Odyssey Marine Posts 2014 Second Quarter Results
Odyssey Marine Exploration, Inc., a pioneer in the field of deep-ocean exploration, has reported results for the second quarter ended June 30, 2014.
The company’s operations during the quarter were focused primarily on the recovery of gold from the SS Central America shipwreck and validation of the phosphate mineral deposit controlled by one of the company’s subsidiaries.
Seabed Mineral Exploration Update
During the quarter, Odyssey focused on advancing the development of the phosphate deposit controlled by one of its subsidiaries. The Mexican government recently granted two additional exclusive mining concession areas to the subsidiary that are contiguous to the existing concession area in the Mexican Exclusive Economic Zone.
The new areas are believed to contain the continuation of the distinct deposit, which features very high phosphate content. This concentrated ore body does not overlap areas previously explored by other groups in shallower waters nearer shore that have much lower phosphate content. The new areas have been incorporated into the “Don Diego” project to extract phosphate sands. Phosphate is a key and irreplaceable component of fertilizers, and the location of the deposit makes it an attractive potential sourcing site for fertilizer companies in Mexico, the Americas, and the Pacific Rim.
An Environmental Impact Assessment (EIA) for the “Don Diego” project was completed before the end of the quarter. Based on the recommendation of advisors, including the project’s environmental and legal team, the EIA underwent a series of reviews with various stakeholders, including environmental groups, local fishing interests and community leaders, as well as potential strategic partners. Feedback received from these reviews was incorporated into the EIA, which is now undergoing final reviews prior to government filing.
This community outreach and solicitation of advice delivered a higher-than-anticipated level of favorable interest and cooperation from local and environmental groups that in turn resulted in more than 20 meetings with stakeholders and further extensive reviews of the EIA. While this has extended the timeline for official government submission of the EIA, the resulting document is now more comprehensive, and moreover has received advance indications of support from the diverse groups of interested parties who contributed input.
The EIA was expanded to more than 4,600 pages with the inclusion of annexes that feature extensive analyses, tests, reports and models from outside experts and environmental scientists on the proposed program to extract the phosphate sands. The extensive report demonstrates that there will be minimal environmental impact, closely paralleling the extensively-studied aggregate dredging programs that have been operating for decades off the coast of the United Kingdom.
“The EIA is awaiting input from one additional stakeholder which has been promised for next week,” noted Mark Gordon, Odyssey’s chief operating officer. “After we receive the input and make any suggested edits to the EIA we will be filing it shortly thereafter.”
Subsequent to the quarter, the company provided an updated assessment of the Oceanica Resources deposit. The independently-verified measurements, now demonstrate that the deposit contains 327.2 million measured and indicated ore tonnes at 18.5% P2O5, an increase of 20% over the last preliminary assessment total of 273.5 million ore tonnes. Further increases in the measured and indicated quantity of the deposit are expected in the future when results from the two additional exclusive mining concession areas recently granted are calculated, but the existing measurements already place the deposit in the top-tier of new world phosphate deposits.
The mining experts and phosphate strategic players that have been examining the data have highlighted countless advantages of this deposit, including the following:
– Very high in situ ore concentration and no or little overburden (thus less mining and lower processing costs);
– Mined material is already fluidized and does not require complicated extraction or grinding;
– No fixed infrastructure needed (thus no capital expenditure for roads, buildings, utilities);
– No people to displace or disturb as is common with land mining operations;
– All mining equipment is mobile and production volume is easily scalable;
– Easy transport to multiple clients since it will be mined directly onto a transport ship.
“We continue to develop a cooperative venture with Royal Boskalis Westminster, the world’s largest dredging company, with ships suitable for mining the Oceanica phosphates,” said Greg Stemm, Odyssey’s chief executive officer. “Our next step now is to file the environmental permit to move us closer to beginning mineral extraction operations.”
The company has sent a termination notice for the charter of the Dorado Discovery vessel so that costs associated with this vessel will cease in the third quarter of 2014. However, the company is looking at opportunities with the ship owner which will provide access to the ship for future projects on an “as-needed” basis.
In addition to the availability of future short-term charters of the Dorado Discovery the company will be able to use other ships to further pursue projects as needed. With this arrangement, the company expects to reduce its current operating cash needs by 25% to 30% by the start of 2015.
Press Release, August 12, 2014