Economic Report Final

WESA
ADVANCING ENVIRONMENTAL SUSTAINABILITY OF CAGE AQUACULTURE IN ONTARIO:

AN ECONOMIC AND FEASABILITY ANALYSIS
PREPARED FOR:
MINISTRY OF THE ENVIRONMENT

Land and Water Policy Branch
135 St. Clair Avenue West, 6th Floor
Toronto, Ontario M4V 1P5
ADVANCING ENVIRONMENTAL SUSTAINABILITY
OF CAGE AQUACULTURE IN ONTARIO: AN ECONOMIC
AND FEASIBILITY ANALYSIS
Prepared for:
MINISTRY OF THE ENVIRONMENT

Land and Water Policy Branch, 6th Floor
135. St. Clair Ave West
Toronto, ON M4V 1P5
Prepared by:
WESA Inc.
171 Victoria Street North
Kitchener, ON N2H 5C5
WESA Project Number W-B7717-00
October 2009
Ref: WB7717 Advancing Environmental Sustainability of Aquaculture.doc

Ministry of the Environment
Advancing Environmental Sustainability of
Cage Aquaculture in Ontario:
An Economic and Feasibility Analysis
Disclaimer
The information gathered in this report is a compilation of research, publicly available resources
and personal communication with various industry experts. Specific financial information from
individual cage aquaculture operations was not made available for consideration in this report.
Page i
EXECUTIVE SUMMARY
In January 2009, WESA Inc. (WESA) was retained by the Ontario Ministry of the Environment
(MOE) to investigate the following broad objectives:
1. To assess the financial feasibility of existing cage aquaculture operations

2. To assess the costs of implementing MOE’s cage aquaculture monitoring program
3. To prepare an economic evaluation of implementing technologies and/or operational
strategies to enhance/improve environmental performance
4. An economic evaluation of market outlook
5. A sensitivity analysis of aquaculture operations.
An economic evaluation of three scales of cage production operations was conducted to

determine the economic feasibility of cage culture operations. The analysis indicated that
profitability is highly dependent on the scale of the operation with larger operations being more
profitable than smaller operations, as shown in the table below.
260 tonne 460 tonne 1260 tonne

Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.
Gross Margin 24.9% 28.5% 28.9%
Return on Sales 6.7% 19.3% 24.9%
Cash Earnings on Sales 5.5% 13.2% 12.9%
ROI (cash-in - cash out) 1.3% 26.9% 51.6%
Other Ratios to Consider

NPV (@ 7%) -$394,692 $736,374 $2,806,185
FIRR -11.3% 22.4% 33.9%
NPV / Investment -0.66 0.92 2.16
Large operations are most profitable and can generate a net present value (NPV) that is more
than double the initial investment and provides a financial internal rate of return (FIRR) of
33.9%. Conversely for small scale operations, the NPV is negative with a negative 11.3% rate of
return. Existing operations of this size that are fully capitalized and with little debt may in fact be
currently profitable.
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An assessment of the cost to implement the MOE’s aquaculture monitoring program indicates
that the cost of monitoring on a unit basis depends on the scale of the operation and whether
sample collection is done in house or contracted out. The cost of the monitoring program has a
relatively low sensitivity relative to the total cost of production. Current operations should be
able to absorb the additional cost without substantial hardships.
Scenario 260 tonnes 460 tonnes 1260 tonnes
Cost per kg of Production
In House $0.06 $0.03 $0.02
Contracted $0.14 $0.07 $0.03
When these monitoring costs were compared to the monitoring costs of a land-based operation
regulated under a Certificate of Approval the unit cost basis were comparable between cage
culture operations and land based farms.
The economic feasibility of a number of environmental strategies were evaluated at three scales
of production. The technologies evaluated include the RH waste recovery system; feed
monitoring, fallowing, closed containment, land-based pump ashore production facilities and
recirculating aquaculture systems. Improved feed monitoring, which minimized feed waste,
resulted in a net economic benefit to the operation. Fallowing was of no economic benefit, but
was quite feasible for large scale production. Conversely, RH waste recovery systems resulted in a
negative financial performance, and did not provide any economic benefit to the fish culture
operation. Both closed containment and land-based pump ashore aquaculture operations are
economically feasible at an appropriate scale of operation and are comparable in economic
performance to large scale cage production. They both provide good waste recovery and as well
as providing significant operational advantages. Both closed containment and pump ashore
operations also enable a high degree of management control. For example, operators can use
oxygen supplementation to boost performance thereby reducing capital requirements and
operating costs.
An evaluation of the current and projected market demand indicates that unsatisfied domestic
and export market demand could support an industry growth rate of up to 20% per year. The
Ontario trout industry currently accounts for 70% of domestic trout production and is very well
positioned to supply U.S. markets, where the unsatisfied demand for trout is expect to a grow to
live weight equivalent of 6,000 tonnes per year by 2020.
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A sensitivity analysis was conducted on the economics of aquaculture for all operational scales
and technologies; however the results did not vary substantially. The single most sensitive
variable affecting economic performance is farmgate selling price with a 10% variation price
resulting in a 46% variation in profit margins. The analysis indicated that after farmgate price and
feed costs, growth is the third most significant factor affecting profitability, and as a result
environmental conditions at the site (e.g., temperature, oxygen concentration) can have a large
impact on the profitability of a cage production operation. Aquaculture operations are
moderately sensitive to labour and fingerling costs. A 10% change in these costs results in
corresponding change in profitability of 2.7% and 4.2%, respectively and a change in
production costs of 0.78% and 1.2%, respectively. All other variables are fairly minor in
comparison. Due to the relatively low power consumption of pump ashore operations that are
designed for energy efficiency, pump ashore and closed containment operations are fairly
insensitive to variations in power costs. For example, a 10% variation in power costs only
changes production costs by 0.5% and profits by 1.4% for a pump ashore facility.
Based on an evaluation of the economics of cage production and environmental strategies, it is

evident that economical feasible opportunities to make significant improvements in the
environmental performance of cage production facilities are limited. Through careful feed
management, fallowing and ongoing site monitoring there will likely be further incremental
improvements reducing the impact of cage operations on the local environment and ensuring
there is no lasting impact from fish culture operations. The current focus of environmental
management for cage operations essentially becomes an exercise of finding the best way to
disperse wastes so that their impact on the local environment is minimized, however very little
can be done to further reduce loading into the receiving water.
The study recommends the development of a research facility and a test site where new
approaches to fish production can be tested and monitored; with the long term objective of
facilitating the adoption of emerging sustainable technologies as they mature. The development
of such a facility could include contributions and collaborations with industry, non-industry
stakeholder groups, government and/or aboriginal communities.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY
1. INTRODUCTION .............................................................................................................. 1
1.1 BACKGROUND ................................................................................................................... 1
2. CURRENT STATUS OF KNOWLEDGE ............................................................................... 4
3. STUDY RESULTS ............................................................................................................... 8
3.1 FINANCIAL FEASIBILITY OF EXISTING CAGE AQUACULTURE OPERATIONS ................................... 8
3.2 ASSESSMENT OF THE COSTS OF IMPLEMENTING MOE’S CAGE AQUACULTURE MONITORING
PROGRAM ....................................................................................................................... 17
3.3 ECONOMIC EVALUATION OF IMPLEMENTING TECHNOLOGIES AND/OR OPERATIONAL STRATEGIES
TO ENHANCE/IMPROVE ENVIRONMENTAL PERFORMANCE.................................................... 26
3.3.1 RH Waste Retrieval System.................................................................................... 27
3.3.2 Improved Feed Delivery and Monitoring .............................................................. 29
3.3.3 Fallowing of Production Sites ................................................................................. 31
3.3.4 Recirculation Aquaculture System .......................................................................... 33
3.3.5 Closed Containment and Land-Based Pump Ashore Production ............................. 35
3.3.6 Effectiveness of Environmental Control Measures .................................................. 38
3.4 ECONOMIC EVALUATION OF MARKET OUTLOOK ................................................................ 42
3.5 SENSITIVITY ANALYSIS ....................................................................................................... 47
4. CONCLUSIONS .............................................................................................................. 49
5. RECOMMENDATIONS .................................................................................................... 51
6. CLOSING ........................................................................................................................ 53
7. REFERENCES .................................................................................................................. 54
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LIST OF TABLES
(In text of Report)
Table 1: Expected Feed Conversion Rates Based on Fish Size

