Doc and others interested...
This was just published on GibFocus
http://www.gibfocus.gi/details_headlines.php?id=1322
I think you will find it very interesting and maybe a bit telling. Interpret as you will.
<------>
HMS Sussex treasure worth only $500 million NOT $4 billion company tells shareholders
HMS Sussex treasure worth only $500 million NOT $4 billion company tells shareholders
Following this weekends disclosure that some 500,000 silver coins weighing more than 17 tons, hundreds of gold coins, worked gold, and other artifacts were transferred by Odyssey Marine Exploration to the US the company has stated that it has met Salvage Law and the Law of the Sea Convention.
As the Spanish Government has raised its suspicions over the latest finding Odyssey Marine Exploration this weekend stated that ?all recovered items have been legally imported into the Unites States and placed in a secure, undisclosed location where they are undergoing conservation and documentation.?
In a statement issued this weekend they claimed that the treasure had been ?recovered in conformity with Salvage Law and the Law of the Sea Convention, beyond the territorial waters or legal jurisdiction of any country. The Company does not believe that the recovery is subject to sovereign immunity by any nation pursuant to the Law of the Sea Convention.?
Further adding that ?the work accomplished to date on this site has diligently followed archaeological protocols using advanced robotic technology, and the artifacts are now undergoing a meticulous conservation process by some of the world's most experienced coin conservators.
?The Company is not prepared to disclose the possible identity of the shipwreck at this time, and may only do so after thoroughly examining the artifacts, analyzing the research and proving the identity, if possible, of the shipwreck.?
John Morris, Odyssey Co-founder and CEO said "Our research suggests that there were a number of Colonial period shipwrecks that were lost in the area where this site is located, so we are being very cautious about speculating as to the possible identity of the shipwreck. Nevertheless, we have treated this site with kid gloves and the archaeological work done by our team out there is unsurpassed. We are thoroughly documenting and recording the site, which we believe will have immense historical significance."
"The remarkable condition of most of the first 6,000 silver coins conserved has been a pleasant surprise, and the gold coins are almost all dazzling mint state specimens." said Greg Stemm, Odyssey's Co-founder. "We are excited by the wide range of dates, origins and varieties of the coins, and we believe that the collecting community will be thrilled when they see the quality and diversity of the collection."
Just as the discovery was being made public Odyssey Marine Exploration, Inc. held its annual general meeting.
At the meeting the company updated its stakeholders over various issues such as the latest status of the HMS Sussex project.
Amongst the details provided to stakeholders includes claims that Odyssey is currently waiting for the archaeological staff to be selected and scheduled before resuming operations on the site believed to be HMS Sussex.
The claims came hours before the Spanish Government has ordered the Guardia Civil to start and investigation against the companies latest finding.
Surprisingly in its question and answers to stakeholders the company has admitted that the $4 billion value which has been tagged on the HMS Sussex treasure value could be an overestimation. The company admitting that the actual value is likely to be of some $500 million. The estimated figure is similar to that provided for the value of the Black Swan Project, which has been valued at $500 million by the company as it disclosed details over the findings.
At the Annual General Meeting Odyssey Marine Exploration provided the following information to its shareholders:-
Annual Stockholder Meeting 2007
QUESTIONS AND ANSWERS Odyssey Marine Exploration has prepared the following document for the Company's 2007 Annual Meeting. Due to time constraints of the meeting, and Odyssey's intention to share information conveyed at the meeting with all shareholders, the Company has prepared this series of questions and answers about the Company.
If you have a question not addressed in this document, please contact Odyssey's Investor Relations Department directly at (813) 876-1776 x 2553 or Investor Relations.
NOTE: Odyssey Marine believes the information set forth in this document 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, 2006, which has been filed with the Securities and Exchange Commission. You may access the Company's filings via
www.shipwreck.net.
PROJECTS AND OPERATIONS
1. Why don't you provide more operational updates?
We do understand that shipwreck exploration is fascinating and that shareholders and the general public want to share in the excitement as well as make informed investment decisions. However, for security, competitive and political reasons, we may not comment or disclose information on some projects until they are completed. As our relationships with governments become more complex, it does not benefit the Company (and therefore shareholders) to disclose ongoing operational details.
