Hook / Thesis
TMC The Metals Co (TMC) is a classic optionality trade: essentially no commercial revenue today, but a potentially multi-decade claim on polymetallic nodules in the Clarion-Clipperton Zone (CCZ) if permits, technology and ESG concerns align. The company just filed a consolidated deep-seabed mining application on 01/22/2026 that increases its expected commercial recovery permit area to 65,000 km2 - a tangible regulatory milestone that can act as a positive catalyst for the stock.
This is not a fundamentals-driven buy in the traditional sense. It is a position-sized, event-driven wager. The company reported Q3 2025 revenues of just $1.34M and a Q3 net loss of $184.52M, with negative equity of $40.62M as of 09/30/2025. The stock currently trades around $9.31 (last trade) and is being bid up on the permitting progress and positive narrative about critical battery metals. I recommend a measured long — but only as a small part of a diversified speculative sleeve, with entry, stop and target levels spelled out below.
What the company does - the business in plain terms
TMC focuses exclusively on the exploration, collection and development of processing for polymetallic nodules - rocks on the seafloor that contain nickel, copper, cobalt and manganese. These metals are inputs for batteries and clean-energy infrastructure. The company’s business is effectively the development of the supply chain from seabed recovery through to a metallurgical process that produces marketable metal products.
Why should the market care? Because large-scale access to high-grade, concentrated metals in the CCZ could materially expand global supply of battery metals at a time when EVs and grid storage are driving demand. That supply optionality is what can justify a high multiple on future potential, even while present financials are pre-commercial.
Hard numbers you need to know
- Q3 2025 (quarter ended 09/30/2025): revenues $1.34M; costs & expenses $185.73M; net loss attributable to parent -$184.52M. Operating loss was -$55.36M. (10-Q filed 11/13/2025)
- Cash flow dynamics in Q3 2025: operating cash flow -$11.49M; financing inflows +$11.41M; net cash flow roughly -$0.11M for the period. The company has routinely relied on financing activity to fund operations.
- Balance sheet snapshot Q3 2025 (09/30/2025): assets $175.62M; liabilities $216.24M; equity attributable to parent -$40.62M (negative equity).
- Share count data (diluted average shares in Q3 2025) was 405,506,978 shares. Using the recent last trade of $9.31, that implies an approximate market capitalization of roughly $3.8B (405.5M * $9.31). This is an approximation using reported diluted share count and the last trade price; the dataset does not provide an official market cap number.
Interpretation: the business remains pre-revenue relative to commercial-scale mining. The firm has a material cash burn and depends on financing to continue. At the same time, the market is valuing the company like a multi-billion-dollar optionality play given the prospective permit area and the strategic nature of battery metals.
Valuation framing
There is no tidy EV/revenue multiple to apply — the company is pre-commercial and recorded only $1.34M in revenues in its most recent quarter. The sensible way to think about valuation is as an exploration/patent/permit-style option. Using the diluted shares from Q3 2025 and the last trade price gives an implied market cap near $3.8B; that valuation prices in a significant probability of future commercial cash flows or an acquisition.
Compare that implied $3.8B to the balance sheet reality: negative equity and recurring operating losses. The spread between market value and balance sheet reality reflects investor willingness to pay for the prospect of permit approvals, successful pilot extraction and a pathway to metallurgy and offtake. If you believe the regulatory path will clear and metallurgy/pilot tests scale, upside can be large; if permits are blocked or technology fails, downside can be severe and quick.
Peers in the traditional mining world are imperfect comparators. This is a specialized pre-commercial play with high ESG sensitivity; therefore a qualitative valuation approach that weighs permitting odds, potential resource size, and dilution risk is preferable to a straight peer multiple.
Catalysts to watch (2–5)
- Regulatory progress: approvals or positive findings from national regulators, NOAA, or the International Seabed Authority will be the primary value driver. The company filed a consolidated application on 01/22/2026 that expands the expected permit area to 65,000 km2 - track updates to that application.
- Pilot extraction and metallurgical test results: any evidence the company’s processing route produces market-grade concentrations at reasonable recovery rates would materially derisk the business case.
- Strategic partnerships and offtake: announcements of industrial partners, battery makers, or offtake agreements would move the story from speculative to commercial more quickly.
- Financing windows: equity raises, convertible notes, or project-level financing will affect dilution and runway. Favorable financing at high valuations is a near-term positive; dilutive financing without clear milestones is a negative.
- Macro commodity prices: higher nickel/cobalt/copper prices raise the expected NPV of recovered metals; sustained price weakness reduces upside substantially.
Trade idea - actionable framework
This is a position-sized trade for risk-tolerant investors who want exposure to a high-optional outcome. Size the position small (single-digit percent of a speculative sleeve). I recommend the following plan:
Entry: $8.75 - $9.75 (aggressive buyers can average in up to $10.50)
Stop: $7.00 (hard stop; limits downside to ~22% from $9.00 midpoint)
Target 1 (near-term catalyst/swing): $12.00 (take partial profits on regulatory progress or positive pilot news)
Target 2 (medium-term): $16.00 (if permitting advances and metallurgy shows strong recoveries)
Target 3 (stretch): $25.00+ (if commercial recovery permit is issued and offtake/financing announced)
Position sizing: no more than 2-5% of total risk capital; treat as binary event risk.
Why these levels? The recent price action shows the stock trading from the low single-digits up to the current high single-digit/double-digit range over the past year. The stop at $7.00 sits beneath a cluster of prior support zones and provides a defined risk band while keeping you in the trade for incremental positive news. Targets are milestone-driven: short-term for positive permitting headlines, medium-term for pilot/metallurgy proof points, and stretch for full commercial permit plus offtake/financing.
Risk checklist - what can go wrong
- Regulatory denial or delay - permitting is the binary hinge of this story. A denial or lengthy delay by domestic regulators or the International Seabed Authority could vaporize much of the value priced in today.
- Environmental/legal challenges - deep-sea mining is under intense environmental scrutiny. Litigation, NGO campaigns, or new restrictive policy could block or limit activity.
- Technology / metallurgy failure - the economic case depends on recovering metals at scale and at acceptable cost. If pilot tests underperform, the project economics could be unsalvageable.
- Cash burn and dilution - the company has recurring operating losses and has depended on financing to continue. Continued reliance on dilutive equity raises could materially reduce per-share upside.
- Commodity price risk - nickel, copper and cobalt price declines reduce project NPV and make financing harder.
- Negative equity / balance sheet stress - Q3 2025 showed negative equity of -$40.62M, which flags capital structure stress in a downturn and increases the likelihood and size of dilutive financings.
Counterargument (one clear, credible reason to fade this long): You can reasonably argue that regulatory and ESG headwinds make commercial deep-sea mining unlikely or least highly delayed. If governments or the International Seabed Authority adopt stricter rules, or if public opposition forces moratoria, an otherwise well-funded technical program becomes a stranded asset. In that scenario, TMC’s multi-billion implied market cap collapses toward asset value, and investors face severe losses even absent operational failure.
What would change my mind
- I would increase conviction (and size) if the company demonstrates repeatable, independent metallurgical recoveries at scale and publishes a realistic projected path to commercial production with committed project financing or offtake agreements.
- I would become significantly more negative if the company reports failed pilot tests, permit rejections, or if financing becomes prohibitively dilutive (e.g., large equity issuance at materially lower prices without clear milestone alignment).
Bottom line / Conclusion
TMC is a pure optionality play pinned to permitting and technical execution. The consolidated application filed on 01/22/2026 expanding the expected permit area to 65,000 km2 is an important near-term catalyst and justifies tactical, position-sized exposure for risk-tolerant traders. However, the company is pre-revenue, posted a -$184.5M net loss in its latest reported quarter, and carries negative equity on the balance sheet. Financing and dilution are real live risks.
If you want exposure to the potential upside of a new source of battery metals, take a small, disciplined long with a clear stop at $7.00 and defined profit-taking at the milestones above. Treat this as a speculative event trade, not a traditional mining equity investment.
Disclosure: This is not financial advice. The idea is a high-risk trade framed around regulatory and technical catalysts. Always size positions to your risk tolerance and perform your own due diligence.