Table 2: Summary of conclusions of the ReThink & Canadian Aquaculture
Systems study
Table 3: Common Model Assumptions for all Production Scenarios
Table 4: Modeling Assumptions for all Cage Production Scenarios
Table 5: Cage Scenarios and Cage Configuration
Table 6: Financial Performance Ratios for Cage Production Scenarios
Table 7: Cost of In-House Water Quality Monitoring for Cage Operations
Table 8: Cost of Contracting Water Quality Monitoring for Cage Operations
Table 9: Cost of In House Benthic Sampling for Cage Operations
Table 10: Cost of Contracting Benthic Monitoring for Cage Operations
Table 11: Costs of Water Quality and Benthic Monitoring
Table 12: Environmental Technologies and Practices Evaluated
Table 13: Comparison of Cage Scenarios with and without Waste Recovery
Table 14: Comparison of Cage Scenarios with and without Improved Feed Monitoring and
Feed Delivery
Table 15: Assumptions for Evaluation of the Economic Impact of Site Fallowing
Table 16: Comparison of Cage Scenarios with and without Fallowing
Table 17: Comparison of Cage Production Scenarios with IPSFAD Model Aqua-Farm
Table 18: Comparison of Large Scale Production Scenarios
Table 19: Summary of Investment Requirements and Financial Performance
Table 20: Summary of Financial Ratios and Investment Performance
Table 21: Effectiveness of Environmental Strategies
Table 22: U.S. Fresh Trout Imports
Table 23: Results of Sensitivity Analysis
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LIST OF FIGURES
(In text of Report)
Figure 1: Comparison of Ontario land-base and cage aquaculture production between

1988-2006
Figure 2: Rainbow Trout Temperature Growth Relationship
Figure 3: Average Monthly Water Temperature for Fish Production Modeling
Figure 4: US Trout Imports by Product Form
LIST OF APPENDICES
Appendix A: Economic Scenarios for Open-Water Cage Production

Appendix B: Scenarios for Assessing the Economic Impact of Environmental
Management Alternatives for Cage Production
Appendix C: Economic Scenarios for Large-Scale Aquaculture Operations (Closed
Containment and Pump Ashore)
Appendix D: Economic Scenario for Model Recirculation Aquaculture System
Appendix E: Glossary of Terms
Page iii
1. INTRODUCTION
WESA Inc. (WESA) was retained by the Ministry of the Environment to conduct an economic
evaluation of the current costs associated with operating a cage aquaculture operation; the cost
of implementing the sediment and water quality monitoring program for a range of scenarios
and operational scales; and to evaluate the cost of implementing technologies and/or operational
changes to improve environmental performance. The study was based on conducting six tasks in
order to determine the impact of proposed provincial environmental regulations and measures
on the existing industry and its economic health; and to evaluate the economics and feasibility of
implementing sustainable environmental practices by the industry.
1.1 BACKGROUND
Fish have been reared in Ontario in provincial government hatcheries since the turn of the last
century. The Ontario aquaculture industry had its start in 1962 when the Ministry of Natural
Resources (MNR) permitted the culture of rainbow trout, brook trout, and smallmouth and
largemouth bass. From a handful of early pioneers the industry gradually grew into the current
industry. During this time the industry has transformed from a large number of small farms
growing rainbow trout in ponds, tanks and concrete raceways using springs, artesian and
pumped wells or in some cases surface water, to an industry that is largely dominated by
production from a small number of producers growing trout in open net pens within Georgian
Bay and the North Channel.
After a period of more or less steady growth, stretching from the 1970’s to the mid 1990’s, the
total output of the industry has largely flatlined. While there was a period of transition from land
based farms to net pens as outlined in the below figure; since 1996, when total industry output
reached 4200 tonnes, output has not increased significantly and was in fact lower in 2006 than
in 1996 (Figure 1).
Page 1
Source: (Moccia and Bevan (2007), Aquastats 2006, Aquastats Ontario Aquacultural Production
in 2006, OMAFRA Factsheet 07-002
Moccia and Bevan (2007) state a number of reasons for this. The authors attribute the lack of
growth due to internal factors rather than competition and highlight that this lack of growth has
occurred at a time when world seafood consumption continues to grow. They further go on to
state that the “Ontario industry is languishing in one of its worst periods in the last decade”.
Moccia and Bevan (2007) state that the major constraint is the fragmented legislative, regulatory
and policy barriers that have limited the expansion of cage culture in public waters. Ontario’s
share of Canadian aquaculture production has fallen from more than 10% in 1986 to less than
3% in 1995 (Canadian Aquaculture Systems Inc., 2008). Ontario Industry share was about 2.6%
of total Canadian production in 2005 (Harry Cummings and Associates Inc., 2007). To help deal
with these constraints the MNR and other federal and provincial agencies are working to
develop siting guidelines to assist with the site and aquaculture license approval process.
This current situation contrasts sharply with the industry outlook in the early 1990’s. At that time
the Ontario Aquaculture Association (OAA) prepared a vision statement which projected a
diverse industry twice the size of the current industry consisting of small and large land-based
farms, new cage sites and pump ashore facilities in the Great Lakes.
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A recent market study by J.M Johnston and Associates (2008) commissioned by the Department
of Fisheries and Oceans identified the potential for an additional 6,000 tonnes of live trout sales
to the US. A recent study by Canadian Aquaculture Systems (2008) stated the aquaculture
producers and related industries generate a total of almost $51 million in sales and support 229
full-time jobs. A recent study commissioned by the Northern Ontario Aquaculture Association
(NOAA) (Canadian Aquaculture Systems, 2008) confirmed that with 10% growth that total farm
gate receipts could reach almost $34 million, with a further $84 million in indirect sales to related
business. Many of the jobs created by the industry are in rural and northern communities where
their impact can be significant. Despite the potential for growing the cage culture industry, there
are a several concerns and constraints that need to be taken into account, including
environmental concerns for the public waters from various interested parties (e.g. Georgian Bay
Association, Green Peace) such as potential impact of nutrient additions, dissolved oxygen levels,
fish escapes and the potential impacts of fish manure and uneaten feed on benthic organisms.
Some of these groups have stated that they do not oppose the presence of a strong and vibrant
aquaculture industry as long as it is done in a manner which is environmentally sustainable.
There are also several other interested parties (e.g. Ontario Federation of Anglers and Hunters,
local fish and game clubs, etc.) who believe there is tremendous potential for growth of the cage
aquaculture industry in Ontario.
One of the major challenges for the industry is that rearing fish in cages makes the recovery of
manure and uneaten feed very difficult and expensive. As a result, the major focus of the industry
has been a reduction in solid waste production per unit of feed and the proper site selection to
ensure adequate dilution and to minimize local impacts. Significant effort has been devoted to
improving fish diets in an effort to reduce waste volume and nutrient content. Data shows that
commercial scale cage operations can potentially contribute a significant phosphorus loading to
the surrounding environment (Bolton, 2006) the majority of which is delivered to the sediment
(Bristow et al, 2008) and approximately 60% of it is bioavailable (Yan, 2004; references
therein).
For the above reasons it is vital to find the balance that provides an industry that is both
environmentally and economically sustainable for the long term.
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2. CURRENT STATUS OF KNOWLEDGE
A number of studies have been conducted examining the impact of cage production and the
opportunities which may exist for reducing the ecological “foot print” of the cage operations.
The Ontario Ministry of Environment (MOE) commissioned a study by Stechey and Linquist
(2005) titled, Wastewater Management and Best Practices of the Freshwater Aquaculture Sector.
This report provided a comprehensive evaluation of wastewater management and best
management practices in the context of the aquaculture industry. The study examined the
technical feasibility and economics of wastewater management.
A further study conducted for OMAFRA by Rethink Inc. & Canadian Aquaculture Systems (2006)
included a thorough assessment of emerging technologies and their feasibility for both land-based
and open-cage aquaculture. The study also examined the economics of a range of scenarios for
land-based and open-water production.
For this study, a feed analysis was conducted and it was determined that though the nitrogen and
phosphorus content was similar between feeds, feeds with higher dietary protein and digestible
energy resulted in less waste. It was also found that feeds with lower phosphorus content resulted
in waste with lower P content.
Extensive work has been done by producers, researchers and the feed industry to improve feed
digestibility and reduce phosphorus content, with significant improvement in feed quality and
waste generation.
Currently, commercial feeds based on the most nutrient dense diet formulations have the
following expected conversions:
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Table 1
Expected Feed Conversion Rates Based on Fish Size
Expected Conversion Rate

