Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in
the field of deep-ocean exploration, reported results for the
second quarter ended June 30, 2019, and provided an update on
current projects.
“Earlier this year, we articulated our business plan which
focuses on developing subsea mineral assets to create and realize
near and long-term value. To achieve this, we intend to continue
development of our own projects, acquire other mineral
rights/deposits and earn equity in deep-sea mineral projects
through our leveraged contracting model,” said Mark Gordon, Odyssey
Chief Executive Officer and Chairman of the Board. “We’ve made
significant progress on these goals so far this year, and we
continue to push forward.”
Odyssey recently announced the acquisition of a 79.9% equity
interest in Bismarck Mining Corporation (PNG) Limited. This company
owns an exclusive exploration license covering at least five (5)
prospective exploration targets within two different mineralization
types: seamount-related epithermal and modern placer gold. The
license area is adjacent to Lihir Island in Papua New Guinea, where
one of the world’s largest known terrestrial gold deposits is
currently being mined and processed. Bismarck’s license area
includes two subaqueous debris fields believed to have originated
from the same volcanogenic source that is currently being mined on
Lihir.
Odyssey’s previous exploration work in this license area
indicates a strong probability of polymetallic resource with
commercially viable gold content in the license area. We are
already working to advance the value of this project by further
validating and quantifying the precious and base metal contact of
the prospective resource and expect to be have an expedition
working on site in early 2020.
“Our strategy also involves monetizing small percentages of our
holdings at various stages of development to provide funds for
additional development of new subsea mineral projects. We expect to
close a transaction in the third quarter where we will sell up to
one third of the 15% equity we hold in an early stage mineral
project for $1 per share up to a total of $5 million if fully
exercised,” continued Gordon.
“Our team also continues to work closely with our NAFTA counsel
on the claim regarding our ExO Phosphate Project in Mexico. We
expect the tribunal in the case to be constituted by the beginning
of next quarter. In the meanwhile, discussions with Mexican
government officials in pursuit of a mutually beneficial settlement
continue. We have entered into an agreement that provides
sufficient funding to support robust and sustained pursuit of this
action. The funding allows us to continue to focus corporate
funds on the development of additional subsea mineral
projects.”
Odyssey is also continuing to provide offshore
services to our shipwreck business partner Magellan Limited for a
range of services on a major shipwreck recovery project covering
multiple valuable targets..
Second Quarter 2019 Financial
Results
Net loss for the current quarter was $2.8
million, or ($0.30) per share, compared to a loss
of $0.6 million or ($0.08) per share in the
same period a year ago.
Total revenue in the current quarter was $0.8
million, a $0.3 million decrease compared the revenue in the same
period a year ago. The revenue generated in each period was a
result of performing marine research, project administration and
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
mineral-related services in 2019 to the deep-sea mineral
exploration company, CIC, LLC owned and controlled by our past
Chairman of the Board.
Marketing, general and administrative expenses
increased $0.1 million to $1.6 million for the three-month period
ended June 30, 2019 compared to $1.5 million from the same period
in 2018. There are several variances that resulted in this
increase from period to period variance. Personnel costs
decreased by $0.1 million due to lower employee and share-based
compensation, directors fees increased by $0.1 million as a result
of directors not receiving cash compensation in 2018, financing
related fees increased by $0.1 million, and there was an
increase in financing related fees, an increase of $0.1
million related to admiralty legal support and a $0.1 million
decrease in general corporate overhead.
Operations and research expenses increased by
$1.2 million from 2018 to 2019 primarily as a result of the
following items: (i) the prior period contained an extraordinary
gain related to the sale of marine assets for $1.0 million, (ii) a
$0.1 million decrease in mineral technical services and related
travel, (iii) a $0.1 million decrease in marine recovery labor and
(iv) a $0.4 million increase in legal fees.in legal spend.
Total other income and expense was $1.3 and $0.7
million in net expenses for 2019 and 2018, respectively, resulting
in a net expense increase of $0.6 million. This variance was
primarily attributable to an increase in interest expense of $0.5
million from recording the beneficial conversion feature tied to a
promissory note.
Consolidated financial statements as well as Odyssey's Quarterly
Report on Form 10-Q for the period ended June 30, ,2019, are
available on the company's website at www.odysseymarine.com as
well as at www.sec.gov
About Odyssey Marine ExplorationOdyssey
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.laura@odysseymarine.com
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