DeepGreen Metals has agreed to merge with blank cheque company Sustainable Opportunities Acquisition (SOAC) in a deal that values the combined company at $2.9bn.
Based in Canada, DeepGreen Metals develops battery metals from seafloor polymetallic nodules.
Post-merger, the combined entity will be renamed as “TMC the metals company” and will operate as The Metals Company. It will become a publicly traded company with a listing expected to be on either the New York Stock Exchange (NYSE) or Nasdaq.
DeepGreen Metals has exploration and commercial rights to three polymetallic nodule contract areas across the Pacific Ocean’s Clarion Clipperton Zone, sponsored by the Nauru, Kiribati, and Tonga governments.
The exploration contract areas held by its subsidiaries are claimed to have enough resource for powering 280 million electric vehicles (EVs).
The combined company will be led by DeepGreen Metals chairman and CEO Gerard Barron.
Barron said: “The reality is that the clean energy transition is not possible without taking billions of tons of metal from the planet. Seafloor nodules offer a way to dramatically reduce the environmental bill of this extraction.
“We are getting into this industry with a deep commitment to ocean health and a clear stop date in mind. The plan is simple: produce better metals to supply the EV transition, while building up enough metal stock to stop extracting from the planet and enable society to live off recycled metals.”
DeepGreen Metals’ process to produce metals from polymetallic nodules is claimed to involve near-zero solid waste, thereby removing the necessity for tailings dams on land.
The merger will provide it with the required capital to move towards a feasibility study and enable it to start earning revenue from at least 2024.
The deal includes a private investment in public equity (PIPE) of $330m, priced at $10 per share. The PIPE investors include Allseas, Maersk Supply Service, Glencore, and certain strategic and institutional investors.
SOAC CEO Scott Leonard said: “Sourcing battery metals is the biggest hurdle facing the clean energy transition, and the pipeline of new mining projects on land is insufficient to meet rising demand.
“We looked at over 100 companies, many of them in the EV and renewable energy space. DeepGreen stands above the rest. It offers a real, scalable solution to the raw materials problem, at a low production cost and with a significant reduction in the ESG footprint of metals.
“Assuming full-scale production, we expect The Metals Company to be among the lowest cost nickel producers in the world.”
The deal will be subject to the approvals of both the firms’ shareholders and other customary closing conditions. It is anticipated to be finalised in Q2 2021.
