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The Metals Company (Nasdaq: TMC), an explorer of lower-impact battery metals from seafloor polymetallic nodules, has announced a registered direct offering that would see the company raise gross proceeds of $27 million, potentially rising to $38 million.
On Monday, TMC entered into a securities purchase agreement with certain investors for the purchase of approximately 13.46 million common shares, without par value, and accompanying Class A warrants to purchase up to an additional 6.73 million common shares.
Each common share and accompanying warrant is being sold at a price of $2.00, representing a premium of 82% to TMC’s closing share price on August 11, with expected gross proceeds of approximately $27 million based on existing commitments.
The warrants will have a strike price of $3.00 per share, subject to certain adjustments, and are exercisable immediately upon issuance until December 31, 2027.
According to TMC, this registered direct offering is on significantly above-market standard terms, and is led by its largest shareholder Andrei Karkar through his family office ERAS Capital, strategic partner Allseas, as well as several institutional investors.
Two of the institutional investors and their designees can elect to increase commitments in this transaction by an aggregate amount of $11 million at the same terms upon written notice to the company by September 15, if TMC’ stock closing price on the day immediately prior to such notice is $3.00 or less.
Shares of TMC shot up by 28.5% to trade at $1.40 apiece as of noon EDT following the offering announcement. The company’s market capitalization is estimated at $396.5 million.
TMC currently has exclusive access to the Nori Clarion-Clipperton Zone (CCZ) polymetallic project, located 4,000 metres deep in the northeastern Pacific Ocean. It is ranked as the world’s biggest undeveloped nickel project with an estimated 11.53 million tonnes of contained metal.
“Raising capital in volatile markets is not an easy task. However, the size, the quality and the value of our resource portfolio combined with the determination of our team to responsibly develop this resource have helped us attract a diverse range of shareholders who recognize the significant upside of this asset,” TMC CEO Gerard Barron said in a news release.
“In the current market, the vast majority of follow-on offerings are issued at discounts to the current share price, but we believe a premium is warranted given that the asset we are developing is world-class, needle-moving and transformational,” CFO Craig Shesky added.
Both Barron and Shesky, along with several TMC board members, also participated in the transaction.
