Odyssey Marine Exploration, Inc. (NasdaqCM: OMEX), a pioneer in the field of deep-ocean shipwreck exploration, has acquired a minority interest in SMM Project LLC, a company funded by a group of investors to bring together the exclusive licenses and skills of world renowned deep-ocean geologist Dr. Timothy McConachy of Bluewater Metals, the deep-ocean survey and exploration expertise of Odyssey, and the offshore coring and mining expertise of Robert Goodden.

SMM Project LLC recently purchased a majority interest in Bluewater Metals Pty Ltd, an Australian company with licenses for mineral exploration of approximately 150,000 square kilometers of ocean floor in four different countries in the South Pacific. The group will focus on the exploration and monetization of gold and copper-rich Seafloor Massive Sulfide (SMS) deposits through a new business entity which will acquire the remaining interest in Bluewater, in accordance with a memorandum of understanding concluded between the parties.

It is anticipated that Odyssey will dedicate certain marine assets, including a ship and related marine exploration technology to the endeavor, and will own approximately 40% of the new entity. In addition, Odyssey is expected to provide proprietary expertise and personnel management to the entity under contract, and will supervise operations to explore for deep-ocean gold, copper and silver deposits in areas covered by exploration permits currently held by Bluewater Metals.

“This is a natural extension for Odyssey and leverages our core competencies in an exciting new deep-ocean field. Deep-ocean SMS exploration and mining is where offshore oil exploration was 50 years ago, and the challenges to date have mostly centered on lack of technical expertise to find and recover these extremely valuable deposits that have high concentrations of gold, copper, silver and other minerals. We have been monitoring this field for years and have finally decided that the time is now right - and we have found the right partners - to make our move,” stated Greg Stemm, Odyssey Chief Executive Officer.

“The Bluewater Metals team has done an outstanding job building relationships with governments and securing exploration permits in some of the most promising areas in the world for deep-ocean mineral deposits. We look forward to working with their team to maximize the revenue potential from high-value mineral deposits on the ocean floor. The opportunities in this arena are a perfect complement to our pioneering shipwreck exploration work. Interestingly, looking for SMS deposits is a lot like looking for barely discernable shipwreck ballast piles, and I don’t think there is a better team in the world for this kind of work than ours, ” continued Stemm.

“We’re excited by the possibilities of this new deep ocean mining venture, but we remain committed to our core shipwreck exploration goals,” said Mark Gordon, President of Odyssey. “Although we plan to dedicate certain marine assets and personnel to this exciting venture, we’ve become highly proficient at mobilizing our technical gear on ships of opportunity and therefore retain our full operational capability for our shipwreck projects. We’re planning a full schedule of shipwreck exploration for 2010.”

“We’re looking forward to exploring our permitted areas with the Odyssey team,” said Dr. Tim McConachy, Co-Founder of Bluewater. “We’ve been successful in securing exploration permits in areas that we believe are likely to feature valuable SMS deposits based on previous expeditions and years of detailed geological research. The next step is conducting the deep-ocean surveys necessary to confirm these deposits. Partnering with Odyssey, a company with proven deep-ocean expertise and capabilities is the best way to ensure our success and with Robert Goodden and his team’s involvement we are confident of successfully proof coring anything we find.”

About SMS Deposits

Seafloor Massive Sulfide (SMS) deposits are naturally occurring deposits which contain high concentrations of gold, copper, zinc, silver and other metals in relatively compact areas. Although possible anywhere new ocean crust is forming, the highest grade deposits have been found at convergent plate margins, especially in the South Pacific. These deposits are formed as cold seawater moves down through cracks in the seafloor and is superheated by the molten magma deep within the crust. The hot hydrothermal fluid rises to the surface, dissolving and leaching metals from the surrounding rock as it rises. When the hydrothermal fluid encounters the cold seawater, the metals and sulphur precipitate and accumulate on the seafloor as a SMS deposit.

About Bluewater Metals Pty Ltd.

Bluewater was co-founded by Dr. Timothy McConachy and Mr. Harvey Cook. Dr. McConachy is widely considered to be one of the world’s most knowledgeable geologists with respect to subsea mineral resources and exploration. He has previously served as Chief Geologist for one of the world’s largest mining companies, Rio Tinto, and as Head of Seabed Ore Systems for CSIRO, Australia’s national science agency. Mr. Cook is an Australia-based businessman with broad experience in the South West Pacific region.

