Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in
the field of deep-ocean exploration and project development,
reported results for the full year ended December 31, 2019, and
provided an update on current projects and future plans.
“In spite of the world-wide changes taking place due to
COVID-19, the Odyssey team remains fully engaged in moving projects
forward while working remotely,” stated Mark Gordon, Odyssey
Chairman and CEO.
“Over our 25-year history, Odyssey’s business plan has always
focused on developing high-value assets in the deep ocean that have
the potential to deliver asymmetric returns to our investors. As
such, our stock value has historically been uncorrelated to the
general market,” stated Gordon. “We currently have three
significant seafloor mineral projects in various stages of
development for critically important resources including;
phosphate, cobalt, nickel, copper, rare earths and gold. Our team
is hard at work advancing the value creation of these projects and
we have the real potential for significant progress in one or more
of these assets that we hope to be able to report upon soon.”
“Our prime focus remains bringing our Exploraciones Oceánicas
Phosphate Project into production for the benefit of both our
shareholders and the people of Mexico,” Gordon continued. “This
project holds the key to helping President Andrés Manuel López
Obrador realize his stated vision of achieving fertilizer
independence and food security for Mexico. Given the current
pandemic and recent drop in oil prices with the resulting
devaluation of the Mexican Peso, the realization of President López
Obrador’s vision for fertilizer independence is more important now
than ever.”
“While productive talks with senior leaders in Mexico to develop
a mutually beneficial outcome for this project continue, Odyssey
must pursue the NAFTA case launched last April to protect
shareholder rights on the phosphate project. The Arbitral Tribunal,
consisting of three international arbitrators well-versed in
international investment treaties, has been constituted and the
parties are now in the process of finalizing the arbitration
schedule and procedures with the Tribunal”, Gordon explained. “We
have been working and will continue to work with the legal team on
the preparation of the First Memorial, which we expect to file in
the second quarter. This is the filing that lays out our case,
witnesses and evidence for the Tribunal and at the present time we
have been advised that we should not expect any impact to our
planned filing date due to the pandemic.
“We intend to continue to work diligently and in good faith with
Mexico’s current administration to achieve an equitable resolution
of this dispute and to help Mexico provide fertilizer to its
farmers, but we are prepared to proceed with the full NAFTA
arbitration process if necessary, and have recently received
increased litigation funding specifically to support this
case.”
Additional information about the NAFTA case is available at
www.odysseymarine.com/NAFTA and additional information about the
deposit is available at www.exploracionesoceanicas.mx.
Odyssey’s subsidiary, Exploraciones Oceanicas, S. de R.L. de
C.V. (ExO), holds a 50-year mining license on an area in
Mexico’s Exclusive Economic Zone that contains one of the largest
and most important phosphate deposits to be discovered in the
world. On the basis of substantial exploratory and coring activity,
independent experts estimate the deposit to contain at least 588
million tonnes (measured, indicated and inferred) of phosphate ore
- enough to supply the fertilizer needs of North America for 100+
years. It is believed the resource estimate will dramatically
increase when further coring is completed as some prior cores ended
in full mineralization and additional areas of the license area
have not been fully sampled. The deposit is at a depth of 70-90
meters and is 25-40 kilometers from the coast of Mexico. With
little to no overburden, the phosphate ore can be recovered using
existing dredging technology that has been used in Mexico for over
20 years.
“In addition to moving full speed ahead on the NAFTA case, we’re
also continuing to develop new subsea mineral deposits. We’re
planning offshore operations in 2020 on our Lihir Offshore Gold
Deposit to acquire data that will be used in the production of a
resource estimate, environmental impact assessment and eventual
mining plan,” explained John Longley, Odyssey President and COO.
“We have high expectations for this project due to earlier work
conducted by Odyssey in the area and its close proximity and
adjacency to one of the world’s highest producing gold deposits
currently being mined on Lihir Island by one of the world’s largest
gold mining companies, Newcrest Mining.”
Odyssey owns approximately 80% of Bismarck Mining Corporation
LTD (PNG), the company that holds an exclusive exploration license
covering approximately 320 square kilometers of subsea area off
Lihir Island. This license area contains at least five prospective
exploration targets in two different mineralization types:
seamount-related epithermal and modern placer gold.
Previous exploration expeditions in the license area, including
a survey conducted by Odyssey, indicate a polymetallic resource
with commercially viable grade gold content may exist.
Additionally, the two subsea debris fields within the area and
adjacent to the terrestrial Ladolam epithermal gold deposit are
believed to have originated from the same volcanogenic source that
is currently being mined on Lihir.
“While pushing forward on our business plan, we are also
carefully managing expenses and cashflow. While expenses look
higher comparing 2019 to 2018, the cash required was reduced.
Nearly four million dollars in expenses related to NAFTA was funded
through our $10 million litigation funding agreement and nearly one
million of the difference related to a gain from a one-time
equipment sale in 2018,” Gordon noted.
“We will continue to manage cash and secure
funding to the minimum extent necessary to reach a settlement or
award in the NAFTA case as we expect that will bring a significant
increase in Odyssey’s valuation. Odyssey has a long-proven history
of successfully funding our business through many different market
conditions and we also have various opportunities to fund
additional development of our projects,” continued Gordon. “Our
strategy includes monetizing small percentages of our project
ownership at various stages of development and we also have the
potential of a multi-million dollar payment to Odyssey in 2020
relating to a previously completed shipwreck recovery.”
Odyssey is also continuing to provide a range of
offshore services on several strategically significant deep-ocean
projects. These activities generate a combination of cash inflows,
debt reduction and project equity accumulation.
2019 Financial Results Total
revenue in 2019 was $3.1 million, a $0.2 million decrease from
2018. The $0.2 million decrease is comprised of a $0.3 million
increase in increased marine mineral support services for CIC and
an increase in other marine services offset by a $0.5 million
reduction related to Magellan’s offshore marine services. CIC is a
mineral development company working in the South Pacific.
Marketing, general and administrative expenses decreased $0.2
million from $5.7 million in 2018 to $5.5 million in 2019. This net
decrease of $0.2 million was primarily due to (i) a net decrease of
$0.8 million in personnel expenses attributable to regular,
incentive and share-based compensation, (ii) an increase of $0.9
million of equity-based director compensation at the corporate and
subsidiary level (the corporate directors did not receive any cash
compensation in 2018), (iii) a $0.1 million decrease in corporate
legal support and professional services and (iv) a $0.2 million
allocated reduction of corporate overhead support.
Operations and research expenses were $7.9 million in 2019
compared to $3.7 million for the same period in 2018. The variance
of $4.2 million was primarily due to (i) a $3.7 million increase in
legal related support of our NAFTA arbitration with the government
of Mexico to assure the fair treatment of our foreign investment,
(ii) reductions of $0.1 million and $0.3 million in operational
support services and depreciation, respectively, and (iii) a $0.9
million gain on sale of marine equipment that occurred in 2018, but
not in 2019.
The net loss for 2019 was $10.4 million or $ 1.12 per share.
Consolidated financial statements as well as
Odyssey's Annual Report on Form 10-K for the period
ended December 31, 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, 2019, which was filed with
the Securities and Exchange Commission on March 30,
2020. 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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