Is It Too Late to Buy TMC The Metals Company After Its 32% Rally?

TMC The Metals Company (NASDAQ: TMC) is a one-of-a-kind mining company that sits at the heart of America's push for green power. Indeed, there is no company in the world doing the kind of mining that TMC aspires to do as it is not yet legally permitted.

In a nutshell, TMC aims to commercially collect polymetallic nodules -- that is, potato-sized rocks rich in nickel, cobalt, copper, and manganese. These metals are critical for clean energy, electric vehicle (EV) batteries, and other high-tech manufacturing. TMC's plan is to harvest the nodules from the seafloor of the Pacific Ocean and then refine them into battery-grade metals to sell to industrial buyers.

TMC does not have regulatory approval to mine the seafloor; as such, it also doesn't yet have revenue. Its speculative nature as a stock means its price has been all over the chart, from $10 a share last fall to about $5 today.

Over the last month, however, TMC has picked up significant momentum, gaining about 32%. But investors who missed that market-beating performance needn't worry; if this company can just do one thing, the biggest gains should arrive.

The green light to a bigger valuation

TMC is in a bit of a bind. The company has zero revenue, and it's losing money by the quarter. Its quarterly losses aren't widening -- in fact, they've narrowed -- but its roughly $99 million in cash won't last but four or five quarters at its current burn rate of about $20 million. The metal company has $143 million in total liquidity, but even so a year of expenses is likely all it has left on hand.

This would be concerning for any company. But for TMC, it's a double-edged problem. The entire nodule mining industry is at a standstill due to the lack of a regulatory rulebook. The organization charged with creating these rules, the International Seabed Authority (ISA), has been slow to finalize them in international code. Hence, the reason TMC has mining rights for a multibillion-dollar hoard of nodules but no legality to bring them to dry land.

Image source: TMC The Metals Company.

That said, the last year and a half has opened a second path for TMC. The U.S. government, which never ratified the treaty that made the ISA, is very supportive of TMC's ambitions. It has created a streamlined process that could bypass the ISA's impasse and issue TMC a license for international seabed mining. The Trump Administration has made this process easier for TMC, and the company is expecting to secure a commercial recovery permit by late 2027.

If the company gets that permit, it would be the ultimate symbol of U.S. support. With it, the company could move confidently toward harvesting nodules. And that, I think, could send TMC stock soaring.

Should you buy TMC before that final decision?

There are some reasons to doubt, however, that a final U.S. decision would put the ISA's competing claim over the deep sea to rest. Even if TMC does get the green light from the U.S. government, international opposition could still complicate its path to commercialization.

The risks are real, and the company's future isn't crystal clear yet. However, given how urgently the world needs critical metals, the company will, I think, find a way to bring its nodules to the surface. For investors willing to stomach the uncertainty, TMC looks like a speculative bet worth considering before the regulatory picture crystallizes.

Steven Porrello has positions in TMC The Metals Company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.