0001104659-23-116306 | 10-Q | XBRL Viewer

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

4.Fair Value of Financial Instruments

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. In accordance with US GAAP, the Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

●

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

●

Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2023, and 2022.

As at September 30, 2023, and December 31, 2022, the carrying values of cash, receivables, and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The financial instruments also include public and private warrants issued by the Company. These warrants are valued at fair value, which is disclosed in Note 9.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Exclusive Vessel Use Agreement with Allseas - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands		2 Months Ended	3 Months Ended	9 Months Ended
	Aug. 01, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2023	Jul. 31, 2023
Exclusive Vessel Use Agreement with Allseas
Lease liability	$ 6,500				$ 6,515
Stock issued during period shares new issue	4,150
Right-of-use asset	$ 6,500	$ 6,198	$ 6,198	$ 6,198	$ 6,515
Lease expense		$ 317	$ 300	$ 318

Warrants (Details)			9 Months Ended
Warrants (Details)	Aug. 09, 2023 USD ($)	Jul. 26, 2023 shares	Sep. 30, 2023 USD ($) D $ / shares shares	Dec. 31, 2022 USD ($) shares
Private Warrants
Class of Warrant or Right
Fair value of outstanding recorded as warrants liability \| $			$ 2,197,000	$ 983,000
Public warrants
Class of Warrant or Right
Number of warrants outstanding			15,000,000	15,000,000
Value of outstanding Public Warrants \| $			$ 19,500,000
Public warrants \| SOAC \| IPO
Class of Warrant or Right
Warrants to acquire shares of common stock			15,000,000
Public warrants \| Minimum
Class of Warrant or Right
Trading days for redemption of public warrants \| D			20
Public warrants \| Maximum
Class of Warrant or Right
Consecutive trading days for redemption of public warrants \| D			30
Public warrants \| Redemption Of Warrants When Price Per Share Of Class Common Stock Equals Or Exceeds 18.00
Class of Warrant or Right
Issue price per share \| $ / shares			$ 18.00
Private placement warrants
Class of Warrant or Right
Number of warrants outstanding			9,500,000	9,500,000
Number of shares issuable per warrant			0
Private placement warrants \| SOAC \| Private Warrants
Class of Warrant or Right
Warrants to acquire shares of common stock			9,500,000
Allseas Warrants
Class of Warrant or Right
Shares issued upon the exercise of the warrant		11,578,620
Exercise fee received \| $	$ 115,800
Volatility \| Public warrants \| Common stock
Class of Warrant or Right
Warrant liability measurement input			0.50
Volatility \| Private Warrants \| Common stock
Class of Warrant or Right
Warrant liability measurement input			0.50

Strategic Partnerships

9 Months Ended

Sep. 30, 2023

Strategic Partnerships

Strategic Partnerships

6.Strategic Partnerships

Strategic Alliance with Allseas

On February 13, 2023, the Company entered into a Fifth Amendment to the Pilot Mining Test Agreement (the “PMTA”) and Third Amendment to Strategic Alliance Agreement (together with the PMTA, the “Amendments”), which was effective as of February 8, 2023, with DGE, DeepGreen Metals Inc. and Allseas. The Amendments relate to the Company’s settlement of the third and final payment of $10 million due to Allseas upon successful completion of the trial of the pilot mining test system (the “PMTS”) in NORI Area D and certain other costs due to Allseas under the PMTA through the issuance of 10,850,000 common shares to Allseas, priced at $1.00 per share. On February 23, 2023, the Company settled the third milestone payment of $10 million and additional PMTS overage charges amounting to $0.9 million by issuing 10.9 million of its common shares to Allseas.

On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas pursuant to which Allseas will give exclusive use of the vessel (“Hidden Gem”) to the Company in support of the development of the Project Zero Offshore System until the system is completed or December 31, 2026, whichever is earlier (Note 13). In consideration of the exclusivity term, the Company, on August 14, 2023, issued 4.15 million common shares to Allseas and recorded a right-of-use asset of $6.2 million.

On August 9, 2023, 11,578,620 common shares were issued to Allseas upon the exercise of the warrant that were granted to Allseas in March 2021, and receipt of the exercise fee of $115.8 thousand. The warrant vested and became exercisable on successful completion of the PMTS in November 2022 (refer “Allseas Warrant”, Note 9).

As a part of the Registered Direct Offering in August 2023 (Note 8), Allseas purchased 3,500,000 common shares and accompanying Class A Warrants to purchase 1,750,000 Common Shares (Note 9) for a total purchase price of $7 million.

As at September 30, 2023, Allseas owned 52.8 million TMC common shares (2022: 22.7 million TMC common shares) which constituted 17.3% (December 31, 2022: 8.9%) of total common shares outstanding.

Investment in Low Carbon Royalties

On February 21, 2023 (the “Closing Date”), the Company and its wholly-owned subsidiary, NORI, entered into an investment agreement (the “Royalty Agreement”) with Low Carbon Royalties, a private corporation formed under the laws of British Columbia, Canada, to finance low carbon emitting energy production and technologies (natural gas, nuclear, renewables), transition metals and minerals required for energy storage and electrification (Cu, Li, Ni, Co, Mn), and the evolving environmental markets (the “Partnership”). In connection with the Royalty Agreement, NORI contributed a 2% gross overriding royalty (the “NORI Royalty”) on the Company’s NORI project area in the CCZ in which NORI currently holds exclusive exploration rights for polymetallic nodules from the ISA to Low Carbon Royalties. The Company retained 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 anniversaries of the Partnership. If both repurchase transactions are executed, the NORI Royalty will be reduced to 0.5%. At the Closing Date, Low Carbon Royalties also owned a 1.56% gross overriding royalty on a producing natural gas field in Latin America. In consideration of the NORI Royalty, TMC received 35.0% of the common shares issued by Low Carbon Royalties and $5 million in cash, as of the Closing Date. In connection with the Royalty Agreement the Company entered into an Investor Rights Agreement with Low Carbon Royalties and a shareholder of Low Carbon Royalties, pursuant to which the Company and this shareholder each has a right, subject to certain percentage maintenance, to nominate a director to Low Carbon Royalties’ board of directors, along with registration and information rights.

The Company has accounted for the investment in Low Carbon Royalties in accordance with ASC 323-10 and has thus applied the equity method of accounting to this investment. When considering the royalty liability instrument as well as the embedded repurchase features, management has elected to account for the royalty liability under the fair value option in accordance with ASC 825-10.

On March 21, 2023, Low Carbon Royalties acquired additional gross overriding royalties on natural gas fields in Latin America, increasing its total gross overriding royalty on the existing first license block from 1.56% to 3.13% and acquiring a new gross overriding royalty of 1.44% on a second license block. The royalty acquisitions were financed through the issuance of Low Carbon Royalties common shares to the third-party vendor of such royalties, thereby reducing the Company’s ownership in the Partnership to 32% from 35%.

Based on the fair value of the NORI Royalty and the cash received on the Closing Date, the Company recorded $9 million as investment in Low Carbon Royalties. For the three and nine months ended September 30, 2023, the Company’s share of the net loss generated by the Low Carbon Royalties was $0.1 million and $0.5 million, respectively.


	Investment
Fair value of NORI Royalty	$	14,000
Cash received	$	(5,000)
Cost of Investment on Closing Date	$	9,000
Equity-accounted investment loss for the nine months ended September 30, 2023		(475)
Investment as at September 30, 2023	$	8,525

The net consideration received of $14 million exceeded the NORI Exploration Contract’s carrying value of $0.25 million, resulting in a gain on disposition of asset of $13.75 million recorded in the Company’s first quarter of 2023 statements of loss and comprehensive loss. NORI is in the exploration phase of the project and under the Company’s policy, exploration spending is expensed.

Use of Estimates

9 Months Ended

Sep. 30, 2023

Use of Estimates

Use of Estimates

3.Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the notes thereto. Significant estimates and assumptions reflected in these condensed consolidated interim financial statements include, but are not limited to, the evaluation of going concern, the valuation of share-based payments, including valuation of incentive stock options (Note 10), as well as the valuation of warrants liability (Note 9), the valuation of the investment in Low Carbon Royalties Inc. (“Low Carbon Royalties”) (Note 6) and the valuation of leases (Note 5). Actual results could differ materially from those estimates.

