Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the
field of deep-ocean exploration, reported results for the first
quarter ended March 31, 2019, and provided an update on current
projects.
“As promised, we are remaining laser-focused on
developing subsea mineral assets to create and realize near-term
and long-term value. This is our core business and we’re continuing
to enlarge our subsea mineral portfolio through development of new
deposits, acquisition of mineral rights/deposits and through our
leveraged contracting model, which allows us to earn equity in
deep-sea mineral projects,” said Mark Gordon, Odyssey CEO and
President.
“The acquisition and development of these assets
allows us to self-fund our business plan through the sale of equity
in individual mineral assets as we move them up the value curve. In
the early stages of the Exploraciones Oceanicas (ExO) phosphate
deposit, we sold 24% of the project for $27.5 million,” continued
Gordon. “As we move our existing and new mineral projects through
each necessary stage from research and permitting into exploration,
testing, resource evaluation and mine planning, the valuation of
the asset increases. Between expected non-dilutive funding and
other cash produced from operations or monetization of one or more
of our early stage mineral assets, we’re optimistic that there will
be sufficient cash to continue to build and enhance our subsea
mineral portfolio into 2020.”
Odyssey recently announced an agreement to acquire
a controlling interest in a potentially significant subsea mineral
deposit in the South Pacific, and the company continues to acquire
equity in a separate South Pacific mineral opportunity by providing
expertise and services. These projects have the potential to be as,
or even more valuable than, the Mexican phosphate deposit. These
and other mineral opportunities throughout the world offer powerful
diversification to Odyssey’s expanding portfolio of seafloor
mineral properties.
The project currently furthest along the
development path is the phosphate dredging project in Mexico,
ownership of which is held through Odyssey’s majority-owned
subsidiary Exploraciones Oceanica (ExO). Odyssey is pursing the
environmental permit to allow for the recovery of phosphate sands
from the deposit. In order to protect its rights and promote a
positive outcome to this process, Odyssey is pursuing a North
American Free Trade Agreement (NAFTA) claim against Mexico arising
out of arbitrary and discriminatory political interference in the
environmental approvals process for the project by Mexico’s
previous Secretary of Environment and Natural Resources. Odyssey is
confident in the merits of the project and of the environmental
soundness of its development plans. A copy of the Notice of
Intent (NOI) filed is available at
www.odysseymarine.com/notice.
The NOI, which was filed on January 4, 2019
prompted renewed and constructive dialogue with the Mexican
government. While Odyssey intends to vigorously pursue its claim,
it will also continue to promote a mutually beneficial outcome to
the case with Mexico through the pursuit of consultations.
“We continue to believe that a negotiated
settlement in lieu of continued litigation under NAFTA is in
Mexico’s and Odyssey’s best interests,” stated Mark Gordon, Odyssey
CEO. “But, if this is not Mexico’s desire we are prepared to
go the distance to ensure our shareholders realize their rightful
return on our investment.”
Prior to the NAFTA action, Odyssey had been
pursuing available domestic remedies, including through Mexico’s
Superior Tribunal Federal de Justicia Administrativa (TFJA) which
ruled in Odyssey’s favor on March 21, 2018. It was following
SEMARNAT’s October 2018 refusal to follow the TFJA’s instructions
that Odyssey turned to international recourse under NAFTA. Odyssey
will continue to ensure than any domestic steps it may take are
consistent with the ultimate goal of seeking project approval. Most
recently, on April 24, 2019 the TFJA declined to review ExO’s
domestic set-aside attempt on technical grounds, advising ExO that
a new and different procedure would need to be filed. Odyssey
will continue to take appropriate strategic decisions in light of
this most recent event.
In addition to Odyssey’s work on mission-aligned
mineral projects, the company has several legacy projects
continuing, including a shipwreck recovery project currently being
conducted under contract where Odyssey is paid for operations and
retains a portion of the back-end profits.
First Quarter 2019 Financial
Results
Net loss for the current quarter was $1.2 million,
or ($0.13) per share, compared to a loss of $1.7 million or ($0.21)
per share in the same period a year ago, an improvement of $0.5
million.
Total revenue in the current quarter was $0.8
million, a $0.3 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 and related parties. We provided
these services to our related party customer Magellan during both
of these periods as well as providing marine related services in
2019 to the deep-sea mineral exploration company, CIC.
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 $0.1 million from $1.4 million in 2018 to $1.3 million
in 2019 primarily as a result of (i) a decrease of $0.1
million of personnel expenses mainly attributable to share-based
compensation and employee compensation and (ii) a $0.1 million
corporate overhead decrease consisting of corporate legal support
and corporate administration support costs and (iii) an increase of
$0.1 million in maritime legal support.
Operations and research expenses primarily include
all costs within Marine Operations, Archaeology, Conservation,
Exhibits, and Mineral Research/Geology, which includes all vessel
and charter operations. Operations and research expenses increased
by $0.7 million from 2018 to 2019 primarily as a result of the
following items: (i) an increase of $0.1 million in marine labor
directly tied to the related incremental revenue and (ii) a $0.6
million increase of legal fees incurred in support of efforts
undertaken while we try to secure the environmental permit for our
Mexican subsidiary.
Consolidated financial statements as well as
Odyssey's Quarterly Report on Form 10-Q for the period ended March
31,2019, 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, 2018,
which was filed with the Securities and Exchange Commission on
April 1, 2019. 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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