A Korean firm enlisted Canadian deep-sea explorers to help it identify a long-lost Russian shipwreck, which sank over a century ago with potentially billions of dollars worth of treasure on board.
The Seoul-based Shinil Group says it found the wreck of the Dmitri Donskoi, a first-class armoured Russian cruiser, teetering on an underwater ledge near Ulleungdo Island, South Korea, earlier this month.
Shinil Group hired Canadian entrepreneur Phil Nuytten, president of the Vancouver-based firm Nuytco Research, to help it identify the wreck.
“We found it within two days,” Nuytten told Global News.
Nuytten’s team used a deep-sea submersible called the DeepWorker 2000 to locate and visit the sunken ship, which sits approximately 480 metres below the ocean’s surface.
The sub captured footage of the outside of the wreck, including the Cyrillic nameplate identifying it as the Dmitri Donskoi, Shinil Group said in a news release.
“We were able to read the nametag on it,” added Nuytten.
A video released by Shinil Group shows the moment when Nuytten’s team came upon the name.
The Donskoi was built in 1885 and served in the Russian fleet for 20 years, before it was damaged in battle during the Russo-Japanese War in May 1905. The crippled vessel escaped the battle but the crew deemed it unable to make it to port, prompting them to abandon it near Ulleungdo Island.
“It’s a very old wreck,” Nuytten said.
“For its age and the fact that it’s a wood hull, it’s in surprisingly good condition.”
It’s thought the ship may have been carrying up to 5,500 boxes of gold bars and treasure meant to pay for the fleet and its crew. The treasure is said to have been brought on board from other ships that were damaged in the initial battle.
The treasure could be worth up to US$130 billion.
The prospect of recovering that booty has sent many investors scrambling for a piece of the action in South Korea. It’s also sparked some skepticism about the claim.
Russian scholars have previously cast doubt on suggestions that the vessel might be carrying that much gold in its hold. They pointed out that the Donskoi was already loaded down with armoured plating, 12 guns, 500 sailors and some 1,600 tons of coal, leaving room for no more than about 200 tons of gold.
The Bank of Korea has approximately 104 tons of gold in its reserves, which is valued at around US$4.8 billion.
Shinil Group has not officially requested salvage rights to the site, a Korean official told the Associated Press. Such a request would require the company to put down a 10 per cent deposit on its anticipated findings, to the tune of US$13 billion.
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Shinil argued this week that it hasn’t actually found the treasure — just the ship, which it deems to be worth US$1 million. A company spokesperson says it plans to file a salvage request with a deposit of US$105,540.
A deposit is required before any recovery operations begin, according to Korean laws.
Nuytco Research deployed the crown jewel of its submarine fleet, the DeepWorker 2000, to help with the Korean firm’s exploration of the site.
The DeepWorker 2000 can carry a single occupant up to 610 metres (2,000 feet) below the ocean’s surface, and is equipped with lights and robotic arms to conduct various deep-sea operations.
“This wreck is in very deep water — too deep for conventional diving,” Nuytter said.
Nuytten says his DeepWorker subs are frequently used to explore shipwrecks, and have been deployed to visit such famous wrecks as the Lusitania (sunk in 1915) and the Edmund Fitzgerald, which sank in Lake Superior in 1975.
They’ve also been used to inspect underwater pipelines and communication cables, and to train NASA astronauts.
“We have been involved very heavily with a lot of deep-water stuff,” Nuytten said.
The Donskoi proved to be nothing more than a ghost ship back in 2000, when the Korea-based Dong-Ah Construction company first claimed it had found the prized wreck. Dong-Ah enjoyed a sharp surge in its stock price after the announcement, but the company never managed to recover any treasure.
Korean officials delisted Dong-Ah from the stock market as punishment for its empty claim, and the company declared bankruptcy a year later.
While the Dong-Ah caper ought to serve as a cautionary tale for potential investors, there was nevertheless a surge in interest around Shinil Group earlier this week.
Investors starting pumping their money into Jeil Steel on Tuesday, amid rumours that Shinil Group’s president was on the verge of buying it. Shinil Group was founded on June 1 and is not publicly traded.
Jeil Steel’s stock spiked by 30 per cent on Tuesday, then dipped by 20 per cent on Thursday after a regulatory filing revealed that Shinil’s president was only buying a minority stake in the company.
South Korea’s Financial Supervisory Service says it’s keeping a close eye on trading activity involving Jeil Steel.
An agency official told the Associated Press that the regulator was watching out for possible deceptive practices involving the trade of Jeil shares, including inducing investors through false information.
“Investors should beware because it’s uncertain whether the ship is salvageable and whether Shinil would be able to gain ownership of the assets even if it gets permission to raise it,” said the official, who didn’t want to be identified, citing office rules.
“Dong-Ah Construction made similar claims over the same ship but failed to deliver on its promises and went bankrupt, causing huge losses for investors.”
An official with the South Korean Financial Ministry raised the possibility that Russia might decide to lay claim to the wreck, and any potential gold found therein.
A Russian claim on the treasure could sink the salvage operation, unless Shinil Group finds a way to navigate the treacherous waters of international law.
Nuytten says things may have already been resolved.
“I believe the group that we’re working for has made a deal with the Russian government,” he said.
“The deal is simply to split it.”
— With files from The Associated Press
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