Dear Fellow Stockholder:
It is an exciting time to be a part of Odyssey Marine Exploration, and I am honored to be the Chief Executive Officer at the helm. We are continuing our evolution to build on our past operational successes by focusing on enhancing stockholder value through economic success. During the past 20 years, our team has done extraordinary things in the deep ocean, from setting world records for exploration and recovery projects to solving mysteries that had confounded the world for centuries.
Odyssey started out focusing on historic shipwreck projects. We have a passion for conducting best-in-class deep-ocean archaeology and have had more success in this field than anyone else in the world. We share our exciting work through archaeological papers, traveling and virtual exhibits, television documentaries, books and media coverage. Odyssey has built an international brand synonymous with excellence in deep-ocean exploration. Five years ago we began a program to leverage our core competencies and expand into the recovery of cargo from commodity shipwrecks and mineral exploration. We now have the opportunity to build Odyssey into something much bigger than we ever could have accomplished by relying solely on historic shipwreck projects.
The commodity shipwreck projects in our portfolio, while generally under $100 million in value each, can advantageously be grouped by region to spread the expense and risk over several projects. Monetization of the cargo can generally be accomplished on a much quicker timeline than with historic shipwreck projects, as evidenced by our work on the Gairsoppa project, which was monetized in the same calendar year as the offshore operations.
A successful mineral project can be worth many multiples of even the most valuable shipwreck projects. While these mineral projects can take longer than a shipwreck project to reach production or outright sale of the deposit, there are opportunities to sell equity in projects at earlier stages, as we did with Oceanica. In the first year of this project, we sold $27.5 million of equity in the project at a point in time that we had only invested approximately $8 million in the venture.
Seafloor mineral exploration is where we now believe the most important and promising opportunities for Odyssey lie. I want to be clear that we are not abandoning our shipwreck roots. However, as I promised when I assumed the role of Chief Executive Officer, we have an increased focus on financial discipline aimed at reducing operating costs and more closely matching the timing of our investments to nearer term returns. To this end, we are being more selective in both the shipwreck and mineral projects we undertake in order to lower the risk profile on these projects.
Over the past few years, Odyssey has discreetly researched and analyzed many mineral deposits around the globe. Based upon these activities, we have developed a database of information relating to potential opportunities covering a variety of different minerals that may be commercially viable. One of the principal gating factors to begin harvesting these potential opportunities has been access to necessary capital and our need to remain focused on fully developing one of these deposits as the proof-of-concept to establish our credentials in this emerging field. Armed with this credibility, we believe the potential for success in the development of all subsequent seafloor mineral projects will be greatly enhanced.
The recently announced financing arrangement with strategic investor Minera del Norte S.A. de C.V. (MINOSA) and Penelope Mining LLC, its wholly owned subsidiary, has the potential to provide us with the capital necessary to begin harvesting the portfolio of deep-ocean mineral deposits that we have
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ODYSSEY MARINE EXPLORATION • 5215 WEST LAUREL STREET • TAMPA, FL 33607
(P)813.876.1776 • (F)813.876.1777 • WWW.ODYSSEYMARINE.COM
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been identifying. Taking these potential opportunities from the exploration stage to fully permitted seafloor mineral extraction projects is a complicated and highly speculative endeavor. Assuming we are successful with the development of these deposits, by not selling mineral assets outright at early stage valuations, we will be able to participate in the value creation that occurs as these potential opportunities advance from early development stage through to production stage. By staying involved in these projects, we expect to have the opportunity to capture new revenue streams, initially through offshore exploration contracts targeted at gathering mining feasibility and resource assessment data, and, if the projects are successful, ultimately through fees generated from the oversight and management of extraction operations. In addition, our current projects could be a source of near-term revenue as they may require additional exploration and test mining work to be performed inside this calendar year.
As you’ll see in the attached proxy, two highly-qualified individuals affiliated with MINOSA, Jim Pignatelli and John Abbott, are proposed as candidates for Odyssey’s Board of Directors. Reviewing their biographies will give you a sense of why we expect that these new Board members will provide our management team with invaluable advice and insight to help grow our business.
I want to emphasize that Odyssey’s management team and Board of Directors spent considerable time exploring all of the options available to the Company prior to making the decision to move forward on the transaction with MINOSA. Collectively, we believe that this transaction is the most beneficial for the Company and our stockholders. We believe it has the potential to transform Odyssey and increase stockholder value dramatically by not only providing the capital necessary to execute our current pipeline of offshore projects, but, more importantly, through the potential strategic guidance and resources that we believe will be a crucial catalyst to our future success.
As stockholders, you now have the opportunity to vote on whether you think we have made the best choice. I encourage you to review the attached proxy carefully, and if you have any questions, call the information telephone number noted. I am highly confident that this path forward is one that will permanently strengthen Odyssey so that we will stand the test of time and enjoy outstanding success as the world’s premier deep-ocean exploration company.
We encourage you to vote FOR all of the proposals included in the attached proxy statement.
We appreciate your ongoing support and belief in the Odyssey team, and thank you for your trust in our stewardship of your company.
Sincerely,
Odyssey Marine Exploration, Inc.
LOGO
Mark D. Gordon
President, Chief Executive Officer,
and Member of the Board of Directors
