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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-14 · 187 added, 115 removed, 339 unchanged (47% of the section changed)

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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, 2024 contained in our 2024 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 2024 Annual Report on Form 10-K, as updated and/or supplemented in subsequent filings with the SEC.

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, 2025 and 2024, 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, 2025 and 2024, respectively, present the financial position and results of operations of TMC the metals company Inc.

and its consolidated subsidiaries.

We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone (“CCZ”), with NORI Area D located approximately1,500 miles south-west of San Diego, California.

We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, with NORI Area D located approximately1,500 miles south-west of San Diego, California.

The CCZ is a geological submarine fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 kilometers (4,500 miles) that spans approximately 4,500,000 square kilometers (1,737,000 square miles).

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These four metals contained in the polymetallic nodules are critical for energy, defense, manufacturing and infrastructure.

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

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

If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products:

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

We are still in the exploration phase and have not yet obtained an exploitation contract or a commercial recovery permit from any regulators.

We are now in the evaluation stage following release of the TMC USA-A Prefeasibility Study, Technical Report Summary on August 4, 2025 where the Company declared world first mining reserves for a seafloor polymetallic nodule project.

We have not yet obtained an exploitation contract or a commercial recovery permit from any regulators.

Additionally, we do not yet hold the environmental or other permits required to construct and operate commercial-scale polymetallic nodule processing and refining facilities on land.

The International Seabed Authority (“ISA”), comprised of 169 countries and the European Union, established regulations over deep-sea mining activities of their nationals, pursuant to UNCLOS.

The ISA, comprised of 170 countries and the European Union, established regulations over deep-sea mining activities of their nationals, pursuant to UNCLOS.

The ISA has adopted exploration regulations and issued 19 polymetallic nodule exploration contracts but has been unable to adopt the final exploitation regulations, standards and guidelines despite initiating work in 2014.

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NOAA implemented regulations for exploration licenses in 1981 and for commercial recovery permits in 1989.

We are increasingly focused on advancing our commercial production strategy under the U.S.-based DSHMRA regime.

We continue to be focused on advancing our commercial production strategy under the U.S.-based DSHMRA regime.

In April 2025, our wholly owned subsidiary, The Metals Company USA, LLC, or 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_2) to NOAA.

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pathway, we continue to preserve our rights under the ISA system.

While the ISA does not have jurisdiction over activities conducted under the regulatory authority of the United States, we maintain two ISA exploration contracts in the CCZ, one held by our subsidiary Nauru Ocean Resources Inc., or NORI, sponsored by the Republic of Nauru, and one held by Tonga Offshore Mining Limited, or TOML, sponsored by the Kingdom of Tonga.

While the ISA does not have jurisdiction over activities conducted under the regulatory authority of the United States, we maintain two ISA exploration contracts in the CCZ, one held by our subsidiary Nauru Ocean Resources Inc., or NORI, sponsored by the Republic of Nauru (“Nauru”), and one held by Tonga Offshore Mining Limited, or TOML, sponsored by the Kingdom of Tonga (“Tonga”).

The ISA has issued a total of 19 exploration contracts covering approximately 1.28 million square kilometers, 17 of which are located in the CCZ.

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We do not believe pursuing licenses and permits with NOAA under DSHMRA affects our ISA exploration contracts.

We have key strategic partnerships with (i) Allseas, a leading global offshore contractor, which developed and tested a pilot collection system, and is now working to modify it into the first commercial production system, (ii) PAMCO, an experienced Japanese ferronickel producer, which is responsible for pre-feasibility and feasibility studies on nodule processing, and (iii) Glencore which holds offtake rights to 50% of the NORI nickel and copper production if produced from a DGE-owned or controlled facility.

(“PAMCO”), an experienced Japanese ferronickel producer, which is responsible for pre-feasibility and feasibility studies on nodule processing, and (iii) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from the our subsidiary DeepGreen Engineering Pte Ltd.

(“DGE”) owned or controlled facility.

In addition, we have worked with engineering firm Hatch Ltd.

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The primary processing stages of the flowsheet from nodule to NiCuCo matte intermediate were demonstrated as part of our pilot plant program at FLSmidth and XPS’ (Glencore subsidiary) facilities.

The matte refining stages have been tested at SGS Lakefield with positive results.

The matte refining stages have been tested at SGS facility in Lakefield Canada with positive results.

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

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(i) define our resource and project economics, (ii) develop a commercial offshore nodule collection system, (iii) assess the environmental and social impacts of offshore nodule collection, and (iv) develop onshore technology to process collected polymetallic nodules into a manganese silicate product, and an intermediate nickel-copper-cobalt alloy or matte product and/or end-products like nickel and cobalt sulfates, and copper cathode.

We are also working towards a pre-feasibility study, which we are now updating to reflect the U.S.

regulatory pathway and a new set of requirements under DSHMRA.

Developments in the First Quarter 2025

Below are some of the major developments that occurred in the first quarter of 2025:

TMC and PAMCO Achieve Nodule Processing Milestone, Unlocking Critical Battery & Steelmaking Materials at Existing Facilities

On February 18, 2025, we announced that PAMCO had successfully smelted 450 tonnes of calcine into 35 tonnes of NiCuCo alloy and 320 tonnes of Mn silicate products, during a campaign to process a 2,000-tonne sample of deep-seafloor polymetallic nodules at our partner PAMCO’s Hachinohe Rotary Kiln Electric-Arc Furnace facility in Hachinohe, Japan, demonstrating the process at scale.

The process data and operational experience gathered during the processing trial will inform expected definitive processing agreements between the parties.

Extension of Credit Facility with ERAS Capital LLC and Gerard Barron

On March 26, 2025, we entered into the Third Amendment to the 2024 Credit Facility with the 2024 Lenders, to, among other things, increase the borrowing limit to $44 million in the aggregate ($22 million from each of the 2024 Lenders) and extend the maturity of the 2024 Credit Facility to June 30, 2026.

