Feature
Detectives of the Deep
Michelle Seaton
01/01/2006

In 1693, HMS Sussex, an 80-gun warship, left Gibraltar for Savoy, a small duchy in what is now northern Italy. With 10 tons of gold coins on board, the ship was on a mission from the king of England to bribe the duke of Savoy to continue his war against their common enemy, France. Although the Sussex was just a year old and one of the finest vessels in the British fleet, it never reached its destination. A sudden, violent storm sent it and its treasure to the bottom of the Mediterranean.

HARVEY KALTSAS’ team searches for the pirate Spanish slave ship Guerrero, which sunk in 1827. (Top: Schooner Photos: Karuna Eberal. Bottom: Photograph courtesy Mel Fisher’s Treasures; Odyssey Marine Exploration.)
The Sussex still lies off Gibraltar, submerged in several thousand feet of water, accessible only to deep ocean submersibles and robots. If historical documents are correct, and if the bulk of the treasure it carried is in good condition, today the king’s bribe could be worth anywhere from $500 million to $4 billion.

After spending seven years and several million dollars searching, Greg Stemm believes his company, Tampa, Fla.-based Odyssey Marine Exploration, a publicly traded, for-profit firm that searches for and recovers valuables from old shipwrecks, may have found the Sussex and its legendary treasure. After scouring 600 square miles of ocean floor, archaeologists working for Marine Odyssey are so convinced that the site contains the remains of the Sussex that the company has struck a deal with the British government, which has a moral and proprietary claim on a military vessel sunk in international waters. Under these terms, Odyssey may keep 80 percent of the first $45 million of recovered treasure, then 50 percent of up to $500 million recovered and, finally, 40 percent above $500 million.

Exploring sunken ships for artifacts, treasure or merely excitement has become an expensive, high-stakes venture requiring vast reserves of time and money, along with savvy diplomatic skills. The convergence of readily available historical documents, advanced technology that enables searchers to map the ocean floor and capital to back expeditions has transformed treasure hunting from an eccentric hobby into a potentially lucrative gamble for even landlocked investors.

 Top: GOLD AND silver coins brought up from the Nuestra Señora de Atocha. Bottom: The SS Republic paddlewheel shows the effects of more than a century beneath the sea. (Photography courtesy Mel Fisher’s Treasures; Odyssey Marine Exploration.)
Today, there are thousands of divers searching for the estimated 3 million shipwrecks worldwide. Some search individually, while others form companies that offer investors a stake in whatever treasure they find. Those such as Stemm spend anywhere from a few hundred thousand dollars to a few million dollars on boats and equipment. They hire historians to discover where specific ships may have gone down, then enlist crews and divers or robotic equipment to search the ocean floor for telltale signs of ships. Although few ever achieve a significant return on this investment, the mere possibility of finding historically significant—and wildly profitable—artifacts spurs them on. “We’ve discovered U-boats, prehistoric ships, colonial shipwrecks, pirate ships,” Stemm says. “This gives me the chance to be the underwater archeologist I always wanted to be.”

Stemm was a marketing and advertising executive who owned his own firm in Tampa. In 1986, he and his partner, John Morris, bought an 85-foot ocean research vessel and $1 million in equipment, including a remotely operated vehicle, to search for shipwrecks and treasure. The next year they purchased a treasure map from the renowned treasure hunter Robert Marx. The map was literally a nautical chart with an X that marked the spot where Marx believed there to be remnants of a Spanish galleon that had gone down during a 1622 hurricane.

Yet after two years of research and weeks of round-the-clock searching, they could not find the wreck. Finally, one of Stemm’s researchers resorted to an old trick. He found a large fish and startled it, hoping it would dash to the nearest hiding spot—possibly the wreck they sought. Amazingly, it worked. They found the remains of a galleon that contained 26 gold bars, 726 silver coins, thousands of pearls and archaeologically significant navigational tools among a total of 20,000 artifacts. Although the haul was appraised at more than $4.7 million, Stemm, Morris and Marx had spent $3 million to find it.

