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I think overall with treasure sense you get more royals, than without it. Not sure the higher the level the better treasure. I can get royal from lower level ships as well as higher levels. It's all pretty random. Sinking the Jug can yield 3 royals, or 1 crate. Sinking a level 20 ship can yield a royal.
I have noticed lately though, the ships aren't quite as generous as they used to be.
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