Warrants - Fair value measurements assumptions (Details) - Private Warrants - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Class of Warrant or Right
Exercise price	$ 11.50	$ 11.50
Share price	$ 0.99	$ 0.77
Volatility	109.48%	88.05%
Term (years)	2 years 11 months 8 days	3 years 8 months 8 days
Risk-free rate	4.68%	4.04%
Dividend yield	0.00%	0.00%

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities
Net loss for the period	$ (26,572)	$ (61,395)
Items not affecting cash:
Amortization	262	299
Lease expense during the quarter	318
Expenses settled with share-based payments	6,839	16,298
Equity-accounted investment loss	475
Change in fair value of warrants liability	1,214	(892)
Gain on disposition of asset	13,750
Unrealized foreign exchange movement	(24)	56
Changes in working capital:
Receivables and prepayments	(2,364)	(1,426)
Accounts payable and accrued liabilities	(10,757)	300
Net cash used in operating activities	(44,359)	(46,760)
Investing activities
Cash received from investment in Low Carbon Royalties	5,000
Acquisition of equipment	(175)	(959)
Net cash provided by (used in) investing activities	4,825	(959)
Financing activities
Proceeds from employee share purchase plan	49	56
Proceeds from exercise of stock options	77	76
Proceeds from exercise of warrants by Allseas	116
Proceeds from Registered Direct Offering	15,723
Expenses paid for Registered Direct Offering	(779)
Proceeds from PIPE financing		30,400
Expenses paid for PIPE financing		(680)
Proceeds from issuance of shares	30
Taxes withheld and paid on share-based compensation		(78)
Net cash provided by financing activities	15,216	29,774
Decrease in cash	(24,318)	(17,945)
Impact of exchange rate changes on cash	24	(56)
Cash - beginning of period	46,842	84,873
Cash - end of period	$ 22,548	$ 66,872

Significant Accounting Policies Adopted During the Period

9 Months Ended

Sep. 30, 2023

Significant Accounting Policies Adopted During the Period

Significant Accounting Policies Adopted During the Period

5.Significant Accounting Policies Adopted During the Period

Investments

The Company consolidates investments over which it has control in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). Where the Company does not have control over the investment, but has significant influence, the Company records the investment in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”) whereby, after recording the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of the equity method investments is impaired if it is determined that there is an other-than-temporary decline in value. Investments over which the Company does not have control nor significant influence are recorded at cost.

Leases

The Company records leases in accordance with ASC 842, Leases, and determines if an arrangement contains a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease payments consist of i) fixed payments, less any lease incentives, ii) variable payments, that depend on an index or a rate, iii) exercise price of an option to purchase the underlying asset, iv) payment for penalties for terminating the lease, v) fees disbursed to the owners of special-purpose entities for structuring the transaction, and vi) amounts that are highly probable to be owed under residual value guarantees

Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term. Operating lease liabilities due within the subsequent 12 months of the reporting date are classified as current lease liabilities and are included in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheet. Operating lease liabilities payable after the subsequent 12 months of the reporting date are classified as non-current lease liabilities and are presented as non-current lease liability in the condensed consolidated balance sheet.

ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded as right-of-use assets, net of any amortization on the condensed consolidated balance sheet and are amortized over the lease term. Lease expense is recognized on a straight-line basis over the life of the lease and, depending on the nature of the ROU asset, is either included in exploration and evaluation expenses or in general and administrative expenses. The Company subsequently measures the right-of-use asset for an operating lease at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs.

Exploration and Evaluation Expenses

9 Months Ended

Sep. 30, 2023

Exploration and Evaluation Expenses

Exploration and Evaluation Expenses

7.Exploration and Evaluation Expenses

The detail of exploration and evaluation expenses is as follows:


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2023	Contract		Agreement		Contract		Total
Environmental Studies	$	906	$	—	$	—	$	906
Exploration Labor		1,392		50		161		1,603
Share-Based Compensation (Note 10)		1,242		43		132		1,417
Mining, Technological and Process Development		2,300		—		207		2,507
Prefeasibility Studies		300		—		—		300
Sponsorship, Training and Stakeholder Engagement		654		55		297		1,006
Other		163		—		3		166
	$	6,957	$	148	$	800	$	7,905


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	15,360	$	—	$	—	$	15,360
Exploration Labor		700		167		163		1,030
Share-Based Compensation (Note 10)		1,122		231		234		1,587
Mining, Technological and Process Development		214		16		12		242
PMTS		3,226		229		230		3,685
Sponsorship, Training and Stakeholder Engagement		300		62		93		455
Other		278		11		15		304
	$	21,200	$	716	$	747	$	22,663


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2023	Contract		Agreement		Contract		Total
Environmental Studies	$	5,433	$	—	$	—	$	5,433
Exploration Labor		3,637		136		430		4,203
Share-Based Compensation (Note 10)		3,330		112		347		3,789
Mining, Technological and Process Development		5,287		—		509		5,796
Prefeasibility Studies		1,105		—		—		1,105
Sponsorship, Training and Stakeholder Engagement		1,557		176		756		2,489
Other		354		—		3		357
	$	20,703	$	424	$	2,045	$	23,172


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	20,526	$	8	$	—	$	20,534
Exploration Labor		2,308		541		525		3,374
Share-Based Compensation (Note 10)		5,142		1,123		1,134		7,399
Mining, Technological and Process Development		704		57		52		813
PMTS		5,461		499		498		6,458
Sponsorship, Training and Stakeholder Engagement		654		148		314		1,116
Other		573		16		57		646
	$	35,368	$	2,392	$	2,580	$	40,340

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Condensed Consolidated Balance Sheets
Common shares, par value	$ 0	$ 0
Common shares, issued	305,129,856	266,812,131

Nature of Operations (Details)	Sep. 30, 2023 km²
NORI
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,830
TOML
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,713
Marawa
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,990

Strategic Partnerships - Investment in Low Carbon Royalties (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Strategic Partnerships
Fair value of NORI Royalty	$ 14,000	$ 14,000
Cash received	(5,000)	(5,000)
Cost of Investment on Closing Date	9,000	9,000
Equity-accounted investment loss for the nine months ended September 30, 2023	(475)	(475)
Investment as at September 30, 2023	8,525	8,525
Net loss on investments	$ (100)	$ (500)

Nature of Operations

9 Months Ended

Sep. 30, 2023

Nature of Operations

Nature of Operations

1.Nature of Operations

TMC the metals company Inc. (“TMC” or the “Company”) was incorporated as a Cayman Islands exempted company limited by shares on December 18, 2019 and continued as a corporation under the laws of the province of British Columbia, Canada on September 9, 2021. On September 9, 2021, the Company completed its business combination (the “Business Combination”) with DeepGreen Metals Inc. (“DeepGreen”). The Company’s corporate office, registered address and records office is located at 10^th floor, 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5. The Company’s common shares and warrants to purchase common shares are listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under tickers “TMC” and “TMCWW”, respectively.

The Company is 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 in the Pacific Ocean (“CCZ”), located approximately 1,300 nautical miles (1,500 miles or 2,400 kilometers) southwest of San Diego, California. These nodules contain high grades of four metals (nickel, copper, cobalt, manganese) which can be used as (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediate nickel-copper-cobalt matte, or nickel-copper-cobalt alloy) for electric vehicles (“EV”) and renewable energy storage markets, (ii) copper cathode for EV wiring, clean energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production.

Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the United Nations Convention on the Law of the Sea. The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The ISA requires that a contractor obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and that such nation maintains effective supervision and regulatory control over such sponsored contractor. The Company’s wholly owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), was granted an exploration contract (the “NORI Exploration Contract”) by the ISA in July 2011 under the sponsorship of the Republic of Nauru (“Nauru”) giving NORI exclusive rights to explore for polymetallic nodules in an area covering 74,830 km² in the CCZ (“NORI Area”). On March 31, 2020, the Company acquired Tonga Offshore Mining Limited (“TOML”), which was granted an exploration contract (the “TOML Exploration Contract”) by the ISA in January 2012 under the sponsorship of the Kingdom of Tonga (“Tonga”) and has exclusive rights to explore for polymetallic nodules covering an area of 74,713 km² in the CCZ (“TOML Area”). Marawa Research and Exploration Limited (“Marawa”), an entity owned and sponsored by the Republic of Kiribati (“Kiribati”), was granted rights by the ISA to polymetallic nodules exploration in an area of 74,990 km² in the CCZ (“Marawa Area”). In 2013, the Company, through its subsidiary DeepGreen Engineering Pte. Ltd. (“DGE”), entered into an option agreement (the “Marawa Option Agreement”) with Marawa which granted DGE exclusive rights to manage and carry out all exploration and exploitation in the Marawa Area in return for a royalty payable to Marawa. The Company is working with its strategic partner and investor, Allseas Group S.A. (“Allseas”), to develop a system to collect, lift and transport nodules from the seafloor to shore and to subsequently convert that system into an early commercial production system (Note 6).

The realization of the Company’s assets and attainment of profitable operations is dependent upon many factors including, among other things: financing being arranged by the Company to continue operations, development of a nodule collection system for the recovery of polymetallic nodules from the seafloor as well as development of processing technology for the treatment of polymetallic nodules, the establishment of mineable reserves, the commercial and technical feasibility of seafloor polymetallic nodule collection and processing, metal prices, and regulatory approvals and environmental permitting for commercial operations. The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control.

Share-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Compensation

Share-Based Compensation

10.Share-Based Compensation

The Company’s 2021 Incentive Equity Plan (the “Plan”) provides that the aggregate number of common shares reserved for future issuance under the Plan as of September 30, 2023, is 44,372,170 common shares, including 10,672,485 shares added to the Plan in January 2023 pursuant to the Plan’s automatic annual increase provision, provided that 2,243,853 of the outstanding common shares shall only be available for awards made to non-employee directors of the Company. On the first day of each fiscal year beginning in 2022 to the tenth anniversary of the closing of the Business Combination, the number of common shares that may be issued pursuant to the Plan is automatically increased by an amount equal to the lesser of 4% of the number of outstanding common shares or an amount determined by the board of directors.

