Is Odyssey in trouble??

[Mackaydon]

Odyssey Marine Exploration Inc (OMEX): Due Diligence On Odyssey's "Oceanica" Project Uncovers Numerous Undisclosed Risks - Seeking Alpha
Don.......

 

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[Jolly Mon]

Odyssey Marine Exploration Inc (OMEX): Due Diligence On Odyssey's "Oceanica" Project Uncovers Numerous Undisclosed Risks - Seeking Alpha
Don.......

LOL...No, Odyssey is not in trouble.
Do you normally take your investing advice from those who admit a short position on a stock?
Do you normally believe the reports issued by hedge fund managers?



From the "comments" section:

"Based on this article, I was about to sell all my OMEX. Then I looked at the top where it said the author is shorting OMEX. So I realized there were two possibilities.
1) The author did all this research, and spent all this time because he is altruistically trying to help his fellow man or
2) He is trying to drive down the price so he can make a profit.
Which do you think?
Here's a hint, it is not number 1."

Here is another:
"Same old, same old. Ryan Morris will say anything at all to cause OMEX’s share price to decline. It doesn’t matter to him if it’s a lie, a distortion, or an omission of material fact – he just wants the stock to go lower at any cost. Thankfully the market has become inured to his “investigative research” and no longer pays attention.

Morris still doesn’t know a lot about Oceanica. He makes erroneous assumptions about where the company will mine within its claim. He makes erroneous assumptions about work done by Rofomex and Innophos. He makes erroneous assumptions about costs, the environmental permitting prospects, the political climate, concession status, and more.

His cost assumptions are clearly well off-mark. The cost chart that Morris displays is based on the “best guess” of an accountant who was part of the Phosmex organization. What Morris doesn’t realize is that there’s a massive pipeline built into the later cost numbers he shows in the chart. That means those costs include all the pipeline and pumping costs and slurry preparation costs. Even that estimate is questionable as it was based on a personal conversation rather than hard data. Oceanica has no need for pipelines if they operate like Chatham (which I guess that they will). Like Chatham, Oceanica is likely to take rock phosphate delivered at port at a cost of somewhere near $50/ton (Chatham will pay $80/ton).

The costs will be well below Chatham’s quoted price of $80/ton (which Chatham believes they can reduce). Chatham will operate in 1,200 feet of rough seas. I believe Oceanica will operate in 300 ft of relatively calm water. Based on my discussions with Chatham and dredgers, a $50/ton number is a good estimate. Some feel costs may come in below that number, but I’d rather be conservative. Most important, those familiar with the cost economics of subsea phosphate mining have the hard data to show these operations can be cost competitive with some of the largest and lowest cost phosphate mines in the world. What data does Ryan Morris supply?

Morris claims that the environmental permitting process stops nearly all mining projects in Mexico. Yet Mexico is the world’s number one producer of silver, and mining is the country’s third largest source of foreign income following oil and auto. According to a study done in 2013 by Behre Dolbear, Mexico ranked #5 in the world for business environment from mining. Further, Morris doesn’t mention that Phosomex successfully obtained a full mining permit for its phosphate dredging operation in Baja years ago. The fact is that Mexico depends on the mining sector for 5% of its GDP and it’s obvious that many mining applications are successful and permits are granted. This doesn’t sound like the unfriendly mining environment that Morris attempts to portray.

Morris cites the salt mine expansion that Mitsubishi attempted in the ‘80s as proof that mining is difficult to get approved in Mexico, even with a large budget. Yet he fails to note that Mitsubishi was attempting to expand into an established nature reserve, a protected whale breeding ground, and a known bird sanctuary directly inside the environmentally sensitive San Ignacio Lagoon. Oceanica has none of these issues. Rather than operate next to shore, I believe Oceanica will operate 20-30 miles offshore where the phosphate concentrations are highest.

The claim regarding overlapping concessions is absurd. The Ministry of Mining is the single authority in Mexico empowered to grant concessions, and Mexican statutes only allow for concessions to be granted on “free” lands – lands which have not already been granted a concession. http://bit.ly/1d65FYG
I spoke with the company about this idea, and they said that there are zero overlapping mineral concessions for Oceanica. The maps that are used on the Ministry’s website can be confusing and are not rendered in fine enough detail to establish true boundaries. For that purpose, the lawyers, geologists, and Ministry officials would have relied on a “meets and bounds” survey to establish the borders of the concession and determine that all land within those borders was not already claimed.