We provided notice of our intent to reduce the amount of information available to the public about some of our ongoing operations in our Annual Report on Form 10-K for the year ended December 31, 2005, and we continued to make statements reconfirming our disclosure policy on projects in public filings and press releases with language similar to the following:
"In order to protect the identities of the targets of our planned search or recovery operations, in some cases we will defer disclosing specific information relating to our projects until we have located the targeted shipwreck or shipwrecks and determined a course of action to protect our property rights. "
2. What is the status of the Sussex project?
The Company has an exclusive partnering agreement with the Government of the United Kingdom for the archaeological excavation of HMS Sussex, a large British warship that sank in 1694, and which remains the property of the United Kingdom. On March 23, 2007, the Spanish Ministry of Foreign Affairs issued a press release to announce agreement between Spain and the United Kingdom for Odyssey to proceed with the Alboran project, which includes preliminary phases of excavation and identification of the site believed to be the Sussex as well as a survey of the area in which the shipwreck lies. As part of this agreement, Odyssey has agreed to provide information relative to other shipwrecks in the surrounding area to the Spanish Government to assist in their protection and preservation. The Company has already completed all work detailed in Phase 1 A of the Sussex archaeological project plan (
www.shipwreck.net/sussexpp.html), as well as portions of Phase 1B, to the satisfaction of the Government of the United Kingdom. Odyssey is currently waiting for the archaeological staff to be selected and scheduled before resuming operations on the site believed to be HMS Sussex.
2 a. Is the site really the Sussex?
While we do not have absolute evidence (such as an engraved bell) that proves the site is that of HMS Sussex, all work done to date suggests that the site is that of the Sussex.
The site is consistent with reports of the sinking location and wreck site features are consistent with those expected to be found on a late-17th century Royal Navy warship of Sussex's type. Odyssey has conducted extensive research, completed all work detailed in Phase 1A and portions of 1B of the Sussex archaeological project plan. According to our archaeological team work and testing done to date reveals information consistent with what would we would expect to find on the Sussex shipwreck site.
No information or evidence gathered to date rules out the site as being a warship of HMS Sussex's period, nationality, and type.
2 b. Some say the site is too small to be the Sussex?
As stated on page 11 (and repeated on page 18) in Odyssey Marine Exploration's Abridged HMS Sussex Project Plan available to the public,
"....the observed wreck mound measures 33 meters in length and 12 meters in width... . the mobile sediment at the Site prohibited accurate survey of the surface features ... ."
The keel length of the Sussex was 39 meters and the beam of the Sussex was 12.5 meters wide.
It is apparent from the first phases of the investigation accomplished so far that there is a significant amount of buried material around the visible site and the site is larger than the visible mound.
(To view Odyssey's Sussex Project Plan, please visit
www.shipwreck.net/sussexpp.html )
2 c. Is the Sussex shipwreck really worth $4 billion?
Odyssey has never claimed that the Sussex is worth $4 billion. A New York Times article in February 2002 first suggested a theoretical value of up to $4 billion (
http://shipwreck.net/nytimes-feb232002.html.)
The number of $4 billion was set forth by the writer of the article, and was qualified as "APPARENTLY gold and silver coins IN THEORY worth up to $4 billion today" (emphasis added.)
This statement was based on the reporter's own analysis of the research, and is significantly higher than the Company's public estimates of theoretical numismatic value, which range from several hundred million dollars to $500 million or more. Of course, these numbers are theoretical numismatic values suggested by the Company's research, and the actual income that eventually accrues to Odyssey from this project could be significantly less because of marketing expenses.
Odyssey has multiple disclaimers both on its website as well as on all relevant print material that any content not originated or created by the Company is not the responsibility of Odyssey, but rather of the person who originated or created such content. For additional information please read the General Disclaimer posted repeatedly on Odyssey's website (this currently requires a setting to allow pop-up windows.)
2 d. Why did the British Government send coins rather than a Bill of Exchange? Are the coins on HMS Sussex gold or silver? What is the significance of the use of the term "Pound Sterling"?
Why did the British Government send coins rather than a Bill of Exchange?
There is significant archival evidence about hard money payments to Savoy. Bills of Exchange were generally not used in state-to-state exchanges such as this one. In addition, records make mention of "money" issued for the Fleet, not Notes or Bills of Exchange.
Presumably, if a "Bill of Exchange" was lost, presumably another would simply have been issued and the Duke of Savoy would have remained loyal to the cause of the Allies.
Are the coins on HMS Sussex gold or silver?
There is circumstantial evidence that the Allies, if indeed they sent this shipment of money, were countering an offer of "3 millions in money and 6 tunns of gold". The most efficient means of matching the initial offer would have been in the same form. In addition, based on comparative quantities and weight of coins, transporting gold was much more efficient from a logistic point of view.
Furthermore, at the time of the Fleet's voyage, silver was in very short supply, and England was actually passing laws making it a criminal offense to send silver abroad.
In any event, the actual modern day value of silver coinage would in all likelihood be greater if the cargo was silver, so to some extent this is a moot point.
What is the significance of the use of the term "Pounds Sterling"?
"Pound sterling" was the official government standard of value, regardless of the metal in the money or even which country's money was being counted. There were many different kinds of coins circulating in England in the 1690's, and such a "money of account" was the only practical way to help set a value on anything. Today "sterling silver" is a term of art for jewelry and metalsmithing, but that derives from later meanings and usages of silver money of a particular purity rather than "pound sterling."
According to the Oxford English Dictionary, the basic term derives from a silver Norman penny called (in different forms) a "sterling." A "pound of sterlings" eventually became the "pound sterling" money of account equal to 240 pence (OED terminology.)
In official writing, when a reference was made to "pound sterling," it was not related to any kind of coin of either silver or gold. It meant a specific value to ensure it always referred to the same thing.
3. Where are the Company's ships currently located and what are they doing at this time?
We do not comment on day-to-day specifics of our marine operations schedule, where our ships are or what they are doing. Given that the Company has now arrested three sites that require more extensive ROV operations, and archaeological work on the Sussex project is expected to resume when staffing is finalized, the Company's upcoming operational schedules will be developed to most efficiently utilize the Company's marine assets. The Company may, from time to time, also use charter vessels with our other search equipment and additional ROV systems, and use of these charter vessels may not be disclosed for security reasons. It is also important to note that the Company does not necessarily need to file an Admiralty arrest on a site prior to conducting a recovery operation.
4. What is the name of the vessel similar to Odyssey Explorer you purchased last year?
It remains our policy not to officially disclose or acknowledge the name of the vessel at this time for security reasons.
5. Can you share more about the recent arrests of two shipwrecks?
On April 9, 2007, Odyssey filed Admiralty arrests in the U.S. District Court for the Middle District of Florida on two sites, one in the Atlantic Ocean and one in the western Mediterranean. The Company plans to continue additional work on both sites. Until additional ROV surveys and further exploration can be completed, the Company is not prepared to confirm the identities of either site.
As Odyssey is in the shipwreck exploration business, filing arrests on shipwreck sites to protect our interests occurs in the normal course of business. For security reasons, we cannot comment publicly on either of these shipwreck arrests nor on any speculation raised by the arrests at this time. As Odyssey continues to search the oceans of the world, we expect to file additional Admiralty arrests in the future. On most of these, specific information regarding these shipwreck arrests will not be released at the time of the arrest filing.
6. With Sussex and three additional arrests in your portfolio, what are your project priorities going forward?
Our project priorities will be dictated by a number of factors, including optimum weather windows (periods during which marine operations are not highly likely to encounter severe sea conditions), political relationships, search or recovery breakthroughs, security, other shipwreck discoveries, ongoing research, equipment availability and needs for specific projects, projected cargoes, and marketability of cargoes.
Odyssey considers an enormous amount of non-public information when determining priorities, including confidential data on undisclosed projects.
One of the most important considerations is balancing weather windows and security with availability of our equipment. For example, on shipwrecks such as the Sussex (which are protected from competitors by our UK Government agreement and the weather allows year-round operations), we may alter our schedule in favor of projects which are not protected by sovereign agreements, or where we may have limited weather windows, such as in the "Atlas" area.
These decisions are often based on data which literally change day to day, and while we know that it is difficult to make investment decisions without specific information, it is up to management to decide whether disclosure of information could jeopardize the crew, ship or recovery operations on a project.
7. If you find one of your target vessels during the next search, and with the Odyssey Explorer located elsewhere, how will you excavate the find or finds?
Odyssey has the capability to work on several shipwreck recovery projects simultaneously with additional leased vessels and our other ROV systems.
8. Will you eventually return to the SS Republic?
In 2004, Odyssey received a default judgment by the U.S. District Court for the Middle District of Florida, Tampa Division granting the Company title and ownership to the SS Republic shipwreck and cargo, including the hull, all artifacts and the specie that was on board when the ship sank. The site is therefore protected from access by third parties, and Odyssey can return to the site if and when the Company decides to do so. This is, however, not on our currently planned operations schedule for 2007.
ATTRACTIONS
9. What do you expect of the SHIPWRECK! Pirates & Treasure exhibit at MOSI?
We are very excited to bring our traveling exhibit to our headquarters city of Tampa. We are currently preparing the Grand Opening of SHIPWRECK! Pirates & Treasure at the Museum of Science & Industry (MOSI). This multimedia exhibit will open on June 22, 2007 and run through January 31, 2008. We are using existing assets from our New Orleans show and have added an interactive Pirate exhibit. We are very pleased to be partnering with MOSI whose management is highly experienced in the development of traveling exhibits, and with whom we share common educational and cultural goals. We are already experiencing significant interest from the media and anticipate a lively response from the public.
