, in which case the affected work is treated as a permissible suspension under the Agreement.

Our estimates used in reaching this conclusion are based on information available as at the date of filing this Quarterly Report.

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 government-based funding, non-dilutive asset, royalty or project-based and/or asset-based financings.

If 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.

If these or other financing sources are not available, or if the terms of financing are less desirable than we expect, or are available only 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.

On September 16, 2022, we filed a registration statement on Form S-3 with the SEC, which the SEC declared effective on October 14, 2022, to sell up to $100 million of securities.

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On December 22, 2022, we entered into an At-the-Market Equity Distribution Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”) and Wedbush Securities Inc., as sales agents, allowing us, from time to time, to issue and sell common shares with an aggregate offering price of up to $30 million.

In 2025, we issued 7,542,996 common shares at an average share price of $2.02, for net proceeds of $14.8 million under the Sale Agreement.

In 2025, we issued 7,542,996 common shares at an average share price of $2.02, for net proceeds of $14.8 million under the Sales Agreement.

The Sales Agreement expired in October 2025.

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The funds raised under this Securities Purchase Agreement are to be used for general corporate purposes.

We may receive up to approximately $432.5 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants, the Class B Warrants, Class C Warrants, and Warrants issued to Korea Zinc, Nauru and Tonga based on the per share exercise price of such warrants.

We may receive up to approximately $432.5 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants, the Class B Warrants, Class C Warrants, and Warrants issued to Korea Zinc, Naoero and Tonga based on the per share exercise price of such warrants.

However, the exercise price for the outstanding Public Warrants and Private Warrants is $11.50 per common share and there can be no assurance that such warrants will be in the money prior to their expiration, and as such, such warrants may expire in September 2026 worthless.

In certain circumstances, the Public Warrants and Private Warrants, Class A Warrants, Class B Warrants and Class C Warrants may be exercised on a cashless basis and the proceeds from the exercise of such warrants will decrease.

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.

The warrants issued to the Republic of Nauru and Kingdom of Tonga can only be exercised after the commercial recovery permit is received and commercial production commences and there can be no assurance that the exercise conditions will be met prior to their expiration.

In addition, the exercise price to purchase one common share under the outstanding Class A Warrants and Class B Warrants is $2.00 each, Class C Warrants is $4.5, warrants issued to Korea Zinc is $7.00, warrants issued to Republic of Nauru is $4.72 and warrants issued to Tonga is $5.87 (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 exercise thereof.

Furthermore, even if the warrants are 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.

The warrants issued to the Republic of Naoero and Kingdom of Tonga can only be exercised after the commercial recovery permit is received and commercial production commences and there can be no assurance that the exercise conditions will be met prior to their expiration.

In addition, the exercise price to purchase one common share under the outstanding Class A Warrants and Class B Warrants is $2.00 each, Class C Warrants is $4.5, warrants issued to Korea Zinc is $7.00, warrants issued to Republic of Naoero is $4.72 and warrants issued to Tonga is $5.87 (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 exercise thereof.

Cash Flows Summary

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For the Three Months Ended

For the Six Months Ended

Net cash used in operating activities

Net cash used in investing activities

Net cash generated (used in) investing activities

Net cash provided by financing activities

Increase (decrease) in cash

Three Months ended March 31, 2026 compared to Three Months ended March 31, 2025

(Decrease) increase in cash (1)

(1) Excluding foreign exchange movement.

Six Months ended June 30, 2026 compared to Six Months ended June 30, 2025

Cash flows used in Operating Activities

For the three months ended March 31, 2026, major operating activities included initial work on pre-feasibility studies update and work to advance our permit applications, resulting in net cash used in operating activities of $0.6 million.

This consisted of $4.1 million on payroll costs, $1 million on various environmental work, $1.1 million on legal and consulting fees, $1.2 million on business development, communications and IT costs, $0.8 million on prefeasibility studies and mining, technological and process development costs, $0.7 million on stakeholder engagement, $0.7 million on underutilization fees paid to the lenders of the 2024 Credit Facility and an additional $1 million for various expenses.

