Iceberg hits The Metals Company: deep sea miner gets damaging write up from influential underground website Iceberg Research

An underground financial website with a history of damaging exposés against public companies has set its sights on The Metals Company.

IceBerg Research, whose work has been covered by the Financial Times, Reuters, and Wall Street Journal, published a piece last night challenging the financial projections of The Metals Company and the pay packet of its CEO, Gerard Barron.

Iceberg has reportedly shorted the company's stock and has predicted that it will go the way of its predecessor, Nautilus Minerals. Nautilus was a deep sea mining company involving Barron which infamously went bankrupt and cost Papa New Guinea, which granted it a mining licence and held a 30% stake, millions of dollars when the project ran ashore.

The Iceberg Research piece is written anonymously as are all its previous articles. However Iceberg Research has a track record, having brought companies like Hong Kong's Noble Group to its knees.

When the website ran several pieces in 2015 accusing Noble of inflating its assets and overstating the valuation of commodity contracts, among other charges, the company's market value was all but wiped out and within months, Moody's cut its rating to junk status.

The company denied the charges, claimed a former disgruntled employee was behind it, and sued. But the damage was already done and the company struggled to recover in the years after.

Iceberg Research claims

Now, Iceberg Research has published an unfavourable article on deep sea miner, The Metals Company, which trades as $TMC on the Nasdaq.

TMC has been soaring in the weeks following Donald Trump's deep sea mining executive order and the company's subsequent application for a licence, which is expected to be granted within a year.

The stock has climbed by over 450 percent in six months and is now trading above $4.50, multiples from its 52-week low of $0.72 which it hit in December.

Projected earnings

But last night, Iceberg Research took aim at the company's financials claiming The Metals Company is being overly optimistic about its net present value (NPV) and about what it will cost to process the minerals and to collect the polymetallic nodules from the Clarion Clipperton Zone. The website significantly revised downwards the company's NPV, claiming its own sums showed a figure much lower.

Iceberg Research also raised its eyebrow over The Metal Company's EBITDA margin, suggesting it appears wildly optimistic and would suggest that TMC is more profitable than the most efficient of land mining producers and "more profitable than Microsoft". It queries whether the company has adequately factored into its discount rate the significant risks of deep sea mining, given the harsh unknown environment it would be operating in.

Supplier relationships and prefeasibility study

Iceberg Research also questions whether the relationship with offshore partner Allseas is secure, given the Swiss company's own exploration licence through the International Seabed Authority. Allseas owns a company called Blue Minerals Jamaica, whose testing licence is sponsored by Jamaica, and is expected to be converted into a mining licence once the ISA completes its regulations.

Iceberg Research also tackled TMC's repeated delays in publishing a long-awaited pre-feasibility study, suggesting that it was unusual not to have done this prior to applying for a mining licence. At the company's Q1 Corporate Call on 14 May, TMC CFO Craig Shesky asked for patience, promising it would now be ready by end of September, saying TMC was adding in new assumptions for the US regulatory market:

“We often get a question, why not just release all the information now? Well, for one, we’ve been busy getting these applications complete, but also as a NASDAQ listed and SEC regulated company, there are very specific rules on the assumptions and sign-offs required to make resource and financial projections to ensure it’s all based on reality and can reasonably be relied upon by investors”

Compensation concerns

One of the more damaging arguments by the underground financial website regards CEO Gerard Barron's pay packet, which Iceberg Researcher is querying the size of, relative to the CEOs of comparable companies.

SEC filings show Barron making a total of 3.19 million last year including basic salary, bonus and stock awards. Iceberg Research argues that this is well above the market rate for companies of a similar size and profile.

However TMC argued in the same SEC filing that:

"We believe that establishing a competitive benefit package consistent with companies with which we compete for employees is an important factor in attracting and retaining talented employees."

Credit cost concerns

Iceberg Research also challenged the cost of the credit facility being used by TMC.

The company reports access to a $41.5 million credit facility listed as ERAS/Barron, with ERAS understood to be referring to the family office of director and largest individual shareholder Andrei Karkei, while Barron refers to the CEO.

Iceberg Research queried why the facility is not cancelled given it was underused in 2024 and attracts a relatively expensive underutilisation fee and a high annualised interest rate.

Conclusion

Iceberg Research concludes its hit piece against The Metals Company by predicting that it will go the way of Nautilus.

It has published an extensive disclaimer noting that its short position means it stands to gain if the company's stock value declines. However, the website says it stands by its research and views which are based on a deep dive into public records.

Other analysts

It should be noted that consensus rating among analysts for TMC's stock is a 'buy' rating, including respected Wall Street firm HC Wainwright which initiated coverage a week ago as trading volume for $TMC tripled.

The CEO responds

Responding to the news a short while ago, the TMC CEO wrote the following on X:

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