Stock options

As at September 30, 2023, there were 15,236,340 stock options outstanding under the Company’s Short-Term Incentive Plan (“STIP”) and 9,783,922 stock options outstanding under the Company’s Long-Term Incentive Plan (“LTIP”). During the three and nine months ended September 30, 2023, 120,000 STIP stock options were exercised.

During the three and nine months ended September 30, 2023, the Company recognized $0.1 million and $0.4 million, respectively (three and nine months ended September 30, 2022 - $1.7 million and $9.2 million, respectively), of share-based compensation expense for stock options in the statement of loss and comprehensive loss. For the three and nine months ended September 30, 2023, a total of $57 thousand and $195 thousand, respectively, of this share-based compensation expense recognized was related to exploration and evaluation activities (three and nine months ended September 30, 2022 - $0.7 million and $4.6 million, respectively). The amount of this share-based compensation expense recognized related to general and administrative matters for three and nine months ended September 30, 2023 was $60 thousand and $236 thousand, respectively (three and nine months ended September 30, 2022 - $1 million and $4.6 million, respectively).

Restricted Share Units

The details of restricted share units (“RSUs”) granted during the three and nine months ended September 30, 2023 are described below.


	Three months		Nine months
	ended September 30,		ended September 30,
Vesting Period	2023	2022	2023	2022
Vesting immediately⁽¹⁾⁽²⁾	—	8,576	3,237,710	1,721,729
Vesting fully on the first anniversary of the grant date⁽³⁾	—	—	1,014,349	476,189
Vesting in thirds on each anniversary of the grant date⁽⁴⁾	—	95,238	8,683,486	464,632
Vesting in fourths on each anniversary of the grant date	—	—	343,750	527,800

(1)

Of the 3,237,710 units vesting immediately granted during the first quarter of 2023, 3,222,086 units were issued to settle liabilities with a carrying amount of $2.9 million, at a weighted average grant date fair value of $0.89 per RSU.

(2)

During the three and nine months ended September 30, 2023 the Company granted nil and 23,438 units to consultants, (three and nine months ended September 30, 2022: 8,576 units and 649,157 units, respectively) resulting in $nil and $23 thousand, respectively, charged to professional and consulting fees under general and administrative expenses for three and nine months ended September 30, 2023 (three and nine months ended September 30, 2022: $7.5 thousand and $1.2 million, respectively). During the three and nine months ended September 30, 2023 the Company also granted nil and 15,625 units to consultants as a prepayment for the services (three and nine months ended September 30, 2022: nil). The amortization of the prepayment amounting to $nil and $15 thousand, respectively, was charged to professional and consulting fees under general and administrative expenses for three and nine months ended September 30, 2023 (three and nine months ended Sept 30, 2022: nil).

(3)

During the three and nine months ended September 30, 2023, nil and 1,014,349 RSUs respectively, were granted to the Company’s non-employee directors under the Company’s Non-employee Director Compensation Policy, which vest upon the Company’s 2024 annual shareholders meeting. The total fair value of units granted as annual grants to the non-employee directors amounted to $700,000.

(4)

During the three and nine months ended September 30, 2023, the Company granted nil and 8,645,465 units, respectively, as payment for the 2022 LTIP awards and 38,021 units as a sign-on grant. The 2021 LTIP awards were granted in the fourth quarter of 2021 and totaled 3,500,000 units.

During the three and nine months ended September 30, 2023, a total of $2.4 million and $6.4 million, respectively (three and nine months ended September 30, 2022 - $1.8 million and $5.7 million, respectively), was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs. For the three and nine months ended September 30, 2023, a total of $1.4 million and $3.6 million, respectively, of this share-based compensation expense recognized was related to exploration and evaluation activities (three and nine months ended September 30, 2022 - $0.9 million and $2.8 million respectively). The amount of this share-based compensation expense recognized related to general and administrative matters for three and nine months ended September 30, 2023 was $1 million and $2.8 million, respectively (three and nine months ended September 30, 2022 - $0.9 million and $3.0 million, respectively). As at September 30, 2023, total unrecognized share-based compensation expense for RSUs was $9.1 million (December 31, 2022 - $6.1 million).

As at September 30, 2023, an aggregate of 498,863 vested units were outstanding and due to be converted into common shares.

Employee Share Purchase Plan

As of September 30, 2023, there were 7,922,445 common shares reserved for issuance under the Employee Share Purchase Plan (the “ESPP”), including 2,668,121 shares added to the ESPP in January 2023 pursuant to the ESPP’s automatic annual increase provision. An aggregate of 201,501 of the reserved common shares have been issued under the ESPP. Under the ESPP, the number of shares reserved for issuance is subject to an annual increase provision which provides that on the first day of each of the Company’s fiscal years starting in 2022, common shares equal to the lesser of (i) 1% percent of the common shares outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares as is determined by the board of directors will be added to the ESPP.

During the three and nine months ended September 30, 2023, the Company issued nil and 83,572 common shares respectively to its employees, thereby converting employee payroll contributions received over the previous six months into shares, as prescribed in its ESPP program (in the three and nine months ended September 30, 2022, nil and 42,426 common shares respectively).

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Fair Value of Financial Instruments
Fair value of assets, Transfers from Level 1 to Level 2	$ 0	$ 0	$ 0	$ 0
Fair value of assets, Transfers from Level 2 to Level 1	0	0	0	0
Fair value of liabilities, Transfers from Level 1 to Level 2	0	0	0	0
Fair value of liabilities, Transfers from Level 2 to Level 1	0	0	0	0
Fair value of liabilities, Transfers into (out of) Level 3	0	0	0	0
Fair value of assets, Transfers into (out of) Level 3	$ 0	$ 0	$ 0	$ 0

Strategic Partnerships (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Strategic Partnerships (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Sep. 30, 2023
Strategic Partnerships
Net consideration received		$ 14,000
Carrying value		250
Gain on disposition of asset	$ 13,750	$ 13,750

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2023	Nov. 08, 2023
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity File Number	001-39281
Entity Registrant Name	TMC THE METALS COMPANY INC.
Entity Incorporation, State or Country Code	A1
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	595 Howe Street, 10th Floor
Entity Address, City or Town	Vancouver
Entity Address, State or Province	BC
Entity Address, Postal Zip Code	V6C 2T5
City Area Code	574
Local Phone Number	252-9333
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		305,161,602
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001798562
Entity Ex Transition Period	false
Amendment Flag	false
Common Shares, without par value
Document And Entity Information
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	TMC
Security Exchange Name	NASDAQ
Redeemable warrants, each whole warrant exercisable for one Common Share, each at an exercise price of $11.50 per share
Document And Entity Information
Title of 12(b) Security	Redeemable warrants, each whole warrant exercisable for one Common Share, each at an exercise price of $11.50 per share
Trading Symbol	TMCWW
Security Exchange Name	NASDAQ

Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2023

Basis of Presentation

Basis of Presentation

These unaudited condensed consolidated interim financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statements. Accordingly, certain information and footnote disclosures required by U.S. GAAP have been condensed or omitted in these unaudited condensed consolidated interim financial statements pursuant to such rules and regulation. In management’s opinion, these unaudited condensed consolidated interim financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position, operating results for the periods presented, comprehensive loss, shareholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2023 or for any other period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2022. The Company has applied the same accounting policies as in the prior year, except as disclosed below.

Use of Estimates

Fair Value of Financial Instruments

●

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2023, and 2022.

Investments

Leases

- Definition

Disclosure of accounting policy for investment in financial asset.

+ References + Details

Warrants - Fair value of warrant liabilities (Details) - Private Warrants $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Changes in the fair value of warrants liability:
Warrants liability as at December 31, 2022	$ 983
Increase in fair value of warrants liability	1,214
Warrants liability as at September 30, 2023	$ 2,197

Loss per Share

9 Months Ended

Sep. 30, 2023

Loss per Share

Loss per Share

11.Loss per Share

Basic and diluted loss per share was the same for each period presented as the inclusion of all common share equivalents would have been anti-dilutive. Anti-dilutive equivalent common shares were as follows:


	Nine months ended	Nine months ended
	September 30,	September 30,
	2023	2022
Outstanding options to purchase common shares	25,020,262	25,140,262
Outstanding RSUs	13,477,784	5,021,783
Outstanding shares under ESPP	77,241	34,116
Outstanding warrants	28,480,770	36,078,620
Outstanding Special Shares and options to purchase Special Shares	136,239,964	136,239,964
Total anti-dilutive common equivalent shares	203,296,021	202,514,745

Exclusive Vessel Use Agreement with Allseas

9 Months Ended

Sep. 30, 2023

Exclusive Vessel Use Agreement with Allseas

Exclusive Vessel Use Agreement with Allseas

13.Exclusive Vessel Use Agreement with Allseas

The Company has determined that the Exclusive Vessel Use Agreement with Allseas (described in Note 6) is a lease agreement, classified as an operating lease. On August 1, 2023, the Company had recorded lease liability amounting to $6.5 million, which represents the fair value of 4.15 million common shares issued to Allseas on August 14, 2023, as consideration. As the entire lease liability was settled within 14 days of the commencement of lease, the discount rate for calculating the present value of lease payments was determined to be nil. On the date of the agreement, the Company recognized $6.5 million as a right-of-use asset, which represented the present value of the lease payments.

