Exploration Contracts

9 Months Ended

Sep. 30, 2022

4.Exploration Contracts

Strategic Partnerships

Pilot Mining Test Project with Allseas

The Company made the second $10 million payment of the amended Pilot Mining Test Agreement (“PMTA”) on April 25, 2022, upon successful completion of the North Sea drive test on March 25, 2022. The third and final $10 million payment will be payable upon successful completion of the pilot trial of the Pilot Mining Test System (“PMTS”) in NORI Area D. Completion of the pilot trial of the PMTS and third and final payment is expected to occur in the fourth quarter of 2022.

Total cost recorded as exploration and evaluation expenses for the PMTS during the three and nine months ended September 30, 2022 amounted to $1.3 million and $4 million, respectively (three and nine months ended September 30, 2021 amounted to $12.9 million). The Company has not recorded a liability for the third payment as at September 30, 2022.

On March 16, 2022, the Company’s subsidiary, NORI, and Allseas entered into a non-binding term sheet which contemplates an upgrade of the PMTS into a commercial nodule collection system and commercial operation of this system in NORI Area D. The terms are subject to negotiation between NORI and Allseas and if successful, may result in amendments to the existing Strategic Alliance Agreement.

As at September 30, 2022, Allseas owned 22.7 million TMC common shares (December 31, 2021 – 16.2 million TMC common shares) which constituted 8.6% (December 31, 2021 – 7.2%) of total common shares outstanding.

On November 9, 2022, the Company and Allseas agreed to settle the third and final payment of $10 million in either cash or shares of the Company, at the Company’s election. With the successful completion of the pilot trial of the PMTS, as approved by the Company’s Board of Directors on November 11, 2022, the Company intends to satisfy the Allseas obligation through the issuance of common shares in the fourth quarter of 2022, subject to regulatory approval (Note 12).

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, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	15,360	$	—	$	—	$	15,360
Exploration Labor		700		167		163		1,030
Mining, Technological and Process Development		214		16		12		242
PMTS		3,226		229		230		3,685
Share-based compensation (Note 6)		1,122		231		234		1,587
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 three months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	14,871	$	1,852	$	1,847	$	18,570
Exploration Labor		435		199		185		819
Mining, Technological and Process Development		429		185		80		694
PMTS		15		7		4		26
Share-based compensation (Note 6)		1,578		594		860		3,032
Sponsorship, Training and Stakeholder Engagement		428		6		65		499
Other		194		14		—		208
	$	17,950	$	2,857	$	3,041	$	23,848


	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
Mining, Technological and Process Development		704		57		52		813
PMTS		5,461		499		498		6,458
Share-based compensation (Note 6)		5,142		1,123		1,134		7,399
Sponsorship, Training and Stakeholder Engagement		654		148		314		1,116
Other		573		16		57		646
	$	35,368	$	2,392	$	2,580	$	40,340


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	35,331	$	4,341	$	4,332	$	44,004
Exploration Labor		1,286		555		556		2,397
Mining, Technological and Process Development		960		402		296		1,658
PMTS		32		9		7		48
Share-based compensation (Note 6)		16,680		6,925		6,972		30,577
Sponsorship, Training and Stakeholder Engagement		563		73		166		802
Other		587		70		38		695
	$	55,439	$	12,375	$	12,367	$	80,181