The outflow was offset by receipt of interest income of $1.1 million and recovery of withholding taxes on awards that vested in the first quarter of 2026.

For the three months ended March 31, 2025, major operating activities included advanced work on pre-feasibility studies and work to advance our permit applications, resulting in net cash used in operating activities of $9.3 million.

This consisted of $3 million on various environmental work, $2.6 million on payroll costs, $1.5 million on stakeholder engagement, $1 million on legal and consulting fees and an additional $1.2 million for various expenses.

For the six months ended June 30, 2026, major operating activities included initial work on pre-feasibility studies update and work to advance our permit applications, resulting in net cash used in operating activities of $20.7 million.

This consisted of $7.8 million on payroll costs, $3.5 million on legal and consulting fees, $3.3 million on prefeasibility studies, $2 million on stakeholder engagement, $2.3 million on business development, communications, investor relations and IT costs, $1.4 million on various environmental work, $1.2 million on underutilization fees paid to the lenders of the 2024 Credit Facility, $0.3 million on mining, technological and process development costs, and an additional $1.1 million for various expenses.

The outflow was offset by receipt of interest income of $2.2 million.

Cash used in operating activities in the second quarter of 2026 of $20.1 million included $9 million of withholdings related to equity awards that were collected at the end of March 2026 and remitted in early April 2026.

For the six months ended June 30, 2025, major operating activities over this period included advanced work on pre-feasibility studies and work to advance our permit applications, resulting in net cash used in operating activities of $20 million.

This consisted of $5.4 million on payroll costs, $4.9 million on various environmental work, $2.1 million on stakeholder engagement, $2.1 million on legal and consulting fees, $2 million on business development, investor relations and communications, $1.7 million in interest paid on 2024 credit facilities and working capital loan, and $1.8 million for various expenses.

Cash flows used in Investing Activities

Net cash provided by investing activities for three months ended March 31, 2026 and 2025 represent the purchase of equipment and software development.

Net cash used in investing activities for the six months ended June 30, 2026 of $0.9 million includes the investment of $1.0 million to purchase shares in the Company’s equity investment in TMCR (refer to Note 7 in the Company’s second quarter 2026 interim financial statements) and the purchase of equipment and software development.

A total of $0.2 million was spent on the development of software in the comparative period of 2025.

Cash flows provided by Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2026 was $2.7 million, which comprised of proceeds from the exercise of stock options.

Net cash provided by financing activities for the three months ended March 31, 2025 was $8.3 million, which comprised of proceeds received from the Registered Direct Offering announced in November 2024 of $5 million (less fees of $0.5 million), proceeds from shares issued from our ATM of $5.6 million and the repayment of short-term debt of $1.8 million.

Net cash provided by financing activities for the six months ended June 30, 2026 was $2.8 million, which consisted of proceeds from the exercise of stock options.

Net cash provided by financing activities for the six months ended June 30, 2025 was $132.1 million, which consisted of net cash proceeds received from the Korea Zinc investment of $85.2 million, net proceeds from the 2025 Registered Direct Offerings of $30.0 million, the remaining net proceeds from the 2024 Registered Direct Offerings of $4.5 million, proceeds from shares issued from ATM of $14.8 million and proceeds from exercise of stock options and warrants of $6.9 million.

This increase was partially offset by repayments totaling $9.3 million on our credit facilities and on the Allseas Working Capital loan.

Contractual Obligations and Commitments

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NORI is currently implementing its approved five-year plan.

NORI’s exploration contract expires on July 21, 2026.

NORI submitted an application to the ISA for a five-year extension of the contract that is currently under review.

The cost of the proposed five-year plan of work include in NORI’s extension application is dependent on the ISA’s approval of the NORI extension Work plans are reviewed annually by NORI, agreed with the ISA and may be subject to change depending on their progress to date.

