Treasure hunters who found $75m of shipwrecked gold coins

Treasure hunters Greg Stemm and John Morris made headlines last month when they recovered more than 500,000 pieces of gold and silver from a wreck codenamed Black Swan'. The haul, which could be worth as much as $500m, sent the share price of their company, Amex-listed Marine Odyssey Exploration, rocketing from $4.35 to $9, valuing the company at $400m; and Stemm and Morris at about $14.8m and $12.8m respectively. The ship's identity has yet to be confirmed, but it is thought to be the Merchant Royal, an English ship known as the Eldorado of the Seas', which sank off the Cornish coast in 1641 full of treasure from Mexico.

Stemm, 49, started his career in PR for the Bob Hope organisation before setting up his own advertising agency in Florida. Morris, 57, worked in real estate and built shopping malls in the MidWest and Florida. When the two met in the 1980s, they discovered a mutual love of boats. In 1986 they bought an 85ft exploration ship from a university as a party boat. Before long, they were leasing it to research scientists and treasure hunters and in 1988, fired with "fantasies of sunken gold", they bought a map from treasure hunter Robert Marx and went looking for the wreck of a 17th-century Spanish galleon in the Caribbean.

It took them two years to find. By the time they had retrieved all the artefacts, the sale price of $3m barely netted a profit, says Adam Goodheart in Preservation magazine. But what they had gained was credibility. The pair set their sights on the SS Republic, a steamship that sank en route to New Orleans in 1865 carrying a reported $400,000 in coins. The following decade was tough. Year after "empty year", Stemm and Morris had to dilute their Odyssey shareholdings until they were minority shareholders, said Priit Vesilind in National Geographic.

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Then, in 2003, they struck paydirt. "After 17 years," said Brett O'Reilly in Fortune, "the company was an overnight success." They found coins worth an estimated $75m. In the first month of sales, Odyssey made $3m, ten times more than the previous ten years. One coin fetched $500,000. PR-savvy Stemm controlled every photo or video of the shipwreck and its treasure and struck a deal with National Geographic to produce two TV specials. Stemm knew it was just the beginning. "When we found the gold, we weren't awestruck. It was just plain relief." And as Morris pointed out, coins aren't money they are "inventory that has to be turned into money".

But salvage isn't the only revenue-earner. In 2005, Odyssey launched an entertainment unit to develop and manage shipwreck-themed public attractions. Stemm has met with Disney about TV and film projects based on the Black Swan. An even bigger story may be round the corner if Odyssey has, as it hopes, found the wreck of the HMS Sussex. The British warship, which sank near Gibraltar in 1694, was said to be carrying nine tonnes of gold, intended to bribe the Duke of Savoy to join forces against France. If Odyssey has located the ship, the king's bribe could be worth anywhere between $500m and $4bn, says Michelle Seaton in Worth. Should it fail, there's no shortage of targets. Stemm reckons there are "3,000 good wrecks out there" to keep his firm busy. "My goal is to make money for shareholders and employees, to retire wealthy and have fun doing it."

The foes they have to fight for the treasure

Treasure hunting is risky, expensive, time-consuming, and requires excellent diplomatic skills, says Michelle Seaton in Worth. Uncertain earnings aren't the only problem. From the outset, Stemm's greatest fear was becoming snared in costly ownership disputes, says O'Reilly. To avoid this, he and Morris decided early on only to "pursue wrecks without dispute claims, or strike a clean deal with the owners right away".

Yet Odyssey still attracts controversy. Salvage law dictates that treasure hunters get to keep 90% of their finds, but much depends on the ship's original owner and whether other claimants come forward. Odyssey bought the Republic from Atlantic Mutual Insurance (which had paid out when it sank) for $1.6m, but that didn't stop the US government pitching in to see if any of the money on board belonged to a Federal payroll (it didn't), while a research firm sued for a share, for helping to locate the ship (or so it claimed). Even though the Black Swan's identity has not officially been announced, says The Mail on Sunday, at least one descendant of the captain of the Merchant Royal, John Limbrey, has made enquiries about the wreck.

Archaeologists are their other foes. Although Stemm and Morris say they treat sites with "kid gloves", critics argue that as a public company, profit takes precedence over preservation. Kevin Crisman, a marine archaeologist at the Institute of Nautical Archaeology at Texas A&M University, described the work of treasure hunters as the "theft of public history". If these guys "tore up the floor of the Acropolis", he told The New York Times, "they'd be in jail in a minute".