Victory at Sea
Treasure hunting for thrill and profit entered the modern era on July 27, 1956, when Peter Gimbel, department store heir and adventurer, took the first pictures of the Andrea Doria, the ocean liner that collided with another ship two days earlier, sinking the next day, 45 miles south of Nantucket. Using crude diving gear, Gimbel and a friend dove 150 feet down, following the trail of bubbles still rising from the groaning hull. They snapped photographs of the ship’s pristine deck and unbroken portholes for Life magazine. Over the next three decades Gimbel became obsessed with the wreck, and the artifacts that he could salvage from it. In 1981, one of his fellow divers cut a hole in the side of the ship, now called Gimbel’s Hole, in an attempt to recover the ship’s safe. Over the years, more than a dozen divers have died trying to recover artifacts from the ship.

MANY ARTIFACTS were recovered from the SS Republic, such as the porcelain angel above.(Photograph courtesy Odyssey Marine Exploration.)
As research methods have improved, so has the quality of the finds. Real estate developer Harvey Kaltsas has found 15 wrecks from the 1800s in the waters near Florida. Kaltsas and his group of investors, who call themselves the Spanish Main Treasure Co., have surveyed a 40-mile swath of the west coast of Florida using sidescan sonar equipment. He is currently searching for the remains of a Dutch warship called the Eendracht, which is believed to have sunk off the southwest Florida coast in 1624. Although Kaltsas is captivated by the historical significance of the ships he is hunts for, he is also planning to be rewarded for his efforts. “I fully intend to make a profit at this,” he says.

Having circumnavigated the globe, the Eendracht is of great historical significance to more than one nation. It was one of the first European ships to explore the western coast of Australia, under Captain Dirk Hartog. While chasing Spanish ships in the Gulf of Mexico, the Eendracht went aground and sank. The crew abandoned ship, seized one of the vessels they were chasing and left the Spanish sailors stranded on shore. Kaltsas’ company has already sent researchers to the Netherlands to review the accounts of the seamen who returned.

Next, Kaltsas must locate the wreck, which can take years, even with the most sophisticated sonar equipment. If the wreck can be found in waters shallow enough to dive, and if Kaltsas can negotiate a deal with the state of Florida, the Dutch government and perhaps even Spain, then he might be in a position to become a wealthy, legendary explorer—assuming of course that he does not run out of money first. To date, Kaltsas and his fellow investors have spent $300,000 on a boat, equipment and fuel, and after so many years of searching, he is taking a break to focus on real estate ventures, which are “less speculative,” he says. He and his partners, however, plan to resume their search soon.

TOP VIEW
Traditionally considered a hobby for eccentrics, searching for shipwrecks containing lost treasure has become big business. Treasure hunters with staffs of historians, archeologists and divers use sonar, historic maps and undersea robots to locate and recover valuables lost at sea centuries ago. They also lure investors to fund their increasingly expensive efforts. While the odds of seeing a generous return are slim, adventure and fascinating cocktail party conversation are nearly guaranteed.
By far the most successful treasure hunter was a former chicken farmer named Mel Fisher, who spent 16 years searching for the wreck of a Spanish galleon, the Nuestra Señora de Atocha, which sank in 1622 off Key West, Fla. Fisher followed rumors for the first six years. Then, funded by a group of investors, he sent professional researchers to Seville to translate historical records of survivors in order to narrow the search to a manageable area.

On July 20, 1985, Fisher’s persistence paid off: He found pieces of the Atocha and some of the treasure entombed within. The recovered fortune is worth $500 million, and divers still bring up artifacts. Researchers have accounted for just 60 percent of the items in the ship’s manifest, including six pounds of uncut emeralds from an estimated 70 pounds that were on the ship when it sank. “We’ll be salvaging it for years to come,” says Kim Fisher, Mel’s son.

