Sunken Treasure Could Save Odyssey Marine Exploration From Shorts

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Meson Capital Partners LLC, headed by Ryan Morris, has been shorting Odyssey Marine Exploration Inc (NASDAQ:OMEX) since the end of October last year, and it looks like the hedge fund has a new claim to investigate. OMEX says that it brought up nearly 1,000 ounces of gold during a preliminary dive to the wreck site of the SS Central America, and OMEX thinks there could be another $86 million left to be salvaged, reports Liezel Hill for Bloomberg.

“Gold ingots and other artifacts were clearly visible on the surface of the site during the dive and no excavation was required for their removal,” the company said in a statement.

Odyssey Marine Exploration: Original salvager now a federal fugitive

Odyssey Marine Exploration Inc (NASDAQ:OMEX) isn’t the first company to try to retrieve gold from the wreck site. Previous operations between 1989 and 1991 pulled in two tons of gold after the Columbus-America Discovery Group found the ship that had been lost since 1857. Their haul was worth more than $100 million, but it led to claims from a number of insurance companies who had paid damages when the ship originally sunk. Columbus-America was eventually awarded the bulk of the gold.

But Columbus-America head Tommy Thompson allegedly never paid his crew more than $2 million he owed them and never sent his investors a dime. He is now a federal fugitive and his former company has been put into receivership. Odyssey Marine Exploration Inc (NASDAQ:OMEX) became involved when the court-appointed receiver Ira Owen Kane offered OMEX a large percentage of whatever remaining salvage it can find to complete the project.

SS Central America salvage is a setback to Meson Capital short

Meson Capital’s short thesis is largely based on the argument that Neptune Minerals Inc, which Odyssey Marine Exploration Inc (NASDAQ:OMEX) claimed as $108 million in off balance sheet value, is actually insolvent with cumulative losses of $49 million and $25 million in losses in 2013 alone. Meson Capital also says that many of the shipwrecks that OMEX is likely to salvage were blockade runners carrying Nazi war loot that OMEX won’t be able to hold onto.

The SS Central America salvage is a different matter entirely. Since Odyssey Marine Exploration Inc (NASDAQ:OMEX) got the job from the court appointed receiver and insurance companies have already fought for their share of the gold, there shouldn’t be any outstanding legal challenges. Also, it’s known that the original operation didn’t recover all of the gold that the ship originally carried (though how much is recovered is still an open question). IF OMEX’s estimate is accurate, it will be a big strike against the Meson Capital short.

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About the Author

Michael Ide
Michael has a Bachelor's Degree in mathematics and physics from Boston University and Master's Degree in physics from University of California, San Diego. He has worked as an editor and writer for several magazines. Prior to his career in journalism, Michael Worked in the Peace Corps teaching math and science in South Africa.

6 Comments on "Sunken Treasure Could Save Odyssey Marine Exploration From Shorts"

  1. Early recovery results are well beyond our expectations. We’ve already recovered over $100,000 in 1857 face value of ingots and other gold
    including rare natural nuggets, jewelry and a wide array of different coins. The collection we have recovered to date represents an amazing
    cross section of the type of wealth that resulted from the California gold rush, and coupled with the excellent methodical archaeological work
    our team is conducting, will contribute a great deal to the historical record.
    Based on estimates provided by the independent expert hired by the court-appointed Receiver, this gold recovered to date represents a small
    fraction of his best estimate of what remained on the site. Now that we’ve completed recovery of most of the gold and valuable artifacts on the
    surface outside the hull structure, we’re starting on the excavation inside the hull itself. Ingots, gold nuggets, dust and coins have been coming
    up from this new excavation area daily, so we are off to a great start on this project.

    Is this the treasure that doesn’t exist?

  2. If there is no treasure as you say then why are we seeing Odyssey Marine bringing up Gold bars and coins. Why would Columbus America Discovery Group try to sue to get the gold Odyssey is recovering if there is that little of it?

  3. Odyssey never claimed there was a secret army cache. The $85M upper estimate assumes that there is no such cache. Only 3rd parties ever mentioned such a cache as a possibility. Regarding #8, Bob Evens, who was involved in every aspect of the first recovery and is now on board the Odyssey Explorer, stated that the site is undisturbed from his last visit. Not too surprising given that the wreck is a mile and half deep underwater.

  4. From Meson Capital’s March report that fully and without question debunked the SS
    Central America:

    After
    extensive analysis of the SS Central America and the seeded claims of a secret
    Army gold cache, we conclusively know that no secret cache exists.

    1. I
    spoke with credible deep sea archaeology experts directly involved with the SS
    Central America case for over two decades and they universally dismissed the
    notion of a secret Army cache.

    2.
    Tommy Thompson’s best friend and expedition ship mate stated without question:
    there was never a secret army treasure on board.

    3.
    Multiple Judges and official court documents conclusively dismiss the
    possibility of a secret cache.

    4.
    Direct source materials from 1857 we obtained also clearly prove there is no
    secret Army cache.

    5.
    SS Central America estate’s own internal expert analysts show the SS Central
    America has no Army cache.

    6.
    Eyewitness direct quotes from 1857 of Captain Herndon of SS Central America
    also clearly demonstrate there is no Army cache.

    7.
    SS Central America tried to both raise their own money to excavate this
    treasure with their own crew directly experienced on the site and were not
    successful. They also explored selling the project outright with no success as
    well.

    8.
    Even if there was anything of value left below, it would have been long ago
    stolen by other salvors the SS Central America estate knows have been going
    after the treasure while their insolvency has left the site defenseless and
    without oversight for over 5 years.

    9. Even if an army
    gold cache existed, it would lead to a repeat of the “Black Swan” fiasco as
    there is no statute of limitations on government property under maritime law
    and the shipment would be forfeit like in the “Black Swan” case.

  5. OMEX WINS YOU LOSE | May 5, 2014, 6:37 pm at 6:37 pm |

    Nice comment, Ryan. You’re such a tool….have fun in the pokey after LEI, OMEX and a host of others sue you into oblivion. :P Maybe you will luck out and get to work on a prison farm that uses fertilizer made by OMEX’S upcoming phosphate ventures…that way you can be reminded every day that you were on the wrong side of history on everything your slimy hands touched.

  6. Meson Capital already debunked this treasure: http://seekingalpha.com/article/2083453-no-secret-army-gold-on-the-ss-central-america-short-sale-profits-to-go-to-charity

    Odyssey Marine has disappointed on 100% of past projects, this will be no different

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