The Metals Royalty Company Inc. (TMCR)

The Metals Royalty Company Inc. owns two royalties, one on a deep-sea metals project and one on an iron ore mine being built in Minnesota, and neither has paid it anything yet 2.

On 24 August 2026 it completed the purchase of a second 1.0 percent royalty on the Mesabi mine, for consideration of $132.5 million in cash and shares 2. That brought its Mesabi royalty to 2 percent 2.

It paid for the deal with $140.0 million of 8.00% convertible notes due 2031 and a $25.0 million first lien term loan 42.

A prospectus dated 22 October 2026 lets the selling securityholders it names resell shares, and the company receives no proceeds from the shares they sell 2.

The open question is the mine, since royalty revenue starts only when it produces 2. Its operator has said it targets first pellet production in the fourth quarter of 2026 2. The company says it has not verified that information itself 3.

The company was incorporated on 27 October 2022 in British Columbia as Low Carbon Royalties Inc. 2. It took its present name, The Metals Royalty Company Inc., in September 2025 2.

Its first royalties were on natural gas in Colombia, both on blocks run by NG Energy International Corp. 1. It held 3.125 percent of the Maria Conchita block and 1.44 percent of the SN-9 block 1.

In 2023 it bought a royalty on the seabed nodule project of TMC, The Metals Company, paying about 13.9 million of its shares, 25.15 percent of the total, and $5 million in cash 1.

The royalty is a gross overriding royalty, which pays the owner a share of sales without deductions for the operator's costs 2. The rate is 2.0 percent 2.

For 2025 it reported net income of $1.1 million, against a loss of $283,276 in 2024 1. The gain came from the oil and gas business, which earned $8.0 million and was later reported as a discontinued operation 1. The royalty business alone lost $6.8 million 1.

General and administrative costs rose from $0.9 million to $6.1 million in 2025 1. About $1.6 million of that was one-time cost of preparing the direct listing 1.

On 18 December 2025 the company spun its oil and gas royalties out to its shareholders as a return of capital 3. That left the NORI royalty as its only royalty 3.

It then listed its existing shares directly on the Nasdaq Capital Market, where trading under the symbol TMCR began on 8 April 2026 3. Earlier, 3,134,481 subscription receipts turned into shares and released $15.7 million to the company 3.

On 6 May 2026 it agreed to buy a royalty on the Mesabi iron ore project for $132.5 million, made up of $125.0 million in cash and $7.5 million in shares 3. The deal closed on 1 June 2026 3.

To pay the cash it sold 6,164,141 shares in a private placement for about $80.1 million and drew a $44.6 million term loan at 9.00 percent a year, maturing in June 2029 3.

On 29 May 2026 it exercised its option to buy the second Mesabi royalty 3. After an extension of the closing date it completed that purchase on 24 August 2026 52.

Costs rose with the listing and the deals: operating expenses for the six months to 30 June 2026 were $16.9 million, up $16.5 million 3. Share-based pay, mostly shares given to consultants, rose by $9.5 million 3.

The NORI royalty on seabed nodules

The first royalty is a 2.0 percent gross overriding royalty on all metals and minerals produced from the NORI areas of TMC in the Clarion-Clipperton Zone of the Pacific Ocean 1. These areas hold polymetallic nodules, seafloor rocks that contain nickel, copper, cobalt and manganese 1.

TMC, not the royalty company, runs the project 2. The royalty company says it expects revenue from the NORI royalty to break down about 60 percent nickel, 25 percent cobalt, 10 percent copper and 5 percent manganese 2.

The royalty is not producing: the project is in development and, in the company's words, not currently permitted for commercial production 1.

TMC applied to the US ocean agency NOAA, and on 1 May 2026 NOAA found the consolidated application in full compliance, moving it to the certification stage 2. TMC has said it expects the process to conclude before the end of the first quarter of 2027 2.

TMC can buy part of the royalty back: half of it, from the second anniversary of the royalty agreement until 2030, at a payment that gives the company an agreed rate of return 21.

The Mesabi royalty on iron ore pellets

The second royalty is on the Mesabi Metallics project near Nashwauk, Minnesota, an open-pit mine, concentrator and pellet plant on the Mesabi Iron Range 2. Its operator, Mesabi Metallics Company LLC, is part of the Essar Group and is not linked to the royalty company 2.