Extension of Allseas Working Capital Loan Agreement and Termination of Allseas 2023 Credit Facility

On March 24,2025, we entered into a Letter Agreement (the “Letter Agreement”) with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the repayment date under our working capital loan agreement (“Working Capital Loan Agreement”) with Allseas Investments dated September 9, 2024 was extended to September 30, 2025.

Additionally, under the Letter Agreement, we and Argentum Cedit Virtuti GCV agreed to cancel the unsecured credit facility established in 2023 with no outstanding amounts remaining, other than our obligation to pay the underutilization fee thereunder.

Exploring U.S.

Regulatory Pathway

On March 27, 2025, we announced that we initiated a pre-application consultation process with NOAA and the U.S.

Department of Commerce under the DSHMRA to consider a U.S.

regulatory pathway for the commercial recovery of deep-sea polymetallic nodules in the CCZ.

We believe this regulatory pathway offers a clear and predictable route to securing an exploration license and a commercial recovery permit for polymetallic nodules found in the CCZ.

We are in the initial planning stages of this strategy, however, and there are no assurances that we will be able to secure any exploration or commercial recovery rights under the DSHMRA in a timely manner, or at all.

Developments Subsequent to March 31, 2025

Developments in the Second Quarter 2025

Below are some of the major developments that occurred in the second quarter of 2025:

TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals Under U.S.

Seabed Mining Code

On April 29, 2025, we announced that TMC USA had submitted the first-ever application for a commercial recovery permit and two exploration licenses under the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA), advancing the Company’s timeline ahead of its original June 27, 2025 application target.

The application area for the commercial recovery permit, TMC USA-A_2, covers a total combined area of 25,160 square kilometers in the Clarion Clipperton Zone which includes areas that contain the Company’s already indicated and measured resources.

The application area for the commercial recovery permit, TMC USA-A_2, covers a total combined area of 25,160 square kilometers in the CCZ which includes areas that contain the Company’s already indicated and measured resources.

TMC USA also submitted two exploration license applications:

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partners and allies, on the feasibility of an international seabed benefit-sharing mechanism.

NOAA Confirms Substantial Compliance for TMC USA’s Exploration License Applications

On May 29, 2025, the U.S.

National Oceanic and Atmospheric Administration confirmed substantial compliance for TMC USA’s exploration license applications over the USA-A and USA-B exploration areas.

The confirmation secures TMC USA’s priority over these areas, including its commercial recovery permit application.

TMC Announces Registered Direct Offering for $37 million

On May 12, 2025, the Company entered into a securities purchase agreement with certain new and existing investors, including an existing strategic investor, for the sale of an aggregate of 12,333,333 common shares (the "Shares") and accompanying Class C warrants (the "Class C Warrants"), in a registered direct offering.

On May 12, 2025, we entered into a securities purchase agreement with certain new and existing investors, including an existing strategic investor, for the sale of an aggregate of 12,333,333 common shares (the “Shares”) and accompanying Class C warrants (the “Class C Warrants”), in a registered direct offering.

The offering price was $3.00 per Share, resulting in gross proceeds of $37.0 million ($36.75 million after associated fees), with each Share including an accompanying Class C Warrant to purchase one common share.

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The Class C Warrants include customary anti-dilution protections and a repurchase feature, permitting the Company to repurchase the warrants for $0.0001 per Common Share underlying the Class C Warrants if the volume-weighted average price of the Company’s common shares exceeds $7.00 per share for each trading day in a consecutive 20-trading-day period.

Rutger Bosland, Pioneering Engineer and Technical Lead on Development of TMC’s Nodule Collection System, Joins Company to Drive Commercial Readiness

On April 15, 2025, we announced that Rutger Bosland, the engineer and technical lead who oversaw the design, build, and successful test deployment of Allseas’ integrated nodule collection system, had joined the Company as Chief Innovation and Offshore Technology Officer (CIOTO).

Rutger will lead offshore innovation and efforts to scale our technologies for commercial production.

He brings world-class expertise in deep-sea mining, naval architecture, and offshore operations to TMC, having led a team of 80+ engineers in developing TMC’s nodule collection system, and Allseas’ program to scale-up nodule collection technology in preparation for TMC’s planned commercial operations.

Project and Regulatory Updates

Project Developments

Progress continues on the Environmental Impact Statement (EIS) post the Impact Assessment workshop held in January 2025 and with the Pre-Feasibility Study (PFS) which will now require additional work to finalize, as a result of the change to permitting under DSHMRA, which is due to be completed in the third quarter of 2025.

TMC and Nauru Announce Updated Sponsorship Agreement for Nauru Ocean Resources Inc.

On June 4, 2025, we and the Government of the Republic of Nauru jointly announced the signing of a revised Sponsorship Agreement (Agreement), updating the terms of the Agreement signed between the parties in 2017.

The Agreement guarantees that the Republic of Nauru will continue to receive existing financial benefits, training and capacity building programs and in-country community and social programs it receives today, while ensuring that, in consideration for its continued sponsorship of Nauru Ocean Resources Inc (“NORI”), Nauru will receive continuity benefits upon the commencement of commercial production by any subsidiary of TMC, other than NORI, under the U.S.

regulatory regime.

Strategic Investment from Korea Zinc — a World-Leader in Non-Ferrous Metal Refining and pCAM Technology

On June 16, 2025, we announced that Korea Zinc Company Ltd.

(“Korea Zinc”), a world leader in non-ferrous metal refining and precursor Cathode Active Material (pCAM) technology, had agreed to make a strategic investment of approximately $85.2 million in us through the purchase of common shares and warrants in a private placement.