Fish Size
(Feed : Fish)
<0.7 : 1 <100g
<0.8 : 1 100g-250g
<0.9 : 1 250-350g
<1.2 :1 Overall for fish up to 900g
Source: Jeff Mountjoy (2009).
There has been a concerted effort devoted in several jurisdictions, such as Denmark and in
Ontario at the University of Guelph, to improve fish feed performance, as a means of reduce the
environment impact of aquaculture operations (Dansk Aquaculture, 2009). It should also be
noted that further improvements in diet formulation will provide diminishing returns as it
becomes more difficult to improve formulations without significantly impacting the economics of
feeding lower pollution diets (Dansk Aquaculture, 2009).
The ReThink study (2006) concluded that at production levels reviewed by the study (9 to 36
tonnes / year), new land-based flow-through aquaculture operations, even without the cost of
environmental controls, were not commercially viable. Existing farms with existing assets and
little debt may however still be financial viable.
This finding is confirmed by current experience in the Ontario industry. There have been very
few new land-based farms starting up with an overall decrease in farm numbers as owner-
operators retire or leave the business due to lack of profitability. While total trout production has
remained fairly steady over the last 15 years, the number of farms has dropped. In the early
nineties less than 20% of production came from open cages. The ratio is now flipped, with over
80% of trout production coming from larger cage based operations (Moccia and Bevan, 2007).
The ReThink study also assessed the economics of open-water cage operations and concluded
that a production threshold of 450 tonnes was required to generate acceptable financial returns,
and found large economies of scale in the industry with the cost of production decreasing with
increased farm size; $3.61/kg for 210 tonnes, $3.26 for 450 tonnes and $2.98 for 1260 tonnes.
The study also found similar economies of scale for the waste treatment scenarios. It is important
to note that these conclusions apply to new operations, and do not necessarily apply to existing
facilities which have already been capitalized.
Page 5
The study also concluded that effluent treatment facilities add between 3% and 35% to the
investment cost of a land-based farm, and add between $5 and $16 per kilogram of solids
removed, with the net cost of effluent treatment adding $0.06 to $0.30 per kilogram to the cost
of production. The study concluded that the most practical treatment option in terms of efficacy
and economic efficiency was the use of a double drain system to concentrate waste solids within
the tank, prior to removal of a concentrated solids stream for settling.
The findings for cage systems were that solids recovery resulted in an added cost of $3 to $7 per
kilogram of solids removed and $0.08 to $0.23 per kilogram to the cost of production. The most
promising technology for waste removal from cages is the RH Waste Retrieval System (Aquatech
Environmental Systems Ltd., 2009).
Table 2
Summary of Some Conclusions of the ReThink & Canadian Aquaculture Systems
(2006) Study
Cost per kilogram of

Production Technology Cost per kg of solids removed
production
Land-based flow-through $5 to $16 $0.06 to $0.30
Open-water cage $3 to $7 $0.08 to $0.23
One of the most significant findings of the study was that the economies of scale were very
important to the application of waste treatment technologies to cage culture operations. Waste
treatment was only affordable at a very large scale of operation. The studies concluded that to be
able to adopt more sustainable technologies, the industry must be allowed to develop
production sites of sufficient scale to be economical.
A number of studies have been conducted into the feasibility of production alternatives to open
net cages. In 1984, around the same time as the first commercial cage operations were being
established in the North Channel, a large flow through land-based operation, Coolwater Farms
Limited, was constructed next to the Pickering Nuclear Generating Station in a decommissioned
wastewater treatment plant located within a kilometer of the plant with an annual production of
550 tonnes of trout. This was made possible by the use of heated water from the power plant,
and the use of oxygen supplementation in deep production tanks with a solid waste collection
system that diverted solid wastes from the aquaculture facility to the Duffin Creek WPCP in order
to improve their wastewater treatment processes.
Page 6
The Coolwater operation was able to achieve profitability with an 11 to 12 month growing cycle
for 900 gram marketable fish, where feed conversions frequently approached 1.0:1, however this
operation ceased when the infrastructure was no longer available. Today, with current power
rates, the operation would be difficult to sustain (Kamaitis, Pers. Comm.).
A number of attempts have been made to develop feasible alternatives to net pens with floating
containments. Two commercial floating bag systems have been developed. Procean AS from
Norway and Future SEA Technologies in British Columbia developed floating bag systems that
would fit inside a standard 50’ x 50’ cage enclosure for the production of salmonids. Both of
these systems were flexible walled bags with provision for a floatation collar and with inlets and
outlets for pumped water circulation. Both systems are no longer manufactured due to the large
number of failures of the bag enclosures with resulting fish losses. While published studies on the
economics of bag systems for salmon indicated that bags were not cost competitive with cages
(Liu & Sumaila, 2007), there is reason to believe that at a large scale under intensive production
conditions for rainbow trout results may be more favourable result. Based on operating
experience with Future SEA bags at Trillium Valley Fish Farms in Wesleyville and intensive
production experience at Coolwater Farms, there is reason to believe that the energy efficiency
of a closed containment under intensive rearing conditions, may be feasible if the system
reliability issue with bags can be addressed (Kamaitis, 2009).
There have also been many attempts to fully integrate the fish production and wastewater
treatment to recondition, recycle and reuse water for fish production. Northern Tilapia in Lindsay
has been actively producing an African ciclid tilapia in a warmwater re-circulating fish culture
facility at Sir Sanford Fleming College in Lindsay Ontario. There are also an increasing number of
freshwater Atlantic Salmon smolt production facilities on both the East and West Coasts
commercially producing salmon smolts for stocking sea cages for salmon production. The limiting
factor for Recirculation Aquaculture Systems (RAS) is no longer technical, as it has been
demonstrated by successful operations for salmon smolts and trout and other coldwater species
in countries such as Denmark. The critical issue is economic, and the need to be cost competitive.
RAS systems are being successfully utilized where the value placed on the product is sufficient to
justify the substantial capital investment and greater operating cost.
Recently an initiative was undertaken by the Interprovincial Partnership for Sustainable

