For Odyssey Marine Exploration, a deep sea mineral extraction corporation based mostly in Tampa, a proposed phosphate mining job off the coast of Mexico appeared the fantastic option. The corporation sunk tens of thousands and thousands of dollars into the procedure and was making ready to start off dredging — only to have the Mexican Ministry of the Ecosystem and All-natural Assets pull the plug by denying a one environmental permit.
Was that denial unlawful? Odyssey Maritime CEO Mark Gordon is convinced it was, and he has some convincing voices backing him up.
“The greatest degree court docket in Mexico gave us the very first unanimous selection in 20 several years that Mexico did act unlawfully,” Gordon claims. “Despite that ruling nothing occurred, so we had to go by way of this other system.”
The “other mechanism” is a legal assert that alleges Mexico violated the terms of the North American Free of charge Trade Settlement (NAFTA).
‘We by no means required to have to choose this authorized motion, and we even now believe it’s in Mexico’s most effective curiosity as well as Odyssey’s buyers to shift this undertaking forward. Mark Gordon, Odyssey Maritime
“If a govt acts in either a biased or arbitrary way and that motion damages the expense, under the treaty that the U.S., Mexico, and Canada have signed up for, that government then has to spend the investor the equal of what the financial investment would have been well worth — not the sunk expenses,” Gordon claims. “In this case the underwater assets, the value of the enterprise, has been valued at about $2 billion by various various unbiased authorities, so which is what Mexico would have to shell out us.”
That opportunity $2 billion judgment (of which Odyssey would be entitled to 65%, or some $1.3 billion, owing to partnerships) for a publicly traded company with a current market cap of about $90 million has been attractive to investors. Considering the fact that the litigation started, Gordon suggests he’s seen a new team of investors arise who are wagering on the consequence of the litigation. To day, Odyssey Marine has lifted extra than $30 million for the court docket fight with Mexico, with $20 million coming in the variety of non-recourse debt that will not have to be repaid if they eliminate. The firm posted $2.03 million in profits in 2020, down from $3.07 million in 2019.
“Odyssey Maritime has often been structured all over asymmetric bets,” Gordon claims, “and the buyers that invest in our firm are betting on asymmetric returns.”
That consists of the early times of the enterprise, when they plumbed the ocean depths in search of shipwrecks rather of minerals. All those exploits ended up coated on Television set for the Discovery Channel collection Treasure Quest (2009) and in specials for National Geographic. But a different legal dispute, this just one about treasure from a disputed Spanish shipwreck Odyssey was ultimately ordered to return to Spain in 2012, compelled the company to change course to fulfill buyers.
“That situation wrote a new and terrible precedent,” Gordon says. “I joined Odyssey because of the shipwrecks. I labored my way through college or university and MBA university as a diver training civilian and law enforcement divers and diving on shipwrecks like every weekend somewhere on the east coastline of the United States. I despise the simple fact that we experienced to exit it, but running a community organization we experienced no selection primarily based on how the governments handled us on that large offer. We couldn’t just retain banging our head on that wall.”
Odyssey Marine submitted their 1st Memorial in the situation against Mexico in September 2020. The document operates 1000’s of pages, and features testimony of extra than 20 professionals who communicate to the illegality of Mexico’s steps and the total dollar worth of the mining job. The Memorial was released in late January, marking the initially time the big facts and proof in the situation were being readily available to the general public.
Mexico is predicted to concern their response to Odyssey’s Memorial in spring, and the case will proceed for the relaxation of 2021. Gordon suggests a selection ought to arrive someday in early 2022. If the circumstance truly tends to make it that far. There continues to be a important possibility Mexico will settle and make it possible for Odyssey to carry on with the challenge — Gordon’s favored final result.
If the dispute does not settle, beneath the latest timetable there is an impending collection of filings that develop to an overall look right before a tribunal of a few arbitrators who render a final decision. That visual appeal is at this time scheduled for January 2022.
“We in no way needed to have to get this lawful motion, and we still assume it’s in Mexico’s ideal desire as perfectly as Odyssey’s investors to shift this project ahead,” Gordon suggests, pointing to an ongoing phosphate scarcity in Mexico that has the place importing 50 percent their source from Morocco. “This venture would fix some of Mexico’s ongoing foods insecurity problems thanks to low crop yields.”
(This tale was current to replicate a quotation from Mark Gordon on what investors are seeking for in the company.)