David Heydon says the rock he dredged from a mile beneath the sea off Papua New Guinea looked like nothing more than a dull-brown fire hydrant. Inside were veins of copper and gold worth $300.

Two companies exploring the South Pacific seas with new remote-controlled robots are betting rocks like these will start an underwater gold rush for billions of dollars lining the ocean floor, reversing the prospects for a method of mining that has never been economical.

"We should mine on the sea floor, because it is the most common spot on the planet," says Heydon, chief executive of Vancouver, British Columbia-based Nautilus Minerals Inc., who recounted details of the dredging dive he supervised in February. "It's just not the most common to us."

With the prices of some metals, such as copper and silver, more than doubling in the past three years and land deposits dwindling, the modern-day forty-niners are defying investor skepticism, untested gear and a history of failed ocean ventures to mount the first commercial exploration in a generation.

Nautilus and London-based Neptune Minerals Plc have raised more than $50 million and secured such partners as Barrick Gold Corp., the world's biggest gold producer, and Canyon Offshore Inc., a maker of undersea rigs.

They are trying to take advantage of surging demand for mineral wealth. Stockpiles of copper, needed for factories and houses in the emerging economies of China and India, have dwindled to about 150,000 metric tons as of March 2006, from 1.2 million tons in 2003, according to the U.S. Geological Survey.

Four of the five largest deposits are in Chile. Keeping up with escalating demand through 2020 will require adding 1.1 billion tons, the equivalent of about three more Chiles, to global supply, the agency says.

METALS PRICES SURGE

The squeeze pushed copper prices up 72 percent to $7,545 a metric ton on the London Metal Exchange this year through Sept. 29, while gold futures climbed 15 percent to $598.60 an ounce in the same time after reaching a 26-year high of $732 on May 12.

"The geological potential down there is awesome," says Tony O'Sullivan, who joined Nautilus as chief operating officer in May after tiring of the hunt for new strikes on land as head of base metals exploration at Melbourne, Australia-based BHP Billiton Ltd.

Ocean miners will have to overcome concern that excavation will harm the environment and prove too expensive to make the ventures profitable.

Sentry Select Capital Corp. bought 1 million Nautilus shares, convinced that metals supply shortages are likely to persist. "It's harder and harder to find large deposits," says Laura Lau, a fund manager at the Toronto-based firm.

'SUBSTANTIAL' RISK

That doesn't mean ocean mining is viable, says Paul van Eeden, president of Cranberry Capital Inc., a Toronto-based private investment firm. Major mines depend on churning up rock that yields a consistent grade of metals, and it's too early to say how uniform the material is on the sea floor, he says.

"The risks are substantial," he says. "None of this has been tested."

The undersea deposits form along the 25,000-mile "ring of fire" that encircles the Pacific like a gold band, stretching from Australia, through the Sea of Japan, past Canada's west coast and on to the tip of South America.

OCEAN DEPOSITS

At the sea floor, slabs of the earth's crust collide. Sea water mingles with the magma below and vents through cracks in the floor, forming plumes of superheated, metals-rich water called "black smokers." They crystallize into chimneys as tall as 100 feet that may contain gold, copper and zinc.

First discovered near the Galapagos Islands off Ecuador in 1977, the black smokers are the geological cousins of deposits mined on dry land for centuries in volcanic regions of Australia and Spain, which were under water millions of years ago.

Limited sampling by research vessels has turned up 200 of these ocean deposits, mainly in coastal waters owned by New Zealand, Papua New Guinea, Japan and Indonesia, according to a report by the International Seabed Authority, which the United Nations established in 1982 to regulate sea mining.

A typical deposit may contain 5 million to 10 million tons of ore rich in copper or gold — worth as much as $7 billion at today's prices. Only 5 percent of the undersea ridges have been explored, so there are probably far more deposits.

During the sustained rally in metals markets of 1977 to 1980 some of the world's largest mining companies, including Inco Ltd. and Kennecott Minerals Co., spent $500 million combined to experiment with deep-sea mining, according to the International Seabed Authority.

Potato-sized rocks, rich in manganese and zinc, line the Pacific floor. A group led by Toronto-based Inco in 1978 brought up 800 tons from 18,000 feet of water at the equator, essentially vacuuming them into a ship through a pipe.

The trial was abandoned after prices fell and it proved cheaper to keep looking on land, says Ted Brockett, who worked on the Inco project and now runs Sound Ocean Systems Inc., a Seattle company that makes ocean-monitoring equipment.

"If the economics had been there, we'd all be out ocean mining by now," he says.

ROBOTIC MINERS

Today's undersea promoters say their approach is better because the deposits near black smokers are richer in metals. They can also rely on more advanced equipment developed by offshore oil companies.

Nautilus has made two sampling voyages this year, retrieving rocks with drills and robotic arms made by companies including Leidschendam, Netherlands-based Fugro NV, the world's largest surveyor of deepwater oil fields, and Canyon, a unit of Houston-based Helix Energy Solutions Group Inc. Canyon's robotic arms are attached to 9-foot-long submersibles tethered to ships and maneuvered with remote-controlled thrusters.

The deposits are located by towing another device shaped like a cruise missile. Equipped with a video camera, it sweeps the sea floor and measures temperature, salinity and magnetism.

Biologists are intrigued by the black smokers. The surrounding sea is rich in exotic life, from blind shrimp to 3-foot-long tubeworms that weren't known to exist until the smokers were discovered, says Peter Rona, a marine science professor at Rutgers University in New Brunswick, N.J.

IMPACT STUDY URGED

He says mining should be allowed only after intensive study.

"We need sources of metals, but we need to do it in a knowledgeable and sustainable manner," Rona says.

The companies say they won't target active vents, only nearby mounds of metals-rich rock formed as long as 5 million years ago by now-dormant smokers. They argue that oil and gas companies already mine in the ocean and lay pipes and dig trenches in the North Sea and the Gulf of Mexico.

"The disturbance we'll do on the sea floor is less than the oil and gas industry," says Heydon, 50, the Nautilus chief executive.