Ann: COZ 2014 AGM Presentation, page-3

Interesting thought Inchiquin and it might have helped with the awareness, but I think that the spike in sales in Nov and Dec is more related to the post larvals that were placed a few months earlier – remembering that it takes a few months for them to grow to saleable size, and also noting that leading up to the Xmas period COZ could sell any prawns they had available to sell – that’s reflected in the great sales achieved in Dec of around $6 million, clearly converting some of the previously referred to “biological stock” in the Sept 30th 2014 Ann Report (valued at $3.425 million) plus further stock growth subsequent to 30th Sept.
The update for Nth Queensland prawn farms was very positive IMO, not just the sales performance, but also the confirmation that improved farming methods and hatchery techniques (including the benefits of increasing domesticated breeding in-house and lessening third party procurement) is increasing ultimate yield in the grow out ponds.
Euroz has now begun to follow the company, and has initiated research on COZ (soon to be trading as SFG), it provides a fairly balanced analysis and discussion of the merits of the company, in particular its view of Project SeaDragon (PSD). The link to the research is via the Seafarms website: http://seafarmsgroup.com.au/broker-research/
Euroz values COZ, in terms of a 12 month forecast of 13 cents :
Nth Qld prawning operations at 6.6 cents + a discounted risk valuation (discounted 85%) for PSD at 6.6 cents; thus a Forecast 12 month share price of 13 cents (Euroz variation relates to rounding).
Euroz estimates the potential of PSD alone (on an undiscounted basis) for COZ of 44 cents per share!
Euroz current market valuation of the North Queensland prawn operation (6.6 cents) thus values current PSD around 1.0 cents (at a current share price of 7.6 cents). I stick by my view that the Nth Qld prawning valuation should be considered similar to CSS market cap, thus on a pure market cap basis COZ could be trading at around 11.0 cents currently and thus is trading at a discount as well as valuing the potential of PSD valuation at nil!
Trading in COZ during the week in general was as I had anticipated, with a slight run up to the AGM on Thurs, but on a blow by blow basis there was some very telling trades occurring through the week, especially upon receipt of the AGM presentation. Clearly there is/are some buyers wanting to get more COZ, with a bidder seeking 1 million (give or take a few) around 7.3 cents - just under the last sale price of 7.6 cents. At the announcement of the AGM presentation some sellers pushed the price as low as 6.5 cents, but clearly the buyer let the seller push it down mid-session before coming into the market and taking out stock all the way up to 7.6 cents. My view is that the seller/s may have been focussed on the Feasibility Study for PSD taking 21 months, at an estimated cost of $21 million. (This is actually a reduction from an estimate of $25 million in the earlier Moellis presentation).
I think this simple assumption fails to consider that the company will not require additional funding for a considerable number of months due to the current cash in company (from cash flow), and I understand most of the higher cost elements in the Feas Study are skewed towards the second year of the study. In the meantime there are clearly going to be other announcements that build further credibility to the PSD story, and additionally there are possibilities that the funding will be sourced from third parties as needed, and not necessarily via equity issues. Thus any rushed selling in anticipation of another round of equity raisings may be a BIG mistake and meet eager buyers!
Personally I can see COZ hanging around the current level for a while until the next positive announcement, unless some brokers begin to follow the company like Euroz has done, which might hasten the share price somewhat. I consider that COZ now coming onto the radar of investors will pick up with each positive announcement, also noting that the Northern Territory Govt is very positive on the development, esp with the likelihood of the considerable employment once development proceeds.
With so many shares held by the Directors and Top 20 Shareholders any new investors, only now getting some appreciation of what COZ’s story is about, will have to pay a premium to get them IMO. With Euroz only now beginning its research surely this will bring in some new investors, and I can imagine this happening with a few other brokers in coming months. This should cause COZ to finally break through the resistance at 8.0 – 8.5 cents level. Again IMO of course.
As for the AGM, did anyone attend? IF so, can you please give us an idea of how many shareholders attended, and what was the general feeling after the meeting by shareholders?