SSCA Inventory Unsealed: Confirms Disappointing Salvage, Meson's Estimates

| About: Odyssey Marine (OMEX)


SS Central America inventory matches Meson estimates posted July 10: ~5,000oz gold total, ~70/30 ingots/coins. ONLY ~150 1oz coins found in last month of work.

Fifth Third credit line borrowing capacity should max out at $7mm unrestricted cash now, confirms Meson estimates made July 10.

Project now appears incrementally unprofitable for further salvage, seems unlikely Odyssey Explorer will revisit the site.

Appears OMEXs only hope of surviving August is Oceanica’s roadshow but EIA still not filed and environmental opposition in Mexico is extremely strong due to undisclosed overlapping fishing concessions.

The court has just unsealed the inventory of Odyssey Marine Exploration (NASDAQ:OMEX)'s latest SS Central America inventories. Some news sources have just recently picked up on this but are not reporting the precise numbers found in the documents. As usual, we are bringing you transparency before the company itself, as the results confirm a recovery well below OMEX's stated expectations of 80k+ oz of gold, coming in at 5,000oz.

As a refresher there have been 4 salvage trips: April 15 ("2 hour dive"); May 8-13; May 19-June 12, and the most recent June 19-July 15 (which does not yet have a status report except what we reported July 10: only a few small containers. All of these containers would easily fit into the trunk of a small vehicle)

The key court documents:

1) Status Report For April 15-May 15

2) Inventory Sheet for April 15-May 15

3) Status Report May 15-June 19

4) Inventory Sheet for May 15-June 19

5) Inventory Sheet for June 19-July 15 (JUST FILED TODAY: only salvaged ~200 Double Eagles total)

Summarizing the findings

As we know from the documents, gold was $20/oz when the ship sank so the "face value" reported in dollars can be used to calculate the total oz of gold. We also know that the Fifth Third credit line allows borrowing $2,000/oz for double eagle coins (1oz) and ½ the appraised value of ingots (we will conservatively also estimate these at the same value as coins so $2,000/oz for borrowing against those). After the first $5mm borrowings, the collateral requirements double to $1,000/oz borrowing capacity.

Note there are numerous other non-gold artifacts but the gold is all that can be borrowed against on the credit line. Given that these artifacts will not be sold for a very long time and the trustee does not have to worry about rapid cash burn to pay executives that OMEX does, they will likely take their time to sell them in an orderly way to maximize profits to the estate, perhaps over the course of 2 years, but who knows.

The point is the only source of cash for OMEX is the borrowing against these on the credit line. We believe Fifth Third has made a grave error lending against these assets as they are not within OMEX's control to liquidate, but that is their issue, not shareholders…

soure: court docs, meson est

Based on the new data (in green) we can confirm our estimates posted July 10th of an extra $2.7mm unrestricted cash availability vs May 15th on the credit line. If cash burn is still at $3mm/month then cash should hit zero (with liabilities at $18.5mm in the first week of August, about 2-3 weeks from today).

As you can see from the data, the total salvage per day of searching has been on a steady decline, which makes sense as treasure is not a renewable resource. We further believe that this latest trip was likely to be unprofitable given the initial indications that the salvage was minimal and it is likely the Odyssey Explorer will not revisit the site as the expenses (estimated $60k/day all in - vs $100k/day cash burn at the company overall) will not be covered.

source: court docs, meson estimate

Summary Table from key documents

Presented for your convenience from the 2 activity reports above. Note for the pure gamblers out there they did not find any trace of "Army Gold" though they did in fact find a safe which held a handful of gold wrapped in cloth…

source: omex court docs

Oceanica is now apparently on a roadshow - last and only hope to have cash for OMEX past August

Thanks to Green River, as usual, sharing his nonpublic information that he likely received from OMEX, it seems Oceanica is in the middle of a roadshow to raise money.

source: green river sa

Source: Green River Asset Comment July 9

As we previously discussed on July 8th, Oceanica still has not filed its EIA and any cash raised will likely simply be funneled out to pay OMEX compensation at the parent company.

In fact, we have learned quite a bit more about Oceanica as people in Mexico reach out to us to share the chaos that is happening with the project. We will share more on this in the near future but the project appears to be completely unraveling and has hit a wall of environmental resistance. In fact, it appears that OMEX didn't even have the proper permits to perform the drilling core samples!

A sample of the powerful environmental resistance in the local Mexican media (which of course has not been disclosed by OMEX):









Disclosure: The author is short OMEX. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Ryan Morris, President, Meson Capital, has pledged to donate his personal profits from OMEX short sales to charity. Full disclaimer at

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