Freshwater Aquaculture Development (IPSFAD) to develop a model aqua-farm based on RAS
technology to help refine and develop the technology and then transfer it to farmers.
Page 7
The program is modeled on similar Danish initiative developed in 2004 to address concerns with
the economic sustainability and environmental impact of the Danish industry. It is important to
note that the Danish environmental program was 100% funded by the Danish government and
EU, with 30% of farmers capital costs also covered by the Danish government and EU (Dansk
Aqvakulture, 2009). The IPSFAD initiative plans to develop a model farm of a minimum size
which would ensure economic viability, however economics are dependent on current land and
farm infrastructure ownership.
The Department of Fisheries and Oceans are conducting a multi-year study in the Experimental
Lakes Area near Kenora to measure and monitor the impacts of cage trout production on water
and sediment quality in a lake ecosystem. As this information become available it will be
considered in the Province’s environmental monitoring programs.
Most recently, Agrimarine Corporation has developed a model farm for closed containment
marine aquaculture for salmon at a site near Campbell River on Vancouver Island. The model
farm will test the performance of a patented floating rigid tank system under production
conditions. The company has also installed floating tanks in a freshwater lake in China for the
grow-out of rainbow trout for the Chinese domestic market. The Agrimarine system is designed
to facilitate manure recovery and to provide a controlled environment for fish production.
3. STUDY RESULTS
This study was broken down into six fundamental tasks with the preparation of a final report to
present the results of the study. It is a desktop study based on the information from a literature
review, documents and studies provided to WESA by OMAFRA and the MOE and information
gathered from producers, industry groups, interested parties, suppliers and knowledgeable
experts.
3.1 FINANCIAL FEASIBILITY OF EXISTING CAGE AQUACULTURE OPERATIONS
One of the key concerns of the aquaculture industry is financial viability in an increasingly
competitive global economy. Farm operators often characterize their industry as having to
manage substantial risks, maintain large inventories and having to run on small margins.
Page 8
To develop a clearer picture of the existing cage aquaculture industry a model was constructed to
evaluate key cost inputs and to project the financial performance of typical aquaculture ventures.
As concluded in the Rethink and Canadian Aquaculture Systems Report (Rethink Inc. & Canadian
Aquaculture Systems, 2006) the scale of cage operations has a large impact on the cost of
production. A large variability in cost structure also exists within the industry because of site
conditions, and operator experience. There can also be significant differences in water
temperatures from site to site, with differences as great as 3 to 4 degrees Celsius, which affect
facility viability (e.g., fish growth).
Three sizes of operations were selected for this evaluation representing the range of farm sizes
currently in operation. The projected economic performance of small (260 tonne), medium (460
tonne) and large (1260 tonne) operations was evaluated. Capital and operating budgets were
developed and projected Income Statements, Cash Flows, Balance Sheets and financial ratios
projected for 10 years, the typical length of two site tenure permits for a cage operation. All key
cost inputs were verified using current industry data for feed prices and feed conversion efficiency
(Mountjoy, personal communication, 2009). The operating costs were broken down into
variable and fixed operating costs. To allow for comparison of the current economic projections
with previous studies (Stechey, D., J. Linquist, 2005, ReThink Inc. & Canadian Aquaculture
Systems Inc., 2006) a similar report format with comparable cost categories was used to generate
the projected financial statements. Due to the significance of water temperature on projected
growth, scenarios were modeled using typical average monthly temperature data. To make the
scenarios comparable a single temperature regime was utilized for each of the production
scenarios.
To reduce impact of live fish inventory valuation on production and cost data, a fiscal and
operating year end of April 30 was selected for the production and financial models. At that time
of year live fish inventories are at a minimum and the bulk of new stock purchases are being
made for the coming production cycle. Inventory valuation can have a significant impact on the
perceived economic performance within the first two production cycles. Early in the operation’s
production life, aquaculture operations tend to be significantly less efficient than once they reach
full capacity. Facility and staff utilization is usually sub-optimal. Staff and management early in
their learning curve will tend to be more conservative to try avoid mistakes or by not pushing
production beyond their comfort level. Once staff and management develop some operational
experience they will tend to manage the operation more confidently and efficiently. To the
extent possible this inefficiency was modeled in the operating model by keeping stock densities
lower in the first two years of operation.
Page 9
The two smaller production scenarios of 260 and 460 tonnes were assumed to be tied to shore.
The large production operation is modeled after the large production scenario evaluated in the
ReThink study (2006). A production operation of this size is designed for an off-shore location
and would not be practical in a near shore environment.
Fish are an exothermic (cold-blooded) animal and unlike most other livestock, their metabolism,
respiration and growth are very closely tied to water temperature. The length of a production
cycle can vary significantly based on the temperature regime in which fish are raised. Figure 2
below provides a typical growth curve for rainbow trout based on water temperature. The
growth rate of trout also varies with body size and is at its maximum rate (expressed as a
percentage) when the fish are smallest, decreasing over the production cycle. While the rate of
growth decreases as the fish grows, the absolute growth expressed as grams per fish per day
actually increases with fish size. For the purposes of this assessment the model was run for a fish
at the mid-point of its production cycle, or about 1/3 of its market weight. This assumption
slightly under estimates growth early in the production cycle and overestimates it later in the
cycle, but is not significant over the entire production cycle.
It is important to be able to model the effect of temperature on fish production and growth and
economic performance in order to compare sites and to evaluate the impact of different
production technologies. One of the potential advantages of closed containment technologies is
the ability to manage water temperature extremes in the winter and summer months by selecting
the depth from which water is drawn.
Page 10
Figure 2: Rainbow Trout Temperature Growth Relationship (Kamaitis, 1999)
Fish growth can also be affected by other environmental factors such as dissolved oxygen (DO)
and un-ionized ammonia levels. Temperatures can also have an indirect effect on fish growth as
the solubility of oxygen decreases with increasing temperatures. In practice it can be difficult to
distinguish between the impact of temperature and lower oxygen concentration on a fish
production, as both tend to occur at the same time. Extensive experience with rearing trout in
power plant cooling water has clearly demonstrated that oxygen supplementation can in fact
offset and boost feeding and growth at temperatures that are commonly considered to be above
the optimum for trout growth (18oC). While at most cage sites temperature and oxygen levels are
rarely at the level where they affect fish survival, there are sites where temperature and oxygen
conditions in August and early September will require farmers to reduce or entirely withdraw
feed until conditions improve.
Page 11
Depressed DO levels tend to inhibit feeding and growth; however, heavy feeding increases a
fish’s oxygen demand while depressing oxygen concentrations. Sub-optimal oxygen levels,
particularly in the warmer months when a fish’s requirement for oxygen is high and the
saturation level of oxygen is lower, can significantly reduce growth potential. This growth
reduction was modelled in the growth model by imposing an environmental feed-back factor for
the months of August and September of 60% and 85% of maximum potential respectively.
Elevated un-ionized ammonia levels will also negatively affect fish feeding and growth. In cage
sites with good flow and currents this is not normally an issue, but it can be of concern in RAS,
closed containment, tank-based facilities or cages sited in locations with poor circulation or water
exchange.
A number of assumptions were made for the purposes of running the production and economic
models. Figure 3 provides the monthly temperature profile for a typical cage site. This
temperature data was used model the three cage production scenarios.
25
Average Monthly Water
20
Temperature (C)
15
10
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Month
Figure 3: Average Monthly Water Temperature for Fish Production Modeling (ReThink Inc.
& Canadian Aquaculture Systems Inc., 2006)
Table 3 Common Model Assumptions for all Production Scenarios below provides the
assumptions for all of the production scenarios prepared for this evaluation. Table 4: provides
the assumptions relating to the three cage production scenarios.
Page 12
Table 3
Common Model Assumptions for all Production Scenarios
Modeling Assumptions
Production
Cost of Feed $1.603 /kg
(per Martin Mills Standard Schedule,
assuming delivery in 1 tonne totes)
Cost of Fingerlings 10g @ 0.20 each
(delivered to site) 15g @ 0.25 each
25g @ 0.35 each
45g @ 0.55 each
Delivery Charge $0.058 /kg
Shipping cost is assumed to be midway $1000 per 26 tonne load to Parry Sound
between Parry Sound and Manitoulin $2000 per 26 tonne load to Manitoulin
Average Mortality Rate 1%/month
Maintenance & Repairs 0.035% of capital investment/month
Supplies and Other Directs $.0025/kg/month
Based on the (Biomass+Growth)/2 for each
month
Fish Health $.0025/kg/month
month
Fuel Separate item for offshore operations, included
with the supplies for shore based
Stock Insurance 5% of inventory valuation
Average Market Size of Fish 900 gm
Fish Growth According to Figures: 1 and 2
Financial
Sales Price of Fish $3.86/kg ($1.75/lb)
Inventory Value of Live Fish $3.315/kg ($1.50/lb)
Equity Financing 50%
Debt Financing up to 50% at 7% amortized over 120 months
secured against hard assets of farm
Feed Financing up to 50% of feed
based on feed purchased for current fish
inventory
Page 13
Table 4
Modeling Assumptions for all Cage Production Scenarios
Modeling Assumptions (Cage Production Scenarios)
Labour
Average labour rate $40,000/person/year
(based on multipliers tied to growth and
standing biomass – given for each scenario)
Labour Multiplier 75,000 kg/person
month
Manager $60,000/year (260 and 460 tonne)
$72,000/year (1260 tonne)
Small Scenario 1 manager
3 crew
Medium Scenario 1 manager
1 foreman
5 crew
Large Scenario 1 manager
1 foreman
12 crew
Production
Feed Conversions 1.20 kg feed : 1 kg live wt. fish
The economic evaluation fish production for each scenario was modelled with a production
model that has been developed and tuned based on many years of fish production and growth
data. The model is based on a 10th order polynomial which was fitted to temperature-growth
curve program using curve-fitting program DataFit™ Version 9.
Page 14
The curve fit has an r2 value greater than 0.99. The equation of the polynomial is:
SGR=-1.81336x10-10T10 + 2.06312x10-8T9 - 9.9774x10-7T8 + 0.00002682T7 -0.00043876T7

+ 0.00043876T6 + 0.00043876T6 + 0.0044784T5 - 0.02793T4 + 09935T3 + 0.16508T2
+ 0.09867T - 0.001466
Where:
SGR = Specific Growth Rate (as a %)
T = Water Temperature (oC)
The production model was developed using a Microsoft Excel spreadsheet to model fish
production on a monthly basis to generate the necessary inputs into the economic model.
The production and economic model were run for three cage scenarios in t able 5 Cage Scenarios
and Cage Configuration below.
Table 5
Cage Scenarios and Cage Configuration
Cage Production Scenarios

Cage Configuration 8 steel cages 12 steel cages 30 steel cages in
clusters of 6 cages
Cage Size 15m x 15m x 15m 15m x 15m x 15m 15m x 25m x 15m
Location Tied to shore Tied to shore Offshore
Income Statements, Cash Flows, Balance Sheets and Capital Budgets were prepared for each
scenario (Appendix A). Detailed Financial Ratios for each production scenario have been
prepared and are found in Appendix A, and are summarized in Table 6: Financial Performance
Ratios for Cage Production Scenarios below.
Page 15
Table 6
Financial Performance Ratios for Cage Production Scenarios
260 tonne 460 tonne 1260 tonne

In Year 10 In Year 10 In Year 10
RATIOS
Liquidity
Current Ratio (times) 10.29 16.09 25.61
Quick Ratio 7.58 13.42 22.72
Assets Management
Inventory Turnover (days) 82 78 88
Debt Management
Debt Ratio 0% 0% 0%
Times Interest Earned 28.08 65.45 188.60
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Gross Margin 24.4% 20.2% 28.9%
Return on Sales 8.3% 10.9% 25.0%
Cash Earnings on Sales 6.9% 6.9% 13.0%
ROI (cash-in - cash out) 2.9% 13.5% 51.7%

NPV (@ 7%) -$324,334 $132,474 $2,809,817
FIRR -11.3% 10.0% 34.0%
NPV / Investment (0.54) 0.17 2.16
Based on the economic comparison of three cage production scenarios it is evident that
production scale has a very large impact on the economic performance of the operation. The
best results, despite being an offshore site which requires vessel access, are for the 1260 tonne
production scenario. The Financial Internal Rate of Return (FIRR) is a robust 34% and the net
present value of (NPV) at 7% is $2.8 million or 2.16 times the initial $ investment. The 460
tonne scenario does not compare well with the larger production scale. The FIRR is only 10%
and the NPV is $132 thousand or a ratio of 0.17 of the initial investment, worth less than the
investment required. The small (260 tonne) production scenario produces a negative return on
investment and has a negative present value.
Page 16
Clearly the economics of cage production favour larger operations and may be indicative of the
significant incentive for existing cage producers to expand their operations. This analysis also
indicated that small production sites have limited resources to improve the environmental
performance of their operations, and likely cannot adopt many measures which do not improve
the profitability of their operations.
3.2 ASSESSMENT OF THE COSTS OF IMPLEMENTING MOE’S CAGE AQUACULTURE MONITORING

