Wresting treasure from Spanish galleons

Buried treasure! The very phrase evokes visions of treasure chests bulging with Spanish gold doubloons, silver ingots, and precious gems. This year it will also produce a prospectus for a limited partnership.

Melvin A. Fisher, the president of Treasure Salvors Inc. here, is searching not only for treasure but also for potential investors with deep pockets. Mr. Fisher is hoping to raise $1.25 million from a private placement of a limited partnership and $12 million from a public limited-partnership offering. The public offering, underwritten by Underhill Associates Inc. of Red Bank, N.J., is currently in registration at the Securities and Exchange Commission. The private placement, which was begun earlier in the year, is still not completely subscribed to.

Fisher is well known in the Florida Keys for discovering the wrecks of the Nuestra SeNora de Atocha and the Santa Margarita. Both vessels were Spanish treasure galleons loaded with an estimated $400 million worth of gold and silver. They were on their way to Spain in 1622 when they met with a hurricane in the Gulf Stream off the Keys. Some of the treasure was later salvaged by the Spanish, but most of it ended up burried under tons of sand off the Marquesas Keys.

Mr. Fisher started to pull it out of the water in the mid-1970s. One 1980 limited partnership, a source indicated, has returned about $10 for every $1 invested. Some of that loot was shown to the public earlier this year when Treasure Salvors displayed it at the East Martello Museum here. So far, about 25 percent of Margarita's treasure has been found and 6 percent of the Atocha's.

In the tax-shelter aspect of the partnerships, investors can expect to write off 85 cents for every $1 invested. The write-offs will come from investment tax credits and depreciation of equipment purchased to extract the treasure - if any is found. The private placement is designed to salvage treasure from the Margarita.

The $12 million limited partnership, if it manages to raise funds, will mount eight expeditions. These would include more salvage of the Atocha and Margarita; a 1715 wreck off Vero Beach, Fla., which Fisher has the rights to salvage; a 1733 wreck off Tavernier, Fla.; and possibly wrecks off of Vera Cruz, Mexico, and Cartagena, Colombia, and a land treasure search in Peru.

The minimum purchase for the public limited partnership is $5,000. With an 85 cent write-off, for an investor in the 50 percent tax bracket it means the out-of-pocket risk is $2,175. If Fisher finds any treasure in this risky business, he will split 70 percent with the limited partners and keep 30 percent himself, after expenses.