NORI submitted an application to the ISA on January 19, 2026 for a five-year extension of the contract, which the Council of the ISA approved on July 20, 2026:

the extended contract expires July 21, 2031.

The application included a programme of activities and anticipated annual expenditures for the extension period.

Work plans are reviewed annually by NORI, agreed with the ISA and may be subject to change depending on their progress to date.

TOML Exploration Contract

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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.

TOML’s exploration contract expires on January 10, 2027.

TOML is required to submit an application for extension no later than six months before the expiration of the contract.

TOML intends to submit an application for a five-year extension in 2026.

TOML’s exploration contract is due to expire on January 11, 2027.

On July 10, 2026, TOML applied to the ISA to extend its exploration contract for a further five years.

The ISA’s LTC is scheduled to consider the application in February and March 2027, and TOML expects the contract to be deemed extended from January 12, 2027 under the transitional provision of the ISA’s extension procedures until the Council is able to act on the Commission’s recommendation.

Regulatory Obligations Relating to Exploration Contracts

Both TOML and NORI require sponsorship from their host sponsoring States, Tonga and Nauru, respectively.

Both TOML and NORI require sponsorship from their host sponsoring States, Tonga and Naoero, respectively.

Each company has been registered and incorporated within the applicable host State’s jurisdiction.

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Sponsorship Agreements

NORI is sponsored by Nauru pursuant to a certificate of sponsorship signed by the Government of Nauru on April 11, 2011.

NORI is a Nauruan incorporated entity and is subject to applicable Nauruan legislation and regulations.

In 2015, the Nauruan government established the Nauru Seabed Minerals Authority to regulate activities carried out by companies sponsored by Nauru.

NORI is sponsored by Naoero pursuant to a certificate of sponsorship signed by the Government of Naoero on April 11, 2011.

NORI is a Naoeroan incorporated entity and is subject to applicable Naoeroan legislation and regulations.

In 2015, the Naoeroan government established the Nauru Seabed Minerals Authority to regulate activities carried out by companies sponsored by Naoero.

Throughout the period of the NORI Exploration Contract, NORI must be sponsored by a State that is party to UNCLOS.

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In either event, if NORI does not obtain another sponsor meeting the requirements prescribed in the ISA Regulations and fails to submit to the ISA a certificate of sponsorship for NORI in the prescribed form within six months, the NORI Exploration Contract will terminate.

On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into a sponsorship agreement (the “NORI Sponsorship Agreement”) formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules within the NORI Contract Area of the CCZ.

On May 29, 2025 the Republic of Nauru and NORI signed a revised Sponsorship Agreement, updating the terms of the Agreement signed between the parties in 2017.

On July 5, 2017, Naoero, the Nauru Seabed Minerals Authority and NORI entered into a sponsorship agreement (the “NORI Sponsorship Agreement”) formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules within the NORI Contract Area of the CCZ.

On May 29, 2025 the Republic of Naoero and NORI signed a revised Sponsorship Agreement, updating the terms of the Agreement signed between the parties in 2017.

The revised Sponsorship Agreement will remain in force unless terminated by mutual agreement of the parties or earlier terminated in accordance with its terms, including in the event of a material breach by either party or upon the assignment of NORI’s rights and the transfer of sponsorship to another sponsoring State.

Under the agreement, NORI will pay Nauru a seabed mineral recovery payment of $2 per tonne of polymetallic nodules recovered under an ISA contract, subject to annual inflation adjustment.

In addition, NORI will pay an annual administration fee, initially set at $500,000, which may increase by 5% annually, to support Nauru’s administration of its sponsorship and regulatory oversight.

The agreement also provides for potential continuity payments to Nauru if a subsidiary other than NORI develops nodules in the NORI Contract Area under the U.S.

Under the agreement, NORI will pay Naoero a seabed mineral recovery payment of $2 per tonne of polymetallic nodules recovered under an ISA contract, subject to annual inflation adjustment.

In addition, NORI will pay an annual administration fee, initially set at $500,000, which may increase by 5% annually, to support Naoero’s administration of its sponsorship and regulatory oversight.