PROGRAM
The cost for implementing MOE’s cage monitoring program was evaluated based in the
requirements of the program as outlined in the Coordinated Guide’s Sediment Discussion Paper
and Water Quality Discussion Paper (Phase 2) (Ontario Ministry of the Environment, 2009;
Ontario Ministry of the Environment, 2009). The program requires the implementation of both
water quality and benthic sampling programs at each site. The program has different
requirements depending on site characteristics. Several cost quotes from consultants and
laboratories were examined, and final cost estimates were prepared for the annual costs of both
the water quality and sediment (benthic) monitoring programs for sites that are tied to shore and
located offshore. For each scenario the costs were also estimated based on whether the producer
had the inclination and ability to implement the sampling program in house, or would require
the services of a qualified environmental consultant. While conducting the work in house would
provide savings to the producer, it would require dedicating time on a regular basis to sample
collection and for the operator to rent or purchase the necessary equipment for benthic sampling.
Retaining a professional firm to conduct the work has a number of significant advantages. It frees
up production staff and does not tie sampling schedules to the operating requirements for the
site. The collection of samples by an outside firm will also provide strong third party verification
of sampling procedures, a documented chain of custody and will ensure that samples are
properly collected and handled prior to analysis. Tables 7 to 10, inclusive, summarize the
monitoring costs.
Page 17
Table 7
Cost of In-House Water Quality Monitoring for Cage Operations
Water Quality Monitoring Program

Ongoing Operation - Assume Type 3 site
Tied to Shore Off-shore
Sample Analysis - Water Chemistry and in situ Profiles

Number of Samples 55 66
Cost per Water Sample $95 $95
Total Analytical Cost $5,225 $6,270
Time required for a full series and to deliver samples to lab

Time per sample series (two people required in vessel for safety)
Number sampling events per year 11 11
Time per sampling event 8 8
Total Time 88 88
Labour Rate $20.66 $20.66
Total Labour Cost $1,818 $1,818
Cost of Water Quality Monitoring $7,043 $8,088
Page 18
Table 8
Costing of Contracting Water Quality Monitoring for Cage Operations
Water Quality Monitoring Program

Ongoing Operation - Assume Type 3 site
Tied to Shore Off-shore
Sample Analysis - Water Chemistry and in situ Profiles

Number of Samples 55 66
Cost per Water Sample $95 $95
Cost per Sediment Sample $5,225 $6,270
Total Analytical Cost

Number of sampling events per year 11 11
Sampling Time 8 8
Travelling Time 8 8
Total Time 176 176
Total Labour Cost $14,080 $14,080
Vessel for sample collection

Number of Days Required 11 11
Cost for boat and motor $225 $225
Total Vessel Cost $2,475 $2,475
Cost of Water Quality Monitoring $21,780 $22,825
* Note: Total travel time to the site is assumed to be eight hours, however if a local company is
used, the costs associated with travel time may be significantly reduced.
Page 19
Table 9
Costing of In-House Benthic Sampling for Cage Operations
Benthic Monitoring Program

Ongoing Operation
Year 2 and/or Annual Year 4 (only) Sampling
Sampling Requirement Requirement
Sample Analysis - Benthos and Sediment
Number of Samples 18 27 - 36
Cost per Benthic Invertebrate Sample $185 $185
Cost per Sediment Sample $75 $75
Total Analytical Cost $4,680 $7,020 - $9,360

Time per sample series (two people req 22 32 - 36
Total Time 22 32 - 36
Total Labour Cost $455 $661- $744
Cost of Benthic Monitoring $5,135 $7,681 - $10,103
Page 20
Table 10
Cost of Contracting Benthic Monitoring for Cage Operations
Benthic Monitoring Program

Ongoing Operation
Year 2 and/or Annual Year 4 (only) Sampling
Sampling Requirement Requirement
Sample Analysis - Benthos and Sediment
Number of Samples 18 27 - 36
Cost per Benthic Invertebrate Sample $185 $185
Cost per Sediment Sample $75 $75
Total Analytical Cost $4,680 $7,020 - $9,360

Sampling Time 22 32 - 36
Travelling Time 8 8
Total Time 30 40 - 44
Total Labour Cost $2,400 $3,200 - $3,520
Vessel for sample collection

Number of Days Required 2 2
Cost for boat and motor $225 $225
Total Vessel Cost $450 $450
Cost of Benthic Monitoring $7,530 $10,670 - $13,330
* Note: Total travel time to the site is assumed to be eight hours, however if a local company is
used, the costs associated with travel time may be significantly reduced.
The cost of both water quality and benthic monitoring were also calculated in terms of the
additional cost per kg for each production scenario in order to measure the potential impact on
profitability and selling price (Table 11 Costs of Water Quality and Benthic Monitoring).
Page 21
Table 11
Costs of Water Quality and Benthic Monitoring

Cost of WQ Monitoring
Annual In House $7,043 $7,043 $7,043
Contracted $21,780 $21,780 $21,780
Cost of Benthic Monitoring
Year 2 In House $5,135 $5,135 $5,135
Contracted $7,530 $7,530 $7,530
Year 4 In House $10,103 $10,103 $10,103
Contracted $12,330 $12,330 $12,330
Total Cost of Monitoring
Year 1 In House $7,043 $7,043 $7,043
Contracted $21,780 $21,780 $21,780
Year 2 In House $12,178 $12,178 $12,178
Contracted $29,310 $29,310 $29,310
Year 3 In House $7,043 $7,043 $7,043
Contracted $21,780 $21,780 $21,780
Year 4 In House $17,146 $17,146 $17,146
Contracted $35,110 $35,110 $35,110
Year 5 In House $7,043 $7,043 $7,043
Contracted $21,780 $21,780 $21,780
Page 22
Table 11 Continued
Costs of Water Quality and Benthic Monitoring

Cost per kg of Production
Year 1 In House $0.03 $0.02 $0.01
Contracted $0.08 $0.05 $0.02
Year 2 In House $0.05 $0.03 $0.01
Contracted $0.11 $0.06 $0.02
Year 3 In House $0.03 $0.02 $0.01
Contracted $0.08 $0.05 $0.02
Year 4 In House $0.07 $0.04 $0.01
Contracted $0.14 $0.08 $0.03
Year 5 In House $0.03 $0.02 $0.01
Contracted $0.08 $0.05 $0.02
When the impact of monitoring is calculated in terms of the cost per kilogram of production and as a percentage of the farm gate Price
for trout, the impact based on the scale of the operation is immediately evident. The percentage of the selling price ranges from 0.75%
to 3.54% if monitoring is contracted out, and 0.35% to 1.93% if done in house. On a cost per kilogram basis, the cost of monitoring
can contribute from $0.05 to $0.14 per kilogram in additional operational costs for a small producer.
Page 23
At the other end of the scale the cost can be as low as $0.01 for a large operation when sample
collection is conducted in house. It is also interesting to note that the relative cost of monitoring
is greatest on a unit cost for those operations that contribute the smallest quantity of waste solids
to the receiving water. While total loading may be smaller, it is important to note that due to
siting and operational practices the environmental effect of operations can vary significantly
based on factors other than loading. The cost of the monitoring program has a relatively low
sensitivity relative to the total cost of production. Current operations should be able to absorb
the additional cost without substantial hardships.
A land-based operation discharging to a receiving water at a single point source under a