Under the terms of the agreement, Korea Zinc purchased 19.6 million common shares at the last market closing price of $4.34 per share and received a three-year warrant to purchase 6.9 million common shares (0.35 warrant shares for every 1 initial common share for no additional consideration) with an exercise price of $7.00 per share, subject to call exercise provisions at our option should our common shares trade above $10.00 for 20 consecutive days.

Upon closing on June 26, 2025, Korea Zinc became one of our largest strategic shareholders with ownership of approximately 5% of the Company’s outstanding common shares.

As part of this investment, in July 2025, Yun B.

Choi, the Chief Executive Officer of Korea Zinc became a non-voting observer to our board of directors.

Appointment of Michael Hess and Alex Spiro to our Board of Directors

On June 16, 2025, we announced the appointment of Michael Hess and Alex Spiro to our Board of Directors strengthening TMC’s Board as we execute on our U.S.

strategy and accelerate progress toward commercial recovery of polymetallic nodules in international waters under the existing U.S.

seabed mining code.

Michael brings deep operational and investment experience in the U.S.

energy sector, along with a strong network and strategic perspective that will support our path toward commercial operations under U.S.

Alex adds significant legal and capital markets expertise, and his counsel is already proving valuable as we work closely with NOAA and engage with the new Administration to advance our application.

Developments Subsequent to June 30, 2025

Publication of Technical Reports Prepared under Subpart 1300 of Regulation S-K

On August 4, 2025, the Company announced the publication of two technical economic studies prepared in accordance with Subpart 1300 of Regulation S-K:

(i) a pre-feasibility study included in the technical report entitled “ S-K 1300 NORI Area D Technical Report ”, dated August 4, 2025 (the “NORI TRS”) , prepared by AMC Consultants Pty Ltd.

and other qualified persons, and (ii) an initial assessment included in the technical report entitled “ Technical Report Summary—Initial Assessment of TOML and NORI Properties, Clarion-Clipperton Zone ”, dated August 4, 2025 (the “NORI AND TOML Initial Assessment”) , prepared by AMC Consultants Pty Ltd.

and other qualified persons relating to its polymetallic nodule projects in the Clarion Clipperton Zone of the Pacific Ocean.

The NORI TRS covers NORI Area D where the Company is applying for an exploration license and commercial permit under DSHMRA and was filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2025 (the “August Form 8-K”).

The NORI and TOML Initial Assessment covers the remaining NORI and TOML areas where the Company is applying for an exploration license under DSHMRA and was filed as Exhibit 96.2 to the August Form 8-K.

TMC and Tonga Announce Updated Sponsorship Agreement for Tonga Offshore Mining Ltd.

On August 4, 2025, we and the Government of the Kingdom of Tonga jointly announced the signing of a revised Sponsorship Agreement (Agreement), updating the terms of the Agreement signed between the parties in 2021.

The Agreement guarantees that the Kingdom of Tonga will continue to receive existing financial benefits, training and capacity building programs and in-country community and social programs it receives today, while ensuring that, in consideration for its continued sponsorship of Tonga Offshore Mining Limited (“TOML”), the Kingdom of Tonga will receive continuity benefits upon the commencement of commercial production by any subsidiary of TMC, other than TOML, under the U.S.

regulatory regime.

NOAA Confirms Full Compliance of TMC USA’s Exploration License Applications

On August 11, 2025, TMC USA received notice of full compliance from NOAA on its exploration applications, and confirmation that TMC USA has priority right over both exploration areas.

Both applications entered the certification stage in late July, which we expect to be approximately 100 days.

The news follows earlier determinations of substantial compliance in May 2025, demonstrating a systematic regulatory process under DSHMRA as the Company targets a fourth quarter 2027 production start

Regulatory Updates

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

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These are now under agency review.

Each application includes the full environmental, technical, financial, and operational data required under DSHMRA and the National Environmental Policy Act, or NEPA.

The NOAA review process includes a determination whether applications for exploration licenses are in full or substantial compliance with the applicable requirements under DSHMRA and its implementing regulations within 30 days of receipt and whether applications for a commercial recovery permit is complete within 60 days.

NOAA has notified the Company that its exploration license applications are in substantial compliance with the applicable requirements.

NOAA is then expected to proceed with a full review of the applications, including interagency consultation with other U.S.

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All licenses and permits issued under DSHMRA are subject to oversight, periodic reporting, and potential suspension or revocation for noncompliance or unforeseen environmental harm.

In July 2025, NOAA issued proposed amendments to its regulations under DSHMRA (15 C.F.R.

Parts 970 and 971), published as FR Doc.

2025-12513 (90 Fed.

The proposed rule introduces a new consolidated application procedure under § 971.214, allowing applicants to submit a single application for both an exploration license and commercial recovery permit.

The revisions also include updated electronic submission requirements, restructured environmental review protocols, revised fee schedules, and clarified procedures for interagency consultation and public disclosure.

These changes are intended to modernize and streamline the DSHMRA permitting process.

The proposed rule remains subject to public comment until September 5, 2025.

DSHMRA and its regulations do not include a statutory deadline for application review.

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laws and regulations as development progresses and are in the early stages of analyzing their applicability and potential impact on our operations.

On May 28, 2025, the National Oceanic and Atmospheric Administration (NOAA) determined that TMC USA’s two exploration license applications were in substantial compliance and confirmed TMC USA has priority of right over both exploration application areas.

On July 27, 2025, TMC USA submitted amended exploration applications with additional information requested by NOAA.

NOAA confirmed that both exploration license applications were fully compliant and it had begun its certification process.

Existing ISA Exploration Contracts

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AMC subsequently compiled the NORI Technical Report Summary, dated March 2021, which included an initial assessment and an economic analysis of NORI Area D prepared in accordance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K (the “SEC Mining Rules”).

The NORI Technical Report Summary is filed as Exhibit 96.1 to this Annual Report.

See Item 2 entitled “Properties” included in this Annual Report for additional information about the 2021 economic analysis of NORI Area D.

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”).

On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration application to the ISA (subsequently granted) for the TOML Contract Area.

The sponsorship agreement was updated on September 23, 2021.

TOML commissioned a Technical Report Summary by AMC, dated March 2021, which is filed as Exhibit 96.2 to this Annual Report.

The sponsorship agreement was updated on August 4, 2025.

TOML commissioned a Technical Report Summary by AMC, dated March 2021.

Key Trends, Opportunities and Uncertainties

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Components of Results of Operations

We are an exploration-stage company with no revenue to date and a net loss of $20.6 million for the three months ended March 31, 2025, compared to a net loss of $25.2 million in the same period of 2024.

We have an accumulated deficit of approximately $652.0 million from inception through March 31, 2025.

We are an exploration-stage company with no revenue to date and a net loss of $74.3 million and $94.9 million for three and six months ended June 30, 2025, respectively, compared to a net loss of $20.2 million and $45.4 million in the same period of 2024, respectively.

We have an accumulated deficit of approximately $726.4 million from inception through June 30, 2025.

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

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We recognize forfeiture of any awards as they occur.

Nauru Warrant cost

The Nauru Warrant cost represents the fair value of the warrants issued as part of the revised sponsorship agreement with the Government of the Republic of Nauru signed on May 29, 2025.

As the warrants did not contain complex features, the fair value was calculated using a Black-Scholes valuation model.

Interest Income

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Foreign Exchange Gain/Loss

The foreign exchange gain or loss for the periods reported primarily relates to our cash held in Canadian dollars and to the settlement of costs incurred in foreign currencies, depending on either the strengthening or weakening of the U.S.

The foreign exchange gain 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

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Results of Operations

The following is a discussion of our results of operations for the three months ended March 31, 2025 and 2024.

The following is a discussion of our results of operations for the three and six months ended June 30, 2025 and 2024.

Our accounting policies are described in Note 3 “Significant Accounting Policies” in our financial statements filed as part of the 2024 Annual Report on Form 10-K.

Comparison of the Three Months Ended March 31, 2025 and 2024

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

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

Equity-accounted investment loss (income)

Change in fair value of warrants liability

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Interest income

Fees and interest on borrowings and credit facility

Loss for the period

Three Months ended March 31, 2025 compared to Three Months ended March 31, 2024

We reported a net loss of approximately $20.6 million in the first quarter of 2025, compared to a net loss of $25.2 million in the same period of 2024.

The following explains the major reasons for the decrease in the net loss in the first quarter of 2025.

Fees and interest on borrowings and credit facilities

Net Loss for the period

Three Months ended June 30, 2025 compared to Three Months ended June 30, 2024

We reported a net loss of approximately $74.3 million in the second quarter of 2025, compared to a net loss of $20.2 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the second quarter of 2025.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the three months ended March 31, 2025 were $9.5 million, compared to $18.1 million for the same period in 2024.

The decrease of $8.6 million is primarily due to a decrease in mining, technological and process development of $8.6 million as the comparative quarter of 2024 included costs incurred on the transportation of nodules to PAMCO’s facility in Japan, resource definition costs incurred during Campaign 8 which was completed in the first quarter of 2024 and lower costs incurred on environmental and prefeasibility studies, partially offset by an increase in share-based compensation of $0.9 million due to the amortization of the fair value of RSUs and options granted to the officers in the second quarter of 2024.

Exploration and evaluation expenses for the three months ended June 30, 2025 were $10.5 million, compared to $12.4 million for the same period in 2024.

The decrease of $1.9 million is primarily due to a decrease in mining, technological and process development activities of $2.4 million compared to the same quarter of 2024, partially offset by an increase in share-based compensation of $0.2 million due to the amortization of the fair value of RSUs and options granted to officers in the second quarter of 2024.

General and Administrative Expenses

G&A expenses for the three months ended March 31, 2025 were $8.5 million compared to $6.6 million for the same period in 2024.

The increase of $1.9 million in G&A expenses was mainly to the result of an increase in share-based compensation of $2.2 million due to the amortization of the fair value of RSUs and options granted to the directors and officers in the second quarter of 2024, partially offset by a decrease of $0.3 million in legal costs in the first quarter of 2025.

G&A expenses for the three months ended June 30, 2025 were $11.5 million compared to $7.9 million for the same period in 2024.

The increase of $3.6 million in G&A expenses was mainly the result of an increase in share-based compensation of $1 million due to the amortization of the fair value of RSUs and options granted to the directors and officers in the second quarter of 2024, an increase of $2 million in consulting costs to pursue the U.S.

regulatory route and financing activities.

Nauru Warrant cost

As part of the signing of a revised Sponsorship Agreement with the Government of the Republic of Nauru on May 29, 2025, we issued 9,146,268 warrants to the Republic to purchase common shares of the Company.

The fair value of the Nauru Warrants, calculated using a Black-Scholes valuation model, 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.

Change in F air V alue of W arrants L iability

The change in fair value of warrants liability consists of the change in the fair value of the 9,500,000 Private Warrants.

During the three months ended March 31, 2025, the fair value of warrants liability increased by 48% reflecting the increase in both the price of the public warrants and price of the Company’s shares.

The increase in the fair value of the 9,500,000 Private Warrants liability in the three months ended June 30, 2025 of $16.2 million, results from the significant increase in the price of the Company’s shares and the price of our public warrants over this same period (284% and 568% respectively).

Refer to Note 12 in the Company’s second quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

Fees and Interest on Borrowings and Credit Facilities

The interest charged on the Company’s short-term debt borrowings was $0.2 million in the first quarter of 2025 ($nil for the same period of 2024), while interest on drawn amounts on the Company’s credit facilities was $0.1 million and underutilization fees on these same facilities was $0.7 million in the first quarter of 2025 ($nil and $0.3 million over the same periods in 2024, respectively).

