Bloomberg News

Odyssey’s Shipwreck Gold Recovery Beating Expectations

June 04, 2014

Odyssey Marine Exploration Inc. (OMEX:US) rose the most in more than seven years after saying recoveries at the site of the SS Central America, a ship that sank off the coast of South Carolina 157 years ago, are exceeding its expectations.

Odyssey gained 20 percent to $1.51 at the close in New York, the largest increase since May 2007. Odyssey has recovered ingots and other gold worth more than $100,000 in 1857 face value from the sidewheel steamer, which sits in waters more than a mile deep, the Tampa, Florida-based company said in a filing today. Items recovered included nuggets, jewelry and coins.

“Early recovery results are well beyond our expectations,” according to Chief Executive Officer Gregory Stemm’s prepared remarks for the company’s annual meeting today. “The collection we have recovered to date represents an amazing cross section of the type of wealth that resulted from the California gold rush.”

The ship sank in 1857, 160 miles (260 kilometers) off the coast of South Carolina, with the loss of 425 lives. Previous recovery efforts in 1989 through 1991 netted more than two tons of gold. Odyssey said May 5 it recovered almost 1,000 ounces of gold during its first reconnaissance dive to the wreck in April.

Odyssey was contracted for the salvage work by Ira Owen Kane, a court-appointed receiver for the companies that undertook a prior recovery project. Odyssey will receive 80 percent of recovery proceeds until a fixed fee and a negotiated day rate are paid. After that, Odyssey will get 45 percent.

The company has completed recovery of most of the gold and valuable items on the surface outside the hull structure and is now starting to excavate inside the hull itself. “Ingots, gold nuggets, dust and coins have been coming up from this new excavation area daily,” according to the prepared remarks.

Odyssey has been targeted by short-seller Ryan Morris of hedge fund Meson Capital Partners LLC, who said in March it was unlikely Odyssey would find any easily recoverable gold at the site.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editors responsible for this story: Steven Frank at sfrank9@bloomberg.net Tina Davis, Robin Saponar


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Companies Mentioned

  • OMEX
    (Odyssey Marine Exploration Inc)
    • $1.28 USD
    • -0.05
    • -3.91%
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