Certificate of Approval for a wastewater treatment facility would likely be required to sample
water quality monthly directly from the discharge and at two reference locations in the receiving
water upstream and downstream of the discharge. This would result in the collection and analysis
of 36 water samples a year, costing approximately $2,700 per year. The time required for
sample collection would likely be substantially less than for a cage production facility due to
easier access to the sampling locations. If it is assumed that the three samples are collected in
house, and that they can be collected with a couple of hours of work each month; the cost of
sampling labour would be approximately $500 per annum. It is important to consider that the
size of a large land-based operation would be substantially smaller than the smallest cage
operation. Assuming 9 tonnes of annual production, the cost of water sampling is equivalent to
$0.36 per kilogram of production, and is substantially greater than the cost of water quality and
benthic monitoring even on the smallest cage site. For a large 100 tonne operation monitoring
under a Certificate of Approval would contribute about $0.03 per kilogram to production costs
or be comparable to unit cost for a large (1260 tonne) cage operation located at a single site.
Based on this analysis it can be concluded that the cost of water quality and benthic monitoring
for a cage culture operation under currently the proposed in the Draft Coordinated Guide
Sediment Discussion Paper and Water Quality Discussion Paper is comparable to the cost of
monitoring for a typical land-based operation monitoring under a Certificate of Approval on a
unit and percentage cost basis.
Page 24
It can also be concluded that the size of the operation is more of a factor in influencing the per
unit cost of sampling and monitoring than whether the facility is operating under a Certificate of
Approval or the currently proposed guidelines.
Alternatives to benthic sampling have also been suggested for monitoring cage sites. For example,
benthic samples could also be evaluated in a bioassay for toxicity. Bioassays can be conducted
with invertebrates such as Hyalellea azteca and Chironomus tentans or fish such Rainbow trout
(Oncorhynchus mykiss) and Fathead minnow (Pimephales promelas) Typical costs for an
invertebrate bioassay would range from $800 to 900 per sample with 5 replicates for statistical
analysis. Minnow bioassays would range from $1,500 to $1,800 per sample also with five
replicates. Chemical analysis of sediment samples for nutrients, organic content and BOD would
cost in the order of $85 to $125 per sample. These alternative analyses are generally comparable
in cost to the proposed benthic sampling as outlined in the sediment discussion paper, if a similar
monitoring regime is required.
In Canada, Environmental Effects Monitoring (EEM) programs exist within two regulations: the
Pulp and Paper Effluent Regulations and the Metal Mining Effluent Regulations under the
Canadian Fisheries Act. The EEM monitoring program manages industries that release nutrients as
well as other contaminants e.g. chemicals in their wastewater. EEM provides a biological, effects-
based feedback loop to assess the effectiveness of technology-based regulations in protecting
receiving environments. The monitoring protocols for these programs are based on stakeholder
consultation and are generally far more extensive than the proposed program for open cage
aquaculture. The basic requirements for EEM monitoring would require the enumeration of
benthic organisms to the taxa level with the determination of benthic diversity and would require
toxicity testing of benthic material (Walker et al, 2003), with costs as outlined in the previous
paragraph. The requirements for baseline data would likely be more extensive, and the threshold
for ecological impact would likely be lower due to the more sensitive data analysis which is
required under EEM. While an exact estimate of costs is not possible it would likely be several
times greater that the currently proposed program.
Page 25
3.3 ECONOMIC EVALUATION OF IMPLEMENTING TECHNOLOGIES AND/OR OPERATIONAL STRATEGIES

TO ENHANCE/IMPROVE ENVIRONMENTAL PERFORMANCE
To determine the feasibility and economic implications of implementing technologies and

operational strategies to enhance and improve environmental performance the most the most
feasible technologies and practices that were identified by ReThink Inc. & Canadian Aquaculture
Systems Inc., (2006), and Stechey and Linquist (2005); production operations were modeled
based on the production and financial models used for the three cage scenarios.
Table 12 below provides a summary of the technologies and scenarios which were evaluated to
determine the economic impact of these technologies and practices on cage production.
Table 12
Environmental technologies and Practices Evaluated
Environmental Technology
Production Scenarios Description of Technology
or Operating Practice
460 tonne (medium) Waste recovery cones
1,260 tonne (large) developed by AquaTech
RH Waste Retrieval
Environmental Systems for
salmon production
Improved Feed Delivery & 260 tonne Improved feed delivery with
Monitoring 460 tonne feed blowers and underwater
1260 tonne video monitoring
460 tonne Two production at two sites
1260 tonne with fish production
Fallowing of Production Sites
alternating between the two
sites
100 tonne Model Canadian Aqua-Farm
Recirculation Aquaculture
Developed by IPSFAD
1960 tonne A floating rigid tank system
Closed Containment System developed by Agrimarine
Industries
9 tonne Flow through farms with tanks
100 tonne (9 tonne and 50 tonne)
Land-based Farms
3500 tonne pump ashore located inland, 2000 tonne
located on shore
Descriptions of each scenario and the assumptions made for each scenario are outlined below.
Page 26
3.3.1 RH Waste Retrieval System
The RH Waste Retrieval System has been installed at three sites in British Columbia (Tweeten,
personal communication, 2009) and is still being refined for broader application. The most
recent application is an Atlantic smolt rearing facility in an inland lake in British Columbia. The
system consists of a large conical bag with 60o sloped walls suspended below each cage, a
collection system and a shore or barge-based solids concentration system. The bags act as
collection systems; an airlift in the bottom of each bag removes waste manure and uneaten feed,
as well as any fish mortalities. The air lift brings these to the surface where they are collected and
pumped to shore or to the barge mounted filtration system. The solids are concentrated with a
rotating drum filter. Polymer can be added to help thicken the manure prior to filtration.
Beneficial wastewater treatment bacteria are added to the separated sludge and to the effluent to
help degrade the waste solids and convert any nutrients in the water to bacterial biomass,
helping to bind nutrients as beneficial microbial biomass rather discharging dissolved nutrients in
effluent and promoting the growth of plant biomass within the receiving water.
A cost estimate for a complete system was obtained from Allan Tweeten (2009), which served as
the basis for this evaluation. The evaluation assumed that polymer was added to assist with solids
removal and that the operation and maintenance of the collection system adds 20% to the
labour requirement of the production operation. No additional costs were allocated for waste
disposal as it was assumed the collected wastes could be composted, packaged and sold; or
would be given away to local farmers to use for their nutrient value.
The economic model for waste recovery system was only applied to the medium (460 tonne)
and large (1260 tonne) production scenarios. Based on the initial evaluation of the economics of
cage production, the small production scenario is unable to support a waste recovery system.
Furthermore the solid waste treatment facility, which would be located on shore, cannot not be
economically scaled down to for a smaller operation. The results of the evaluation of the RH
Waste Retrieval are found in Appendix B (detailed 10 year projections) and Table 13 below:
Page 27
Table 13
Comparison of Cage Scenarios with and without Waste Recovery
with RH Waste Recovery Comparison (%

Base Case Scenario System Improvement)
460 tonne 1260 tonne 460 tonne 1260 tonne 460 tonne 1260 tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
RATIOS
Liquidity
Current Ratio (times) 25.17 25.59 5.59 15.83 -77.8% -38.1%
Quick Ratio 22.31 22.70 3.22 13.18 -85.6% -42.0%
Assets Management
Inventory Turnover (days) 84 88 72 81 -14.3% -8.1%
Debt Management
Debt Ratio 0% 0% 16% 0% 0.0% -66.9%
Times Interest Earned 87.41 188.48 18.67 81.07 -78.6% -57.0%
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Gross Margin 28.5% 28.9% 13.1% 22.0% -54.2% -23.7%
Return on Sales 19.3% 24.9% 3.9% 17.9% -80.0% -28.1%
Cash Earnings on Sales 13.2% 12.9% 2.8% 7.7% -79.0% -40.2%
ROI (cash-in - cash out) 26.9% 51.6% -1.8% 18.2% -106.8% -64.8%

NPV (@ 7%) $736,374 $2,806,185 -$898,111 $334,165 -222.0% -88.1%
FIRR 22.4% 34.0% -21.9% 9.7% -197.5% -71.5%
NPV / Investment 0.92 2.16 -0.82 0.15 -188.7% -92.9%
It is evident from the financial analysis that the economics of waste recovery at both the medium
(460 tonne) and large (1260 tonne) scale of production using the RH waste retrieval system are
not attractive. At the medium scale the addition of a waste recovery system drives the operation
from a positive rate of return and NPV into negative value and returns, and cannot be justified as
an attractive investment. For the large scale operation, adopting waste recovery dramatically
decreases the net present value and return on investment reducing the NPV by 88.1% rate of
return by 71.5 %. It can be concluded that the RH Waste Recovery system, in its present
configuration, is not an economically viable environmental technology for trout production in
cages at any scale of operation.
Page 28
3.3.2 Improved Feed Delivery and Monitoring
An environmental technology that is considered to be effective for a wide range of cage culture
operations is the use of improved delivery and monitoring of feed to ensure that optimum levels
of feed are fed and that little feed is wasted (Stechey and Linquist, 2005). To achieve maximum
feed conversion it is important to not only avoid feed wastage, but to also ensure that sufficient
feed has been fed to maintain optimal growth. Under-feeding can just as easily result in poorer
feed conversion efficiencies as over feeding; and it is important to recognize that optimal feed
usage cannot just focus on eliminating excess feed and feed wastage. This scenario assumes the
deployment of an advanced feed monitoring technology such as an underwater video
surveillance system to monitor fish feeding behavior and feed wastage, and the use of feed
blowers to disperse feed evenly over the cage surface. It was assumed that the additional capital
cost of such a system would be $35,000, $50,000 and $85,000 for the 260, 460 and 1260
tonne scenarios respectively, and it would result in a 1% improvement in feed conversion rate.
The model also assumed that any time savings from using better feeding equipment would be
used for feed monitoring, and as such there would be no net labour savings.
The detailed results of the assessment for the three production scenarios are found in Appendix B
and summarized in Table 14 below.
Page 29
Table 14
Comparison of Cage Scenarios with and without Improved Feed Monitoring and Feed Delivery
With Improved Feed Monitoring and