The interest charged on the Company’s short-term debt borrowings was $0.1 million in the second quarter of 2025 ($nil for the same period of 2024), while interest on drawn amounts on the Company’s credit facilities was $0.1 million and underutilization fees on these same facilities was $0.6 million in the second quarter of 2025 ($0.1 and $0.4 million over the same periods in 2024, respectively).

Six Months ended June 30, 2025 compared to Six Months ended June 30, 2024

We reported a net loss of $94.9 million in the first half of 2025, compared to a net loss of $45.4 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the first half of 2025.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the six months ended June 30, 2025 were $20.0 million, compared to $30.5 million for the same period in 2024.

The decrease of $10.5 million was primarily due to an decrease of $11 million in mining, technological and process development cost and a decrease of $1.2 million incurred on environmental studies as the costs incurred in the first six months of 2024 were higher on account of transit costs of the Allseas vessel in the first quarter of 2024, transportation of nodules to PAMCO’s facility in Japan and due to Campaign 8 which was completed in the first quarter of 2024, offset by increase in share-based compensation of $1.2 million due to amortization of the fair value of RSUs and options granted to the officers in the second quarter of 2024.

General and Administrative Expenses

G&A expenses for the six months ended June 30, 2025 were $19.9 million, compared to $14.5 million for the same period in 2024.

The increase of $5.4 million in G&A expenses in the first half of 2025 was mainly the result of an increase in share-based compensation of $3.2 million due to amortization of the fair value of RSUs and options granted to the directors and officers in the second quarter of 2024, an increase in consulting cost of $1.5 million to pursue the U.S.

regulatory route, and higher cost incurred on legal, and advisory activities.

Nauru Warrant cost

The fair value of the Nauru Warrants, calculated using a Black-Scholes valuation model, 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.

Change in F air V alue of W arrants L iability

The significant increase in the fair value of the 9,500,000 Private Warrants liability in the first half of 2025 of $16.7 million, results from the significant increase in the price of the Company’s shares and the price of our public warrants, mainly over the second quarter of 2025.

Refer to Note 12 in the Company’s second quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

Liquidity and Capital Resources

Our primary sources of financing have come from private placements and public offerings of Common Shares and warrants, the issuance of convertible debentures and from credit facilities.

As of March 31, 2025, we had cash on hand of $2.3 million.

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 contract area, and by negotiating the settlement of program expenditures with our equity whenever possible.

As of June 30, 2025, we had cash on hand of $115.8 million.

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 a commercial recovery permit contract for the TMC USA-A area, and by negotiating the settlement of program expenditures with our equity whenever possible.

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

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We expect to incur significant expenses and operating losses for the foreseeable future, as we advance our application to NOAA for exploration licenses and 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.

Based on our current cash balance, 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 Quarterly Report.

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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.

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, which includes the $30 million that may be sold under the At-the-Market Equity Distribution Agreement discussed below and the Common Shares and shares underlying the Class A Warrants issued in the Registered Direct Offering.

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.

In addition, on November 30, 2023, we filed an additional registration statement on Form S-3 with the SEC, which the SEC declared effective on December 8, 2023, to sell up to an additional $100 million of securities.

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Any such offering, if it does occur, may happen in one or more transactions.

Specific terms of any securities to be sold will be described in supplemental filings with the SEC.

Specific terms of any securities to be sold under these registration statements will be described in supplemental filings with the SEC.

As previously disclosed, the capacity under these registration statements is used as part of our capital raising strategy and we plan to file a new registration statement for the issuance of additional securities in the future.

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.

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The offer and sales of the shares are made under our effective “shelf” registration statement on Form S-3 filed with the SEC on September 16, 2022, which the SEC declared effective on October 14, 2022.

No funds were raised from the Sales Agreement in the fourth quarter of 2024, while for the 2024 year, we sold 3,251,590 Common Shares for gross proceeds of $4.9 million under this offering.

In 2024 we sold 3,251,590 Common Shares for gross proceeds of $4.9 million under this offering.

In the three and six months ended June 30, 2025, we issued 4,567,770 and 7,542,996 common shares, respectively, at an average share price of $2.08 and $2.02, for net proceeds of $9.2 million and $14.8 million respectively.

As of the date of this Quarterly Report, $9.8 million remains available for sale under the Sales Agreement.

On March 22, 2023, we entered into the 2023 Credit Facility with Argentum Cedit Virtuti GCV, the parent of Allseas Investments S.A.

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As per the Second Amendment, the rate of underutilization fee was retroactively increased from 4% to 6.5% on any undrawn amounts under the 2024 Credit Facility.

On January 30, 2025, we repaid $1.8 million from the drawn amount, leaving a balance of $2.5 million drawn under the 2024 Credit Facility, as of the date of this Annual Report.

On January 30, 2025, we repaid $1.8 million from the drawn amount, leaving a balance of $2.5 million drawn under the 2024 Credit Facility, as of the date of this Quarterly Report.

With the January 2025 repayment, the borrowing limit on the 2024 Credit Facility was reduced to $36.2 million ($17.2 million from Gerard Barron and $19 million from ERAS Capital LLC).

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On March 24, 2025, we entered into the Letter Agreement with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the repayment date under the Working Capital Loan Agreement was extended to September 30, 2025.

In the second quarter ended June 30, 2025, the entire Working Capital Loan amount along with the interest payable was repaid and the facility was cancelled.

On November 14, 2024, we entered into a securities purchase agreement (the “2024 Purchase Agreement”) with certain new and existing institutional investors for the sale of an aggregate of 17,500,000 common shares (the “Shares”) and accompanying Class B warrants (the “Class B Warrants”), in a registered direct offering.

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As at December 31, 2024, we received gross proceeds of $14.9 million (net proceeds of $14.2 million, after offering expenses), with the final $5 million of gross proceeds received on February 6, 2025.

