Contrarian Corpus
short seller research note initial thesis
2021-10-06 · 15 pages

TMC the metals company Inc. TMC

TMC is a recycled Nautilus Minerals fraud: $43M siphoned to insiders for worthless seabed licenses, inflated expenses, and a TOML permit at risk of ISA termination.

N 4 Narrative
V 2 Visual
C 2 Craft
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Thesis

Bonitas argues TMC — the SPAC'd rebrand of DeepGreen via Sustainable Opportunities Acquisition Corp — is a repackaged version of bankrupt Nautilus Minerals whose assets PwC could not sell to any of ~300 bidders in 2019. Bonitas claims TMC overpaid US$43M in cash and stock to undisclosed insiders (Deep Sea Mining Finance) for a Tonga Offshore Mining license nominally worth the ISA's $250K application fee, inflated NORI's 2019 exploration expenses by 124% ($34M disclosed vs $15M in ISA public records), and faces license-termination risk because no Tongan citizen sits on TOML's board post-acquisition. The report ties DeepGreen founder David Heydon, CEO Gerard Barron, and DSMF principals Chris Jordinson (ASIC-convicted insider trader) and Matthias Bolliger (Panama Papers) to a pattern of bad actors, and Bonitas is short the stock expecting significant downside from the $4.46 close.

SCQA

Situation

TMC is a pre-revenue deep-sea-mining SPAC (DeepGreen + SOAC) claiming three Clarion Clipperton Zone exploration licenses worth billions, pitched to retail as 'EV batteries in a rock' at a ~US$1bn market cap.

Complication

The licenses are the same assets that bankrupted Nautilus Minerals in 2019 when PwC could find no buyer among 300 bidders; TMC overpaid $43M to related-party insiders, inflated NORI expenses 124%, and lost Tongan sponsorship required for TOML.

Resolution

Bonitas recommends shorting TMC, asks the SEC to investigate the merger's disclosures, and flags ISA regulatory termination risk given the absence of a Tongan director and the related-party transactions.

Reward

With only ~US$0.50/share in cash and no revenue, Bonitas expects the stock to decline significantly toward worthlessness — the same outcome NMI shareholders got when they received nil in bankruptcy.

The three reasons

  1. 1

    TMC siphoned US$43M to undisclosed insiders overpaying for a TOML license worth only $250K

  2. 2

    NORI 2019 exploration expenses inflated 124% — $15M actual vs $34M disclosed to SEC

  3. 3

    TOML license at risk of termination: no Tongan director remains after DeepGreen takeover

Primary demands

  • Investors should avoid or short TMC stock
  • SEC should investigate the DeepGreen-SOAC merger disclosures
  • ISA should scrutinize TOML license given loss of Tongan sponsorship

KPIs cited

Overpayment to insiders (TOML acquisition)
US$43M cash+stock paid vs $250K ISA fee fair value
NORI 2019 exploration expense inflation
US$34M disclosed to SEC vs US$15M in ISA public records (+124%)
TMC cash balance
US$113M (~$0.50/share) as of 9/30/2021
ISA CCZ license fair value
US$250K application fee + $50K annual dues
NMI creditor recovery
10 cents on the dollar; common shareholders received nil
NMI capital raised and burned
US$686M over 12 years per PwC 1st Report
Bidder interest in NMI SISP (2019)
~300 parties contacted; 0 valued assets above US$23M

Pattern membership

Where this document fits across the library's 12 rhetorical / structural patterns. Orange cells are present in this deck; neutral cells are not.

Precedents cited

  • Nautilus Minerals bankruptcy (NMI)
  • Lockheed Martin UK Seabed Resources carrying CCZ licenses at zero
  • Nauru Ocean Resources (NORI) valuation benchmarks
  • Campaign for Accountability July 2021 letter to SEC

Composition what's on the 15 slides

Visual + textual elements counted across every slide in this deck. Hover a box for what that element is; click to see every slide in the corpus that uses it.

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Notes

Classic Bonitas short report format — Word/Times-style memo with ToC, embedded screenshots of SEC filings, ISA records, Tonga business registry, PwC court reports, and Panama Papers/ICIJ network graphs. Heavy use of primary-source citations and footnotes rather than bespoke data-viz. Pre-filled stake not disclosed (only 'we are short'). Four-claim structure (TOML overpayment / NORI inflation / TOML legal status / history of bad actors) is the deck's SCQA spine. Key named actors: Gerard Barron, David Heydon, Robert Gary Heydon, Scott Honour, Paul Taumoepeau, Chris Jordinson (ASIC insider-trading conviction), Matthias Bolliger (Panama Papers). Cover page has distinctive BR logo with Chinese characters '博力达思研究'.