Since its inception, Bluewater has been granted 46 exploration areas called “tenements” representing approximately 146,311 square kilometers of exclusive mineral exploration rights from the governments of Papua New Guinea, Solomon Islands and Tonga and non-exclusive mineral exploration rights from Vanuatu.

About Robert Goodden

Robert Goodden, a mining engineer, is an acknowledged expert in deep-sea coring and mineral exploration. He founded Seacore Ltd in 1975 and built the company into a world leader in marine geological and geotechnical drilling. Seacore Ltd was sold to the Fugro Group in 2006. Mr. Goodden personally retained Seacore’s marine mining interests and renamed the division of the company Subsea Minerals Ltd.

Mr. Goodden first became involved in SMS deposits in 2001 when he provided advice and oversight of the first two deep ocean drilling programs for Nautilus Minerals, a current leader in the SMS deposit industry. Since that time, Subsea Minerals has acted as a site consultant and drilling contractor to Nautilus. Goodden has been intimately involved with every commercial SMS core drilling project carried out to date, and together with members of his team, has amassed unique know how in remotely operated deep sea coring.

About Odyssey Marine Exploration, Inc.

Odyssey Marine Exploration, Inc. (NasdaqCM: OMEX) is engaged in the exploration of deep-ocean shipwrecks and uses innovative methods and state-of-the-art technology to conduct extensive search and archaeological recovery operations around the world. Odyssey discovered the Civil War-era shipwreck of the SS Republic® in 2003 and recovered over 50,000 coins and 14,000 artifacts from the site nearly 1,700 feet deep. In May 2007, the Company announced the historic deep-ocean treasure recovery of over 500,000 silver and gold coins, weighing 17 tons, from a Colonial era site code-named “Black Swan.” In February 2009, Odyssey announced the discovery of Balchin’s HMS Victory. The Company also has other shipwreck projects in various stages of development around the world.

Odyssey offers various ways to share in the excitement of deep-ocean exploration by making shipwreck treasures and artifacts available to collectors, the general public and students through its webstore, exhibits, books, television, merchandise, and educational programs.

Odyssey’s operations are the subject of a Discovery Channel television series titled “Treasure Quest,” which is produced by JWM Productions. The 12-episode first season aired in the US and the UK in early 2009 and is scheduled to air worldwide throughout 2009. Production on a second season is underway.

Following previous successful engagements in New Orleans, Tampa, Detroit, and Oklahoma City, Odyssey’s SHIPWRECK! Pirates & Treasure is currently on exhibit at Discovery Place in Charlotte, NC. Additional information is available at www.discoveryplace.org.

For details on the Company’s activities and its commitment to the preservation of maritime heritage please visit www.shipwreck.net.

Source

Deep-sea explorers based in Florida filed an objection Tuesday to a judge’s recommendation that they give 17 tons of shipwreck treasure back to Spain.

The dispute concerns the 200-year-old wreck of a Spanish galleon that carried thousands of silver coins and other artifacts estimated to be worth $500 million. The ship is believed to be the Nuestra Senora de las Mercedes y las Animas, which exploded in battle and sank in the Atlantic Ocean west of Portugal in 1804, claiming the lives of 200 people.

In June, a federal magistrate judge in Tampa issued a written recommendation, saying the wreck was likely the Mercedes and accepting the Spanish government’s argument that it had never expressly surrendered ownership of the ship and its contents.

But Odyssey Marine Exploration contends there isn’t enough evidence to confirm that the cargo it recovered came from the Mercedes. The company argues that if it is, the Mercedes was engaged in commercial activity when it exploded, which nullifies Spain’s sovereign immunity claim. Odyssey filed its objection Tuesday afternoon in Tampa federal court.

“We were disappointed in the initial recommendation, but we know that admiralty law is complex, and the facts of this case are unique,” Melinda MacConnel, vice-president and general counsel for Odyssey said in a statement. “We are confident that the facts and applicable law are in our favour.”