On May 12, 2025, we entered into a securities purchase agreement (the “2025 Purchase Agreement”) with certain new and existing investors, including an existing strategic investor, for the sale of an aggregate of 12,333,333 common shares and accompanying Class C Warrants, in a registered direct offering, for gross proceeds of $37 million, of which $30 million was received by the end of June 2025 and $7 million was received in early July 2025.

The offering price was $3.00 per Share, with each Share including an accompanying Class C Warrant to purchase one common share.

The Class C Warrants are exercisable immediately upon issuance at a price of $4.50 per share and expire three years from issuance.

We may receive up to approximately $314 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants and the Class B Warrants, based on the per share exercise price of such warrants.

On June 16, 2025, we entered into a Securities Purchase Agreement with Korea Zinc Company, Ltd.

(“Korea Zinc”), pursuant to which in consideration of gross cash receipt of $85.2 million, we agreed to issue and sell to Korea Zinc 19,623,376 of our common shares and accompanying warrants to purchase an aggregate of 6,868,181 common shares.

The purchase price per share and accompanying warrant was set at $4.34.

The Korea Zinc Warrant are exercisable at an exercise price of $7 per share with an expiration date of June 25, 2028.

Pursuant to this Securities Purchase Agreement, subject to certain exceptions, Korea Zinc will have a right to participate in any public offering or private placement of any of our common shares or common share equivalents primarily for capital raising purposes (each a “Proposed Offering”) up to such amount of securities to maintain its percentage ownership at the time of such Proposed Offering.

Such right to participate in future financings will expire upon the earlier to occur of (i) June 16, 2030, (ii) the date on which Korea Zinc owns less than all of the common shares it purchased and subscribed pursuant to this Securities Purchase Agreement and (iii) immediately after a closing of a Proposed Offering where Korea Zinc does not exercise its participation right in full.

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

We may receive up to approximately $437 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants and the Class B Warrants, Class C Warrants, and Warrants issued to Korea Zinc and Republic of Nauru 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 worthless.

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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.

In addition, the exercise price to purchase one Common Share under the outstanding Class A Warrants and Class B Warrants is $2.00 (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.

The warrants issued to the Republic of Nauru 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 and warrants issued to Republic of Nauru is $4.72 (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 provided by financing activities

Decrease in cash

Three Months ended March 31, 2025 compared to Three Months ended March 31, 2024

Net cash generated (used in) investing activities

Net cash provided by financing activities

Increase (Decrease) in cash

Six Months ended June 30, 2025 compared to Six Months ended June 30, 2024

Cash flows used in Operating Activities

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.

Net cash used in operating activities in the first three months of 2024, amounted to $11.9 million, and included costs on the final stage of Campaign 8, as well as advanced work on engineering and pre-feasibility studies.

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 on interest paid on 2024 credit facilities and working capital loan, and $1.8 million for various expenses.

For the six months ended June 30, 2024, major operating activities over this period involved Campaign 8, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for an exploitation contract and prepare for potential future commercial production.

Net cash used in operating activities in the first half of 2024, amounted to $23.9 million, and consisted mainly of $12.1 million on various environmental work, $3.6 million on personnel costs, $2.8 million on legal, advisory and consulting, $1.5 million for sponsorship, training and stakeholder engagement support, $1.8 million spent on engineering and pre-feasibility studies, $1.1 million on communication and business development expenses, and additional payments of $1 million for various expenses.

Cash flows used in Investing Activities

Net cash provided by investing activities for three months ended March 31, 2025 and 2024 represent the purchase of equipment and software development.

Net cash generated by investing activities for the six months ended June 30, 2025 was $0.2 million which included proceeds from the return of capital from Low Carbon Royalties offset by the purchase of equipment and software development.

In the comparative period of 2024, $0.4 million was spent on acquisition of equipment and software development.

Cash flows provided by Financing Activities

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, while the first three months of 2024 results represent the cash received from the 2023 Registered Direct Offering of $9 million (less fees of $0.1 million) and proceeds from the exercise of stock options of $0.2 million.

Net cash provided by financing activities for the six months ended June 30, 2025 was $132.1 million, which comprised 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.

The first half results of 2024 represent the net proceeds from the 2024 Registered Direct Offerings of $8.9 million, proceeds from shares issued from ATM of $2.5 million, proceeds from the drawdown of our credit facilities and Allseas Debt Agreement of $5.9 million and proceeds from the exercise of stock options of $0.4 million.

Contractual Obligations and Commitments

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

NORI intends to submit an application for a five-year extension in 2025.

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

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

Regulatory Obligations Relating to Exploration Contracts

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In the event the sponsorship is otherwise terminated, such subsidiary will be required to obtain new sponsorship from another state that is a member of the ISA.

Failure to obtain such new sponsorship would have a material impact on the operations of such subsidiary and us.

Failure to obtain such new sponsorship could have a material impact on the operations of such subsidiary and us.

Sponsorship Agreements

On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into the NORI Sponsorship Agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential exploitation of the NORI Area.

Upon reaching the minimum recovery level within the exploitation contract area, NORI will pay Nauru a seabed mineral recovery payment based on the polymetallic nodules recovered from the exploitation contract area.

In addition, NORI will pay an administration fee each year to Nauru for such administration and sponsorship, which is subject to review and increase in the event NORI is granted an ISA exploitation contract.

NORI is in discussions with the Government of Nauru to renegotiate the existing sponsorship agreement and has also committed to ensuring NORI pays corporate income tax within Nauru, assuming our future operations are ultimately profitable.

NORI is required to pay an administration fee each year to Nauru for such administration and sponsorship, which is subject to review and increase in the event NORI is granted an ISA exploitation contract.

On May 29, 2025, NORI and the Government of Nauru entered into an updated sponsorship agreement that superseded the 2017 agreement and reaffirms the Government of Nauru’s sponsorship of NORI under the ISA regime.

