Miawpukek First Nation 21 st Annual Fisheries Conference - - PowerPoint PPT Presentation

Miawpukek First Nation

21st Annual Fisheries Conference Opportunities in Aquaculture

January 28th to 30th, 2020

There are two opportunity streams

Atlantic salmon (Salmo salar); and, Steelhead / Ocean trout (Oncorynchus mykiss)

Atlantic salmon background details:

The players; The locations; and, The opportunities.

Atlantic salmon – the players

Cooke Aquaculture; Grieg NL; MOWI Canada East; To be determined by provincial RFP for Burgeo area Bay Management Area;

A salmon region in NL is held by individual companies with at least 3 BMAs. Rotation is 2 years max per site and 2 ½ years per BMA. Hence fallow 1 year per site and 6 months per BMA. MFN has the opportunity to work with DFLR of the Burgeo RFP

DFLR and AAHD, and DFO; and, NAIA.

The locations east of the Burin Peninsula:

We are here

The locations west of the Burin Peninsula – Placentia Bay

Volume potential

Note that approximately 100,000 salmon per cage, and typical site size at 10 cages.

Cooke 2,000,000 smolt MOWI 8,000,000 Grieg 7,000,000 Burgeo 6,000,000 TOTAL 23,000,000

Should produce 100,000 MT

Atlantic salmon opportunities:

In-situ net cleaning;

23 million smolt per annum will require approximately 690 cages at 10 per site or 69 sites. 1 in situ vessel and robot per 3 sites. Approximately 23 will be required.

Cleaner fish;

Current stocking rates of cleaner fish are planned at rates between 10 to 15% of smolt stocked with a split between cunners and lumpfish. Approximately 2,300,000 clearer fish will be

• needed. MFN has a good lead on acquiring

requisite licences for the cunners. NEXT

Atlantic salmon opportunities (continued)

Cunners continued. The cunners will likely be

• n the heavy side of that equation with MOWI

already requesting 862,500 for 2020.

Cap ex versus fleet leasing;

The opportunity here is an odd one. The stock exchange based Norwegian companies have a preference for leasing services vis a vis capital expenditures and in house setups. Even Norwegian service providers have a preference for leasing over capital expenditures.

Atlantic salmon opportunities (continued 2)

Crewing;

Horizon Maritime (?)

Other site services; and,

Supplies and deliveries (vessel based). Well boats. Clean energy.

Waste management.

Turning various waste streams into value – Fish hydrolysate fertilizers and pharmaceuticals.

Steelhead background details

The players; The locations; and, The opportunities.

Steelhead -- the players

Cooke Aquaculture

Now idle with rumours of restart. They lost their shirt on the last go around with feed and maturation issues. New market pricing has gotten their attention.

Cold Water Fisheries / Nova Fish Farms

Now idle with rumours of restart. They took an exit from the industry around rumours of the owners death and complications with the settlement of his affairs. Also performance issues with feed. Issues resolved and ongoing rumours of restart but nothing on the ground as yet.

Netukulimk Fisheries Limited (MFN)

Has assess to 3 of MOWI’s trout sites that they will not be using (MOWI is only going to grow salmon) Has acquired 23 cages and nets from MOWI (they are trading out old Canadian technology for new Norwegian). Has a site service vessel – again from MOWI (needs a $100k retrofit vs new purchase at $1,000,000.

Steelhead – the locations

We are here

Steelhead – the locations (continued)

Very unique oceanography in the Bay d’Espoir due to the diversion of all southwest rivers into Bay d’Espoir. Brackish fjord – largest in NL. Ideal for steelhead. Warm water in winter with coastal ice insolation. Safe overwinter areas with land locked spring ice. Ready buyer – MOWI located in the region Ready processing capacity – Barry Group in

• St. Alban’s

Steelhead opportunities

Note to addressing the opportunities: steelhead production has been hindered by perception as

salmon’s poor second cousin – now addressed by a market switch to where it gets a premium over salmon; The steelhead production in NL and NS largely collapsed

• ver issues around feed cohesion and very poor efficiencies.