Morris states that underwater phosphate mining has, “never been completed in history.” What’s one more lie? Underwater phosphate mining goes back to the 1800’s in the US, when phosphate was dredged from rivers at depths of up to 50 feet. See http://bit.ly/1d65FrN . What Oceanica is going to do is not technically difficult. Every single part of the operation is done at commercial scale, for one purpose or another, at present.

The political climate for mining in Mexico isn’t deteriorating as Morris claims. It’s improving. Mexico has shown massive success attracting foreign investment since liberalizing the mining sector in the early 80’s and now it wants to take a bigger cut from the miners. Despite the increased tax, the relatively low general tax rate means that the overall tax burden is still highly competitive, that’s why most miners are continuing to invest in Mexico despite the increase. Mexico mining taxes unlikely to significantly impact investment - analyst - BNamericas Notably, the Mexican government will be anxious to prove it can still be successful at attracting new investment post the implementation of this tax structure. They are especially anxious to increase fertilizer feedstock production. Pemex 2014-18 business plan targets three petrochemical chains - BNamericas

Innophos chose not to pursue its claim because it was not economic. Oceanica will not be mining where Innophos was testing. For Morris to assume that Oceanica is non-economic because Innophos had no luck in a different spot is just foolish.

Every new mine is opposed by environmental groups. The difference for Oceanica is that their form of mining is relatively environmentally friendly, and they are not displacing anyone with their activities. Morris doesn’t appreciate the fact that mining 20 miles out in the open ocean is vastly different from mining in Magdalena Bay. Oceanica won’t disrupt whales, turtles, surfers, land developers, tour operators, or fishermen. The operations will be dramatically less invasive than presently approved commercial activities in the region such as land development, bottom trawling fishing, and land-based phosphate mining.

There’s little doubt in my mind that the project will be approved. If a couple environmentalists are truly “furious” about Oceanica as Morris claims, it’s only because they are being used as pawns in Ryan Morris’s holy war against OMEX. Once they are supplied with actual facts rather than Morris’s lies, they will appreciate the limited impact of the project as well as its massive economic and humanitarian benefits for the Mexican population. Regardless, a few narrow interest groups won’t determine the outcome of a project which, I believe, will have meaningful national importance to the Mexican people.

Morris obviously thinks he knows a lot about Oceanica. He thinks that pulling some concession info. and talking to a couple environmentalist gives him an edge. I’m going to go out on a limb and make the assumption that JP Morgan bankers and Mako investors have a lot more information about Oceanica than Ryan Morris. They not only have access to the same public information upon which Morris relies, but they have access to incredibly valuable private information that Morris doesn’t. They think that the asset is worth quite a bit of money. So, who has the informational and analytic advantage, Ryan Morris or Mako and JP Morgan?"

 

[Jason in Enid]

Meson has been sued many, many times for falsifying information in their reports in attempts to crash a company's stock value.

 

[Mackaydon]

Jolly Mon,
I don't buy stock nor listen to hedge fund managers. Why do you ask?
I simply passed on a news article--but apparently hit a nerve with you.
Sorry about that.
Don....

 

[Jolly Mon]

Jolly Mon,
I don't buy stock nor listen to hedge fund managers. Why do you ask?
I simply passed on a news article--but apparently hit a nerve with you.
Sorry about that.
Don....

No nerve was hit. I just did not want others to make the same mistake you did.
What you passed on is not "news".
It is a report written by a hedge fund manager.
Meson Capital are short sellers. They make their money by driving the price of a given stock down (usually by issuing long reports short on facts, but long on innuendo and "opinion"). When the stock meets the price point they are looking for, they then buy the stock themselves.
Outfits like Meson have lawyers write their "reports" to tow the fine line between "free speech" and libel.

Here is a copy and paste from Meson's disclaimer (unfortunately many people don't read disclaimers):

"You should assume that as of the publication date of our reports and research, Meson Capital Partners, LLC (possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our clients and/or investors and/or their clients and/or investors has a short position in all stocks (and/or options, swaps, and other derivatives related to the stock) and bonds covered herein, and therefore stands to realize significant gains in the event that either declines. We intend to continue transacting in the securities of issuers covered on this site for an indefinite period after our first report, and we may be long, short or neutral at any time hereafter regardless of our initial recommendation ."

 

[Mackaydon]

Apparently you didn't read the complete Disclosure the author of the article provided, so I'll show it here:
"Disclosure: I am short OMEX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article."
The writer's position was quite clear; one man's opinion; and I simply printed it. It obviously offended you. Again, sorry about that. Do you hold a stock position in OMEX?
Don.......

 

[seeker41]

don't let certain gloating, mental midget, Odyssey haters see this or it will turn into another never ending thread!!!!!

chuck.

 

[Mackaydon]

Chuck, you right.
I've seen enough of them.
I'll disconnect.
Don...

 

[Jolly Mon]

Apparently you didn't read the complete Disclosure the author of the article provided, so I'll show it here:
"Disclosure: I am short OMEX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article."
The writer's position was quite clear; one man's opinion; and I simply printed it. It obviously offended you. Again, sorry about that. Do you hold a stock position in OMEX?
Don.......

I read the partial disclosure. As a matter of fact, I circled it in red.
I also read Meson's FULL disclosure, which is somewhat more difficult to find, and I provided it for anyone interested in my previous post.
Nothing about your post offended me. I simply wanted to make sure anyone reading this thread was made aware that what you originally called a "news article" is nothing of the kind.
Believe it or not, there are some people who don't know the meaning of "short selling". Others do not know how "hedge funds" generate profits.
This might especially be true of investors in an equity like OMEX, who are often people not generally attracted to the market.
As for myself, I do not hold a stock position in OMEX, except possibly as part of mutual funds.

 

[Mud Skipper]

I read the partial disclosure. As a matter of fact, I circled it in red.
I also read Meson's FULL disclosure, which is somewhat more difficult to find, and I provided it for anyone interested in my previous post.
Nothing about your post offended me. I simply wanted to make sure anyone reading this thread was made aware that what you originally called a "news article" is nothing of the kind.
Believe it or not, there are some people who don't know the meaning of "short selling". Others do not know how "hedge funds" generate profits.
This might especially be true of investors in an equity like OMEX, who are often people not generally attracted to the market.
As for myself, I do not hold a stock position in OMEX, except possibly as part of mutual funds.

Time to bail this one, if that macminus troll in the VI sees it he will jump in.....

 

[AUVnav]

Jolly Mon, in your post you said....

Morris cites the salt mine expansion that Mitsubishi attempted in the ‘80s as proof that mining is difficult to get approved in Mexico, even with a large budget. Yet he fails to note that Mitsubishi was attempting to expand into an established nature reserve, a protected whale breeding ground, and a known bird sanctuary directly inside the environmentally sensitive San Ignacio Lagoon. Oceanica has none of these issues. Rather than operate next to shore, I believe Oceanica will operate 20-30 miles offshore where the phosphate concentrations are highest.

I believe Oceanica will operate in 300 ft of relatively calm water.

I think that 20-30 miles offshore of Baja is about 3000meters, not 300 feet. (macaydon can probably verify)

 

[Jolly Mon]

Jolly Mon, in your post you said....





I think that 20-30 miles offshore of Baja is about 3000meters, not 300 feet. (macaydon can probably verify)

Perhaps you should consult a chart. Baja is a nearly 800 mile long peninsula. There are places where, 20 miles offshore, you can stand 4000 feet above sea level.

 

[AUVnav]

Not in the area of the lease.

 

[Jolly Mon]

Not in the area of the lease.

You have the concession boundaries that Odyssey will be mining?
Please list them and provide your source.

 

[AUVnav]

Ah yes, typical.
So, you have no idea of the location of the lease area, yet you decided it was 20-30 miles offshore with a 300 foot depth?

Its just somewhere along the 800 mile peninsula, 20-30 miles offshore, with a depth of 300 feet. Perhaps there is a location that fits your analysis of the costs and viability.

Will Odyssey just mine there, and ask permission later, as with the Mercedes?

BTW where, 20 miles off the coast of Baja, can you be 4000 feet above sea level, you going inland

 

[Jolly Mon]

Ah yes, typical.
So, you have no idea of the location of the lease area, yet you decided it was 20-30 miles offshore with a 300 foot depth?

Its just somewhere along the 800 mile peninsula, 20-30 miles offshore, with a depth of 300 feet. Perhaps there is a location that fits your analysis of the costs and viability.

Will Odyssey just mine there, and ask permission later, as with the Mercedes?

BTW where, 20 miles off the coast of Baja, can you be 4000 feet above sea level, you going inland

Sorry you became testy because so much of Mr. Morris' false information was debunked. After all, it was Mr. Morris (AKA Meson Capital ) who has gone to such great lengths to suggest he knows exactly where the concession is located (he doesn't).

The concession's exact location is proprietary. You might want to contact JP Morgan Chase or Mako Resources LLC ( who several months ago purchased a small portion of the concession from Odyssey for $15 Million USD). That is quite a bit of change for a small part of a concession you and Mr. Morris consider "worthless".

To further illustrate the "quality" of Mr. Morris' "research", his contention that phosphates have never been economically mined underwater is debunked here: The Century in Phosphates and Fertilizers: A Sketch of the South Carolina ... - Philip E. Chazal - Google Books. Underwater phosphate deposits have been successfully mined since the late 1860's, both by dredge and by use of divers.

By the way, the big environmentalist "push" Mr. Morris suggests will occur in Mexico to foil Odyssey's plans has, to date, garnered exactly 236 signatures on its petition (almost none of the signees are actually Mexican citizens).

Have you never heard of Isla Cedros ? Its 4000 foot summit is quite conspicuous when making the passage south from San Diego.

 

[AUVnav]

The location is not proprietary, it is a matter of public record, as is any mining claim/lease. This is not a 'secret location' admiralty arrest, it is a mining claim and lease, which are recorded documents.

And yes, I am very familar with Isla Cedros, enough to know I would call it about 10 miles offshore, not 20.

As far as anything else, I have not made any claims on the value or viability of the project, I was responding to your analysis of location and depth.

 

[Jolly Mon]

The location is not proprietary, it is a matter of public record, as is any mining claim/lease. This is not a 'secret location' admiralty arrest, it is a mining claim and lease, which are recorded documents.

And yes, I am very familar with Isla Cedros, enough to know I would call it about 10 miles offshore, not 20.

As far as anything else, I have not made any claims on the value or viability of the project, I was responding to your analysis of location and depth.

Below is a map with the Oceanica concession circled. Can you tell me where in this vast area Odyssey is taking cores and plans to extract??
No, you can't.
Neither can Mr. Morris.
But Mr. Morris never lets something as minor as lack of information stand in the way of his bombast.

Monte Cedros, the highest point on Isla Cedros, is 20.95 miles from Punta Eugenia.

 

[AUVnav]

Ah, so you meant the highest point, not the island itself. If you knew the area of the lease, why were you arguing about locations along the 800 mile baja peninsula?

You said this..

Sorry you became testy because so much of Mr. Morris' false information was debunked. After all, it was Mr. Morris (AKA Meson Capital ) who has gone to such great lengths to suggest he knows exactly where the concession is located (he doesn't).

The concession's exact location is proprietary. You might want to contact JP Morgan Chase or Mako Resources LLC

But then you show a map of the lease are that was taken from public records.
It appears your only method to express yourself is to argue and illustrate with a crayon.?

I can also read a bathymetric chart, which shows the area of the lease anywhere from about 75 feet to about 1200 feet deep, so it would appear that the 300 foot depth that you stated leaves out 60% of the lease area.

The report you are so irate about appears to have many questions about the viability of the operation, with numerous cites of recent data from previous owners.
The report is much more about questions than definitive answers.

1. In the report, the area of the lease from the public records is shown (Why did you say it was a secret, then provide it?)
2. There are the recent reports and assays cited in the report from that area and the surrounding areas. Doesnt really matter exactly where in that area they plan to dredge. Rofomex was just recently in that area, and abandoned ops. The offshore dredge is still visible in Google Earth where they left it on the beach. ( 25°15'22.74"N, 112° 4'42.97"W) (look at the images that people have taken to see the extent the barge has been stripped) More than a few have thought Odyssey has purchased this..
3. Did you happen to notice the sections of inlet lagoons just to the South of the lease area? That is a protected area, and I am willing to bet that sediment from dredging ops will transport into that area.
4. I dont know where they plan to extract, but this is not their business model, nor do they have any expertise and equipment to do so. I think more than a few posters on this board have expertise in dredging, and what it would take to use a suction dredge at 300 feet or more, to lift tons of sediment to fill a barge, sort it and dump the tailings.


Should you be able to provide any information that is contrary, please try to do so in a civilized manner.

Remember, it is the phosphate percentage in the rock phosphate that is of value, but the percentage of rock phosphate in the sediment is very small. That is a significant portion of this adventure that is overlooked. Find that in the reports.
(reports from the 1860's in the Carolinas have no foundation in current reality, while the recent Rofmex mining activities certainly do)

As a note, in the last year, phosphate prices have declined about 40%

 

[Darren in NC]

It appears your only method to express yourself is to argue and illustrate with a crayon.?

As I read the above posts, you were the one who threw the first punch. Putting a man on the defensive on a public forum and then accusing him of arguing is hardly a fair exchange. In fact, most of your posts are argumentative in nature - hardly a sign of maturity. Most likely, it is the crayon of insecurity to need an audience to show off. Jolly Mon continues to provide helpful research in most of his posts on Tnet, thus my appreciation. Try being civil and your knowledge may be taken more seriously. I want to appreciate your views. Perhaps they can come in a different package?