TAMPA, Fla., Nov. 7, 2013 (GLOBE NEWSWIRE) — On Tuesday, November 5, 2013, via a public conference call, the management team of Odyssey Marine Exploration, Inc. (Nasdaq:OMEX), reported to shareholders on a number of positive corporate developments, along with an increasingly positive outlook for remainder of the year and through 2014.
“Our company has never had better visibility on potential results from shipwreck cargo recovery operations than we do now,” noted Mark Gordon, Odyssey’s president and chief operating officer, on the well-attended conference call. “We can look three or more years into the future with confidence in our commodity recovery plans. We know where the ships are, our rights are secured under contract, and we do not foresee any regulatory or legal issues.”
Gordon said the company is targeting one or more commodity shipwreck cargo recoveries per year totaling at least $50 million per year, “We see this as a good opportunity to create a substantial flow of income generation for many years to come. With this year’s completion of the huge silver recovery from the SS Gairsoppamore than 99% that was reported to be on boardwe’ve proven our capabilities to successfully locate and extract significant value from 20th-century commodity shipwrecks.”
The Gairsoppa project demonstrates the technological feasibility and economic attractiveness of this part of the company’s business model. While cash inflows from its cargo monetization are expected to total more than $75 million, the recovery costs for the two-year Gairsoppa project totaled an estimated $27 million. The project generated cash inflows of nearly $9 million in the third quarter of 2013, with more than $20 million expected in the fourth quarter. As a result, the company expects to record a small net loss in third quarter of less than one million dollars, turning to a significant net profit in the fourth quarter.
In the call, the company said that it had $11 million in cash at the end of the third quarter, and with the remaining cash inflows from the Gairsoppa silver monetization and assuming an eventual exercise of Mako’s options in Oceanica, the company anticipates ending 2013 with more than $30 million of cash on hand to fund its exploration and recovery projects in 2014. As a result of the improved cash position, last month Odyssey elected to start paying off its convertible debt in cash. Most of the company’s current financial debt is now in the form of a collateralized credit line and bank debt. The company’s estimate for year-end cash on hand of more than $30 million is after an anticipated pay back in the fourth quarter of 2013 of a $10 million bank loan that matures in June 2014.
Odyssey has now turned its sights on an extensive pipeline of cargo recovery projects. On the call it reported securing new project approvals and salvage contracts from shipwreck owners for high-value cargoes. These negotiated salvage contracts award 90% of the recovered cargo value to Odyssey covering four separate 20th-century shipwrecks.
Upon successful testing of a new 6,000 meter Remotely Operated Vehicle that is currently underway, the company expects to perform reconnaissance and salvage planning trips to one or more of these commodity shipwrecks in the first half of 2014. In parallel with the reconnaissance work, Odyssey is considering different options for securing a long-term charter for a more cost effective recovery ship and system so that it is ready to commence full recovery operations in the second half of 2014.
The company is also enhancing its offshore mineral exploration capabilities. In preparation for its next series of mineral projects, Odyssey recently added some very significant technology upgrades to its mineral exploration vessel, Dorado Discovery. This includes a full suite of environmental testing equipment, as well as one of the world’s most advanced multi-beam sonar systems combined with the ability to use backscatter technology to characterize and identify promising geological structures. Odyssey also recently conducted sea trials of a newly installed, state-of-the art, custom seafloor drill. The proprietary drill has multiple functionalities, including advanced coring, reverse circulation and vibro-coring capabilities for validating new seabed mineral deposits.
“Our new sonar system allows us to create amazingly detailed 3-D topographic maps of the seafloor,” said Gordon. “The addition of these capabilities has already garnered several serious inquiries from parties who have near-term project work requiring the unique capabilities we now possess. Our one-of-a-kind deep ocean seafloor drill system will revolutionize prospecting for Seafloor Massive Sulfide deposits, thereby enabling us to dramatically advance the knowledge of the size and value of these deposits.”
The company plans to soon put these new capabilities to work on a new series of survey and exploration projects in the South Pacific Ocean, with operations planned to commence early in 2014. Meanwhile, the company expects to release more information on the Oceanica project, which has been described as ‘world-class’, after completion of the analysis of the cores which are currently being processed and completion of an independently reviewed technical report. Odyssey has generated $25 million in cash so far in 2013 from Oceanica equity transactions with independent investors and the company confirmed on the call that it has been working with JP Morgan Chase to optimize the financial potential of the project.
On the call, the company refuted recent false and misleading allegations about the company which had been made by a small fund manager who has engaged in a “short and distort” attack on Odyssey. As Greg Stemm, the company’s CEO concluded, “We have had a lot of experience with short sellers over the years. Despite their predictions of the company’s demise, which we have been listening to for over a decade, we’re still here, we continue to grow, and we’re stronger than ever.”
Interested parties are encouraged to listen to a replay of the call or to read the transcript, which the company has made available on its website here, along with a downloadable PDF of Frequently Asked Questions sheet.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean exploration using innovative methods and state of-the-art technology for shipwreck projects and mineral exploration. For additional details, please visit www.odysseymarine.com. The company also maintains a Facebook page at http://www.facebook.com/OdysseyMarine and a Twitter feed @OdysseyMarine. For additional details on Odyssey Marine Exploration, please visit www.odysseymarine.com.
Forward Looking Information
Odyssey Marine Exploration believes the information set forth in this Press Release may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, which has been filed with the Securities and Exchange Commission.