The feed cohesion issues are largely solved. Some factories still make a low cohesion feed but working solutions are available; Developmental disease issues have been eliminated by modern vaccines; Steelhead are grown in brackish water where sea lice cannot thrive and avoid about $1.00 per kg in cost relative to salmon.

Steelhead opportunities -- continued

Hatchery: Access to fingerlings primary concern for production;

There is no hatchery production of fingerlings in the NL; Reduces transportation costs for producers relative to importations Reduces transportation risk relative to importations.

Fish farms: Localized opportunity for a major economic engine; and,

MFN poised with sites and near complete farming systems.

Farm services as above for salmon

SUMMARY & MFN’s STRATEGY

Cunners as cleaner fish: MFN early mover with coastal population surveys, bait testing and

pot testing. Did a technology transfer with MOWI in Norway to assess biosecurity, handling and carrying; The gear up to the challenge of this business is very small relative to the return. We will work with already boat equipped fishermen. We have 200 pots but approximately 600 will be required to meet MOWIs ask for this year 862,000 at a price somewhere between $2.00 and $2.50. $1,724,000. We should be able to gross close to $1,000,000 after paying fishermen. We will need a carrier vessel by spring with carrier tanks and control stations per each BMA worked.

SUMMARY & MFN’s STRATEGY

In situ net cleaning: MFN early mover in acquiring new technology to North America for

cleaning nets. The net cleaning Robot is called the FNC8 (Flying Net Cleaner);

SUMMARY & MFN’s STRATEGY

In situ net cleaning (continued): We see the development of the net cleaning opportunity in NL and

particularly with MOWI as a very attractive business opportunity. We view the full opportunity with MOWI to be in the order of 6 full systems -- we have the first one. With our arrangement with NAS and through that agreement we are able to participate at the capacity we are able to generate positive cash flows and acquire equity to maximize the opportunity. In our participation with the RFP for the Burgeo BMAs we will offer full service to the winner of the RFP.

SUMMARY & MFN’s STRATEGY

Steelhead production: We see ourselves taking a benchmarking approach to the first

couple of cycles and only then moving on to more consistent production and relative scaleup. It is as the following from a draft in production for the business financials..

SUMMARY & MFN’s STRATEGY

Steelhead production continued: During the first few cycles there be a requirement for importation of

fingerlings from Nova Scotia. This research to find a source is still

• ngoing.

The financial model of the business is still in development and will be coincidental with the intelligence we can gather. There will be opportunities for our funding partners to participate on some of the remaining capital items, some site license development, and inventory building.

SUMMARY & MFN’s STRATEGY

Waste management: Both steelhead and salmon production have waste two streams

that can be monetized. Silage from mortalities. These can be used to make fish proteins,

• ils and protein concentrates for animal feeds. It can be used as

an organic fertilizer and act to remediate depleted soils. At 15% mortality on some 30,000,000 fish at medial size of 500 grams. That would be some 15,000 cubic liters. Processing wastes. This number will be relative to the end use of the fish and how it is sold. With head on gutted it is 12% of volume. If fillets are the primary production the waste percentage is around 44%. At full potential and assuming that the fish will be sent fully processed the waste stream could total 50,000 MT. This stream would be human food grade and suitable for omega 3 fatty acid

• extraction. Fish proteins. Bone products. Fish oils.

MFN would encourage a feasibility study to determine the extent of this opportunity and the cost and logistics of such an operation.

SUMMARY & MFN’s STRATEGY

Green energy: The farms along the coast are energy intensive and totally based

• n fossil fuels. There will be in the order of 100 of these. Each with

350 kva systems driven by diesel. Energy costs are in the order of $1.00 per kilowatt hour. The generator runs 24 / 7 regardless of

• draw. The actual energy used versus created is at 25%.

The farms are concerned with risks of fuel spills and their carbon

• footprint. Not least would be pubic perception / social license

aspects that will be communicated to the customer. There are opportunities to monetize the need. MFN would encourage a feasibility study to determine the extent of this opportunity and the cost and logistics of such an operation. MFN would encourage and support other entrepreneurial entities to take a lead. A green energy solution would be welcomed by all.

Wela’lin!