In its objection, Odyssey lists a number of arguments disputing the judge’s conclusion that the ship is the Mercedes and that Spain is the rightful owner of the treasure.

The company says eyewitness accounts state the Mercedes sank within view of land and that the ship was carrying between 33 to 50 cannons. The site where the treasure was found is not within view of land and only 17 or 18 cannons have been found, according to the objection. Nor is there any trace of burning among the artifacts, even though the ship exploded.

“Clearly, at a minimum this record evidence raises significant factual questions about the identity of the vessel related to the site,” the objection states.

Odyssey also claims the Mercedes was engaged in commercial activity when it sank. The group cites historical documents which show the vessel transported mail, goods and passengers for freight. Twenty-five descendants of people who privately owned and commercially shipped cargo on the Mercedes have also filed claims of interest.

“Most of the individual claimants purport to descend from individuals heavily engaged in the commerce between the Americas and Spain and who represented very powerful and wealthy merchant families,” the objection filed by Odyssey states.

Odyssey says the recovery is believed to be the largest collection of coins ever excavated from a deep-ocean site. The explorers previously discovered a Civil War-era steamer off the Georgia coast that yielded 51,000 gold coins and other artifacts valued at around $70 million.

Why are we asking this now?

Magistrate Mark A Pizzo, sitting in the US Federal Court at Tampa, Florida, might not be a major figure in international law but he has just made a potentially vital decision on the future of 3,000 treasure-laden shipwrecks that lie in the world’s oceans. Mr Pizzo ruled that an American marine archaeology company should return gold and silver coins worth £300m to the Spanish government after the bullion was removed from a sunken vessel in the Atlantic. Odyssey Marine Exploration removed the 500,000 coins, weighing 17 tonnes, in 2007 and flew them back to its Florida base from Gibraltar.

The move was greeted with fury by the Spanish government, which insisted the wreck was the Nuestra Senora de las Mercedes, a frigate which was sunk by the Royal Navy in 1804. Odyssey insisted there was not enough evidence to prove the site, which it called Black Swan, was the Nuestra Senora and, even if that were the case, the ship was on a commercial mission and its cargo could be legitimately recovered under salvage law and shared among salvors and claimants. Mr Pizzo dealt a serious blow to these plans when he issued a ruling that the sunken vessel was probably the Nuestra Senora and its glittering bullion should be returned in its entirety to Madrid. Odyssey has said it will appeal.

Why is a 205-year-old Spanish wreck so important?

The Nuestra Senora, whose sinking provoked war between Britain and Spain, goes to the heart of a debate about which shipwrecks can be explored and their cargoes retrieved. The 1989 International Convention on Salvage ruled that wrecks found in international waters were effectively there for the taking, requiring salvors to obtain “title” to the site which in most cases gives them ownership of whatever they can recover. But a key exception are the estimated 3,000 sovereign immune vessels which litter the world’s seabeds.

These state-owned ships, including all naval vessels, remain the inalienable property of their originating nation. The US judge decided that the Nuestra Senora was a sovereign vessel despite evidence that it was on a commercial voyage taking privately owned gold from Peru. Odyssey’s share value plunged on news of the ruling. If the recommendation is upheld on appeal, it could have major implications for the dozen or so underwater treasure hunting companies that have sprung up by obliging them to return their finds to government coffers.

Where have all these treasure hunters come from?

The marine archaeology business has been transformed in the past decade by the arrival of remote-controlled submersible robots which have allowed explorers to reach deep-water wrecks for the first time. Such exploration does not come cheap. The smallest remote operating vehicle (ROV), necessary for probing, photographing and retrieving artefacts from the sea bed, costs about £35,000. Odyssey operates a Land Rover-sized ROV called Zeus which cost up to £2.5m and is capable of picking up anything from a two-tonne cannon to a single coin as well as taking high-resolution photographs of a wreck site. Operating costs are vast – about £600,000 a month to run a fully-equipped survey ship.

Why aren’t these wrecks protected sites?

