Company that wants to mine ocean floor says it may have ‘overstated’ its growth potential

Subsea mining is a technique in which robotic machinery would be used to scoop or pump critical minerals, such as polymetallic nodules (pictured), from deep inside the ocean floor. Photo by HO/JAMSTEC/AFP via Getty Images

Article content

Article content

Deep Sea Minerals Corp. said it was launching a review of “all investor relations materials” to ensure they contained “balanced disclosure.” That review extends to its own corporate presentations and social media posts, as well as a series of posts it paid an outside company to create through a contract worth $400,000.

Article content

Article content

Article content

The company said in a press release that it “may have overstated (its) growth potential and the certainty of (its) trajectory, omitting underlying assumptions and risks.”

Article content

Chief executive James Deckelman did not provide comment.

Article content

Some of the material Deep Sea is removing occurred in a corporate presentation published last month in which it compared itself to other companies that already hold mining concessions — essentially licences to explore the seabed — and to companies that hold patents for subsea mining technology. Deep Sea has now said it does not hold either.

Article content

“Furthermore, if the company acquires mineral rights, achieving commercial operations, if ever achieved, will require significant time and capital expenditures,” it said.

Article content

Clicking on “Projects” on the company’s website led to a “Page not found” error as of Wednesday morning. The company’s stock price declined almost 23 per cent on Wednesday morning to 91 cents per share on the Canadian Securities Exchange.

Article content

Deep Sea said it has “commenced early stage engagement with selected governments and regulatory bodies in the Pacific Ocean region to assess potential pathways for future exploration initiatives.”

Article content

Article content

Subsea mining is a still-emerging technique in which robotic machinery would be used to scoop or pump critical minerals, such as nickel and manganese, from deep inside the ocean floor.

Article content

Article content

Although there isn’t any commercial-scale mining of the seabed yet, the International Seabed Authority has granted dozens of exploration licences. Much of the attention has focused on polymetallic nodules that can be located several kilometres below the ocean floor.

Article content

The proposed process has attracted controversy, particularly from environmental groups that say it could damage pristine ecosystems by creating sediment plumes or spreading toxic metals or creating noise disturbances. Others say the ocean floor ecosystem is still poorly understood, so it’s difficult to predict the long-term consequences of subsea mining.

Article content

In February, Deep Sea said it raised approximately $4 million through a non-brokered private placement. Later that month, it announced it would pay $400,000 to Vancouver-based Capital Gain Media Inc. to help market the company to investors over a period of four months.

Article content

That same month, Capital Gains began creating posts. On Wednesday, as part of its review, Deep Sea said it instructed Capital Gain Media to remove at least five posts. It did not say whether it would continue to retain Capital Gain’s services or how much it had paid the company yet.

Article content

Article content

Article content