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June 22, 2013

Australia

Billion-Dollar Sea Dragon Project

 

CO2 Group, Australia’s leading environmental services company (specializing in carbon sequestration), plans to proceed with the development of a 10,000-hectare tiger shrimp (Penaeus monodon) farm (Project Sea Dragon) in northern Australia that hopes to produce 100,000 metric tons of shrimp a year.  The farm will be developed by CO2 Group’s subsidiary, Western Australian Resources Limited (WARL), a company established in 2005 to develop large-scale aquaculture projects.  The CO2 Group and WARL are talking with nine investors about funding the first stage of the billion-dollar project.  Andrew Grant, chief executive officer of the CO2 Group, says the company is targeting Chinese investors “although we have had excellent discussions with trading houses in Japan”, and we have talked with investors in the United States and Thailand.

 

With a pre-feasibility study completed, three Australian and six overseas companies have been granted access to financial details.  A bankable feasibility study will be completed next month with work on environmental approvals to follow.  Two preferred sites for the farm and its associated infrastructure have been secured with option agreements.  There is growing speculation that Project Sea Dragon will straddle the Western Australia/Northern Territory border and link in with development of the Ord Irrigation Scheme.  Most of the infrastructure will probably be in Western Australia.

 

Based on a 3,000-hectare first stage, WARL is targeting an initial investment of up to $500 million.  On June 17, 2013, Rob Bell, WARL’s managing director, said, “We have potential partners doing due diligence to come on board with funding.”  Based on prefeasibility work to date, the financial returns (in USA dollars) for the project are forecast as follows:

 

• Gross Project Cost = $1.25 billion

• Internal Rate of Return = 44%

• Net Present Value at 12% = $5.2 billion

• Year 15 cash flow per year = $800 million

 

The infrastructure for the company’s preferred integrated production model includes:

 

• A mill to produce up to 200,000 metric tons of feed a year.

• A hatchery and breeding center to produce up to 100 million juvenile shrimp a week.

• Growout farms fed by a saltwater channel.

• A processing plant capable of processing up to 500 metric tons a day.

• The ancillary infrastructure to be developed by WARL or others will include a 120MW power station.

• Production will be exported.

 

Australia’s Commonwealth Scientific and Industrial Research Organization (CSIRO) has supported efforts to farm black tiger prawns (Penaeus monodon), a native species which will be bred by WARL.  Project consultants and partners include CSIRO, Sinclair Knight Merz and Herbert Smith Freehills.  WARL has also drawn on the expertise of key figures in the development of one of the world’s biggest prawn farms in Saudi Arabia.

 

Information: Andrew Grant (Interview, Video), Chief Executive Officer, CO2 Group, 349 Moray Street, South Melbourne, Victoria 3205, Australia (phone +61-3-9928-5111, +61-3-9928-5199, email info@co2australia.com.au, webpage http://www.co2australia.com.au).

 

Information: Rob Bell, Managing Director, Western Australian Resources Limited, Level 11, 225 St. George’s Terrace, Perth, Western Australia (phone +61-8-9321 4117, fax +61-8-9321-4411, email info@waresources.com.au, webpage http://www.waresources.com.au).

 

Sources: 1. Au.News.Yahoo.com.  Prawn Farm Venture Closer.  Brad Thompson.  June 19, 2013.  2. CO2 Group’s Website.  Website Visit on June 21, 2013.  3. Western Australian Resources Limited's Website.  Website Visit on June 21, 2013.

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