The agreement also provides for potential continuity payments to Naoero if a subsidiary other than NORI develops nodules in the NORI Contract Area under the U.S.

regulatory regime with the applicable payment amounts and schedule to be determined in accordance with the terms of the agreement.

During any period in which such continuity payments are made, NORI has agreed to maintain an office in Nauru and make annual investments in local presence, community initiatives and training and capacity-building programs for Nauruan nationals.

In connection with the Sponsorship Agreement, Nauru holds warrants to purchase 9,146,268 of our common shares at an exercise price of $4.72.

In connection with the revised Sponsorship Agreement, we also executed a Deed of Guarantee and Indemnity in favor of Nauru, under which we guarantee certain financial obligations of NORI under Nauruan law and the Sponsorship Agreement and provides limited indemnification.

During any period in which such continuity payments are made, NORI has agreed to maintain an office in Naoero and make annual investments in local presence, community initiatives and training and capacity-building programs for Naoeroan nationals.

In connection with the Sponsorship Agreement, Naoero holds warrants to purchase 9,146,268 of our common shares at an exercise price of $4.72.

In connection with the revised Sponsorship Agreement, we also executed a Deed of Guarantee and Indemnity in favor of Naoero, under which we guarantee certain financial obligations of NORI under Naoeroan law and the Sponsorship Agreement and provide limited indemnification.

On March 8, 2008, Tonga and TOML entered into the TOML Sponsorship Agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential exploitation of a proposed application to the ISA (subsequently granted) known as the TOML Area.

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In connection with the Sponsorship Agreement, Tonga holds warrants to purchase 1,000,000 of our common shares at an exercise price of $5.87.

In connection with the revised Sponsorship Agreement, we also executed a Deed of Guarantee and Indemnity in favor of Tonga, under which we guarantee certain financial obligations of TOML under Tongan law and the Sponsorship Agreement and provides limited indemnification.

Allseas Agreements

On March 29, 2019, we entered into a strategic alliance with Allseas to develop a system to collect, lift and transport nodules from the seafloor to shore and agreed to enter into a nodule collection and shipping agreement whereby Allseas would provide commercial services for the collection of the first 200 million metric tonnes of polymetallic nodules on a cost plus 50% profit basis.

On March 29, 2019, we entered into a strategic alliance agreement with Allseas to develop a system to collect, lift and transport nodules from the seafloor to shore and agreed to enter into a nodule collection and shipping agreement whereby Allseas would provide commercial services for the collection of the first 200 million metric tonnes of polymetallic nodules on a cost plus 50% profit basis, which arrangement has been superseded by the Agreement described below.

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.

Under the PMTA, Allseas agreed to cover the development cost of the project in exchange for a payment from us upon successful completion of the pilot trial of the PMTS in NORI Area D.

On March 16, 2022, NORI and Allseas entered into a non-binding term sheet for the development and operation of a commercial nodule collection system.

On March 16, 2022, NORI and Allseas entered into a non-binding term sheet for the development and operation of a commercial nodule collection system, which has been superseded by the Agreement described below.

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.

NORI and Allseas intend to equally finance all costs related to developing and getting the first commercial system into production.

Once in production, NORI is expected to pay Allseas a nodule collection and transshipment fee and, as Allseas scales up production to up to an estimated 3.0 million wet tonnes of nodules per year, it is expected that unit costs will be reduced.

Following the successful completion of the NORI Area D pilot collection system trials in November 2022 and subsequent analysis of pilot data, the parties are reviewing a commercial nodule collection system production targets, system design and cost estimates and intend to enter into a binding Heads of Terms by the end of 2024.

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.

Through December 31, 2025, we have made the following payments to Allseas under the PMTA:

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In consideration of the exclusivity term, on August 14, 2023, we issued 4.15 million Common Shares to Allseas.

