At least £12 million of silver has been discovered in the wreck of a World War One-era British steamer off the south-west coast of Ireland.

The SS Mantola was sunk by a torpedo from the German U-Boat U-81 on 8 February 1917, and was later the subject of a £110,000 war risk insurance claim by the British government on the value of the 600,000 ounces of silver it carried.

The wreck was discovered by US salvage firm Odyssey Marine Exploration Inc. at a depth of over 3,500 metres.

Salvage rights for the ship's cargo have already been negotiated with the government, ensuring that the company will claim the majority of what they are able to recover.

Odyssey's find follows their recent discovery of the SS Gairsoppa almost 100 miles from the remains of the Mantola, which itself contained more than £150 million worth of silver, the largest such haul ever discovered.

Odyssey President Mark Gordon said in a statement: "we are planning to conduct the recovery expedition in conjunction with the Gairsoppa recovery, which will also make the operation very cost-efficient.

"Securing our ownership rights prior to recovery and funding our business from cash-flow produced from operations has been a key focus for us."

Recovery of the ship's cargo is predicted to commence in Spring 2012 as soon as weather conditions in the North Atlantic permit further exploration.