Commodities & Metals

Odyssey Marine Scores on SS Central America Shipwreck

Odyssey Marine Exploration Inc. (NASDAQ: OMEX) is now formally the winner from yet another shipwreck salvage. This is the only public treasure hunting company we know of, which is why we previously named it as one of the most unusual public companies that exist. Odyssey was awarded the exclusive contract to conduct an archaeological excavation and recover the remaining valuable cargo from the SS Central America shipwreck.

The treasure hunting player just announced on March 3, 2014, that it had reached an agreement in principle for this shipwreck. Now a court approval has sealed this up as a win for the company.

After sinking in 1857, the SS Central America is located approximately 160 miles off the coast of South Carolina. It is reported to have one of the largest documented cargoes of gold ever lost at sea.

Thursday’s press release said:

Odyssey was selected for the project by Ira Owen Kane, the court-appointed receiver who represents Recovery Limited Partnership (RLP) and Columbus Exploration LLC (CE). The contract has been approved by the Common Pleas Court of Franklin County, Ohio, which has jurisdiction over Recovery Limited Partnership and Columbus Exploration LLC. Kane is charged by the court with overseeing the recovery project and has the benefit of a permanent injunction and exclusive salvage rights over the SS Central America shipwreck granted by the U.S. District Court for the Eastern Division of Virginia.

So, what sort of gold treasure is down there? Thursday’s press release shows that the experts estimate that the gold shipment was valued at approximately $93,000 in 1857, and that a substantial amount of passenger gold valued in 1857 between $250,000 and $1,280,000 — placing the most likely 1857 face value of the total remaining passenger and commercial gold at $760,000.

The archaeological excavation will be conducted and underwritten by Odyssey, and the company will receive 80% of recovery proceeds until a fixed mobilization fee and a negotiated day rate are paid. After that has been reached, Odyssey will receive 45% of the recovery proceeds.

Work is expected to begin in April, but the task is not as easy as it may sound in just picking up gold. This site was discovered back in 1987 at a depth of approximately 2,200 meters (7,200 feet). Odyssey signaled that less than 5% of the site was investigated after the discovery, but it also said that “an extensive collection of gold coins, bullion and raw gold were recovered from the site during the following years.”

Odyssey shares are up another 5% at $2.44 in late Thursday morning trading against a 52-week range of $1.72 to $3.70.

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