SS Gairsoppa - robot reveals silver ingots in ships hold

Seventy years ago the SS Gairsoppa became another casualty of the battle of the Atlantic. Sunk by a U-boat, it might have been forgotten, were it not for a cargo that looks set to become the largest haul of precious metal to be retrieved from the depths of the Atlantic.

Along with tea and iron, the Gairsoppa, which sank off the coast of Ireland in February 1941, was carrying 200 tonnes of silver – valued at £150m at today's prices.

The ship's remains were found earlier this month by Odyssey Marine Exploration, an American firm which won the contract for the salvage from the British government in 2010.

Under the terms of its contract, Odyssey said, the firm would retain 80% of the cargo's value, with the remainder – up to £30m – going to the Treasury. Although no silver was spotted in a preliminary examination, records indicate that the ship – which was en route from India to Liverpool – was laden with 7m ounces of silver bullion when it went down.

Andrew Craig, Odyssey's senior project manager, said: "We've accomplished the first phase of this project – the location and identification of the target shipwreck – and now we're hard at work planning for the recovery phase. Given the orientation and condition of the shipwreck, we are extremely confident that our planned salvage operation will be well suited for the recovery of this silver cargo."

The Gairsoppa was completing the final stages of its voyage when its captain decided to re-route for Galway on the west coast of Ireland. It was a decision that would bring tragedy: a German U-boat attacked it on 16 February 1941, and 84 men died when the ship went down. Only one man, second officer Richard Ayres, survived after making it in a lifeboat to the Cornish coast two weeks later. Two other crew members who survived the sinking died while trying to make it ashore.

The shipwreck was located by Odyssey's underwater robot three miles below the surface of the North Atlantic, around 300 miles off the coast of Ireland. The hole blasted by the torpedo was clearly in evidence, and Odyssey said it was able to identify the remains from features such as the type of anchor and the red and black colours used by the British Indian Steam Navigation Company.

Greg Stemm, the company's chief executive, said: "We were fortunate to find the shipwreck sitting upright, with the holds open and easily accessible. This should enable us to unload cargo through the hatches as would happen with a floating ship alongside a cargo terminal."

Stemm said he had "high confidence" that the silver would be found because an initial examination had confirmed the presence of tea chests, which were also reported to have been on board the ship.

"The tea is a lighter element of the cargo that would have been placed higher in the hold than the heavier silver, so we're confident that the silver cargo is still there as well," he added.

Odyssey hopes to carry out a full recovery of the cargo in the spring. The company does not expect to find any human remains.

Neil Cunningham Dobson, the company's principle archaeologist, said: "By finding this shipwreck, and telling the story of its loss, we pay tribute to the brave merchant sailors who lost their lives."

Last week Odyssey was ordered by a US appeals court to return to the Spanish government the treasure it took in 2007 from the 19th century shipwreck of Nuestra Señora de las Mercedes – and which is estimated to be worth up to $500m.

Determined to see an upholding of the so-called "finders keepers" law – which would give it the right to keep the treasure it found in the shipwreck – the company said it would press on with its long-running legal battle, requesting a new hearing before appeal judges.

In a statement, a spokesperson for the Department of Transport said: "The contract for the salvage of the SS Gairsoppa was awarded by competitive tender in accordance with government and departmental procedures.

"While we do not comment on the specifics of such commercial arrangements, Odyssey Marine Exploration were awarded the contract as they offered the best rate of return to HMG."