For the three and nine months ended September 30, 2023, the Company has recognized $0.3 million as lease expense recorded as exploration and evaluation expense.

As at September 30, 2023, the net amount of lease liability and right-of-use asset is presented below:


	Lease Liability
Balance as on August 1, 2023	$	6,515
Payments made during the quarter by issuing 4.15 million common shares		6,515
Balance as at September 30, 2023	$	—


	Right-of-use Asset
Balance as on August 1, 2023	$	6,515
Lease expense during the quarter		317
Balance as at September 30, 2023	$	6,198

Strategic Partnerships - Strategic Alliance with Allseas (Details) - USD ($)								1 Months Ended	2 Months Ended	3 Months Ended	9 Months Ended
	Aug. 14, 2023	Aug. 09, 2023	Aug. 01, 2023	Mar. 21, 2023	Feb. 23, 2023	Feb. 21, 2023	Feb. 13, 2023	Aug. 31, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Jul. 31, 2023	Dec. 31, 2022
Strategic Partnerships
Shares issued to Allseas (Note 13)										$ 6,516,000		$ 15,910,000
Common shares issued (in shares)			4,150,000
Right-of-use asset			$ 6,500,000						$ 6,198,000	6,198,000		6,198,000	$ 6,515,000
Increase in percentage of gross royalty in second license block				1.44%
Investments									$ 8,525,000	8,525,000		8,525,000
Registered direct offering
Strategic Partnerships
Gross proceeds	$ 24,900,000
Minimum
Strategic Partnerships
Increase in percentage of gross royalty in first license block				1.56%
Decrease in percentage of gross royalty											32.00%
Maximum
Strategic Partnerships
Increase in percentage of gross royalty in first license block				3.13%
Decrease in percentage of gross royalty											35.00%
Common stock
Strategic Partnerships
Shares issued to Allseas (Note 13)										$ 6,516,000		$ 15,910,000
Common shares issued (in shares)									4,150,000	4,150,000		15,000,000
Warrant [Member] \| Registered direct offering
Strategic Partnerships
Number of shares issued								1,750,000
Strategic Alliance with Allseas Pilot Mining Test Project
Strategic Partnerships
Final settlement							$ 10,000,000
Stock issued (in shares)							10,850,000
Common shares per share							$ 1.00
Third and final payment					$ 10,000,000
Shares issued to Allseas (Note 13)					$ 900,000
Common shares issued (in shares)					10,900,000
Percentage of contribution to gross royalty						2.00%
Percentage of repurchase of gross royalty						75.00%
Percentage of reduction in NORI royalty						0.50%
Percentage of owned carbon royalty						1.56%
Percentage of common stock shares received						35.00%
Royalty expense						$ 5,000,000
Exercise fee received		$ 115,800
Strategic Alliance with Allseas Pilot Mining Test Project \| Common stock
Strategic Partnerships
Shares issued upon the exercise of the warrant		11,578,620
Allseas \| Registered direct offering
Strategic Partnerships
Gross proceeds								$ 7,000,000
Allseas \| Common stock
Strategic Partnerships
Shares owned									52,800,000	52,800,000		52,800,000
Percentage of common stock shares outstanding									17.30%	17.30%		17.30%		8.90%
Allseas \| Common stock \| Registered direct offering
Strategic Partnerships
Number of shares issued								3,500,000
Allseas \| Common stock \| Exclusive Vessel Use Agreement
Strategic Partnerships
Shares issued for services received	4,150,000
Right-of-use asset	$ 6,200,000
Allseas \| Warrant [Member]
Strategic Partnerships
Shares owned														22,700,000

Exploration and Evaluation Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Exploration and Evaluation Expenses

Schedule of reconciliation exploration licenses


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2023	Contract		Agreement		Contract		Total
Environmental Studies	$	906	$	—	$	—	$	906
Exploration Labor		1,392		50		161		1,603
Share-Based Compensation (Note 10)		1,242		43		132		1,417
Mining, Technological and Process Development		2,300		—		207		2,507
Prefeasibility Studies		300		—		—		300
Sponsorship, Training and Stakeholder Engagement		654		55		297		1,006
Other		163		—		3		166
	$	6,957	$	148	$	800	$	7,905


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	15,360	$	—	$	—	$	15,360
Exploration Labor		700		167		163		1,030
Share-Based Compensation (Note 10)		1,122		231		234		1,587
Mining, Technological and Process Development		214		16		12		242
PMTS		3,226		229		230		3,685
Sponsorship, Training and Stakeholder Engagement		300		62		93		455
Other		278		11		15		304
	$	21,200	$	716	$	747	$	22,663


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2023	Contract		Agreement		Contract		Total
Environmental Studies	$	5,433	$	—	$	—	$	5,433
Exploration Labor		3,637		136		430		4,203
Share-Based Compensation (Note 10)		3,330		112		347		3,789
Mining, Technological and Process Development		5,287		—		509		5,796
Prefeasibility Studies		1,105		—		—		1,105
Sponsorship, Training and Stakeholder Engagement		1,557		176		756		2,489
Other		354		—		3		357
	$	20,703	$	424	$	2,045	$	23,172


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	20,526	$	8	$	—	$	20,534
Exploration Labor		2,308		541		525		3,374
Share-Based Compensation (Note 10)		5,142		1,123		1,134		7,399
Mining, Technological and Process Development		704		57		52		813
PMTS		5,461		499		498		6,458
Sponsorship, Training and Stakeholder Engagement		654		148		314		1,116
Other		573		16		57		646
	$	35,368	$	2,392	$	2,580	$	40,340

Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Class of Warrant or Right

Schedule of changes in the fair value of warrant liabilities


	Private
	Warrants
Warrants liability as at December 31, 2022	$	983
Increase in fair value of warrants liability		1,214
Warrants liability as at September 30, 2023	$	2,197

Private Warrants

Class of Warrant or Right

Schedule of fair value measurement input


	September 30,			December 31,
	2023			2022
Exercise price	$	11.50		$	11.50
Share price	$	0.99		$	0.77
Volatility		109.48	%		88.05	%
Term (years)		2.94			3.69
Risk-free rate		4.68	%		4.04	%
Dividend yield		0.0	%		0.0	%

Class A Warrants

Class of Warrant or Right

Schedule of fair value measurement input


	August 14,
	2023
Exercise price	$	3.00
Share price	$	1.41
Call price threshold	$	6.50
Volatility		107.08	%
Term (years)		4.38
Risk-free rate		4.32	%
Dividend yield		0.0	%

Warrants

9 Months Ended

Sep. 30, 2023

Warrants

Warrants

9.Warrants

For accounting purposes, the Company was considered to have issued the 15,000,000 common share warrants issued by SOAC as part of the units offered in its initial public offering (“Public Warrants”) and the 9,500,000 private placement common share warrants issued by SOAC in a private placement simultaneously with the closing of the initial public offering (“Private Warrants”) as part of the Business Combination.

Public Warrants

As at September 30, 2023, 15,000,000 Public Warrants were outstanding (December 31, 2022 - 15,000,000). Public Warrants may only be exercised for a whole number of shares.

As at September 30, 2023, the value of outstanding Public Warrants of $19.5 million was recorded in additional paid in capital.

Private Warrants

As at September 30, 2023, 9,500,000 Private Warrants were outstanding (December 31, 2022 - 9,500,000).

The Company re-measures the fair value of the Private Warrants at the end of each reporting period. The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. The volatility for the private warrants is based 50% on expected volatility from the public warrants and 50% based on historical volatility of the common shares. The expected volatility was estimated using a binomial model based on consideration of the implied volatility from the Company’s Public Warrants adjusted to account for the call feature of the Public Warrants at prices above $18.00 during 20 trading days within any 30-trading day period.

As at September 30, 2023, the fair value of outstanding Private Warrants of $2.2 million is recorded as warrants liability. The following table presents the changes in the fair value of warrants liability:


	Private
	Warrants
Warrants liability as at December 31, 2022	$	983
Increase in fair value of warrants liability		1,214
Warrants liability as at September 30, 2023	$	2,197

As at September 30, 2023 and December 31, 2022, the fair value of the Private Warrants was estimated using the following assumptions:


	September 30,			December 31,
	2023			2022
Exercise price	$	11.50		$	11.50
Share price	$	0.99		$	0.77
Volatility		109.48	%		88.05	%
Term (years)		2.94			3.69
Risk-free rate		4.68	%		4.04	%
Dividend yield		0.0	%		0.0	%

There were no exercises or redemptions of the Public Warrants or Private Warrants during the three and nine months ended September 30, 2023.

Allseas Warrant

The Allseas warrant vested and became exercisable upon the successful completion of the PMTS in November 2022. On July 26, 2023, the Allseas warrant was exercised resulting in the issuance of 11,578,620 common shares of the Company on August 9, 2023, once the exercise amount of $115.8 thousand warrant fee was received from Allseas.