Thrill and Profit
Even successful treasure hunters like Fisher rarely fund all their expenses from their own pockets. The Fisher family has had investors since the 1970s, when the family sold shares to a few entities who then sold those shares to individuals. The family formed a limited partnership in 1980 and sold 500 shares for $1,000 each. Under this scheme, each investor had to renew the investment annually. The big payout finally came after the company found treasure in 1985. In 1992, the family formed its first limited liability company and sold shares in the business for $40,000 each. It turned out to be a good year for investors, who earned a 6-to-1 payout after divers found a bag of emeralds. After legal problems with the state of Florida were settled in the 1990s (see “Finders Keepers?”) the company, Kim Fisher recalls, threw its first investor party and handed out $80 in treasure for every dollar invested.

Today, Mel Fisher Enterprises has 100 investors who have each paid up to $72,000 for a single share of treasure. (Investors can also purchase fractions of shares. In total, investors claim about 35 percent of the treasure recovered in any year.) Since that first investor party, fuel and other costs have doubled, and the rate of actual treasure recovery has slowed. While the best a new investor can currently hope for is to break even, that could all change if the family finds the ship’s forecastle, which might house the bulk of the Atocha’s treasure. “There is still potential for a 100-to-1 payout,” Kim Fisher enthuses. (See “Vicarious Investment”.)

THE SALVAGE vessel J.B. Magruder serves as the base for excavation of the Nuestra Señora de Atocha. (Photograph courtesy Mel Fisher’s Treasures.)
After Stemm’s first success finding a Spanish galleon in 1989, he and his partner took their company public, folded, founded a new company and went public again in 1995 as Marine Odyssey Exploration, which currently has a market cap of roughly $180 million. The stock trades publicly on the American Stock Exchange as OMR, and as one would expect from a company that racks up huge expenses while hunting for treasure, the stock is extremely volatile; it hit a low of $2.25 per share in 2005. Yet, on news that the company may have found the Sussex, the stock shot up to $5.75 per share.

Top: AFTER THE first coins were removed from the SS Republic site, a virtual carpet of gold was revealed. Bottom: A locket with a photo of Thyrza Nichols was carried by Col. William Nichols when the Republic sank. (Photography courtesy Odyssey Marine Exploration.)
Shortly after the company went public for the second time, Odyssey researchers found the remnants of the SS Republic, a steamship lost in 1865 carrying $400,000 in gold and silver coins, a find with an estimated worth in the millions of dollars. The treasure hunt is the subject of at least two television documentaries and was featured in National Geographic magazine. Marine Odyssey Exploration has already sold $25 million worth of coins from the boat wreckage, however the company also spends millions annually in operational costs.

According to Stemm, the company spends $25,000 a day on everything from on-shore research to the scouring of promising sites and the ongoing excavation of relics such as the Republic. To put together an operation like this one, a treasure hunter would need to spend at least $5 million on a ship capable of carrying the right equipment and crew, and then as much as another $3 million on a remotely operated vehicle system that can work at great depths to record high-definition video of shipwrecks, properly identify the ship and then recover artifacts. Integrating technologies such as sidescan sonar, magnets to detect iron and a GPS system with the research ship and remote vehicle would cost still another $1 million. Stemm employs seven full-time researchers who correlate the data collected from archives from throughout the world in an effort to narrow the search area. It is a process that can take years. He estimates that the company has, to date, spent $30 million on the equipment and research.

MORE THAN 200 different bottle types were recovered from the ship. (Photograph courtesy Odyssey Marine Exploration.)
Stemm knows that groups of explorers are equipping themselves with boats loaded with technology and researchers to compete with Marine Odyssey Exploration to find the next Sussex. He feels that as competition increases, those outfits that are fully funded and, like his company, publicly traded, will dominate the search and recovery of lost treasure. “My goal is to make money for shareholders and employees, to retire wealthy and have fun doing it.”

Michelle Seaton is a Massachusetts-based senior correspondent for Worth.