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Odyssey Marine Exploration Reaches Major Milestone in $2B+ NAFTA Case
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Rhea-AI Summary
Odyssey Marine Exploration (NASDAQ:OMEX) filed its post-hearing brief in the NAFTA case against Mexico on September 12, 2022, marking a significant milestone. The case, initiated in April 2019, revolves around the denial of a mining permit for a phosphate deposit, with Odyssey seeking over US$2 billion in compensation. Odyssey's CEO, Mark Gordon, expressed confidence in their evidence presented to the NAFTA Tribunal, highlighting the potential benefits of the project for both entities. Meanwhile, the company is advancing other mineral projects to address U.S. critical mineral needs.
Positive
Filed post-hearing brief in NAFTA case, indicating progress in legal proceedings.
Seeking over US$2 billion in compensation, which could significantly enhance financial position if successful.
Advancing other projects focused on critical minerals, aligning with U.S. economic and green energy goals.
Negative
Ongoing legal dispute with Mexico could delay future projects and impact operations.
Denial of mining permit by SEMARNAT raises concerns over potential regulatory barriers.
TAMPA, Fla.--(BUSINESS WIRE)--
Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a global subsea mineral exploration and development company, announces that on Monday, September 12, 2022, the company filed its post-hearing brief in its NAFTA case against Mexico. The post-hearing brief represents the final substantive submission in the case and was prepared by Odyssey’s legal team comprised of specialist international arbitration lawyers from Cooley LLP and King & Spalding LLP. The NAFTA case, which began with the Notice of Arbitration filed in April 2019, relates to one of the largest phosphate deposits to be discovered in the Americas.
“This is a major milestone in our NAFTA case. We’ve spent the last several years gathering and providing clear and compelling evidence to the NAFTA Tribunal, and we remain confident in our case, which is now in the hands of the Tribunal,” stated Mark Gordon, Odyssey’s Chief Executive Officer. “We have always believed that bringing this project into production is in Mexico’s and Odyssey’s best interests as doing so has the potential to significantly enhance Mexico’s food security and make it a world leader in environmentally responsible phosphate extraction. It is unfortunate, especially considering current world food prices, that we were forced to commence an arbitration claim for substantial compensation rather than work with Mexico to realize the many economic, social and environmental benefits of the project.”
NAFTA Case Background
In 2012, Exploraciones Oceanicas S de R.L. de CV (ExO), a company in which Odyssey holds an approximately 56% interest, was granted a 50-year mining concession (extendable for another 50 years at ExO’s option) by Mexico. Odyssey conducted significant offshore exploration, sampling and environmental testing and in 2014 completed an NI 43-101 compliant technical report.
With the assistance of experts in marine dredging who have completed more than 200 projects in Mexican waters using the proposed technology and leading environmental scientists from around the world, Odyssey spent three years preparing an environmentally responsible development plan for the deposit, which lies 25-40 km offshore in Baja California Sur, Mexico. Odyssey believes the Mexican Ministry of the Environment and Natural Resources (SEMARNAT) rejected the environmental permit necessary to move forward with the project in April 2016 for political rather than environmental reasons.
ExO challenged the decision in Mexican federal court and in March 2018, the Tribunal Federal de Justicia Administrativa (TFJA), an 11-judge panel, ruled unanimously that SEMARNAT denied the application in violation of Mexican law and ordered the agency to re-take their decision. After SEMARNAT denied the necessary permit again, Odyssey began the NAFTA proceeding against Mexico to protect our shareholders’ interests and significant investment in the project.
Odyssey’s claim seeks compensation of over US$2 billion on the basis that SEMARNAT’s wrongful denial of authorization has destroyed the value of our investment in the country and is in violation of various provisions of NAFTA. All previous filings related to the NAFTA proceeding are available on the ICSID website, and the post-hearing brief is expected to be uploaded to the site after necessary redactions are finalized. Additional information about the case and evidence are included in Odyssey’s 10-K and 10-Q filings at www.sec.gov.
Although neither Odyssey nor its legal counsel can predict the length of the Tribunal’s deliberations or when a ruling will be issued, the company remains confident in the merits of its case.
Advancing Critical Mineral Resource Projects
While Odyssey awaits the outcome of the NAFTA proceeding, Odyssey and its partners continue to make considerable progress on other significant mineral projects. The company is putting its vast phosphate knowledge to use in two new projects currently under development. Separately, Odyssey also has multiple projects focused on the critical minerals essential for U.S. economic and national security and supporting the world’s green energy transformation.
Recent legislative actions by the U. S. government have shined a light on the growing imbalance for key strategic minerals, including cobalt and manganese, within the United States. This imbalance will only increase, and marine-based mineral deposits provides a potential solution that does not include a massive increase in terrestrial mining and the associated environmental challenges that accompany terrestrial mining activities. After completing the necessary environmental studies and requirements, these subsea projects can contribute to a sustainable future with less environmental and social impact on the planet. These factors, among others, have created increasing strategic investor and media interest in these projects.
Odyssey is ready to help solve this strategic mineral imbalance with proven experience in all stages of deep-ocean mineral project development, including resource validation, resource assessment, environmental impact studies, extraction programs, commercial programs and licensing for various mineral resources in multiple jurisdictions around the world.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq: OMEX) is a deep-ocean exploration pioneer engaged in the discovery, validation and development of subsea mineral deposits in a socially and environmentally responsible manner. Odyssey’s growing project portfolio includes different mineral sets in various jurisdictions around the world. Odyssey also provides marine services for private clients and governments. For additional details, please visit www.odysseymarine.com. An investor presentation is available in the Investors section of the website.
Forward Looking Information
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, 2021, which was filed with the Securities and Exchange Commission on March 31, 2021. 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.
What is the latest update on Odyssey Marine Exploration's NAFTA case against Mexico?
Odyssey Marine Exploration filed its post-hearing brief on September 12, 2022, in its NAFTA case against Mexico, seeking over US$2 billion in compensation.
What are the potential financial implications of the NAFTA case for OMEX?
If successful, Odyssey could receive over US$2 billion in compensation, significantly enhancing its financial position.
How does Odyssey Marine Exploration plan to address U.S. mineral needs?
Odyssey is advancing multiple projects focused on critical minerals essential for U.S. economic security and the green energy transition.
What challenges is Odyssey facing regarding its phosphate project in Mexico?
Odyssey is facing ongoing legal disputes and regulatory challenges due to the denial of mining permits by Mexico's SEMARNAT.