On May 11, 2026, we entered into a Contract for Development Work and Commercial Production (the “Agreement”) with Allseas Deepsea Marine Contractors, a wholly owned subsidiary of Allseas, for the design, development, build, testing, commissioning and operation of an integrated offshore polymetallic nodule collection and production system in our license area.

The commercial system is designed for a nameplate production capacity of 3.0 million wet tonnes of nodules per annum, with commissioning targeted to begin in the fourth quarter of 2027.

The commencement of commercial production is subject to, among other matters, receipt of a commercial recovery permit from NOAA, completion and acceptance of the collection system and approval of the applicable work plan and budget.

Under the Agreement, we are required to reimburse Allseas for eligible costs incurred in performing the development work in accordance with approved work plans and budgets, with 50% of such costs payable as incurred and the remaining 50% deferred and repaid based on future commercial production volumes.

The Deferred Amounts remain payable regardless of whether commercial production commences and would become payable upon expiration or termination of the Agreement.

The Agreement has an initial term ending five years following the commencement of commercial production and may be extended by mutual agreement (refer to Note 6 of these Interim Condensed Consolidated Financial Statements).

The Agreement supersedes the strategic alliance agreement entered into on March 29, 2019 and the non-binding term sheet entered into on March 16, 2022

Offtake Agreement

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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.

On August 16, 2024, we entered into the Third Amendment to the 2023 Credit Facility, to increase the borrowing limit of the 2023 Credit Facility to $27.5 million.

Under the terms of the Third Amendment, upon closing of the November 2024 Registered Direct Offering discussed above, the borrowing limit returned to $25 million.

There was no outstanding balance under the 2023 Credit Facility as at December 31, 2025.

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.

Pursuant to the Letter Agreement entered into on March 24, 2025, we agreed to cancel the 2023 Credit Facility with no outstanding amounts remaining, other than our obligation to pay Argentum Cedit Virtuti GCV the underutilization fee thereunder.

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In accordance with the Working Capital Loan Agreement, Allseas Investments provided a loan to us amounting to $5 million (the “Working Capital Loan”) on September 10, 2024, to be used towards general corporate purposes and the repayment of all outstanding amounts under the Short-Term Loan between us and the Lender.

The Working Capital Loan is payable to the Lender on or before the earlier of (i) the occurrence of certain financing events and (ii) April 1, 2025 (the “Original Repayment Date”).

The Working Capital Loan will bear interest based on the 6-month Secured Overnight Financing Rate, 180-day average plus a margin of 4.0% per annum and is payable in two installments on January 2, 2025, and the Original Repayment Date (or plus a margin of 5.0% if all interest payments are deferred to the Original Repayment Date, at our election).

On October 18, 2024, we entered into the First Amendment to the Working Capital Loan Agreement with Allseas Investments, resulting in a further draw of $2.5 million by us and a total Working Capital Loan drawn amount of $7.5 million.

On March 24, 2025, we entered into a Letter Agreement with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the Original Repayment Date under the Working Capital Loan Agreement was extended to September 30, 2025, with principal and interest now repayable on that date.

During the second quarter of 2025, we repaid the entire outstanding loan and interest, amounting to $7.5 million and $0.5 million, respectively, and cancelled the Working Capital Loan Agreement.

2024 Credit Facility with ERAS Capital LLC and Gerard Barron

Under the 2024 Credit Facility wit ERAS Capital LLC and Gerard Barron we may borrow up to $44 million in the aggregate ($22 million from each of the 2024 Lenders).

Under the 2024 Credit Facility with ERAS Capital LLC and Gerard Barron we may borrow up to $44 million in aggregate ($22 million from each of the 2024 Lenders).

On March 25, 2026, the 2024 Lenders extended the Maturity Date by one year for any borrowings under the 2024 Credit Facility, expiring on June 30, 2027.

See above for a further description of the 2024 Credit Facility.

As of March 31, 2026, we had no borrowing under the 2024 Credit Facility and are only incurring the underutilization fee.

As of June 30, 2026, we had no borrowing under the 2024 Credit Facility and are only incurring the underutilization fee.

Off-Balance Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis