Seafarer Exploration Corp (OTCMKTS: SFRX) is an under the radar development stage company engaged in a niche sector of underwater exploration and salvage. The Company's main business is conducting archaeologically-sensitive explorations, leading to documentation, and recovery of historic shipwrecks from the colonial era.
In a recent interview, the Company CEO Kyle Kennedy talked about the upcoming plans of the company. As the Company is involved in a highly-specialized area of operations, it requires obtaining a number of permits and authorizations to carry out its tasks. Seafarer is all set to broaden its horizons as it announced receiving a three-year 1A-31 Exploration permit for the southernmost area of the Melbourne Beach site from the Florida Bureau of Archeological Research (FBAR). The area is also known as Area 1. Seafarer received the permit with a Dig and Identify modification clause.
Mr. Kennedy hailed the permit as "the single most important permit Seafarer has ever received." The statement sounds reasonable as the latest permit will have synergistic impact on the activities carried out by the exploration Company. It has already been engaged in exploration in an adjacent area, widely known as Area 2. During the exploration of this area, the Company had carried out cesium vapor magnetometer survey, which indicated high rate of probable hits in Area 1. With this new permit, the Company will be able to carry out exploration activities in Area 1, which is situated south to Area 2.
The activities in Area 1 are likely to provide boost to the company's prospects as the chances of making successful hits in this area are higher. Seafarer went through a number of hoops for obtaining this permit as the initial application was filed way back in May, 2014. Exploration activities are strictly regulated, making the process of obtaining permits cumbersome and time-consuming. However, the receipt of the latest permit is expected to let the Company boost its efforts.
Since receiving the permit, the Company has carried out a number of activities in the area, with encouraging results. In a recent interview, Mr. Kennedy provided updates about the Company's exploration projects. Kennedy reported that the company was able to find wreckage in the area. He also talked about the condition of the wreckage as the preservation seemed to be better than expected. Seafarer was able to find and investigate nicely preserved large wooden items of upper deck and railing and a large piece of the ship's hull. Other items found include: a nine foot cannon, silver platters, a pistol and locals have found numerous silver coins on the beach at the site.
The CEO also talked about the challenges faced by the Company. He particularly referred to the quality of currently available technology, which in his opinion, needs to be upgraded. However, the Company plans to overcome this challenge by engaging human experts including archaeologists. Seafarer plans to collaborate with specialist organizations for procuring technical know-how.
Seafarer is also in the process of prospecting newer sites where it can start new operations. The Company will benefit from having more sites under its wing, which will increase the probability of finding feasible wreckage. Mr. Kennedy said that they plan to focus on Melbourne Beach and Juno Beach for the time being.
According to the latest SEC filing by the Company, Seafarer did not earn any revenue for its previous financial year. The Company consequently suffered operating losses and the trend is likely to continue for the foreseeable future. Since the Company's main revenue generating activities tend to be spread over the course of multiple years, Seafarer is working to devise a strategy to generate positive cash flows.
However, the Company now expects to make lucrative findings soon. Mr. Kennedy elaborated about the procedure of monetizing the wreckage findings. According to the current laws, different laws are applicable in different jurisdiction. CEO Kennedy said that the Company already has an agreement with the State of Florida in place. According to Florida laws, any wreckage found within 3 miles of low water mark, is deemed to belong to the government. Seafarer has an agreement with the government, which allows the Company to retain 80 percent of the wreckage, while the remaining 20 percent will go the government.
Seafarer is going to celebrate its 10th anniversary this year, which underlines the robustness of its business model. Shipwreck exploration can be a lucrative yet capital intensive business. The Company's survival for a decade indicates that it is working in the right direction. Seafarer also takes a focused approach as it specializes in wreckage belonging to colonial times, ranging from the 16th to 18th century. Having over 300 years of wrecks to target increases the chances of successful expeditions.
Seafarer's efforts have yielded good results in the stock market this year. The Company's stock has gained over 220 percent in the past 12 months while its Year to Date gain is pegged close to 88 percent. However, despite such rise, the stock still offers substantial upside from the current levels, as the stock is still way down from its all times high in 2013. With the encouraging news such as obtaining the new licenses, and more favorable diving months approaching, the company stock is expected to mirror its encouraging operating prospectus. Seafarer also expects to start generating revenue this year, which will help with the corporate liquidity.
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