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04/12/14

17:44

Post #: 14409922
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Originally posted by Amused observer ↑

(First ever post on Hot Copper, so it makes me a beginner). Here is my 2 cents on COZ.

1. Awesome potential (aquaculture) with a fall back revenue stream (carbon business).
2. Chairman holds majority and the shares owe him at least 11 cents for him to break even. Putting aside his income from same entity.
3. Very low market liquidity due to current directors holding large percentage of issued shares. Current share register lacks industry weight.
4. Strategy now largely depends on getting around $1.5-$1.7bn in capital for Project Sea Dragon.
4.a - Seeking this from the market wont work as COZ doesn't have the standing to achieve this.
4.b - Seeking this as project funding might work with the appropriate off-take arrangement but from where? Domestically would be hard work, Asia would be even harder for a prawn farm. US has its own prawn industry and others wont be interested this far away. Super
funds seeking an entry into the aqua/agri space maybe or a syndicate of HNW individuals could do it.
5. If Project Sea Dragon doesn't proceed with a heightened focus then COZ is in for a very long haul as a mid-market seafood supplier and a carbon business waiting for a viable market to emerge. Not a fantastic future.

Investment in this one is a crap shoot with 50:50 odds of success but I have to say I do like it as I like what they are trying to do and perhaps the 11 cents mark will be the tester as to whether it is the exit point (i.e. a lot of volume on the market as the current Directors eject) or whether they sit tight and funding is secured for Project Sea Dragon.

Not many competitors of scale in the domestic market but a large threat is product being imported from the Philippines and don't think WES and WOW wouldn't do that at the drop of a hat if they aren't already. Leaving COZ very much at risk.

In a 6.5 - 7.0 cents and 50% out at 11 cents might be the way to go, getting them with such low volumes will be the challenge.

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AO,

Very high risk in this market shakeout. They will need asian money. Project the size of Sea Dragon would need to be a staged development, I am guessing $ 200--250 million for stage one. 10 YEARS to complete full project. Big ask.
Lash

COZ Price at posting: 7.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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