8-K: TMC Secures $85.2 Million Strategic Investment from Korea Zinc to Advance U.S. Critical Mineral Supply Chain

TMC the metals company Inc. has announced a strategic private placement of $85.2 million from Korea Zinc Company, Ltd., a global leader in non-ferrous metal refining, to accelerate the development of deep-seabed critical minerals and establish U.S. processing capacity.

Summary

• TMC the metals company Inc. (TMC) entered into a Securities Purchase Agreement with Korea Zinc Company, Ltd. (Korea Zinc) on June 16, 2025.
• Korea Zinc will invest approximately $85.2 million in TMC through a private placement.
• The investment includes the purchase of 19,623,376 common shares at $4.34 per share and an accompanying warrant to purchase up to 6,868,181 common shares.
• The warrant has a three-year term and an initial exercise price of $7.00 per share, subject to compulsory exercise if TMC common shares trade above $10.00 for 20 consecutive trading days.
• Upon closing, Korea Zinc will become one of TMC's largest strategic shareholders, owning approximately 5% of the company's outstanding common shares.
• Korea Zinc will have a right to participate in future equity offerings to maintain its percentage ownership until June 16, 2030, or earlier under specific conditions.
• A representative of Korea Zinc may serve as a non-voting observer to TMC's board of directors, with access to certain information and input at meetings.
• Korea Zinc is currently evaluating a bulk sample of nodule material supplied by TMC USA to validate processing and refining pathways and explore vertical integration synergies.
• Both companies intend to explore collaboration for establishing onshore processing infrastructure in the United States, including potential precursor Cathode Active Material (pCAM) manufacturing capacity.
• The closing of the investment is expected on June 26, 2025, subject to customary closing conditions.

Sentiment

Score: 9

Explanation: The announcement is highly positive, securing significant capital and a strategic partnership with a global industry leader, which de-risks future development and strengthens the company's position in critical mineral supply chains. The alignment with U.S. strategic goals further enhances the positive outlook.

Positives

• Secured approximately $85.2 million in gross proceeds, significantly bolstering TMC's pro forma cash balance to nearly $120 million.
• Established a strategic partnership with Korea Zinc, a world leader in non-ferrous metal refining and pCAM technology, providing critical expertise and potential for vertical integration.
• The partnership aims to establish U.S. processing, refining, and pCAM manufacturing capacity, enhancing domestic supply chain resilience for critical minerals.
• Korea Zinc's evaluation of nodule material and interest in collaboration validates TMC's resource and processing potential.
• The investment positions TMC to advance the 'Hidden Gem' commercial production system in anticipation of a commercial recovery permit.
• The partnership has the potential to meet U.S. demand for refined nickel, cobalt, and manganese, and contribute copper, bypassing the Chinese supply chain.
• Korea Zinc's Chairman and CEO expressed bullishness on nickel and copper, aligning with TMC's core business and future prospects.

Risks

• Risks relating to the need to satisfy regulatory and legal requirements with respect to the offering.
• Risks relating to the Company's ability to satisfy certain conditions to closing for the offering on a timely basis or at all.
• Risks related to market and other conditions affecting the offering.
• Uncertainty regarding the Company's future financial performance.
• The outcome and timing of regulatory reviews by NOAA under the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA).
• The ability to obtain an exploitation contract from the International Seabed Authority (ISA) or permits from the U.S. government.
• Risks related to the Company's potential dual-path permitting strategy.
• Changes in environmental, mining, and other applicable laws and regulations.
• Other regulatory uncertainties and the impact of government regulation or political developments on the Company's activities.
• The potential for legal or jurisdictional challenges to the Company's rights or proposed operations in international waters.
• Environmental risks and liabilities associated with deep-seabed mining.
• The Company's ability to develop sufficient data to support permit applications and satisfy environmental requirements.
• The Company's ability to develop commercial operations, including onshore processing capabilities.
• Risks associated with the Company's limited operating history and need for additional financing beyond this raise.

Future Outlook

TMC anticipates advancing discussions with the National Oceanic and Atmospheric Administration (NOAA) on its commercial recovery permit application and preparing the 'Hidden Gem' commercial production system. The company expects to release its Pre-Feasibility Study (PFS) in the third quarter of 2025. The strategic partnership with Korea Zinc is expected to expand, exploring potential collaboration for developing onshore processing infrastructure in the United States, aiming to establish a reliable and independent nickel supply chain.