Class A Warrants

As a part of the Registered Direct Offering (Note 8), the Company issued 3,980,770 Class A Warrants for the purchase of common shares at an exercise price of $3.00 per share. The Class A Warrants expire on December 31, 2027. The valuation of these Class A Warrants was determined using a Monte Carlo simulation.

The Class A Warrants were valued on August 14, 2023, at a fair value of $0.80 per warrant. The fair value of the Class A Warrants was estimated using the following assumptions:


	August 14,
	2023
Exercise price	$	3.00
Share price	$	1.41
Call price threshold	$	6.50
Volatility		107.08	%
Term (years)		4.38
Risk-free rate		4.32	%
Dividend yield		0.0	%

In accordance with ASC 815 – Derivatives and Hedging, the Company has classified the Class A Warrants as equity and as at September 30, 2023 recorded $3.2 million as additional paid in capital.

Basis of Presentation

9 Months Ended

Sep. 30, 2023

Basis of Presentation

Basis of Presentation

2.Basis of Presentation

Segmented Information - Schedule of equipment (Details)	9 Months Ended
Segmented Information - Schedule of equipment (Details)	Sep. 30, 2023 segment
Segmented Information
Number of operating segment	1

Share-Based Compensation - Restricted Stock Units (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
General and administration expenses
Vesting Period
Share based compensation expense	$ 60,000		$ 1,000,000		$ 236,000	$ 4,600,000
Exploration and evaluation activities
Vesting Period
Share based compensation expense	$ 57,000		700,000		$ 195,000	4,600,000
Restricted stock units
Vesting Period
Shares issued	3,222,086				3,222,086
Amount to settle liabilities	$ 2,900,000				$ 2,900,000
Weighted average grant date fair value					$ 0.89
Share based compensation expense	2,400,000		1,800,000		$ 6,400,000	5,700,000
Total unrecognized share-based compensation expense	$ 9,100,000				$ 9,100,000		$ 6,100,000
Aggregate vested units outstanding	498,863				498,863
Restricted stock units \| As payment for the 2022 LTIP awards
Vesting Period
Granted	0				8,645,465
Restricted stock units \| As payment for the 2021 LTIP awards
Vesting Period
Granted				3,500,000
Restricted stock units \| As a sign-on grant
Vesting Period
Granted					38,021
Restricted stock units \| General and administration expenses
Vesting Period
Share based compensation expense	$ 1,000,000		900,000		$ 2,800,000	3,000,000.0
Restricted stock units \| Exploration and evaluation activities
Vesting Period
Share based compensation expense	$ 1,400,000		$ 900,000		$ 3,600,000	$ 2,800,000
Restricted stock units \| Non-Employee Directors
Vesting Period
Granted	0				1,014,349
Total fair value of units granted					$ 700,000
Vesting Immediately \| Restricted stock units
Vesting Period
Granted		3,237,710	8,576		3,237,710	1,721,729
Vesting Immediately \| Restricted stock units \| Consultant
Vesting Period
Granted	0		8,576		23,438	649,157
Vesting Immediately \| Restricted stock units \| Consultant \| As prepayment for the services
Vesting Period
Granted	0		0		15,625	0
Vesting Immediately \| Restricted stock units \| Consultant \| General and administration expenses
Vesting Period
Professional and consulting fees	$ 0		$ 7,500		$ 23,000	$ 1,200,000
Vesting Immediately \| Restricted stock units \| Consultant \| General and administration expenses \| As prepayment for the services
Vesting Period
Professional and consulting fees	$ 0		$ 0		$ 15,000	$ 0
Vesting fully on the first anniversary of the grant date \| Restricted stock units
Vesting Period
Granted					1,014,349	476,189
Vesting in thirds on each anniversary of the grant date \| Restricted stock units
Vesting Period
Granted			95,238		8,683,486	464,632
Vesting in fourths on each anniversary of the grant date \| Restricted stock units
Vesting Period
Granted					343,750	527,800

Warrants - Class A Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2023	Aug. 14, 2023	Dec. 31, 2022
Class of Warrant or Right
Additional paid-in capital	$ 124,168		$ 184,960
Class A Warrants
Class of Warrant or Right
Share price		$ 1.41
Class A Warrants \| Registered direct offering
Class of Warrant or Right
Number of warrants issued		3,980,770
Share price		$ 0.80
Exercise price of warrants		$ 3.00
Additional paid-in capital	$ 3,200
Common stock \| Class A Warrants
Class of Warrant or Right
Number of warrants issued	3,980,770

Exclusive Vessel Use Agreement with Allseas - Net Amount of Lease Liability and Right-Of-Use Asset (Details) - USD ($) $ in Thousands		2 Months Ended	3 Months Ended	9 Months Ended
	Aug. 01, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2023
Lease Liability
Lease liability	$ 6,515	$ 6,515
Payments made during the quarter by issuing 4.15 million common shares		6,515
Lease liability	6,500
Right-of-use Asset
Right-of-use Asset	6,515	6,515
Lease expense during the quarter		317	$ 300	$ 318
Right-of-use Asset	$ 6,500	$ 6,198	$ 6,198	$ 6,198
Stock issued during period shares new issue	4,150,000
Common stock
Right-of-use Asset
Stock issued during period shares new issue		4,150,000	4,150,000	15,000,000

Related Party Transactions (Details) $ in Thousands		3 Months Ended		9 Months Ended
Related Party Transactions (Details) $ in Thousands	Sep. 07, 2023 USD ($)	Sep. 30, 2023 USD ($) installment	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) installment	Sep. 30, 2022 USD ($)	Aug. 14, 2023 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transactions
Exploration and evaluation expenses		$ 7,905	$ 22,663	$ 23,172	$ 40,340
Other receivables		200		200		$ 300
Repayment of notes receivable from related parties	$ 30
Outstanding amount payable		15		15
ERAS Capital LLC
Related Party Transactions
Other receivables		10,000		10,000
Project Management Texhnology Services
Related Party Transactions
Undertutilization fee		500		500
Exploration and evaluation expenses		1,900	1,300	4,800	3,900
Amount payable on related party transaction				6,100	1,800
SSCS Pte. Ltd \| Related party \| DeepGreen Engineering Pte. Ltd
Related Party Transactions
Consulting services		40	69	177	206
Amounts payable		17		17			$ 23
SSCS Pte. Ltd \| Related party \| General and administration expenses \| DeepGreen Engineering Pte. Ltd
Related Party Transactions
Consulting services		8	14	36	41
SSCS Pte. Ltd \| Related party \| Exploration and Evaluation \| DeepGreen Engineering Pte. Ltd
Related Party Transactions
Consulting services		32	55	141	165
Ocean Renaissance LLC \| Chief Ocean Scientist
Related Party Transactions
Consulting services		94	94	281	281
Amounts payable		0		0			$ 0
Ocean Renaissance LLC \| Chief Ocean Scientist \| General and administration expenses
Related Party Transactions
Consulting services		52	47	154	141
Ocean Renaissance LLC \| Chief Ocean Scientist \| Exploration and Evaluation
Related Party Transactions
Consulting services		42	$ 47	127	$ 140
Direct offering
Related Party Transactions
Remaining committed fund		$ 9,000		$ 9,000
Number of installments \| installment		2		2
Direct offering \| Remaining commitment under first installment
Related Party Transactions
Remaining committed fund		$ 2,500		$ 2,500
Direct offering \| Remaining commitment under second installment
Related Party Transactions
Remaining committed fund		$ 6,500		$ 6,500

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current
Cash	$ 22,548	$ 46,842
Receivables and prepayments	5,325	2,760
Total current assets	27,873	49,602
Non-current
Exploration contracts	42,900	43,150
Equipment	2,078	2,025
Right-of-use asset	6,198
Investment	8,525
Total non-current assets	59,701	45,175
TOTAL ASSETS	87,574	94,777
Current
Accounts payable and accrued liabilities	19,344	41,614
Total current liabilities	19,344	41,614
Non-current
Deferred tax liability	10,675	10,675
Warrants liability	2,197	983
TOTAL LIABILITIES	32,216	53,272
EQUITY
Common shares (unlimited shares, no par value - issued: 305,129,856 (December 31, 2022 - 266,812,131))	434,099	332,882
Special Shares	0	0
Additional paid in capital	124,168	184,960
Accumulated other comprehensive loss	(1,216)	(1,216)
Deficit	(501,693)	(475,121)
TOTAL EQUITY	55,358	41,505
TOTAL LIABILITIES AND EQUITY	$ 87,574	$ 94,777

Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Share-Based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
General and administration expenses
Share-Based Compensation
Share based compensation expense	$ 60	$ 1,000	$ 236	$ 4,600
Exploration and evaluation activities
Share-Based Compensation
Share based compensation expense	$ 57	700	$ 195	4,600
Short-Term Incentive Plan
Share-Based Compensation
Number of stock options outstanding (in shares)	15,236,340		15,236,340
Long-term Incentive Plan
Share-Based Compensation
Number of stock options outstanding (in shares)	9,783,922		9,783,922
RSU
Share-Based Compensation
Share based compensation expense	$ 2,400	1,800	$ 6,400	5,700
RSU \| General and administration expenses
Share-Based Compensation
Share based compensation expense	1,000	900	2,800	3,000
RSU \| Exploration and evaluation activities
Share-Based Compensation
Share based compensation expense	1,400	900	3,600	2,800
Equity option
Share-Based Compensation
Share based compensation expense	$ 100	$ 1,700	$ 400	$ 9,200
Short-Term Incentive Plan \| Employee stock option
Share-Based Compensation
Number of exercise of stock options (in Shares)	120,000		120,000
2021 Incentive Equity Plan
Share-Based Compensation
Aggregate number of common shares reserved for issuance under the plan	44,372,170		44,372,170
Additional shares including to the plan 2022	10,672,485		10,672,485
Common Shares issued and outstanding percentage			4.00%
2021 Incentive Equity Plan \| Non-employee directors
Share-Based Compensation
Stock option number of shares outstanding (in shares)	2,243,853		2,243,853

Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2023

Commitments and Contingent Liabilities

Commitments and Contingent Liabilities

15.Commitments and Contingent Liabilities

NORI Exploration Contract

As part of the NORI Exploration Contract with the ISA, NORI submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report, which included a proposed work plan and estimated budget for 2022 to 2026, has been reviewed by and agreed with the ISA, and the Company is implementing the five-year plan. NORI has estimated its work plan for 2023 to be approximately $25 million, which may be settled in cash or equity with its various vendors. The cost of the estimated work plan for 2024 onwards is dependent on the ISA’s approval of the NORI Area D exploitation application. Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area. Work plans are reviewed annually by the Company, agreed with the ISA and may be subject to change depending on the Company’s progress to date.

Marawa Option Agreement and Services Agreement

Through DGE’s Marawa Option Agreement and separate Services Agreement with Marawa with respect to the Marawa Area, Marawa and DGE committed to spend a defined amount of funds on exploration activities on an annual basis. The commitment for fiscal 2023 and 2024 is Australian dollar (“AUD”) $3 million and AUD $2 million, respectively. Such commitment is negotiated with the ISA for a five-year plan and is subject to regular periodic reviews. To date, limited offshore marine resource definition activities in the Marawa Contract Area have occurred. The Company expects to collaborate with Marawa to assess the viability of any potential project in the Marawa Contract Area, although the timing of such assessment is unclear. Marawa has delayed certain activities in the Marawa Contract Area while it determines how it will move forward with additional assessment work.

TOML Exploration Contract

As part of the TOML Exploration Contract, TOML submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report included a summary of work completed over the five-year period and a program of activities and estimated budget for the next five-year period. On December 23, 2022, the ISA accepted TOML’s proposed program of activities for the 2022-2026 five-year period, which included an estimated five-year expenditure of up to $44 million. 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.

Other Commitments

On September 6, 2023, the Company’s wholly owned subsidiary NORI issued a Letter of Intent (“LOI”) to a third party to contract a survey vessel for the NORI-D Collector test monitoring program scheduled in the fourth quarter of the year. Under the LOI, NORI confirmed that in the event that the parties to the LOI not proceed with the formal contact execution or if NORI terminates performance of the designated works, NORI will reimburse the contractor with the actual direct costs and expenditures it has reasonably incurred in performance of the scope of LOI up to a maximum of $3.75 million.

The Company’s wholly owned subsidiary NORI has issued purchase orders to various vendors totaling $0.3 million for the purchase of equipment for upcoming campaigns. These purchase orders are legally binding, resulting in a firm commitment on the part of the Company.

Contingent Liability

On October 28, 2021, a shareholder filed a putative class action against the Company, one of the Company’s executives and a former director in federal district court for the Eastern District of New York, captioned Caper v. TMC The Metals Company Inc. F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about the Company’s operations and prospects during the period from March 4, 2021 and October 5, 2021. On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc. These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected. An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings. The Company denies any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit. On July 12, 2023, an oral hearing on the motion to dismiss was held. The parties are currently awaiting a ruling. There is no assurance, however, that the Company or the other defendants will be successful in the Company’s defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter. Such losses or range of possible losses cannot be reliably estimated. A resolution of this lawsuit adverse to the Company or the other defendants, however, could have a material effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved.

On January 23, 2023, an investor in the 2021 private placement from the Business Combination filed a lawsuit against the Company in New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v. Sustainable Opportunities Acquisition Corp. n/k/a TMC The Metals Company Inc., Index No. 650449/2023 (N.Y. Sup. Ct.). The Company filed a motion to dismiss on March 31, 2023, after which the plaintiffs filed an amended complaint on June 5, 2023. The amended complaint alleges that the Company breached the representations and warranties in the plaintiff’s private placement Subscription Agreement and breached the covenant of good faith and fair dealing. The Plaintiffs are seeking to recover compensable damages caused by the alleged wrongdoings. The Company denies any allegations of wrongdoing and filed a motion to dismiss the amended complaint on July 28, 2023. An Oral Hearing on the Motion to Dismiss has been scheduled for December 7, 2023. There is no assurance, however, that the Company will be successful in its defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter. Such losses or range of possible losses cannot be reliably estimated.

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Common stock	Additional Paid in Capital	Accumulated Other Comprehensive Loss	Deficit	Total
Balance at Dec. 31, 2021	$ 296,051	$ 102,073	$ (1,216)	$ (304,157)	$ 92,751
Balance (in Shares) at Dec. 31, 2021	225,432,493
Exercise of stock options (Note 10)	$ 142	(66)			76
Exercise of stock options (Note 10) (in shares)	118,461
Conversion of restricted share units, net of shares withheld for taxes (Note 10)	$ 2,984	(3,062)			(78)
Conversion of restricted share units, net of shares withheld for taxes (Note 10) (in shares)	1,670,429
Share purchase under Employee Share Purchase Plan (Note 10)	$ 66	(10)			56
Share purchase under Employee Share Purchase Plan (Note 10) (in shares)	42,426
Issuance of shares under PIPE financing - net of expenses	$ 29,668				29,668
Issuance of shares under PIPE financing - net of expenses (in shares)	38,266,180
Share-based compensation (Note 10)		17,982			17,982
Net loss for the period				(61,395)	(61,395)
Balance at Sep. 30, 2022	$ 328,911	116,917	(1,216)	(365,552)	79,060
Balance (in Shares) at Sep. 30, 2022	265,529,989
Balance at Jun. 30, 2022	$ 299,056	113,487	(1,216)	(337,658)	73,669
Balance (in Shares) at Jun. 30, 2022	227,158,455
Exercise of stock options (Note 10)	$ 120	(56)			64
Exercise of stock options (Note 10) (in shares)	100,000
Conversion of restricted share units, net of shares withheld for taxes (Note 10)	$ 67	(67)
Conversion of restricted share units, net of shares withheld for taxes (Note 10) (in shares)	5,354
Issuance of shares under PIPE financing - net of expenses	$ 29,668				29,668
Issuance of shares under PIPE financing - net of expenses (in shares)	38,266,180
Share-based compensation (Note 10)		3,553			3,553
Net loss for the period				(27,894)	(27,894)
Balance at Sep. 30, 2022	$ 328,911	116,917	(1,216)	(365,552)	79,060
Balance (in Shares) at Sep. 30, 2022	265,529,989
Balance at Dec. 31, 2022	$ 332,882	184,960	(1,216)	(475,121)	41,505
Balance (in Shares) at Dec. 31, 2022	266,812,131
Exercise of stock options (Note 10)	$ 144	(67)			77
Exercise of stock options (Note 10) (in shares)	120,000
Exercise of warrant by Allseas (Note 9)	$ 70,016	(69,900)			116
Exercise of warrant by Allseas (Note 9) (in shares)	11,578,620
Shares issued to Allseas (Note 13)	$ 15,910				15,910
Stock issued during period shares new issue	15,000,000
Conversion of restricted share units, net of shares withheld for taxes (Note 10)	$ 3,704	(3,674)			30
Conversion of restricted share units, net of shares withheld for taxes (Note 10) (in shares)	3,573,993
Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 8)	$ 11,349	3,179			14,528
Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 8) (in shares)	7,961,540
Share purchase under Employee Share Purchase Plan (Note 10)	$ 94	(45)			49
Share purchase under Employee Share Purchase Plan (Note 10) (in shares)	83,572
Share-based compensation (Note 10)		6,840			6,840
Expenses settled with share-based payments (Note 10)		2,875			2,875
Net loss for the period				(26,572)	(26,572)
Balance at Sep. 30, 2023	$ 434,099	124,168	(1,216)	(501,693)	55,358
Balance (in Shares) at Sep. 30, 2023	305,129,856
Balance at Jun. 30, 2023	$ 345,775	188,722	(1,216)	(489,226)	44,055
Balance (in Shares) at Jun. 30, 2023	281,136,415
Exercise of stock options (Note 10)	$ 144	(67)			77
Exercise of stock options (Note 10) (in shares)	120,000
Exercise of warrant by Allseas (Note 9)	$ 70,016	(69,900)			116
Exercise of warrant by Allseas (Note 9) (in shares)	11,578,620
Shares issued to Allseas (Note 13)	$ 6,516				6,516
Stock issued during period shares new issue	4,150,000
Conversion of restricted share units, net of shares withheld for taxes (Note 10)	$ 299	(299)
Conversion of restricted share units, net of shares withheld for taxes (Note 10) (in shares)	183,281
Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 8)	$ 11,349	3,179			14,528
Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 8) (in shares)	7,961,540
Share-based compensation (Note 10)		2,533			2,533
Net loss for the period				(12,467)	(12,467)
Balance at Sep. 30, 2023	$ 434,099	$ 124,168	$ (1,216)	$ (501,693)	$ 55,358
Balance (in Shares) at Sep. 30, 2023	305,129,856

Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions

Related Party Transactions

14.Related Party Transactions

Transactions with Allseas and its Affiliates:

On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas, as described in Notes 6 and 13.