Base Case Scenario Delivery Comparison (% Improvement)
260 tonne 460 tonne 1260 tonne 260 tonne 460 tonne 1260 tonne 260 tonne 460 tonne 1260 tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
RATIOS
Liquidity
Current Ratio (times) 8.67 25.17 25.59 9.91 25.98 25.94 14% 3% 1%
Quick Ratio 5.94 22.31 22.70 7.19 23.11 23.04 21% 4% 1%
Assets Management
Inventory Turnover (days) 83 84 88 83 88 88 0% 4% 1%
Debt Management
Debt Ratio 0% 0% 0% 0% 0% 0% -9% -3% -1%
Times Interest Earned 24.56 87.41 188.48 28.25 89.79 191.17 15% 3% 1%
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.
Gross Margin 24.9% 28.5% 28.9% 24.6% 29.1% 29.3% -1% 2% 1%
Return on Sales 6.7% 19.3% 24.9% 8.5% 19.9% 25.4% 26% 3% 2%
Cash Earnings on Sales 5.5% 13.2% 12.9% 5.8% 13.5% 12.7% 5% 2% -2%
ROI (cash-in - cash out) 1.3% 26.9% 51.6% 2.6% 27.0% 52.2% 97% 0% 1%

NPV (@ 7%) -$394,692 $736,374 $2,806,185 -$350,671 $755,363 $2,822,644 11% 3% 1%
FIRR -11.3% 22.4% 33.9% -11.4% 22.3% 33.1% -1% -1% -2%
NPV / Investment -0.66 0.92 2.16 -0.58 0.92 2.17 11% -1% 1%
From the results of the economic analysis it is evident that at all three scales of operation
improved feed monitoring and feed delivery improves the economic performance of the
operation and can be considered to be an economically viable environmental technology which
should be encouraged. Even assuming no net benefit from labour savings, the systems will pay
for themselves out of operational savings due to more efficient feed consumption. In each case
the FIRR benefits with the improved feed monitoring and delivery, with the smallest scale
operation benefiting the most on a percentage basis. There is also an improvement in NPV for
each scenario, with the best improvement for the medium scale operation.
Page 30
3.3.3 Fallowing of Production Sites
To assess the economic impact of site fallowing on cage operations it was assumed that site
permits will need to be reopened or obtained to either permit two production sites or one large
contiguous site which would be able to accommodate two distinct cage anchorages that are
capable of being operated on an alternate basis in a manner which does not interfere with each
other. The basic assumptions for this comparison are found in Table 15. The premise of fallowing
is that by alternating production sites from year to year, the net load in a specific location due to
aquaculture activity will be reduced, and a quiescent period with limited additional inputs will
help to mitigate the impact on the receiving environment and will improve the assimilation of
any waste solids.
Table 15
Assumptions for Evaluation of the Economic Impact of Site Fallowing
Scenario 460 tonnes 1260 tonnes

Additional 75% more than base case 75% more than base
Permitting Costs scenario in Section 3.1
Additional Two times base case Two times base scenario in
Anchoring and Section 3.1
Buoys
Additional Labour 50% more in April 50% more in April
to Relocate Cages
Rotation Cycle Annual Cycle Annual Cycle
An evaluation of fallowing was not conducted for the small production scenario as the economic
performance of this scenario is already marginal and would not support the additional costs of
securing a second fallowing site. Furthermore, the environmental impact of small production sites
would likely be much less than the two larger production scenarios and therefore a benefit due
to site fallowing is unlikely.
The detailed results of this comparison are found in Appendix B and summarized in Table 16
below.
Page 31
Table 16
Comparison of Cage Scenarios with and without Fallowing
Base Case Scenario Fallowing Comparison (% Improvement)
460 tonne 1260 tonne 460 tonne 1260 tonne 460 tonne 1260 tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
RATIOS
Liquidity
Current Ratio (times) 25.17 25.59 25.11 24.71 -0.2% -3.4%
Quick Ratio 22.31 22.70 22.24 21.84 -0.3% -3.8%
Assets Management
Inventory Turnover (days) 84 88 87 87 -3.7% 0.6%
Debt Management
Debt Ratio 0% 0% 0% 0% 0.0% 0.0%
Times Interest Earned 65.45 188.48 88.54 177.93 35.3% -5.6%
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Gross Margin 28.5% 28.9% 28.3% 28.4% -0.8% -1.6%
Return on Sales 19.3% 24.9% 19.1% 24.5% -1.0% -1.8%
Cash Earnings on Sales 13.2% 12.9% 13.1% 12.2% -0.2% -5.7%
ROI (cash-in - cash out) 26.9% 51.6% 23.6% 48.3% -12.1% -6.4%

NPV (@ 7%) $736,374 $2,806,185 $626,556 $2,591,132 -14.9% -7.7%
FIRR 22.4% 33.9% 19.1% 30.8% -14.7% -9.1%
NPV / Investment 0.92 2.16 0.70 1.92 -24.4% -11.1%
While fallowing may have a net benefit to the environment, unless it is tied to some other
benefit such as an increase in production capacity, fallowing would not provide any economic
benefit to medium and large scale cage operations. The net result is negative in terms of any
economic measure for both the medium and large scale of operation. The economic performance
of a medium scale of operations is already marginal with a net present value which is much less
than the original investment and fallowing is not an economically viable strategy. While the
economic net impact of fallowing is also negative at a large scale, it can easily be sustained by the
operation due to its healthy economic performance. The main benefit of fallowing may be to
reduce the quantity of solids deposited in a given area by spreading out the deposition over a
wider area, and by providing quiescent time for solids to decompose. Some producers are
already using fallowing as part of their production operations. It is important to note that there
are currently no guidelines regarding the frequency and timing for the most effective site
rotation.
Page 32
3.3.4 Recirculation Aquaculture System
The three sizes of cage production scenarios were compared to the model farm scenario
developed by the Interprovincial Partnership for Sustainable Freshwater Aquaculture
Development (IPSFAD) to refine and develop the technology and then transfer RAS technology
to farmers. The projections for the IPSFAD model farm are taken from a report prepared by
Canadian Aquaculture Systems (date unspecified) which was extended beyond the original 5 year
projection to 10 years to provide a similar time horizon for comparison with the cage production
scenarios. It is important to note that the IPSFAD report was supplied by OMAFRA, and is
confidential and the property of IPSFAD and appropriate clearances will be required from
IPSFAD in order to publish this data.
The IPSFAD system is a 100 tonne operation which is designed to be retrofitted from an old
agriculture operation that is no longer in production. The capital costs for the barn and
associated infrastructure are treated as sunk costs in the IPSFAD projection. The cost of obtaining
a MOE Permit to Take Water was not included in the IPSFAD model as it is assumed that it
would be in place for the original farming operation. Currently aquaculture operations are
exempt from the Permit To Take Water administrative fee charged to non-agricultural users.
Farm management is not charged out as a cost to the operation and assumed to be part of the
farmer’s investment into the operation. All other assumptions for the operation are comparable
with the assumptions made for the current production scenarios. The results of a side by side
comparison are presented in Table 17 below.
The results indicate that that financial performance of the RAS operation is not unlike the small
(260 tonne) cage production scenario. Both generate a negative Present Value and FIRR. One
difference between the financial model that was used for this study and the original IPSFAD
report is that for the IPSFAD report it was assumed that the labour costs for operating the farm
were part of the return on investment. This may be a valid assumption for a family farm but was
not used in the current projection in order to keep the comparison comparable.
Page 33
Any investment with a negative FIRR is not financially attractive, but when this negative return is
combined with the risks that are inherent in aquaculture, or any animal production, there is
clearly a lot of work ahead for the IPSFAD initiative before it can successfully be to transferred as
an economically viable technology to potential producers.
Table 17
Comparison of Cage Production Scenarios with IPSFAD Model Aqua-Farm
Canadian Model
Aqua-Farm 100
260 tonne 460 tonne 1260 tonne tonne
In Year 10 In Year 10 In Year 10 In Year 10
RATIOS
Liquidity
Current Ratio (times) 8.67 25.17 25.59 16.36
Quick Ratio 5.94 22.31 22.70 12.82
Assets Management
Inventory Turnover (days) 83 84 88 103
Debt Management
Debt Ratio 0% 0% 0% 2%
Times Interest Earned 24.56 87.41 188.48 13.75
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Gross Margin 24.9% 28.5% 28.9% 21.3%
Return on Sales 6.7% 19.3% 24.9% 14.4%
Cash Earnings on Sales 5.5% 13.2% 12.9% 7.3%
ROI (cash-in - cash out) 1.3% 26.9% 51.6% 2.8%

