Odyssey Marine Exploration Provides Update on Mexican Phosphate Project
March 25 2019 - 8:30AM
Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the
field of deep-ocean exploration, today provided an update on
subsidiary Exploraciones Oceanicas (ExO)’s phosphate project in
Mexico. Notably, Odyssey here advises of an additional legal
step it has taken to defend shareholder interests and realize the
full economic value in the development of the project.
As of 2012 the Mexican Government granted ExO
concessions for the development of one of the world’s largest
seabed phosphate deposits, more than 22 kilometers off the coast of
Baja California Sur. Odyssey believes that phosphate sands
extracted from the deposit could supply most of North America’s
fertilizer needs for the next 100 years. Development of this
resource would see Mexico, currently dependent on expensive
imported phosphate, become self-sufficient in fertilizer and
materially advance its domestic food security, in addition to
generating substantial direct and indirect economic and strategic
benefits to the country.
ExO has placed responsible environmental
development of the phosphate resource at the heart of its
plans. ExO spent six years working diligently and to the
highest scientific standards to demonstrate that the concession can
be developed in an environmentally responsible manner causing no
long- or even short-term negative effects on the local marine
environment. ExO worked closely with scientists from Mexico’s
Ministry of the Environment (SEMARNAT), convincing them of the
project’s merits. Despite this, political interference on the
part of the then Secretary of the Environment, Rafael Pacchiano,
led to an initial denial of approval in April 2016.
ExO appealed that negative decision to Mexico’s
Superior Tribunal of Administrative Justice. In March 2018 a
unanimous full bench of the Tribunal confirmed that SEMARNAT’s
initial decision failed to comport with Mexican law, in that it
failed to consider the actual circumstances of the project and the
extensive environmental mitigation measures ExO had proposed.
The Tribunal sent the issue back to SEMARNAT for a proper decision
in compliance with the agency’s statutory obligations.
Unfortunately, in October 2018 SEMARNAT issued a second refusal
that blatantly disregarded the Tribunal’s order. This second
refusal manifestly was politically rather than scientifically
motivated; the then Secretary, Rafael Pacchiano, publicly announced
his intention to engineer a refusal.
Odyssey has full confidence in the environmental
and economic merits of its venture in Mexico. It also intends
to take all necessary steps to protect this valuable shareholder
asset. The past Administration in Mexico has treated
Odyssey’s valuable investment in a manifestly arbitrary and
discriminatory manner, in bad faith and in clear disregard of their
own applicable legal regime. In these circumstances, to
protect its rights and to defend shareholder value, on January 4,
2019 Odyssey formally filed notice of its intention (NOI) to file a
claim against Mexico under Chapter Eleven of the North American
Free Trade Agreement (NAFTA). Filing a NOI initiates a consultation
period during which Odyssey and the Mexican Government will seek
amicably to resolve this dispute. Convinced of the huge
benefits this phosphate development project will bring to Mexico,
Odyssey intends to work diligently and in good faith with President
Andres Manuel Lopez Obrador’s administration to achieve an
equitable resolution of this dispute. Should such an outcome
not prove possible, Odyssey intends to proceed to arbitration under
Chapter Eleven of NAFTA.
In accordance with its commitment to transparency in
investor-State arbitration, Mexico has made Odyssey’s NOI filing
available on the website of the Secretaria de Economia at
https://www.gob.mx/cms/uploads/attachment/file/447269/Odyssey_NAFTA_NOI_Redacted.pdf.
“We believe that development of this
strategically and economically significant resource aligns with the
key objectives outlined by Mexico’s new administration to transform
the economy and achieve food security for the benefit of the
Mexican people,” stated Mark Gordon, Odyssey President and CEO.
“Our proposals also fully comply with principles of careful
environmental stewardship, consistent with Odyssey’s core
values. We welcome the opportunity to work with the Mexican
Government during this consultation period to find a way forward
that benefits all parties.”
Odyssey's lead counsel in this matter is
Christophe Bondy of the law firm Cooley LLP. Mr. Bondy is one
of the world's most experienced NAFTA treaty counsel. He
spent nearly a decade as lead counsel to Canada defending claims
under NAFTA Chapter Eleven. For over 20 years he successfully
has represented both States and investors in high-stakes investment
treaty claims around the world.
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 2562
laura@odysseymarine.com
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