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Shares of Odyssey Marine Exploration, (NASDAQ:OMEX), rose this week after the airing on the Discovery Channel of the show "Silver Rush" which highlighted the company's attempt to work on three shipwrecks in ninety days during the summer of 2012. Those wrecks were the HMS Victory, the most powerful British warship of the early eighteenth century sunk by a storm in 1744 carrying a possible fortune in gold. The SS Gairsoppa, a British cargo ship sunk in 1941 carrying at least 100 tons of silver, and the SS Mantola, a British steamer sunk in 1917 carrying an estimated 22 tons of silver.

The program ran like a reality show and astute shareholders knew ahead of time how the story would end, despite the fact that producers changed the timing of certain events so the program would end with a flourish. Most of the show was a review for shareholders, recapping events from last summers' recovery efforts but it was nice to actually see how the technology worked of opening metal decks at a depth of 15,000 feet.

Odyssey recovered 48 tons of silver ($43 million) from the Gairsoppa before the weather shut down operations for the summer. This figure amounts to less than half of the amount that was insured and documented as being on board. Odyssey plans to go back this summer and recover the remaining 65 tons of insured silver with the possibility of finding a large amount of uninsured silver as well. Then they will move on to the Mantola and search for the $20 million of silver reported to be there. Finally, OMEX is scheduled to begin salvaging several other commodity wrecks now under contract.

If you are one of Odyssey's new shareholders that may have rushed out after watching the show and bought shares of this company that looks for treasure in both old and new shipwrecks, you may not realize that there are some additional assets the company has; some hidden or new enough they caught older investors by surprise. And these assets have nothing to do with shipwrecks. Odyssey has large equity investments in other speculative companies that hold the potential for a huge reward and these investments have recently seen some increasingly positive news.

The first is Neptune Minerals, a Nevada based company involved in seafloor massive sulfide mining for gold, silver and other valuable minerals. They hired Odyssey to do some underwater surveying and paid them with both cash and stock leaving Odyssey owning 6.2 million shares of this privately-held company. Using the last figures available from a private placement, Neptune was valued at $17.50 a share, placing Odysseys' stake at well over $100,000,000. Odyssey carries that value on its books at the sum of $1.00. Neptune Minerals was the last we were told, conducting underwater drilling sampling in some of its huge tracts in the Pacific Ocean and once completed, those samples will be evaluated by an independent surveyor to get an appraisal of what those undersea mining claims could be worth.

Next, was an announcement this week by Odyssey of a 77% ownership in another seafloor mining company called Oceanica Resources, a Panamanian company. Out of the 77 million shares in Oceanica owned by Odyssey, they are selling 10m of those to an outfit named Mako Resources for ten million dollars, with an option to sell 5 million additional shares to raise money for the 2013 summer operations. This equity stake was previously undisclosed or the result of a just completed equity swap for services. Shareholders should learn more about the Oceanica deal shortly. The bottom line is that Odyssey is invested even more than shareholders knew in seafloor mining. Shareholders should appreciate that this summer's recovery might be financed without a share dilution.

Even better news could be on the horizon for Odyssey shareholders with the recent announcements from another seafloor mining operation that Odyssey is involved with. That company is Chatham Rock Phosphate, (CRP.NZ) a New Zealand company trying to become a pioneer in mining phosphates from the ocean floor 280 miles off the coast of New Zealand. For an overview of this investment see the article written by Miles Williams. Chatham has been busy lately and shared several positive press releases. In one from December 2012, the company said that based on their analysis of studies using reactive rock phosphate or RPR, (the kind that would be mined off the coast) as fertilizer on fields in New Zealand that RPR would be better for the environment. Chris Castle, CEO of Chatham noted:

CRP has evaluated some of the studies undertaken which compare the use of rock phosphate and super phosphate on New Zealand and international farmland.

They show that when applied directly reactive rock phosphate (RPR) is both a very effective sustained release fertiliser and resistant to leaching.

The findings of the studies - some of which go back several years - are supported by Dr Bert Quin, probably New Zealand's pre-eminent expert on the use of rock phosphate as a fertiliser, who first conducted extensive field trials while working as a scientist for government agencies during the 1980s.

Dr Quin believes nutrients continue to enter waterways from agricultural land, simply because of the type of fertilisers we use. He says the traditional fertilisers used in New Zealand have been single superphosphate ('super'), which supplies phosphorus and sulphur, and urea for nitrogen.He says their biggest problems are that they are 'leaky' fertilisers.

Mr. Castle noted in another release that cadmium levels in RPR are "among the lowest levels known," and because "excessive levels of cadmium in food can have implications for human health," this is another positive in the promotion of using RPR mined from the off-shore resource.

The second big piece of news shared by Chatham was that Netherlands based, Royal Boskalis Westminister NV, a world-leading ocean dredging company partnering with Chatham on this sea-floor project announced last week they are "considering spending 'hundreds of millions' on a ship capable of mining a phosphate bed . . . off the coast of New Zealand." This is reliant of course on Chatham obtaining the necessary permits. For a company such as Boskalis to be seriously considering an investment of this magnitude is significant news and shows the possibilities that Chatham could be on to something big. It also bodes well for Odyssey which owns 9.3 million shares and one might think that success by Chatham could influence the value investors place on other seafloor mining companies.

As Mark Gordon, President and COO of Odyssey stated in a presentation to the Craig-Hallum group last September, sea-floor mining could in the future become much more important to the company than shipwreck recoveries. If true, the Street might have to apply a higher multiple to OMEX than the one that views Odyssey as a one-trick pony focused on historic shipwrecks.

Risks

At this point OMEX remains a highly speculative investment and any investor should understand that the company has a record of underperforming. As illustrated in the program Silver Rush, many pitfalls await anyone trying to recover treasure from the bottom of the ocean, including but not limited to, the weather, equipment failures and politics. OMEX lost a $500 million recovery last year to Spain after the country sued over a treasure Odyssey recovered in 2007. Spain successfully argued the ship was the frigate Nuestra Señora de las Mercedes and under the law of sovereign immunity, had never lost possession of it. (No matter that it had rented itself out as a merchant ship by hauling treasure and other cargo). Obtaining the necessary permits for seafloor mining adds to the speculative nature of an investment in OMEX but I like the fact that they are diversifying away from a reliance on historic shipwrecks as their primary business. If you are a new shareholder, know there are some huge potential rewards but many risks still remain.

Disclosure: I am long OMEX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Odyssey Marine: Full Of Surprises