Thursday, July 19th, 2012
Controversial US treasure hunting company Odyssey Marine Exploration announced Wednesday that it has recovered 48 tons of silver bullion from the wreck of the British cargo steamship SS Gairsoppa. The ship was carrying 2,600 tons of pig iron, 1,765 tons of tea, and 220 tons of silver ingots when it was sunk by a German U-boat torpedo on February 17, 1941. Although it was a merchant ship not a military one, it was transporting some government-owned bullion along with its private cargo, and the latter was insured by the British government under the War Risk Insurance program. The owners received a payout of £325,000 ($510,000) in 1941, which then gave the state rights to the cargo should it ever be recovered.
At the time, nobody knew exactly where the ship went down. Only one of the 85 crewmen survived the disaster, and data was thin. The UK attempted to salvage the cargo once before in 1989, but the contracted company was unable to locate the wreck. In 2010, the UK Department for Transport opened the Gairsoppa salvage contract to a competitive tender process. Odyssey won. Under the terms of the agreement, Odyssey gets to keep 80% of the net value of all the salvaged silver after expenses. That means their expenses are paid from the government’s 20% cut. It’s an incredibly sweet deal, but the UK is up for it because they stand to make tens of millions of pounds on their outlay of £325,000 71 years ago. Adjusted for inflation, that payout would be worth approximately £14,290,250 ($22 million) in today’s money, so the odds are good that they’ll come out well in the black by both relative and absolute standards.
Last summer, Odyssey found the wreck three miles deep in the North Atlantic about 300 miles west of Ireland. Its depth and the treacherous conditions of the ocean posed a significant challenge to recovery efforts. They spent the autumn and winter months assembling specialized equipment for the salvage — they don’t specify what those tools are, probably because they don’t want to make it easy for anyone else to follow in their footsteps — then began recovery operations on May 31st of this year.
So far, they have recovered 1,203 silver bars; that’s approximately 1.4 million troy ounces and about 43% of the insured bars. Adding in the government-owned bullion, the quantity recovered thus far is about 20% of the total silver cargo. The haul has been moved to a secure facility in the UK and JBR Recovery Limited has been contracted to process and monetize the shipwrecked bullion.
Odyssey is also working a second salvage contract for the British government. While looking for the Gairsoppa last year, they found the World War I steamship SS Mantola which was sunk by another German U-boat torpedo on February 8th, 1917. It too was carrying silver bars, although considerable fewer of them (600,000 total ounces of silver versus Gairsoppa‘s 7,000,000). The Department for Transport awarded Odyssey the contract to recover the Mantola’s loot as well for the same 80% deal. When they’re done with the Gairsoppa salvage, Odyssey will move on to the Mantola which is about 100 miles away and 1.5 miles deep.
This is footage of the Mantola wreck recorded by Odyssey’s remotely operated underwater vehicles last summer: