Calling all adventure capitalists
Guy Zajonc has gone off the deep end. Time after time. When you’re looking for sunken treasure, deep is good.
Up to a point.
Deep, up to three miles down, separates groups with deep pockets and sophisticated knowledge and equipment from those who can pick over relatively shallow wrecks. Not that there’s anything wrong with that. The 1985 discovery of the Spanish galleon Atocha 50 feet down off the Florida coast captured the imagination of millions.
But for more than a decade now, Zajonc (pronounced “Zience”) has worked with businesses or informal groups working at much greater depths. He’s traveled to the remains of the Titanic, slowly rusting away 12,000 feet down in the Atlantic Ocean. He participated in an expedition to the shattered German battleship Bismarck 15,000 feet below the Atlantic’s surface.
Deeper still, and less well known than the others, is the I-52, a Japanese submarine that first whet Zajonc’s appetite for undersea adventure, and remains an object of his ambitions.
With one 1995 dive down to that wreck, he says, “I was bit.”
Zajonc, 57, says he was brought into that venture as a result of contacts made years earlier when he helped raise money for a short-lived company that was trying to locate the remains of a Spanish galleon thought to have gone down off the Oregon coast. At that time, Zajonc specialized in structuring and capitalizing companies that wanted to go public.
Although the Oregon venture failed, one of its financial backers sought Zajonc’s fund-raising help again after the I-52 was found. The sub was Japan’s most advanced when intercepted by the U.S. Navy before its planned rendezvous with a German U-boat. Among the goods to be exchanged at that meeting was two tons of gold.
The gold remains at the bottom on the sea.
After 1995, Zajonc says, he circulated through the relatively small circle of researchers, technicians, financiers and others who coalesce behind one venture or another, than separate and move on to the next project. “It’s like wildcatting,” he says, drawing a comparison with the oil industry. “Every project would round up its own sort of group.”
All have one G.O.D. — gold on deck.
Zajonc finally found some permanence in August 2003, when he joined Odyssey Marine Exploration Inc. in Tampa, Fla., as its general counsel. He was only the eighth employee, but Odyssey was on the threshold of fame. Founders Greg Stemm and John Morris had found the S.S. Republic, a side-wheel steamship that sank in 1865.
The Republic, overcome by a hurricane, sank in 1,700 feet of water 100 miles off the Georgia coast. Aboard were more than 50,000 gold and silver coins bound from New York to New Orleans, then struggling to recover from the Civil War. Stemm and Morris had hunted the Republic for 12 years, spending more than $10 million in the process.
The wreck’s potential value exceeds $75 million. One coin alone sold for $550,000.
Finding the long-lost Republic quickly lifted Odyssey Marine’s shares from the equal obscurity of pink-sheet stocks to the American Stock Exchange. Zajonc says the liquidity provided by public trading of company shares affirms a long-held conviction of his that an ongoing concern like Odyssey would provide higher rewards to backers than less formally organized exploration groups.
Take, for example, investors in the syndicate that recovered more than $100 million in bullion and coins from the S.S. Central America. The ship was found in 1986, but the sheer volume of gold has made total liquidation difficult. Odyssey Marine investors can simply sell their stock.
Odyssey not only has gold to sell, but intellectual property, archaeological expertise, research, technology and other assets the young underwater exploration industry does not yet know how to value.
Although the Republic has been the company’s only major strike, another may lie in the Gibraltar Strait between Spain and Morocco. The H.M.S. Sussex sank there in 1694 with gold intended to help the Duke of Savoy pay mercenaries fighting the French, with whom the British were then at war. That cargo could be worth more than $1 billion, but has remained untouched while Zajonc negotiated an agreement for its recovery with the British government. That deal is in place, but a belated intervention by Spain has created another snag.
But Zajonc will return to his home in Spokane at year’s end to take up full-time residency. He will continue doing some work with Odyssey, he says, but has his own projects in mind. He would like to give more amateurs an appreciation for underwater archaeology by exposing them to relatively accessible wrecks in areas like Puget Sound. He foresees some film projects. Sometimes a wreck’s value lies less in the booty than it does in the story behind it, he says.
Out there, too, is the I-52, if someone can persuade the Japanese government to permit a recovery effort Zajonc estimates would cost as much as $15 million. He’s also tossed out the idea of looking off the African coast for one of the trade ships that used to carry gold east to Asia, and jewels and other luxuries west to Europe.
Perhaps three million ships have gone down over the millennia, Zajonc says. Only a tiny fraction have been explored.
“I see it as a growth industry,” he says.
One with a lot of glitter.