On August 9, 2023, Allseas exercised the Allseas Warrant, as described in Notes 6 and 9.

Allseas participated in the Registered Direct Offering in August 2023, as described in Notes 6 and 8.

During the three and nine months ended September 30, 2023, the Company had not drawn from the Credit Facility with an affiliate of Allseas and has incurred $0.5 million as underutilization fees which would be payable only in the event the Credit Facility is not drawn down at the time such fees are payable (Note 12).

During the three and nine months ended September 30, 2023, Allseas provided the Company with engineering and project management services totaling $1.9 million and $4.8 million respectively, recorded as mining, technological and process development within exploration and evaluation expenses (Note 7). For the three and nine months ended September 30, 2022, Allseas managed and delivered the PMTS project, with services totaling $1.3 million and $3.9 million, respectively, recorded as PMTS within exploration and evaluation expenses (Note 7). As at September 30, 2023, the amount payable to Allseas and its affiliates was $6.1 million (September 30, 2022 – prepaid amount of $1.8 million).

Transactions with Other Related Parties:

The Company’s subsidiary, DeepGreen Engineering Pte. Ltd., is engaged in a consulting agreement with SSCS Pte. Ltd. (“SSCS”) to manage offshore engineering studies. A director of DGE is employed through SSCS. Consulting services during the three and nine months ended September 30, 2023 totaled $40 thousand and $177 thousand, respectively (three and nine months ended September 30, 2022 - $69 thousand and $206 thousand, respectively), out of which for three and nine months ended September 30, 2023 a total of $32 thousand and $141 thousand, respectively (three and nine months ended September 30, 2022 - $55 thousand and $165 thousand, respectively), is disclosed as exploration labor within exploration and evaluation expenses (Note 7) and $8 thousand and $36 thousand, respectively, for three and nine months ended September 30, 2023 is disclosed as general and administrative expenses (three and nine months ended September 30, 2022 - $14 thousand and $41 thousand, respectively). As at September 30, 2023, the amount payable to SSCS was $17 thousand (December 31, 2022 - $23 thousand).

The Company’s Chief Ocean Scientist provides consulting services to the Company through Ocean Renaissance LLC (“Ocean Renaissance”) where he is a principal. Consulting services during the three and nine months ended September 30, 2023 amounted to $94 thousand and $281 thousand, respectively (three and nine months ended September 30, 2022 -$94 thousand and $281 thousand, respectively), out of which for three and nine months ended September 30, 2023 a total of $42 thousand and $127 thousand, respectively (three and nine months ended September 30, 2022 - $47 thousand and $140 thousand, respectively), is disclosed as exploration labor within exploration and evaluation expenses (Note 7) and $52 thousand and $154 thousand, respectively, for three and nine months ended September 30, 2023 is disclosed as general and administrative expenses (three and nine months ended September 30, 2022 - $47 thousand and $141 thousand, respectively). As at September 30, 2023, the amount payable to Ocean Renaissance was $nil (December 31, 2022- $nil).

The Registered Direct Offering announced on August 14, 2023, included approximately $0.3 million from the participation of several of the Company’s Directors and Officers, of which $0.2 million is receivable as at September 30, 2023, and subsequently received. In addition, the committed funding included $10 million from ERAS Capital LLC the investment fund of one of the Company’s Directors, $9 million of which is to be received in two installments, $2.5 million on November 30, 2023 and $6.5 million on January 31, 2024 (Note 8).

The Company advanced $30 thousand to one of its officers on September 7, 2023. As at September 30, 2023, $15 thousand of this amount was outstanding, which was fully repaid on October 31, 2023.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Commitments and Contingent Liabilities (Details) $ in Thousands, $ in Millions		3 Months Ended		9 Months Ended		12 Months Ended			60 Months Ended
	Dec. 23, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2024 AUD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 AUD ($)	Dec. 31, 2021	Sep. 06, 2023 USD ($)
Commitments and Contingent Liabilities
Exploration and evaluation expenses		$ 7,905	$ 22,663	$ 23,172	$ 40,340
Purchase obligations										$ 300
Maximum
Commitments and Contingent Liabilities
Other commitment										$ 3,750
Nauru Ocean Resources Inc
Commitments and Contingent Liabilities
Spending committed							$ 25,000
Marawa Research and Exploration Limited
Commitments and Contingent Liabilities
Exploration and evaluation expenses						$ 2		$ 3
Commitments plan submission period (in years)				5 years
Tonga Off shore Mining Limited
Commitments and Contingent Liabilities
Commitments plan submission period (in years)									5 years
Maximum estimated expenditure for five year period	$ 44,000

Segmented Information

9 Months Ended

Sep. 30, 2023

Segmented Information

Segmented Information

16.Segmented Information

The Company’s business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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+ Details

Exclusive Vessel Use Agreement with Allseas (Tables)

9 Months Ended

Sep. 30, 2023

Exclusive Vessel Use Agreement with Allseas

Net amount of lease liability and right-of-use asset


	Lease Liability
Balance as on August 1, 2023	$	6,515
Payments made during the quarter by issuing 4.15 million common shares		6,515
Balance as at September 30, 2023	$	—


	Right-of-use Asset
Balance as on August 1, 2023	$	6,515
Lease expense during the quarter		317
Balance as at September 30, 2023	$	6,198

Credit Facility with Allseas Affiliate

9 Months Ended

Sep. 30, 2023

Credit Facility with Allseas Affiliate

Credit Facility with Allseas Affiliate

12.Credit Facility with Allseas Affiliate

On March 22, 2023, the Company entered into an Unsecured Credit Facility Agreement, which was amended on July 31, 2023 (“Credit Facility”), with Argentum Credit Virtuti GCV (the “Lender”), the parent of Allseas Investments S.A. and an affiliate of Allseas, pursuant to which, the Company may borrow from the Lender up to $25 million in the aggregate, from time to time, subject to certain conditions. All amounts drawn under the Credit Facility will bear interest based on the 6-month Secured Overnight Financing Rate, 180-day average plus a margin of 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at the Company’s election) on the first business day of each of June and January. The Company will pay an underutilization fee equal to 4.0% per annum payable semi-annually for any amounts that remain undrawn under the Credit Facility. The Company has the right to pre-pay the entire amount outstanding under the Credit Facility at any time before the Credit Facility’s maturity. On July 31, 2023, the maturity date of this Credit Facility was extended to November 30, 2024. The Credit Facility also contains customary events of default.

During the three and nine months ended September 30, 2023, the Company had not drawn any amount from the Credit Facility and has incurred $0.3 million and $0.5 million respectively as underutilization fees, which would be payable only in the event the Credit Facility is not drawn down upon at the time such fees are payable.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Compensation

Summary of the RSU activity


	Three months		Nine months
	ended September 30,		ended September 30,
Vesting Period	2023	2022	2023	2022
Vesting immediately⁽¹⁾⁽²⁾	—	8,576	3,237,710	1,721,729
Vesting fully on the first anniversary of the grant date⁽³⁾	—	—	1,014,349	476,189
Vesting in thirds on each anniversary of the grant date⁽⁴⁾	—	95,238	8,683,486	464,632
Vesting in fourths on each anniversary of the grant date	—	—	343,750	527,800

(1)

(2)

(3)

(4)

Loss per Share - Anti-dilutive common equivalent shares (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Loss per Share
Total anti-dilutive common equivalent shares	203,296,021	202,514,745
Outstanding options to purchase common shares
Loss per Share
Total anti-dilutive common equivalent shares	25,020,262	25,140,262
Outstanding RSUs
Loss per Share
Total anti-dilutive common equivalent shares	13,477,784	5,021,783
Outstanding shares under ESPP
Loss per Share
Total anti-dilutive common equivalent shares	77,241	34,116
Outstanding warrants
Loss per Share
Total anti-dilutive common equivalent shares	28,480,770	36,078,620
Outstanding Special Shares and options to purchase Special Shares
Loss per Share
Total anti-dilutive common equivalent shares	136,239,964	136,239,964

Loss per Share (Tables)

9 Months Ended

Sep. 30, 2023

Loss per Share

Schedule of anti-dilutive common equivalent shares


	Nine months ended	Nine months ended
	September 30,	September 30,
	2023	2022
Outstanding options to purchase common shares	25,020,262	25,140,262
Outstanding RSUs	13,477,784	5,021,783
Outstanding shares under ESPP	77,241	34,116
Outstanding warrants	28,480,770	36,078,620
Outstanding Special Shares and options to purchase Special Shares	136,239,964	136,239,964
Total anti-dilutive common equivalent shares	203,296,021	202,514,745

Registered Direct Offering (Details) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 14, 2023 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) installment shares	Sep. 30, 2023 USD ($) installment shares	Sep. 30, 2023 USD ($) installment shares	Jan. 31, 2024 shares	Nov. 30, 2023 shares
Registered Direct Offering
Proceeds from Registered Direct Offering \| $				$ 15,723
Expenses paid for Registered Direct Offering \| $				$ 779
Common stock
Registered Direct Offering
Stock issued under registered direct offering \| shares			7,961,540	7,961,540
Common stock \| Class A Warrant
Registered Direct Offering
Number of warrants issued \| shares		3,980,770	3,980,770	3,980,770
Direct offering
Registered Direct Offering
Gross proceeds \| $	$ 24,900
Net proceeds \| $	$ 23,500
Proceeds from Registered Direct Offering \| $		$ 15,700
Expenses paid for Registered Direct Offering \| $		1,400
Net proceeds from Registered Direct Offering \| $		14,300
Remaining committed fund \| $		$ 9,000	$ 9,000	$ 9,000
Number of installments \| installment		2	2	2
Direct offering \| Remaining commitment under first installment
Registered Direct Offering
Remaining committed fund \| $		$ 2,500	$ 2,500	$ 2,500
Direct offering \| Remaining commitment under second installment
Registered Direct Offering
Remaining committed fund \| $		$ 6,500	$ 6,500	$ 6,500
Direct offering \| Class A Warrant
Registered Direct Offering
Number of shares per warrant \| shares	0.5
Share price \| $ / shares	$ 2.00
Exercise price of warrants \| $ / shares	$ 3.00
Number of warrants issued \| shares	3,980,770
Direct offering \| Common stock
Registered Direct Offering
Number of shares agreed to sell and issue \| shares	12,461,540	4,500,000	4,500,000	4,500,000
Stock issued under registered direct offering \| shares		7,961,540
Direct offering \| Common stock \| Subsequent event \| Remaining commitment under first installment
Registered Direct Offering
Number of shares agreed to sell and issue \| shares					3,250,000	1,250,000
Direct offering \| Common stock \| Class A Warrant
Registered Direct Offering
Number of shares agreed to sell and issue \| shares	6,230,770	2,250,000	2,250,000	2,250,000
Direct offering \| Common stock \| Class A Warrant \| Subsequent event \| Remaining commitment under first installment
Registered Direct Offering
Number of shares agreed to sell and issue \| shares						625,000
Direct offering \| Common stock \| Class A Warrant \| Subsequent event \| Remaining commitment under second installment
Registered Direct Offering
Number of shares agreed to sell and issue \| shares					1,625,000

Share-Based Compensation - Employee Share Purchase Plan (Details) - Employee Share Purchase Plan - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation
Common shares reserved for issuance	7,922,445		7,922,445
Number of additional shares added			2,668,121
Aggregate reserved common shares have been issued			201,501
Maximum percentage of annual increase for issuing shares			1.00%
Number of common shares issued	0	0	83,572	42,426

Strategic Partnerships (Tables)

9 Months Ended

Sep. 30, 2023

Strategic Partnerships

Schedule of investment


	Investment
Fair value of NORI Royalty	$	14,000
Cash received	$	(5,000)
Cost of Investment on Closing Date	$	9,000
Equity-accounted investment loss for the nine months ended September 30, 2023		(475)
Investment as at September 30, 2023	$	8,525

Credit Facility with Allseas Affiliate (Details) - Unsecured Credit Facility - USD ($) $ in Millions			3 Months Ended	9 Months Ended
	Mar. 22, 2033	Jul. 31, 2023	Sep. 30, 2023	Sep. 30, 2023
Credit Facility with Allseas Affiliate
Aggregate borrowed amount	$ 25.0
Debt instrument term	180 days
Interest rate	4.00%
Kind interest rate	5.00%
Equal interest rate	4.00%
Maturity date		Nov. 30, 2024
Line of credit facility interest rate term	semi-annually
Underutilization fees payable only in the event of Credit Facility			$ 0.3	$ 0.5

Condensed Consolidated Statements of Loss and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses
Exploration and evaluation expenses	$ 7,905	$ 22,663	$ 23,172	$ 40,340
General and administrative expenses	4,613	5,944	15,958	22,502
Operating loss	12,518	28,607	39,130	62,842
Other items
Equity-accounted investment loss	119		475
Gain on disposition of asset			(13,750)
Change in fair value of warrants liability	(117)	(350)	1,214	(892)
Foreign exchange loss (gain)	14	(11)	66	(11)
Interest income	(319)	(352)	(1,092)	(544)
Fees and interest on credit facility	252		529
Net loss and comprehensive loss for the period	$ 12,467	$ 27,894	$ 26,572	$ 61,395
Net loss per share - basic	$ 0.04	$ 0.12	$ 0.09	$ 0.27
Net loss per share - diluted	$ 0.04	$ 0.12	$ 0.09	$ 0.27
Weighted average number of common shares outstanding - basic	294,636,496	239,740,984	282,745,892	231,028,587
Weighted average number of common shares outstanding - diluted	294,636,496	239,740,984	282,745,892	231,028,587

Warrants - Fair value measurements assumptions of the Class A Warrants (Details) - Class A Warrants	Aug. 14, 2023 $ / shares
Class of Warrant or Right
Exercise price	$ 3.00
Share price	1.41
Call price threshold	$ 6.50
Volatility	107.08%
Term (years)	4 years 4 months 17 days
Risk-free rate	4.32%
Dividend yield	0.00%

Registered Direct Offering

9 Months Ended

Sep. 30, 2023

Registered Direct Offering

Registered Direct Offering

8.Registered Direct Offering

On August 14, 2023, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “Registered Direct Offering”) 12,461,540 common shares and issue Class A Warrants to purchase 6,230,770 common shares (Note 9). The common share and accompanying Class A Warrant to purchase 0.5 of a common share were sold at a price of $2.00. The exercise price of the Class A warrants is $3.00, subject to adjustment as provided in the warrant agreement. The aggregate gross proceeds to the Company from the Registered Direct Offering are now expected to be approximately $24.9 million, before deducting fees payable to financial advisors and other estimated offering expenses payable by the Company ($23.5 million net of fees).

As at September 30, 2023, 7,961,540 common shares and Class A Warrants to purchase 3,980,770 common shares had been issued and the Company received gross proceeds amounting to $15.7 million. The Company incurred $1.4 million as offering expenses, resulting in net proceeds received of $14.3 million. The remaining committed funding of $9 million (representing 4,500,000 common shares and 2,250,000 warrants) from an investor affiliated with the Company is to be received in two installments, $2.5 million (1,250,000 common shares and 625,000 warrants) on November 30, 2023 and $6.5 million (3,250,000 common shares and 1,625,000 warrants) on January 31, 2024.

Exploration and Evaluation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Exploration and Evaluation Expenses
Environmental Studies	$ 906	$ 15,360	$ 5,433	$ 20,534
Exploration Labor	1,603	1,030	4,203	3,374
Share-Based Compensation (Note 10)	1,417	1,587	3,789	7,399
Mining, Technological and Process Development	2,507	242	5,796	813
PMTS		3,685		6,458
Prefeasibility Studies	300		1,105
Sponsorship, Training and Stakeholder Engagement	1,006	455	2,489	1,116
Other	166	304	357	646
Exploration and evaluation expenses	7,905	22,663	23,172	40,340
NORI Exploration Contract
Exploration and Evaluation Expenses
Environmental Studies	906	15,360	5,433	20,526
Exploration Labor	1,392	700	3,637	2,308
Share-Based Compensation (Note 10)	1,242	1,122	3,330	5,142
Mining, Technological and Process Development	2,300	214	5,287	704
PMTS		3,226		5,461
Prefeasibility Studies	300		1,105
Sponsorship, Training and Stakeholder Engagement	654	300	1,557	654
Other	163	278	354	573
Exploration and evaluation expenses	6,957	21,200	20,703	35,368
Marawa Option Agreement
Exploration and Evaluation Expenses
Environmental Studies				8
Exploration Labor	50	167	136	541
Share-Based Compensation (Note 10)	43	231	112	1,123
Mining, Technological and Process Development		16		57
PMTS		229		499
Sponsorship, Training and Stakeholder Engagement	55	62	176	148
Other		11		16
Exploration and evaluation expenses	148	716	424	2,392
TOML Exploration Contract
Exploration and Evaluation Expenses
Exploration Labor	161	163	430	525
Share-Based Compensation (Note 10)	132	234	347	1,134
Mining, Technological and Process Development	207	12	509	52
PMTS		230		498
Sponsorship, Training and Stakeholder Engagement	297	93	756	314
Other	3	15	3	57
Exploration and evaluation expenses	$ 800	$ 747	$ 2,045	$ 2,580