The Next Gold Rush is on the Ocean Floor

Posted by - Tuesday, July 10th, 2012

Less than a year ago Keith Kohl, expert investor and editor for our sister publication Energy and Capital, wrote about the last place gold bugs expected to find a gold rush: underwater. While some critics laughed at some of his bold predictions, it proved to be the underwater miners that really had the last laugh...

One company, Nautilus Minerals (TSX:NUS) was able to double the return of their investors as the technology to mine the underwater gold became available. And they've got some even bigger ambitions for 2013...

New robots, sensors and other special technological equipment necessary for prosperous mining projects have finally found their way into the mainstream gold mining community. Much of the technological advances can be attributed to the oil and gas industry. With more robots and machinery now available, underwater gold mining has become a much more realistic goal for various companies with their sights set on recovering precious metal riches buried underneath miles of ocean water.

Fast forward to present day, and the vast deposits of underwater gold already discovered have lured in a mad rush of sea-floor gold miners experiencing “extreme success,” according to Mr. Dettweiler with Odyssey Marine Exploration of Tampa, Fla.

It's a relatively new phenomena, underwater mining. Because it is still in its infancy, there are extremely high concentrations of gold in various gold deposit formations sitting idly untouched all over the seabed.

Now is the time for investors to capitalize on these renewed undersea mining efforts. Investors should be especially enthusiastic to jump on this opportunity amidst the growing reports of metal shortages in traditional (depleting) gold deposits on land.

Robotic arms have already broken off massive chunks of mineral-dense rocks that had previously been trapped too deep under water for miners to be able to extract the gold, silver, copper, and zinc. Until now...

In lieu of the challenges, the new robotic technology has inspired the Australian company mentioned above – Nautilus Minerals – to officially begin major mining projects underwater off the shore of Papua New Guinea next year, according to NPR.

The story has risen back to the surface and is getting investors excited again after an almost 50% dip in share price recently due to a dispute with the State and a Notice of Arbitration filed back in June, threatening their upcoming 2013 project.

This is how the company plans to get the job done in the most environmentally friendly manner possible... Samantha Smith, vice president for the corporate responsibility at the company reports:

"You have two machines that cut, and they do different kinds of cuts," she says. These tools have large grinding wheels and other devices to break up the rock at the sea-floor, which is similar in hardness to concrete. "And then you've got a third machine that goes along and effectively sucks the material up from the sea-floor."

The material is drawn into a long pipe, similar to the kind used in deep-sea oil drilling. This riser pipe brings slurry to ships on the surface, and the mineral-rich material is hauled to shore. The mineral-rich wastewater that comes up the pipe is filtered and pumped back to the sea-floor. That way, it won't harm tuna, which swim closer to the surface, and which commercial fishermen depend upon.

Smith reminds us that this new way of mining is ideal because it won't force families to leave their homelands in order for companies like hers to dig mines and they won't be contaminating rivers and streams either.

With the environmental threats minimized and the precious metals payoff expected to to be unprecedentedly high, Smith says the kind of operation is absolutely advantageous for everyone. She says it simply makes more sense from an environmental and a social standpoint.

This could very well be the birth of brand new and enormously successful industry. Mr. Dettweiler (with Odyssey Marine Exploration) added, if metal prices rise, “a billion-dollar deposit can turn into a hundred billion.”

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