Deep-sea treasure lures UK salvage firm

The search for sunken treasure in deep-sea shipwrecks may sound like the stuff of children's adventure stories rather than corporate boardrooms.

But a British marine salvage company says raising a profit from the depths of the ocean could soon become a reality.

London-listed SubSea Resources Plc sold its first load of copper lifted from a wreck one kilometre 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 said.

"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 per cent.

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.

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

Typically, the company keeps 89 per cent of the money raised and pays the ship's insurers 11 per cent. SubSea doesn't begin work until it has established who owns or insures a wreck and agrees a deal with them to recover the metal.

Decades submerged in sea water has little effect on the metal. After a quick wash, it can be sold for 98 per cent of the normal market price, Mr Gleave said.

The company has a database of 14,000 wrecks, including a 19th century ship lost with a cargo of gold worth an estimated $300 million.

SubSea uses two ships to find and recover cargos, including the John Lethbridge, named after an 18th century English pioneer who invented a barrel-shaped diving contraption to dive for treasure.

After sweeping a site with a sonar device, experts map a vessel using computer imagery and then send down a small, unmanned submarine to take a closer look.

A hydraulic "grab" pulls the metal from the wreckage and dumps it in 50-100 tonne skips which are winched to the surface.

It's not all plain sailing, however.

Bad weather forced them to postpone Project Ella, a search for gold coins and bars worth $12 million in a 19th century ship in the Atlantic.