Shares of TMC The Metals Company (TMC 29.49%) rallied more than 29% on Monday as of market close.
TMC garnered attention back in May when The Wall Street Journal highlighted the company’s opportunity to mine the sea floor in the Pacific Ocean, after the Trump administration directed the National Oceanic and Atmospheric Administration (NOAA) to grant permits opening up those areas for development.
Today, TMC got a significant equity investment from a Korean refining company, seemingly validating the company’s opportunity.
Korean Zinc invests $85 million
Today, TMC announced that Korea refinery Korea Zinc will invest $85.2 million in the company, good for a 5% stake of 19.6 million shares valuing the company at $4.34 per share, while also receiving warrants to buy another 6.9 million shares at $7.
In a press release, TMC noted that Korea Zinc’s technology is uniquely positioned to refine the “nodule-derived” metals that TMC’s technology can extract from the sea floor. That perhaps explains the tie-up, along with Korea Zinc’s likely belief in the opportunity for deep sea mining. The May WSJ article noted there was a potential $20 trillion addressable market for deep sea-mined metals.
Image source: Getty Images.
A runway to commercial operations in sight?
TMC only had a few million dollars in cash at the end of the March quarter, but received a $37 million investment from a strategic investor since then, and has now brought in another $85.2 million. That should help fund the company’s operations for at least a year and maybe more, which could perhaps lead to commercial operations.
However, investors should keep in mind this is a speculative pre-revenue company, and should be viewed as a high-risk lottery ticket today. That being said, there has been a lot of good news about this lottery ticket over the past two months.
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.