Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

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<li>WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).</li>
<li>Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.</li>
<li>Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.</li>
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WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).
Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.


Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

Equity Bottom-Up

<ul><li>TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the company with $28.4 million in cash on hand, which along with still undrawn unsecured debt of $25 million, will be sufficient to fund ongoing operating expenses and working capital needs for the next 12 months, according to management.</li><li>Resistance is futile. The ISA meetings concluded in March 2023 included the commitment by all members to complete the undersea mining code, which management believes will result in said code being finalized in 2H23 and certain media observers recognizing that the commercialization of the industry is a question of “when” and no longer “if”.</li><li>While TMC would prefer to wait for the final mining code issuance to submit its exploitation application, management reserves the right to submit such an application, in accordance with ISA charter, even if final regulations aren’t completed by the end of 2023.</li></ul>

TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the company with $28.4 million in cash on hand, which along with still undrawn unsecured debt of $25 million, will be sufficient to fund ongoing operating expenses and working capital needs for the next 12 months, according to management.Resistance is futile. The ISA meetings concluded in March 2023 included the commitment by all members to complete the undersea mining code, which management believes will result in said code being finalized in 2H23 and certain media observers recognizing that the commercialization of the industry is a question of “when” and no longer “if”.While TMC would prefer to wait for the final mining code issuance to submit its exploitation application, management reserves the right to submit such an application, in accordance with ISA charter, even if final regulations aren’t completed by the end of 2023.

TMC the Metals Company, Inc. - Deep-Sea Mining Is a Question of When, Not If

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

<p>The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals Company’s (TMC’s) deep-sea concession is a proven resource. The key to transforming this resource into a commodity or commercial production is an exploitation licence, which requires the International Seabed Authority (ISA), the governing body, to put in place the required legislation. The meeting to enact this regulation is scheduled for July 2023.</p>

The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals Company’s (TMC’s) deep-sea concession is a proven resource. The key to transforming this resource into a commodity or commercial production is an exploitation licence, which requires the International Seabed Authority (ISA), the governing body, to put in place the required legislation. The meeting to enact this regulation is scheduled for July 2023.

The Metals Company - All set for a pivotal year

<ul><li>Pilot costs drive higher losses. TMC reported 4Q22 results that included a net loss of $109.6 million, compared with a net loss of $19.6 million in 4Q21.</li><li>Higher Y/Y losses were driven largely by the $70 million fair value of the Allseas warrant exercisable post successful collection test, valued at $7 per share based on the grant date of March 2021, partially offset by lower G&amp;A expenses.</li><li>TMC ended 2022 with $46.8 million in cash, which along with the $25 million unsecured credit facility, management believes will be sufficient to meet its WC and capex needs through 1Q24.</li></ul>

Pilot costs drive higher losses. TMC reported 4Q22 results that included a net loss of $109.6 million, compared with a net loss of $19.6 million in 4Q21.Higher Y/Y losses were driven largely by the $70 million fair value of the Allseas warrant exercisable post successful collection test, valued at $7 per share based on the grant date of March 2021, partially offset by lower G&amp;A expenses.TMC ended 2022 with $46.8 million in cash, which along with the $25 million unsecured credit facility, management believes will be sufficient to meet its WC and capex needs through 1Q24.

Building Momentum into the Final Stretch; Turnkey Tolled Processing with PAMCO

<ul><li>Having completed the large-scale pilot program in December 2022, TMC, along with its NORI partners, consultants, and independent observers, generated and collected a wealth of environmental, technical, and economic data pertaining to deep-sea mining operations the company intends to undertake on commercial scale once the ISA exploitation application is accepted and approved.</li><li>TMC also announced that it joined an international consortium to develop the first ESG handbook for marine minerals in an effort to establish global uniform standards for the evaluation of ESG performance of marine mineral projects.</li><li>In preparation for its exploitation contract application, the company has engaged Bechtel Australia Ltd., a global leader in engineering, procurement, and construction, to collect and compile the various technical and economic studies, including environmental studies, being prepared by the consultants that will form the basis for NORI’s application to the ISA for an exploitation contract.</li></ul>

Having completed the large-scale pilot program in December 2022, TMC, along with its NORI partners, consultants, and independent observers, generated and collected a wealth of environmental, technical, and economic data pertaining to deep-sea mining operations the company intends to undertake on commercial scale once the ISA exploitation application is accepted and approved.TMC also announced that it joined an international consortium to develop the first ESG handbook for marine minerals in an effort to establish global uniform standards for the evaluation of ESG performance of marine mineral projects.In preparation for its exploitation contract application, the company has engaged Bechtel Australia Ltd., a global leader in engineering, procurement, and construction, to collect and compile the various technical and economic studies, including environmental studies, being prepared by the consultants that will form the basis for NORI’s application to the ISA for an exploitation contract.

Getting ISA Exploitation Application Ducks in a Row with the Help of Bechtel

Canada

TMC the metals company Inc. operates as an electric vehicles battery metal company. The Company produces metals from polymetallic rocks to store clean energy and power electric vehicles. TMC the metals serves customers worldwide.

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TMC the metals co (TMC US)

Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&P 500.

Water Tower Research

TMC the Metals Company, Inc. - Deep-Sea Mining Is a Question of When, Not If

TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the...

Water Tower Research

The Metals Company - All set for a pivotal year

The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals...

Edison Investment Research

Building Momentum into the Final Stretch; Turnkey Tolled Processing with PAMCO

Pilot costs drive higher losses. TMC reported 4Q22 results that included a net loss of $109.6 million, compared with a net loss of $19.6 million in...

Water Tower Research

Getting ISA Exploitation Application Ducks in a Row with the Help of Bechtel

In preparation for its exploitation contract application, the company has engaged Bechtel Australia Ltd., a global leader in engineering,...

Water Tower Research

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