Management Comments

• Gerard Barron, Chairman and CEO of The Metals Company: "We're thrilled to welcome Korea Zinc as a strategic investor and partner on our journey to redefine how the United States sources critical minerals for energy, defense, manufacturing and infrastructure."
• Gerard Barron: "We believe the strategic fit between the two companies is exceptional: If we receive a commercial recovery permit, TMC USA will be in position to deliver a secure, abundant and low-impact supply of four critical metals under U.S. regulatory oversight. Korea Zinc is probably the only company outside of China that has the capability to take TMC USA's materials and turn them into metal product formats required in the United States. Together, we have the potential to meet the United States demand for refined nickel, cobalt and manganese, and contribute copper while completely by-passing the Chinese supply chain. This is more than capital—it's alignment on values, on urgency, and on building a resilient supply chain for the United States."
• Gerard Barron: "With TMC's robust pro forma cash balance of nearly $120 million, we and Allseas can now turn our attention to preparing the Hidden Gem commercial production system in anticipation of the grant of a commercial recovery permit through the U.S. regulatory framework. We look forward to sharing more detail alongside the expected release of our PFS next quarter."
• Yun B. Choi, Chairman and CEO of Korea Zinc: "I am bullish on nickel and copper. Korea Zinc's well-developed growth strategy, a.k.a. Troika Drive, is predicated on that very view. As such, we are excited to be an investor in TMC, who I believe will be one of the most competitive nickel and copper producers in the world."
• Yun B. Choi: "More than that, I am particularly bullish on the opportunity in critical minerals processing capacity in the United States, and with this new partnership between Korea Zinc and TMC, we now can have a relevant position in this market, having a unique platform upon which a reliable and independent nickel supply chain can be built in the United States, serving U.S. companies and consumers."

Industry Context

This strategic investment highlights the growing global focus on securing critical mineral supply chains, particularly outside of traditional dominant producers like China. The partnership between TMC, a deep-seabed explorer, and Korea Zinc, a leading non-ferrous metal refiner, signifies a move towards vertical integration and establishing new, potentially more sustainable, sources for essential battery metals and other critical materials. The U.S. government's recent Executive Order to accelerate seabed mining underscores the strategic importance of such initiatives for national security and economic resilience, aiming to reduce reliance on foreign supply chains for key industrial inputs.

Comparison to Industry Standards

• Korea Zinc is described as a 'world leader in non-ferrous metal refining and precursor Cathode Active Material (pCAM) technology,' processing over 1.2 million tons of 18 different metals annually.
• TMC management states that Korea Zinc is 'probably the only company outside of China that has the capability to take TMC USA's materials and turn them into metal product formats required in the United States,' positioning this partnership as uniquely capable of bypassing the Chinese supply chain for critical metals.
• Korea Zinc's 'Troika Drive' growth strategy, focusing on renewable energy, green hydrogen, secondary battery materials, and resource recycling, including an 'All-in-One Nickel refinery' under construction in Korea (scheduled for completion in Q2 2026), demonstrates its commitment to advanced materials and aligns with global industry trends towards electrification and circular economy principles.

Corporate Governance

Stakeholder Impact

• Shareholders: Experience dilution from the issuance of new shares but benefit from a significant capital injection, strengthened balance sheet, and a strategic partnership that could accelerate project development and enhance long-term value.
• Employees: Potential for future job creation and stability as the company advances its projects and explores onshore processing facilities in the U.S.
• Customers: Potential for a more secure, diversified, and ethically sourced supply of critical metals, bypassing traditional supply chain dependencies.
• Suppliers: Potential for new business opportunities related to the development of onshore processing infrastructure and the 'Hidden Gem' production system.
• Creditors: Improved financial health and reduced risk due to the substantial capital raise.

Next Steps

• Closing of the Securities Purchase Agreement with Korea Zinc, expected on June 26, 2025.
• Advancing discussions with the National Oceanic and Atmospheric Administration (NOAA) on the commercial recovery permit application under U.S. law.
• Preparing the 'Hidden Gem' commercial production system in anticipation of the grant of a commercial recovery permit.
• Release of the Pre-Feasibility Study (PFS), expected in the third quarter of 2025.
• Exploring potential collaboration with Korea Zinc for the development of onshore processing infrastructure in the United States.

Key Dates

Recommendation

Keywords

deep-seabed mining, critical minerals, nickel, copper, cobalt, manganese, polymetallic nodules, strategic investment, Korea Zinc, TMC the metals company, SEC filing, private placement, supply chain resilience, onshore processing, pCAM, battery materials, Form 8-K, NOAA, DSHMRA