Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the
field of deep-ocean exploration, reported results for the second
quarter ended June 30, 2018, and provided an update on current
projects.
“We have been very productive both onshore and
offshore as our global team continues to achieve goals necessary to
complete the company’s transformation. In the near-term, we expect
to begin generating returns from operations sufficient to cover
current operating expenses, and we look forward to working with the
Mexican authorities to develop the strategic phosphate resource for
the benefit of Mexico,” said Mark Gordon, CEO and President of
Odyssey Marine Exploration, Inc.
“We’re continuing to manage our cash carefully,
achieving an additional 27% reduction in operating expenses
compared to second quarter of 2017, and we’re keeping external
funding to a minimum to bridge to the cash we soon expect from
operations. Our efforts remain on our core focus: the development
of offshore mineral resources both directly for Odyssey and
conducting contracted work for third-parties that provide cash and
equity or profit sharing stakes.
“The strategic phosphate deposit controlled by
our subsidiary Exploraciones Oceanicas, S. De R.L. De C.V. (“ExO”)
is our most advanced mineral project. Earlier this year, we
received positive news from the Mexican Federal Court regarding the
environmental permit on this project, and we anticipate receiving
further news within the next several weeks. Our mineral research
and science team is also developing two additional strategic
mineral deposits—one Odyssey-owned mineral project and another
under contract with Odyssey receiving cash and equity in the new
venture.”
Odyssey’s Current
ProjectsCurrently planned or operational shipwreck and
mineral projects are conducted under leveraged contract models
whereby Odyssey is paid to perform services while retaining a
significant back-end share of the future net proceeds from these
projects or an equity ownership share of the project. The combined
potential cash flows from these projects are expected to fund
operations for multiple years while simultaneously increasing the
value of projects in which the company has an equity ownership
position.
Offshore operations are currently underway on a
contracted project that is expected to begin generating cash in
2018 to fund company operations and is forecast to produce cash
returns for a minimum 12-18 months.
Odyssey holds a controlling interest in Oceanica
Resources, S. de R.L., and ExO, a subsidiary of Oceanica. ExO
controls exclusive 50-year mining permits in an area in Mexican
waters that contains a large amount of phosphate mineralized
material. To move to the next phase of this project in
Mexico, Odyssey and its subsidiaries are awaiting the issuance of
an environmental permit.
On March 21, 2018, the 11-judge panel of the
Superior Court of the Federal Court of Administrative Justice in
Mexico ruled unanimously in favor of ExO, nullifying the original
denial of the environmental permit application. Odyssey is under
contract to provide a variety of services related to the project
once approvals are in place. This contract has the potential to
produce positive cashflows and enhance the value of Odyssey’s
investment in this project.
Two additional strategic mineral deposits are
currently under development. One is an Odyssey mineral project and
the other is being conducted under contract with Odyssey receiving
cash and equity in the new venture.
Another new subsea mineral project that will
require offshore exploration work and resource evaluation by
Odyssey is currently being evaluated for acquisition.
Second Quarter 2018 Financial
ResultsNet loss for the current quarter was $0.6 million,
or ($0.08) per share, compared to a loss of $1.9 million or ($0.23)
per share in the same period a year ago, an improvement of $1.3
million or 68%.
Total revenue in the current quarter was $1.1
million, a $0.5 million increase over the revenue in the same
period a year ago. The revenue generated in each period was a
result of performing marine research, search and recovery
operations for our customers. We provided these services to
our related-party customer Magellan during both of these
periods. In 2018, we began providing these marine related
services to a deep-sea mineral exploratory company indirectly owned
and controlled by the Chairman of our Board.
Marketing, general and administrative expenses
primarily include all costs within the following departments:
Executive, Finance & Accounting, Legal, Information Technology,
Human Resources, Marketing & Communications, Sales and Business
Development. Marketing, general and administrative expenses
decreased by $0.3 million from $1.8 million in 2017 to $1.5 million
in 2018 primarily as a result of (i) a reduction of $0.1 million of
admiralty legal fees, (ii) a $0.1 million decrease in independent
director meeting fees and (iii) a $0.1 million reduction in
personnel compensation related to share-based
compensation.
Operations and research expenses primarily
include all costs within Archaeology, Conservation, Exhibits,
Research, and Marine operations, which includes all vessel and
charter operations. Operations and research expenses
decreased by $0.4 million from 2017 to 2018 primarily as a result
of the following offsetting items: (i) increases of $0.1 million
for our deep-sea mining concession fee and $0.2 million in
professional services and travel related associated with the onset
of a new marine services client and (ii) a $0.1 million decrease
related to depreciation and related equipment insurance and a gain
of $0.6 million from the sale of certain marine
equipment.
Consolidated financial statements as well as
Odyssey's Quarterly Report on Form 10-Q for the period ended June
30, 2018, are available on the company's website at
www.odysseymarine.com as well as at www.sec.gov.
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 to provide access to critical resources
worldwide. Our core focus is the discovery, development and
extraction of deep-ocean minerals. Odyssey also provides marine
services for private clients and governments. For additional
details, please visit www.odysseymarine.com.
Forward Looking
InformationOdyssey 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, 2017, which was filed with the
Securities and Exchange Commission on March 26, 2018. The financial
and operating projections as well as estimates of mining assets are
based solely on the assumptions developed by Odyssey that it
believes are reasonable based upon information available to Odyssey
as of the date of this release. All projections and estimates are
subject to material uncertainties, and should not be viewed as a
prediction or an assurance of actual future performance. The
validity and accuracy of Odyssey's projections will depend upon
unpredictable future events, many of which are beyond Odyssey's
control and, accordingly, no assurance can be given that Odyssey's
assumptions will prove true or that its projected results will be
achieved.
Cautionary Note to U.S.
InvestorsThe U.S. Securities and Exchange Commission (SEC)
permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms
in this press release, such as "measured", "indicated," "inferred"
and "resources," which the SEC guidelines strictly prohibit us from
including in our filings with the SEC. "Inferred mineral resources"
have a great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. U.S. investors are
cautioned not to assume that part or all of the inferred mineral
resource exists, or is economically or legally mineable, and are
urged to consider closely the disclosures in our Form 10-K which
may be secured from us or from the SEC's website at
http://www.sec.gov/edgar.shtml.
CONTACT:Laura Barton Odyssey Marine
Exploration, Inc.(813) 876-1776 x 2562laura@odysseymarine.com
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