Hi Trent, well i agree that this recent trading has probably caught most of us off-guard, pleasantly! I for 1 had expected it to consolidate around 11 - 12 cents, reflecting Nissui's involvement until a clearer path to finance is established.
We all agree that this project is huge, with a capex component far above the sights of many corporates out there (including the likes of Tassal etc). Its been mentioned that starting capex won't be so large, but still considerable, and may then slowly become self-funding from early on cash flows.
Most expect there to be some equity component sold off, and another significant cap raising from Seafarms. I'm wondering if we're starting to see the evolution of that now, with possibly a major corporate, who in their own right may have an interest in a direct stake, plus becoming a significant shareholder in SFG, by way of placement. Its just my view that recent trading fits that path - where the corporate initially takes on-market equity as a starter, before the real cash is outlayed.
I don't believe at all this is a position being taken on spec. If i know something about SFG management they have proved themselves to be very particular with their development, more recently for PSD. And that can be traced even further back when they established the carbon trading business, they set up world's best practise for measuring carbon dioxide take up by trees that was accepted by international standards and markets.
PSD has been frustratingly slow, but each step also has been completed with absolute world's best practise being employed.
Of course I'm excited by this recent share price action, but i can see it going a lot higher from here - no big corporate is getting in here at current price, if my view is correct of course, to buy in at peak price - they also want a considerable share of the reward. It might be an Australian corporate, but knowing that Pareto, a northern European investment bank has been involved, this corporate could be a party most of us have never heard of.
And by way whilst PSD would be the biggest single prawn aquaculture facility in the world, its output on 10,000 hectares is not significant from a world production point of view, on a total tonnage basis. But of course we have Australian provenance, special breeding in biologically isolated ponds, and excellent size of product to command premium pricing.
My view is hold on to your shares, and options, this is just the start.
And of course i could be wrong!!!
SFG Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