The product is direct-reduction grade iron ore pellets, a feed for electric arc furnace steelmakers who make iron without a blast furnace 2. The royalty is set against the Platts index for these pellets, free on board Brazil 2.

Across both purchases the royalty is 2.00 percent of gross revenue on up to 8.5 million metric tons a year, with a floor of $3.00 per ton 2. Production above that pays 0.50 percent, with a floor of $0.75 per ton 2.

The rates step down to 0.50 percent and 0.125 percent once 170 million tons have been produced, which management forecasts for 2047 2. The company also has rights of first offer on the part of the royalty that the seller kept 2.

The project was 95.5 percent complete at the end of May 2026 by the contractor's report, with construction 91.4 percent done 3. The mine fired its first production blast on 10 July 2026, breaking about 211,000 tons of ore 6.

Debt, cash and the equity line

The 8.00% notes carry cash interest of 6.00 percent and payment-in-kind interest of 2.00 percent until September 2027 4. Payment in kind means the interest is added to the amount owed 4.

Noteholders can convert the notes into 115.4401 shares for every $1,000 of principal 4. The company may settle in cash, shares or both 4. The notes mature on 15 September 2031 4.

Macquarie Bank Limited leads the $25.0 million first lien loan and received 500,000 warrants 2. The proceeds also repaid the earlier loan from American Life & Security Corp. 2.

At 30 June 2026 the company had cash of $11.8 million, down from $18.4 million at the end of 2025 3. A standing agreement lets it sell up to $100.0 million of shares to Yorkville over 36 months, at its option 3.

People and size

Brian Paes-Braga is chairman and chief executive, and Don Sewell is president and chief financial officer 2. Michael Hess is non-executive co-chairman 2. Gerard Barron, a director, is also chairman and chief executive of TMC 2.

The company is small: about 10 employees or consultants, working remotely or from the Calgary office 2. It does not mine and pays none of the operators' costs 3.

Problems and risks the company names

The company has no royalty revenue yet and says it has had significant net losses since its start 2. It also depends on operators it does not control, and the NORI project lacks a permit for commercial production 13.

The umbrella, in words

The company has no consumer brands and owns its royalties through subsidiaries: TMCR USA Operations Inc. holds the Mesabi royalty, and TMCR USA Holdings Inc. and TMCR Operations Inc. guarantee the notes 24.

Its ties are of two kinds: it owns a 2.0 percent gross overriding royalty on the NORI areas, and it owns 2 percent of Mesabi production revenue under two royalty purchases 12. The Mesabi royalty is an interest in real property, not a loan or a share 2.

The land is the operator's: the Mesabi project covers more than 4,496 acres, and the NORI areas are in the Pacific 2.

Large shareholders in the latest prospectus are directors and officers as a group at 29.70 percent, with Mr Paes-Braga at 21.12 percent 2. TMC owns 20.65 percent, Mesabi Investments (USA) LLC 6.48 percent, Landsons Investment Corporation 5.53 percent and John B. Hess 5.02 percent 2.

The operator of the Mesabi project has said it targets first pellet production in the fourth quarter of 2026, with commercial production expected after an 8 to 12 month ramp-up 2.

The company expects its two Mesabi royalties to bring about $22 million a year at 7.28 million tons a year over a 23-year mine life, rising to about $26 million at 8.5 million tons 5. These are the company's figures, based on the operator's information 53.

For NORI, TMC has said it expects the US permitting process to end before the close of the first quarter of 2027 and first production in the fourth quarter of 2027, subject to permits 2. The company says no permit is assured 2.

The company says it intends to use its relationships to pursue more royalty purchases across the critical metals and minerals value chain 2. It names no target 2.

On the debt side, the first interest payment on the notes is due on 15 March 2027 4. The company cannot redeem the notes before 15 September 2029, except after certain Canadian tax law changes 4.

The company may owe the seller of the second Mesabi royalty extra shares, set by a formula 12 months after those shares were issued 2.

In July 2026 the company said the Mesabi project was on track for full commissioning in the third quarter and first production in the fourth quarter of 2026 5.

In March 2026 the Export-Import Bank of the United States announced support of up to $10 billion for the development of an iron ore mining and processing facility by Mesabi Metallics 2. The prospectus lists this among US policy supports 2.

The notes' cash interest steps up to 7.00 percent from 15 September 2027 and to 8.00 percent from 15 September 2028 4.

The company says that until royalty revenue is enough for profit, it expects to pay for its cash needs with equity or debt offerings 3.