In theory, they are. The 2001 Unesco Convention on the Protection of the Underwater Cultural Heritage, which Britain has agreed to observe, bans the commercial exploitation of all underwater historical material and states that the preferred action is for all material on the seabed to be left in situ. But to date only 15 countries have formally signed the convention and 20 signatories are required before it can be enforced. Crucially, the convention also contains a clause which allows artefacts to be brought to the surface if they are likely to be disturbed or destroyed on the seabed.

So is this archaeology or piracy?

Shortly after Odyssey announced in 2007 that it had discovered (and relocated to Florida) the Black Swan treasure, its vessels were confronted by the Spanish navy and the country’s culture minister talked darkly of the need to “combat pirates”. Ever since debate has raged about whether the exploration of wrecks is serious archaeology or naked profiteering behind a veneer of hi-tech science. Koichiro Matsuura, director general of Unesco, said: “Technical progress in detection and diving and escalating prices on the international market for objects snatched from the deep have led to the loss of many particularly valuable archaeological sites. The problem is further aggravated by the overly prevalent view of such archaeological sites as “treasures” that can be discovered or appropriated.” Companies such as Odyssey insist there is a valid – and necessary – alternative. They insist that a rigorous archaeological examination of each wreck can be legitimately combined with a sale of surplus recovered artefacts such as coins or cannon to meet their running costs and turn a modest profit. Greg Stemm, the advertising executive turned founder of Odyssey, calls this “marrying archaeology with a business model”.

How much treasure is out there?

Nobody knows for sure but the figures are dizzying. To date, Odyssey alone has found four colonial and early 20th-century wrecks with bullion worth an estimated total of £1.8bn. The SS Republic, an American Civil War-era steamer discovered by Odyssey in 2003, has so far netted the company £29m in salvage fees and sales of artefacts including 51,000 gold and silver coins. The United Nations estimates there are anything up to three million shipwrecks around the world. Only a small proportion will hold valuable artefacts but Britain’s territorial waters alone hold cargoes worth an estimated £15bn.

Has any of this British booty been found?

Yes. Odyssey has located the wrecks of at least three British vessels – HMS Sussex, HMS Victory and the RMS Laconia, a steam liner sunk in the First World War. The Victory, the predecessor to Nelson’s flagship, was discovered last year with bullion estimated to be worth £700m on board. The Sussex, a 17th-century gunship, was sunk off Gibraltar with an estimated £300m of gold on board. The British government has struck a deal with Odyssey to share the proceeds of any gold found from the Sussex on a sliding scale designed to cover the salvors’ costs and then give most of the profit to the taxpayer. Odyssey is seeking similar deals with the Victory and the Laconia, raising questions about British government involvement in “treasure hunting”.

Why can’t these wrecks be left as they are?

Commercial archaeology companies say the image of the seabed as an undisturbed oasis of colonial galleons and corroding steamers is entirely wrong with fishing trawlers and plastic waste ruining countless archaeological sites. Mr Stemm, of Odyssey, said last month: “The English Channel is like a giant industrial wasteland. The devastation we have found flies in the face of policy which is to preserve wrecks in situ. We are saying that this cannot be done and the most important artefacts must be raised.”

Should deep-sea treasure-hunting be banned?

Yes

*Priceless archaeological sites are being plundered for profit rather than scientific study

*Sediment and the lack of oxygen under the sea preserves artefacts better than on land

*Shipwrecks are often submerged cemeteries, in many cases the last resting places of war dead

No

*If digging is permitted on land, then searching the seabed is equally valid to boost knowledge

*Wreck sites are being rapidly degraded by commercial fishing and discarded waste

*Multiple identical artefacts are of little archaeological value and should be sold to fund exploration

Source

Sea explorers probing the depths of the English Channel have discovered what they say is a legendary British warship that sank in a fierce storm in 1744, losing more than 900 men and possibly four tons of gold coins that could be worth $1 billion.

The team found the wreckage of the warship, the H.M.S. Victory, last year and confirmed its identity through a close examination of 41 bronze cannons visible on the sandy bottom, Gregory P. Stemm, head of the discovery team, said Monday at a news conference in London.

The team lifted two of the cannons from the seabed and gave them to the British Defense Ministry, he said. The team’s leaders are now negotiating with British authorities on the disposition of the artifacts and treasure before the divers attempt further recoveries.

“I’m surprised we’ve been able to keep it under wraps for nine months,” Mr. Stemm said at the news conference, calling the shipwreck “a momentous discovery.” He is the chairman and chief executive officer of Odyssey Marine Exploration Inc. of Tampa, Fla., a publicly traded company that specializes in deep-sea exploration and recovery.

In a telephone interview, Mr. Stemm said the discovery, made far from the ship’s believed resting place, was “hard to beat” in terms of raw history, lost treasure and solved mysteries. He said the find cleared the name of the warship’s commander, Adm. Sir John Balchin, whose navigation had been impugned after the catastrophic loss.

The news conference was held by the Discovery Channel, which plans to show a segment about the ship on Thursday on its weekly program “Treasure Quest,” which had its debut last month.

The Victory was armed with as many as 110 bronze cannons, making it one of the deadliest vessels of the age. The largest cannon weighed four tons and could fire cannonballs of 42 pounds — making it the most powerful gun then used in naval warfare.

In July 1744, the flagship Victory and a fleet of warships were sent to rescue a Mediterranean convoy blockaded by a French fleet at Lisbon. After chasing the French away, the Victory escorted the convoy as far as Gibraltar and then headed home.

A furious gale scattered the British fleet shortly after it entered the English Channel, and on Oct. 5, 1744, somewhere off the Channel Islands, Victory went down with all hands. The flagship was the only vessel of the returning British fleet lost at sea.

The belief spread that the ship had grounded on the Casquets, a group of rocky islets west of Alderney that protrude a few dozen feet above the water line. The rocks are called the graveyard of the English Channel. The lighthouse keeper of Alderney was charged with failing to keep its lights on at the time of the ship’s disappearance.

A month after the loss, a Dutch newspaper reported that Victory had been carrying from Lisbon £400,000 destined for Dutch merchants. At the news conference, the ship’s finders said that would amount to about four tons of gold coins.

In the history of the Royal Navy, Victory was the last warship to be lost with a complete set of bronze cannons. Their high cost eventually prompted the British Admiralty to replace them with iron cannons.

For two decades, Mr. Stemm and his colleagues have probed the deep sea, using sonar and robots to discover scores of interesting wrecks and thousands of artifacts. They have found treasures valued at hundreds of millions of dollars.

Last April, the Odyssey team was exploring the English Channel when its sonar registered an intriguing blip. Investigations with a tethered robot showed the seabed covered with cannons, hull remains, iron ballast, two anchors, rigging, a copper cooking kettle and 41 bronze cannons, including 8 of the four-ton guns.

“These were the biggest cannon in the age of sail,” Mr. Stemm said at the news conference. “These things are huge — simply amazing.”

Odyssey released a 46-page analysis of the wreckage. It said the distinctive cannons — many of which display royal arms surmounted by a crown — revealed their nationality and date of manufacture, and gave proof of the wreck’s identity. The powerful guns, the analysis added, made Victory “the pre-eminent warship of the age.”

At the wreck site, the Odyssey team also found human bones, including what appeared to be a rib bone, a skull and other remains. None were recovered, the analysis said, and the team’s robot carefully reburied any that had been uncovered.

Odyssey is keeping secret the exact location of the wreck, but the company said Victory was found beyond the territorial waters of Britain and nearly 62 miles from where the ship was believed to have gone down near the Channel Islands.

At the news conference, Jason Williams, a television producer for the Discovery Channel, said four tons of gold coins would fetch about $125 million if melted down or $1 billion if sold for their historical value.

Mr. Stemm of Odyssey Marine thanked the British authorities for their cooperation with the company “in the face of complicated issues” of wreck handling and disposition.

In the proposed agreement, Odyssey would get either a percentage of the value of the artifact collection, or a percentage of the coins or other duplicate artifacts that the British government judged to be surplus.

The company has a history of collaboration with the British Defense Ministry. It has cut a deal to recover the suspected wreck of the Sussex, a British warship that sank in the Mediterranean in 1694 with a cargo of coins that may be worth billions of dollars.

Asked at the news conference when the team might return to Victory’s resting place, Mr. Stemm said it depended on the Defense Ministry. But he expressed a sense of urgency, calling the underwater site “virtually impossible to protect from trawlers.”