TAMPA, Fla., May 15, 2019 (GLOBE NEWSWIRE) -- Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the field of deep-ocean exploration, reported results for the first quarter ended March 31, 2019, and provided an update on current projects.
"As promised, we are remaining laser-focused on developing subsea mineral assets to create and realize near-term and long-term value. This is our core business and we're continuing to enlarge our subsea mineral portfolio through development of new deposits, acquisition of mineral rights/deposits and through our leveraged contracting model, which allows us to earn equity in deep-sea mineral projects," said Mark Gordon, Odyssey CEO and President.
"The acquisition and development of these assets allows us to self-fund our business plan through the sale of equity in individual mineral assets as we move them up the value curve. In the early stages of the Exploraciones Oceanicas (ExO) phosphate deposit, we sold 24% of the project for $27.5 million," continued Gordon. "As we move our existing and new mineral projects through each necessary stage from research and permitting into exploration, testing, resource evaluation and mine planning, the valuation of the asset increases. Between expected non-dilutive funding and other cash produced from operations or monetization of one or more of our early stage mineral assets, we're optimistic that there will be sufficient cash to continue to build and enhance our subsea mineral portfolio into 2020."
Odyssey recently announced an agreement to acquire a controlling interest in a potentially significant subsea mineral deposit in the South Pacific, and the company continues to acquire equity in a separate South Pacific mineral opportunity by providing expertise and services. These projects have the potential to be as, or even more valuable than, the Mexican phosphate deposit. These and other mineral opportunities throughout the world offer powerful diversification to Odyssey's expanding portfolio of seafloor mineral properties.
The project currently furthest along the development path is the phosphate dredging project in Mexico, ownership of which is held through Odyssey's majority-owned subsidiary Exploraciones Oceanica (ExO). Odyssey is pursing the environmental permit to allow for the recovery of phosphate sands from the deposit. In order to protect its rights and promote a positive outcome to this process, Odyssey is pursuing a North American Free Trade Agreement (NAFTA) claim against Mexico arising out of arbitrary and discriminatory political interference in the environmental approvals process for the project by Mexico's previous Secretary of Environment and Natural Resources. Odyssey is confident in the merits of the project and of the environmental soundness of its development plans. A copy of the Notice of Intent (NOI) filed is available at www.odysseymarine.com/notice.
The NOI, which was filed on January 4, 2019 prompted renewed and constructive dialogue with the Mexican government. While Odyssey intends to vigorously pursue its claim, it will also continue to promote a mutually beneficial outcome to the case with Mexico through the pursuit of consultations.
"We continue to believe that a negotiated settlement in lieu of continued litigation under NAFTA is in Mexico's and Odyssey's best interests," stated Mark Gordon, Odyssey CEO. "But, if this is not Mexico's desire we are prepared to go the distance to ensure our shareholders realize their rightful return on our investment."
Prior to the NAFTA action, Odyssey had been pursuing available domestic remedies, including through Mexico's Superior Tribunal Federal de Justicia Administrativa (TFJA) which ruled in Odyssey's favor on March 21, 2018. It was following SEMARNAT's October 2018 refusal to follow the TFJA's instructions that Odyssey turned to international recourse under NAFTA. Odyssey will continue to ensure than any domestic steps it may take are consistent with the ultimate goal of seeking project approval. Most recently, on April 24, 2019 the TFJA declined to review ExO's domestic set-aside attempt on technical grounds, advising ExO that a new and different procedure would need to be filed. Odyssey will continue to take appropriate strategic decisions in light of this most recent event.
In addition to Odyssey's work on mission-aligned mineral projects, the company has several legacy projects continuing, including a shipwreck recovery project currently being conducted under contract where Odyssey is paid for operations and retains a portion of the back-end profits.
Net loss for the current quarter was $1.2 million, or ($0.13) per share, compared to a loss of $1.7 million or ($0.21) per share in the same period a year ago, an improvement of $0.5 million.
Total revenue in the current quarter was $0.8 million, a $0.3 million increase over the revenue in the same period a year ago. The revenue generated in each period was a result of performing marine research, search and recovery operations for our customers and related parties. We provided these services to our related party customer Magellan during both of these periods as well as providing marine related services in 2019 to the deep-sea mineral exploration company, CIC.
Marketing, general and administrative expenses primarily include all costs within the following departments: Executive, Finance & Accounting, Legal, Information Technology, Human Resources, Marketing & Communications, Sales and Business Development. Marketing, general and administrative expenses decreased by $0.1 million from $1.4 million in 2018 to $1.3 million in 2019 primarily as a result of (i) a decrease of $0.1 million of personnel expenses mainly attributable to share-based compensation and employee compensation and (ii) a $0.1 million corporate overhead decrease consisting of corporate legal support and corporate administration support costs and (iii) an increase of $0.1 million in maritime legal support.
Operations and research expenses primarily include all costs within Marine Operations, Archaeology, Conservation, Exhibits, and Mineral Research/Geology, which includes all vessel and charter operations. Operations and research expenses increased by $0.7 million from 2018 to 2019 primarily as a result of the following items: (i) an increase of $0.1 million in marine labor directly tied to the related incremental revenue and (ii) a $0.6 million increase of legal fees incurred in support of efforts undertaken while we try to secure the environmental permit for our Mexican subsidiary.
Consolidated financial statements as well as Odyssey's Quarterly Report on Form 10-Q for the period ended March 31,2019, are available on the company's website at www.odysseymarine.com as well as at www.sec.gov.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean exploration using innovative methods and state-of-the-art technology to provide access to critical resources worldwide. Our core focus is the discovery, development and extraction of deep-ocean minerals. Odyssey also provides marine services for private clients and governments. For additional details, please visit www.odysseymarine.com.
Odyssey Marine Exploration believes the information set forth in this Press Release 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, 2018, which was filed with the Securities and Exchange Commission on April 1, 2019. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.
Cautionary Note to U.S. Investors
The U.S. Securities and Exchange Commission (SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "measured", "indicated," "inferred" and "resources," which the SEC guidelines strictly prohibit us from including in our filings with the SEC. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable, and are urged to consider closely the disclosures in our Form 10-K which may be secured from us or from the SEC's website at http://www.sec.gov/edgar.shtml.
Laura BartonOdyssey Marine Exploration, Inc.
laura@odysseymarine.com
Source: Odyssey Marine Exploration, Inc.