10. Have you identified a new permanent location for your Shipwreck Museum yet?
After the closure of our New Orleans exhibit in September 2006, we continue to explore options and opportunities for additional attraction location(s). There are several different locations that have presented us with options that we are actively investigating.
FINANCIAL 11. Are you taking steps to reduce expenses in 2007?
We continue to review every area of our business to look for opportunities to reduce expenses without compromising the overall strategic business plan.
12. What steps are you taking to build your brand and improve sales?
To maximize the lifetime value of each shipwreck project to the Company, we aggressively build and pursue multiple sales channels to market an ever-growing range of products from shipwreck coins to jewelry, bottles, replicas, media, and merchandise, and we are laying groundwork for the marketing and media opportunities presented by new shipwreck discoveries.
We have begun to test a variety of advertising methods and mediums many of which are showing great promise and a positive return on our investment. We intend to increase our investment in 2007 for advertising programs that are demonstrating positive sales results with coins as well as bottles and other artifacts.
One recent step toward building increased brand recognition and boosting sales is the collaboration with several Fortune 100 marketing partners on highly visible campaigns centering around Disney's "Pirates of the Caribbean: At World's End" sequel that will give us exposure to millions of potential customers. Thanks to our excellent relationships with these marketing partners and the credibility we have built over the years, we were able to keep expenses for these campaigns extremely low.
Exhibits such as SHIPWRECK! Pirates & Treasure are also excellent vehicles to strengthen our brand, broaden our customer base, and market our treasures. As far as the traveling exhibit is concerned, our strategy is to work with established, widely recognized partner venues with which we share a synergistic market. This helps reduce overhead costs and increases visibility. As regards the permanent exhibit, we are focused on identifying high-traffic locations which attract consumers and tourists from diverse demographic and socio-economic backgrounds in order to target the broadest audience possible.
We also work with the media to give our Company greater exposure locally, regionally, nationally, and internationally. We have had numerous pieces of favorable media coverage and are working with media partners on various projects and documentaries portraying our work and our commitment to archaeologically sensitive marine excavation.
It takes time to build a healthy brand from within, and we are on a very promising track. There have been occasions where we could have compromised the long term value of the SS Republic and others in the pipeline by quick fixes and short-term cash flow opportunities, but we are confident that the path we are taking will help to build the foundation for a long-term strategy that recognizes the real lifetime value of customers, and the importance of enhancing the image associated with the Odyssey brand. And a strong brand translates into revenues and, ultimately, shareholder value.
13. How have coin sales been doing lately?
Coin sales are good. We continue to have significant activity within the collectible coin dealer category where we are distributing SS Republic gold and silver. Additionally, we are opening new channels for coin distribution, including expanded web sales, partnering with direct marketers of collectibles, and driving demand through targeted advertising. This has resulted in continuing demand of SS Republic coin products while creating sustainable sales volumes and velocity. We are pleased with the results and are continuing to conservatively grow our coin distribution channels.
MANAGEMENT
14. Can you explain the ongoing lawsuit in South Carolina over the SS Republic?
In December, 2004 a Complaint was filed in Charleston, South Carolina against Odyssey, John Morris, Greg Stemm, John Lawrence, John Balch, Daniel Bagley, and Seahawk Deep Sea Technologies, Inc. The Complaint was filed by Republic & Eagle Associates, Inc. and Sea Miners, Inc. and included allegations of breach of fiduciary duty, civil conspiracy and breach of contract.
It was based primarily upon a series of alleged contract(s) between the Plaintiffs and Seahawk dealing with the search for the SS Republic. The plaintiffs allege that their research which was provided to Seahawk led to the discovery of the SS Republic. They seek an unspecified amount of damages and public recognition of their contribution. Odyssey Marine Exploration has never had a business relationship nor any type of contract or agreement with the Plaintiffs. Odyssey did not use any information whatsoever provided by the Plaintiffs to discover the shipwreck of the SS Republic. The ownership of the SS Republic and its cargo was decided by the Federal Admiralty Court in 2004. Odyssey believes the lawsuit is without merit and intends to vigorously defend the action.
In February, 2005 the Defendants filed a Motion to Dismiss the Complaint. That Motion was initially granted by the Court on the basis of lack of personal jurisdiction, but upon a Motion for Reconsideration filed by the Plaintiffs, the Court reversed its ruling and denied the Motion to Dismiss. The Defendants intend to appeal the Court's denial of their Motion to Dismiss.