Under the revised agreement, the Government of Nauru and NORI agreed to certain updated payment and taxation commitments, including NORI’s commitment to pay corporate income tax within Nauru assuming future NORI operations are ultimately profitable.

NORI also committed to maintaining its in-country investments and presence.

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 the TOML Area.

On September 23, 2021, Tonga updated the TOML Sponsorship Agreement harmonizing the terms of its engagement with TOML with those held by NORI with Nauru.

TOML expects to renegotiate the existing sponsorship agreement with Tonga prior to entering into operations in the TOML Area and has committed to paying corporate income tax within Tonga, assuming our future operations are ultimately profitable.

On August 4, 2025, TOML and the Government of Tonga entered into a further updated sponsorship agreement reaffirming the Government of Tonga’s sponsorship of TOML and formalizing certain revised terms of engagement.

Under the updated agreement, TOML reaffirmed its commitment to pay corporate income tax within Tonga assuming future operations are ultimately profitable.

TOML also committed to maintaining its in-country investments and presence.

Allseas Agreements

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

Through June 30, 2025, we have made the following payments to Allseas under the PMTA:

(a) $10 million in cash in February 2020, (b) $10 million through the issuance of 3.2 million Common Shares valued at $3.11 per share in February 2020, (c) issued Allseas a warrant to purchase 11.6 million Common Shares at a nominal exercise price per share in March 2021, (d) $10 million in cash in October 2021, following the closing of the Business Combination and meeting certain progress targets on the PMTS and (e) on February 23, 2023 issued 10.85 million Common Shares to Allseas.

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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

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On March 26, 2025, we entered into the Third Amendment to, among other things, increase the borrowing limit to $44 million in the aggregate ($22 million from each of the 2024 Lenders) and extend the maturity of the 2024 Credit Facility to June 30, 2026.

As at March 31, 2025, we have drawn $2.5 million from the 2024 Credit Facility and incurred $0.2 million as interest expense.

Until March 31, 2025, we incurred $1.5 million, as underutilization fees, which would be payable only in the event the 2024 Credit Facility is not drawn down at the time such fees are payable.

Until March 31, 2025, we repaid interest amounting to $0.1 million, and underutilization fees amounting to $0.1 million to the 2024 Lenders.

On January 31, 2025, we repaid the drawn amount and outstanding interest on the 2024 Credit Facility amounting to $1.8 million and $0.1 million, respectively.

In the three months ended June 30, 2025, the Company incurred $58 thousand as interest expense and $0.7 million as underutilization fees.

During the second quarter of 2025, the Company repaid outstanding interest payable amounting to $0.1 million of outstanding underutilization fees amounting to $0.9 million.

Off-Balance Sheet Arrangements

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For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements and other burdens that are otherwise applicable generally to public companies.

We will cease to qualify as an emerging growth company on the date that is the earliest of:

(i) December 31, 2025, (ii) the last day of the fiscal year in which we have more than $1.235 billion in total annual gross revenues, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, or (iv) the date on which we have issued more than $1.0 billion of non-convertible debt over the prior three-year period.

We will cease to qualify as an emerging growth company as of December 31, 2025.

We may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.

This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Cautionary Statements Regarding the NORI Initial Assessment and TOML Mineral Resource Statement

Except where otherwise stated, the scientific and technical information set forth in this Quarterly Report on Form 10-Q relating to the area under which our subsidiary NORI holds an exploration contract issued by the ISA (the “ NORI Area ” ) and the area under which our subsidiary TOML holds an exploration contract issued by the ISA (the “ TOML Area ” ) is based on technical reports (the “ Technical Reports ” ) prepared in accordance with the SEC rules set forth in subpart 1300 of Regulation S-K.

● In respect of the NORI Area, the technical report entitled “ Technical Report Summary – Initial Assessment of the NORI Property, Clarion-Clipperton Zone ” dated as of March 17, 2021, or the NORI Initial Assessment, prepared by AMC Consultants Pty Ltd.

Cautionary Statements Regarding the NORI TRS and the NORI and TOML Initial Assessment

Except where otherwise stated, the scientific and technical information set forth in this Quarterly Report on Form 10-Q relating to the area our subsidiary TMC-USA has applied for an exploration license and commercial permit under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA) (“NORI Area D”) and the area under which our subsidiary TMC-USA has applied for an additional exploration license under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA and includes the area under which our subsidiary TOML holds an exploration contract issued by the ISA) (the “NORI and TOML Properties”)) is based on technical reports prepared in accordance with the SEC rules set forth in subpart 1300 of Regulation S-K (the “SEC Mining Rules”).

In respect of NORI Area D, the pre-feasibility study in the technical report entitled “ S-K 1300 NORI Area D Technical Report ”, dated August 4, 2025 (the “NORI TRS”) , prepared by AMC Consultants Pty Ltd.

and other qualified persons, each a “qualified person” as defined in subpart 1300 of Regulation S-K;

● In respect of the TOML Area, the technical report entitled “ Technical Report Summary – TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean ” dated as of March 26, 2021, or the TOML Mineral Resource Statement, prepared by AMC Consultants Pty Ltd.

In respect of the NORI and TOML Properties, the technical report entitled “ Technical Report Summary—Initial Assessment of TOML and NORI Properties, Clarion-Clipperton Zone ”, dated August 4, 2025 (the “NORI AND TOML Initial Assessment” together with the TRS, the “Technical Reports”) , prepared by AMC Consultants Pty Ltd.

and other qualified persons, each a “qualified person” as defined in subpart 1300 of Regulation S-K.

We plan to continue to estimate our resources in the NORI and TOML Areas and develop the project economics.

The initial assessment included in the NORI Initial Assessment Report is a conceptual study of the potential viability of mineral resources in NORI Area D.

