MV Bluefin Lands 5 Tons in Maiden Coral Sea Trip; $100K Raised via Notes

• MV Bluefin completes first explorational fishing trip in Coral Sea Fishery
• New $150,000 Long Line Drum installed to enhance fishing capacity
• Collaboration with University of Tasmania for $2 million research grant
• Raised $100,000 via Convertible Notes; considering $2 million rights issue or placement
• Plans rebranding to Eco Fisheries Group reflecting ESG commitment

Operational Milestone in Coral Sea

New Zealand Coastal Seafoods Limited (ASX, NZS) has taken a significant step forward in its fishing operations with the MV Bluefin completing its maiden explorational fishing trip in the Coral Sea Fishery (CSF). The 387-ton vessel landed approximately 5 tonnes of seafood during this initial outing, with management optimistic about scaling up to 20 tonnes per trip as the crew gains experience with the new fishing grounds and techniques.

This exploratory success is underpinned by the recent installation of a $150,000 Long Line Drum on the MV Bluefin, a 40km, 100-ton capacity device designed to maximize catch efficiency in the CSF. This investment signals the company's commitment to expanding its operational capabilities in one of Australia's most under-explored fisheries.

Strategic Collaborations and Funding Initiatives

NZ Coastal Seafoods is also advancing its research and development efforts through collaboration with Dr Andreas Seger from the University of Tasmania's Institute for Marine and Antarctic Studies (IMAS). Dr Seger has submitted a $2 million grant application to the Australian Fisheries Research and Development Corporation, currently under consideration by the Commonwealth Research Advisory Committee. This partnership aims to support sustainable fishing practices and ecological risk assessments in the CSF.

On the financing front, the company secured an additional $100,000 through Convertible Note subscriptions post quarter-end and is evaluating a potential $2 million capital raise via rights issue or placement, subject to due diligence. These moves come as NZS seeks to strengthen its balance sheet and fund further expansion.

Corporate Developments and ESG Focus

Reflecting its commitment to Environmental, Social, and Governance (ESG) principles, shareholders have approved a name change to Eco Fisheries Group (EFG). This rebranding aligns with the company's sustainable sourcing and traceability standards, which ensure minimal ecological impact.

Additionally, NZS is exploring an OPCO/PROPCO transaction to adopt an asset-light operating model. This strategy aims to optimize capital utilization, reduce risk exposure, and enhance financing flexibility, though shareholder approval will be sought before proceeding.

Financial Position and Outlook

Financially, the company reported positive operating cash flow of $61,000 for the quarter but experienced net cash outflows from investing ($170,000) and financing activities ($65,000), resulting in a modest cash balance of $29,000 at quarter-end. Unused financing facilities of $187,000 provide some liquidity buffer as NZS navigates its growth phase.

With significant fishing permits in the Coral Sea and Torres Strait fisheries, NZS is actively engaging with government bodies and industry stakeholders to develop these under-utilized resources. The upcoming national workshop on ecological risk assessment, involving key regulatory and research agencies, underscores the company's proactive approach to sustainable fisheries management.

Bottom Line?

NZ Coastal Seafoods’ operational progress and strategic funding plans set the stage for its next growth phase, but execution risks remain.

Questions in the middle?

• Will the $2 million research grant application with IMAS be approved, and how will it impact operations?
• What are the terms and timing for the proposed $2 million capital raise, and how will it affect shareholder value?
• How will the OPCO/PROPCO transaction reshape the company’s risk profile and capital structure?