TMCR

Business Context and Reporting Period

Company: The Metals Royalty Company Inc. (TMCR)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Listing Status: Direct listing on Nasdaq Capital Market completed April 8, 2026.
Business Model: Acquisition and management of critical metal and mineral royalties. Following a "Spin-Out" of its Oil and Gas assets in December 2025, the Company's sole material asset is a 2.0% Gross Overriding Royalty (GORR) on the NORI Property (polymetallic nodules) operated by The Metals Company (TMC) in the Clarion-Clipperton Zone (CCZ). The Company does not conduct exploration or production operations.

Key Financial Metrics

Note: The 2025 Net Income is driven by a $6.6 million gain on the Spin-Out of Oil and Gas assets, which are now classified as discontinued operations. Continuing operations generated no revenue.

Material Changes vs. Prior Period

• Portfolio Restructuring (Spin-Out): Completed on December 18, 2025. The Company distributed its Oil and Gas royalty interests (Maria Conchita and SN-9 blocks) to shareholders via a subsidiary. This resulted in a $6.6 million gain on the spin-out and reclassified all prior royalty revenue as discontinued operations.
• Operating Expenses: Increased significantly by $5.5 million (455%) to $6.7 million. This was primarily due to one-time direct listing costs ($1.6 million), increased legal and accounting fees ($1.6 million), and higher personnel costs ($1.4 million) associated with public company compliance.
• Liquidity: Cash position improved dramatically from $1.4 million to $18.4 million, driven by $22.8 million in equity proceeds raised during 2025 and the conversion of subscription receipts in early 2026.
• Asset Base: Royalty and streaming interests decreased from $19.8 million to $14.1 million due to the removal of Oil and Gas assets, leaving only the NORI Royalty.

Guidance, Outlook, and Risks

• Revenue Outlook: The Company currently generates no revenue from continuing operations. First production from the NORI Property is anticipated in Q4 2027, subject to permitting. Revenue is expected to derive from nickel, cobalt, copper, and manganese.
• Capital Resources: Management anticipates sufficient cash to fund operations through Q4 2027. The Company has a Standby Equity Purchase Agreement (SEPA) with Yorkville for up to $100 million.
• Key Risks:
  • Permitting: Commercial recovery permits from NOAA (under DSHMRA) and the ISA are required but not yet granted. Delays could indefinitely postpone revenue.
  • Single Asset Dependence: 100% of future revenue potential relies on the NORI Property and the financial/operational success of TMC.
  • Repurchase Rights: TMC holds options to repurchase 50% of the royalty by 2030 and an additional 25% by 2033, which could materially reduce future revenue.
  • Internal Controls: The Company identified a material weakness in internal controls over financial reporting (insufficient staffing/oversight) which remains unremediated as of December 31, 2025.
  • Regulatory/Policy: Deep-sea mining faces public opposition and evolving regulatory frameworks. Changes in U.S. policy regarding critical minerals could impact project viability.

Investor Verification Checklist

• Permitting Status: Verify the current status of TMC's applications with NOAA and the ISA for commercial recovery permits.
• Spin-Out Accounting: Review the valuation methodology used for the $6.6 million gain on the Oil and Gas Spin-Out.
• Internal Control Remediation: Monitor progress on remediation of the material weakness in internal controls over financial reporting.
• Repurchase Option Terms: Analyze the specific financial triggers and "agreed rate of return" calculations for TMC's repurchase rights.
• Capital Burn Rate: Assess if the $18.4 million cash balance is sufficient to cover operating expenses until the projected 2027 production start date.