This initial assessment indicates that development of the mineral resource in NORI Area D is potentially technically and economically viable;

The pre-feasibility study included in the NORI TRS indicated that the development of NORI Area D is technically and economically viable.

The pre-feasibility study, however, does not represent a feasibility study and does not support a development decision and additional project planning and design are needed to make this decision.

In addition, the initial assessment included in the NORI and TOML Initial Assessment Report is a conceptual study of the potential viability of mineral resources in the NORI and TOML Properties.

This initial assessment indicates that development of the mineral resource in the NORI and TOML Properties is potentially technically and economically viable;

however, due to the preliminary nature of project planning and design, and the untested nature of the specific seafloor production systems at a commercial scale, economic viability has not yet been demonstrated.

In addition, we have continued to define our resource in the NORI Area, with the goal to develop project economics to pre-feasibility level and are working towards a pre-feasibility study, which is nearing completion.

As part of our ongoing refinement of our business plans and resource definition work, we are now pursuing a low-capital asset expenditure ( “ CAPEX ” ) approach to our development and commercialization of operations for our NORI Area D project where we reuse existing production assets as opposed to the high-CAPEX approach, where the majority of offshore and onshore production assets would be newly built by us as assumed in the 2021 economic analysis included in the NORI Initial Assessment.

In addition, we are increasingly focused on advancing our commercial production strategy under the U.S.-based DSHMRA regime.

As a result of these changes and the general passage of time since the valuation date of January 1, 2021, the 2021 point-in-time economic analysis included in Section 19 of the NORI Initial Assessment and the estimated capital and operating costs set forth in Section 18 of the NORI Initial Assessment, including any references thereto throughout the NORI Initial Assessment, should no longer be relied upon or used by investors for any reason.

The NORI Initial Assessment and TOML Mineral Resource Statement do not include the conversion of mineral resources to mineral reserves.

As used in this Quarterly Report on Form 10-Q or in the applicable report summary, the terms “ mineral resource, ” “ measured mineral resource, ” “ indicated mineral resource ” and “ inferred mineral resource ” , as applicable, are defined and used in accordance with the SEC Mining Rules.

You are specifically cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves, as defined by the SEC.

As a result, we plan to continue to estimate our resources and reserves in NORI Area D and the NORI and TOML Properties and further develop the project economics.

As used in this Quarterly Report on Form 10-Q or in the applicable report summary, the terms “pre-feasibility study,” “feasibility study,” “initial assessment,” “mineral reserve,” “probable mineral reserve,” proven mineral reserve,” “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource”, as applicable, and other terms used herein are defined and used in accordance with the SEC Mining Rules.

The NORI TRS also does not include the conversion of all mineral resources included in NORI Area D to mineral reserves and does not include the conversion of any mineral resources to proven mineral reserves and the NORI and TOML Initial Assessment does not include the conversion of mineral resources to mineral reserves.

You are specifically cautioned not to assume that any part or all of the mineral deposits in categorized as mineral resources will ever be converted into mineral reserves, as defined by the SEC.

You are also cautioned that mineral resources do not have demonstrated economic value.

Information concerning our mineral properties in the NORI and TOML Technical Report Summaries and in this Quarterly Report on Form 10-Q includes information that has been prepared in accordance with the requirements of the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.

Information concerning our mineral properties in the Technical Report and in this Quarterly Report on Form 10-Q includes information that has been prepared in accordance with the requirements of the SEC Mining Rules set forth in subpart 1300 of Regulation S-K.

Under SEC standards, mineralization, such as mineral resources, may not be classified as a “reserve” unless the determination has been made that the mineralization would be economically and legally produced or extracted at the time of the reserve determination.

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Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally commercialized, or that it will ever be upgraded to a higher category.

Approximately 97% of the NORI Area D resource is categorized as measured or indicated.

Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves.

Further information on each of the polymetallic nodule areas in the CCZ and the Technical Reports referred to above can be found in the 2024 Annual Report on Form 10-K.

The information contained in this Quarterly Report in Form 10-Q regarding the NORI Area and the TOML Area has been derived from the Technical Reports, is subject to certain assumptions, qualifications and procedures described in the Technical Reports and is qualified in its entirety by the full text of the Technical Reports, each of which is filed as an exhibit to the 2024 Annual Report on Form 10-K.

Approximately 97% of the NORI Area D resource and approximately 6% of the NORI (Areas A to C) and TOML Properties resource are categorized as measured or indicated.

Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves or that probable mineral reserves will ever be upgraded to proven mineral reserves.

Until mineral deposits are actually mined and processed, mineral resources and mineral reserves must be considered as estimates only.

Further information on each of the polymetallic nodule areas in the CCZ and the Technical Reports referred to above can be found in our Current Report on Form 8-K filed with the SEC on August 4, 2025.

The information contained in this Quarterly Report in Form 10-Q regarding NORI Area D and the NORI and TOML Properties has been derived from the Technical Reports, is subject to certain assumptions, qualifications and procedures described in the Technical Reports and is qualified in its entirety by the full text of the NORI TRS and the NORI and TOML Initial Assessment, which are filed as exhibit 96.1 and 96.2, respectively, to our Current Report on Form 8-K filed with the SEC on August 4, 2025.

The technical report entitled “Technical Report Summary – Initial Assessment of the NORI Property, Clarion-Clipperton Zone” dated as of March 17, 2021 (the “2021 NORI Initial Assessment”) and the technical report entitled “Technical Report Summary – TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean” dated as of March 26, 2021 (the “2021 TOML Mineral Resource Statement”), each prepared by AMC Consultants Pty Ltd.

and other qualified persons, have been superseded by the NORI TRS and the NORI and TOML Initial Assessment and therefore, the 2021 NORI Initial Assessment and the 2021 TOML Resource Statement and any summaries of or excerpts thereof should no longer be relied upon or used by investors for any reason unless specifically allowed by us.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis