Sunken Treasure

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There is a new British firm that has big plans for recovering sunken treasure. No, not that romantic pirate treasure stuff (although that is not ruled out, either). They are set on recovering sunken cargoes of metals such as copper and tin.

London-listed SubSea Resources Plc sold its first load of copper lifted from a wreck 1 km (3,300 feet) below the Atlantic Ocean's surface in September and is predicting more to come.

With base metal prices at record highs earlier this year, SubSea's focus is on copper, nickel and zinc, although gold and silver are also on its radar.

"From time to time over the next 20 years this company will throw out an absolute humdinger of a treasure cargo," SubSea's Chief Executive Mark Gleave told Reuters.

"But for now we are concentrating on building a business with recurring income."

SubSea's immediate task is to transform its grand vision into a profit. On September 29, it reported a loss of 3.1 million pounds for the year to March 31, sending its shares down as much as 5.26 percent.

HIGH RISKS

Although SubSea has forecast a modest profit this year, investors should be aware of the "high risks," according to Mark Thompson, of SubSea's broker Cannacord Adams.

"It is like a mining company — you never know quite what's there until you dig it up," he said. "They have got to prove decent revenue this year."

Targets for the firm's first big project, codenamed Celia, were encouraging, he added.

"Celia" is a French cargo ship, the Francois Vieljeux, which sank in a storm off the Atlantic coast of Spain in 1979.

Gleave hopes to lift nearly all of the cargo of 5,500 tonnes of copper by the end of October. It will cost 7 million pounds, raising 21 million pounds after payments to insurers.

The company uses remote hydraulic "grabs" to pull the cargo out of the wreck. They say they have locations for over 14,000 shipwrecks. The problem with this kind of business is that it is only profitable when prices are quite high for the recovered cargoes. Right now metal is up, but if it takes a downturn, there may be no way to recover cargoes profitably.

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