NPV (@ 7%) -$394,692 $736,374 $2,806,185 -$226,318
FIRR -11.3% 22.4% 33.9% -4.3%
NPV / Investment -0.66 0.92 2.16 -0.48
Page 34
3.3.5 Closed Containment and Land-Based Pump Ashore Production
Land–based aquaculture or some form of closed containment production have been discussed as
potential alternatives to net cage production (ReThink Inc. & Canadian Aquaculture Systems Inc.,
2006; Stechey & Linquist, 2005). Previous economic comparisons have not always compared
systems at an appropriate scale of operation to take advantage of the benefits of enclosed tank
based production systems or the cost savings which tank based systems allow due to a higher
degree of environmental controls, economies of scale and the benefits of being able to highly
mechanize fish handling and harvesting operations.
For this reason this comparison was conducted using production scales that would be appropriate
for each technology and of a sufficient scale to justify the additional infrastructure required to
support these operations. Commercial closed containment using Future SEA Technologies rearing
bag systems has been attempted in Ontario at two sites. Both did not succeed for a variety of
reasons; however, the lack of bag integrity and reliability were at the core of their failure. A new
closed containment system has been developed in British Columbia by Agrimarine Industries Inc.,
based on a floating rigid tank constructed from structural panels consisting of two fiber reinforced
plastic (FRP) layers over a foam core. The tanks have been engineered to withstand a wide
variety of site conditions and the specifications for the structural panels are based on expected
site conditions.
Previous economic assessments of land-based farms have largely focused on small inland
production facilities that were limited in size due to a relatively small water supply, such as a well
or head water stream, with production output from 9 tonnes to 36 tonnes per year (ReThink Inc.
& Canadian Aquaculture Systems Inc., 2006). In practice this scale of operation provides little
opportunity to efficiently take advantage of the high degree of control and management
intervention that is possible in a land-based facility. A large land-based facility, Coolwater Farms,
operated in Ontario from 1984 to 1996 next to the Pickering Nuclear Generating Station, with an
annual production capacity in excess of 600 tonnes. The operation closed after Pickering “A” was
shut-down for undetermined period for major plant maintenance and reconstruction.
Page 35
The Coolwater facility had been constructed in a moth-balled sewage treatment plant and was
not optimally designed for fish production or energy efficiency. The farm did however clearly
demonstrate the high degree of management control and the production potential of large scale
pump ashore facility.
Five large scale production operations were compared in order to determine the economic
feasibility of appropriate alternatives to cage production. The results for each scenario are
provided below in Table 18. This largest cage scenario was evaluated to illustrate the relative
economics of cage aquaculture at the same scale as the closed containment and pump ashore
scenarios. It is not likely that a single large cage operation of this size would be feasible with
current technology.
Table 18
Comparison of Large Scale Production Scenarios
Cage Production Closed Containment Pump Ashore
1260 tonne 3400 tonne 1920 tonne 3,480 tonne 3500 tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
FINANCIAL RATIOS
Liquidity
Current Ratio (times) 25.61 23.58 16.55 16.62 21.10
Quick Ratio 22.64 20.79 14.32 14.02 18.33
Assets Management
Inventory Turnover (days) 88 85 68 79 84
Debt Management
Debt Ratio 0% 0% 0% 0% 0%
Times Interest Earned 188.05 183.47 140.37 150.35 198
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Gross Margin 28.9% 25.9% 22.1% 22.5% 28.0%
Return on Sales 24.9% 24.3% 19.0% 10.9% 24.6%
Cash Earnings on Sales 12.9% 11.8% 9.2% 6.9% 12.7%
ROI (cash-in - cash out) 51.5% 49.6% 36.9% 13.5% 46.6%

NPV (@ 7%) $2,792,599 $6,759,819 $1,956,579 $2,823,531 $4,860,110
FIRR 33.8% 31.0% 19.5% 16.9% 21.9%
NPV / Investment 2.15 1.99 0.98 0.70 1.39
Page 36
Based on this comparison the large net pen operation has the most solid financial performance
followed by the large pump ashore land based farm, and floating closed containment
respectively. Each of these alternatives has a solid FIRR in excess of 20%. The NPV for the closed
containment is not as favourable as the land-based operation primarily due to the fact that the
major capital assets are depreciated more rapidly (10 years vs. 20 years) due the shorter recovery
for assets that are not tied to real estate. Under normal conditions floating containments may
have useful productive life of 20 years which would result in a similar depreciation rate as land-
based facilities. The worst economic scenario is cage production with waste recovery. This
alternative has many of the costs of closed containment and land based operations, without a
comparable operational advantage in terms of operational efficiency.
What the economic comparison does not indicate are the large differences in the level of
management and operational control which can be exercised for each of these scenarios. The
land-based operations and to a lesser degree the closed containment are full 365 day a year
operations, requiring round the clock site supervision. They are fairly independent of offshore
conditions, feeding and fish handling can be scheduled independent of open water conditions;
harvesting, can be easily adapted on a year round basis to market demand and last minute orders
can be accommodated without significant concern over site access and weather conditions. The
primary impact of this variability will be to place limits on when fish can be stocked, harvested
and graded. In actual practice the more easily managed operations will have a distinct advantage
in getting product to market on schedule and in responding to any changes in orders. Through
previous experience with the Coolwater operations this can translate into a higher farmgate price
paid for product.
All of the production scenarios assume a new start-up. The conversion of existing cage operations
into land-based operations would be not unlike a start-up operation. With the exception of
floating containment, very little of the capital equipment and infrastructure from a cage
operation would be useful in a land based operation. In the case of floating containment, some
of the docks, anchors and markers buoys can be reused.
Tables 19 and 20 provide a summary of the financial results, for the main production scenarios
that were evaluated.
Page 37
3.3.6 Effectiveness of Environmental Control Measures
The effectiveness of various environmental measures to reduce waste output have been evaluated
in this study. Table 21 below provides a calculation of the projected waste production per tonne
of trout produced under four production technologies.
Page 38
Table 19
Summary of Investment Requirements and Financial Performance for Production Scenarios
Cage Production Closed Containment Pump Ashore With Manure Recovery
260 tonne 460 tonne 1260 tonne 3400 tonne 1920 tonne 3,480 tonne 3500 tonne 460 tonne 1260 tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
INCOME STATEMENT SUMMARY

Annual Production (kg) 234,929 469,858 1,292,110 3,406,473 1,914,346 3,478,375 3,478,375 469,858 1,292,110
Total Revenue $ 908,589 $ 1,817,177 $ 4,997,237 $ 13,174,534 $ 7,403,735 $ 13,452,617 $ 13,452,617 $ 1,817,177 $ 4,997,237
Cost Of Production $ 672,151 $ 1,284,492 $ 3,495,341 $ 9,567,682 $ 5,706,305 $ 10,236,143 $ 9,589,129 $ 1,458,931 $ 3,803,399
Gross Margin $ 236,438 $ 532,685 $ 1,501,896 $ 3,606,851 $ 1,697,430 $ 3,216,474 $ 3,863,488 $ 358,246 $ 1,193,837
Indirect Costs $ 165,029 $ 177,209 $ 251,495 $ 416,584 $ 264,116 $ 451,675 $ 418,692 $ 194,689 $ 312,292
PROFIT/(LOSS) before taxes $ 71,409 $ 355,475 $ 1,250,401 $ 3,190,267 $ 1,433,314 $ 2,764,799 $ 3,444,796 $ 163,557 $ 881,546
Taxes $ 11,782 $ 58,653 $ 412,632 $ 1,052,788 $ 472,994 $ 912,384 $ 1,136,783 $ 26,987 $ 290,910
PROFIT/(LOSS) after taxes $ 59,626 $ 296,822 $ 837,769 $ 2,137,479 $ 960,320 $ 1,852,415 $ 2,308,013 $ 136,570 $ 590,635
Retained Earnings $ 67,785 $ 2,149,942 $ 6,692,409 $ 16,873,031 $ 7,372,756 $ 12,233,434 $ 16,298,987 $ 645,947 $ 3,879,927
INVESTMENT SUMMARY
Capital Budget $ 755,235 $ 1,103,270 $ 2,433,245 $ 6,753,235 $ 3,650,568 $ 7,509,068 $ 6,637,368 $ 1,444,070 $ 3,897,845
Investment Required
Shareholders Equity $ 600,000 $ 800,000 $ 1,300,000 $ 3,400,000 $ 2,000,000 $ 4,050,000 $ 3,500,000 $ 1,100,000 $ 2,150,000
Long-term Loan $ 600,000 $ 800,000 $ 1,300,000 $ 3,400,000 $ 2,000,000 $ 4,050,000 $ 3,500,000 $ 1,000,000 $ 2,150,000
Feed Financing $ - $ - $ 1,072,584 $ 2,827,721 $ 839,153 $ 1,500,000 $ 1,500,000 $ 1,072,584
Page 39
Table 20
Summary of Financial Ratios and Investment Performance for Production Scenarios
Cage Production With Manure Recovery Closed Containment Pump Ashore RAS
Canadian Model
Aqua-Farm 100
260 tonne 460 tonne 1260 tonne 3400 tonne 460 tonne 1260 tonne 1920 tonne 3,480 tonne 3500 tonne tonne
In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10 In Year 10
FINANCIAL RATIOS
Liquidity
Current Ratio (times) 8.67 16.47 25.61 23.58 5.59 15.81 16.55 16.61 21.21 16.36
Quick Ratio 5.94 22.31 22.70 20.79 3.22 13.16 14.32 14.01 18.44 12.82
Assets Management
Inventory Turnover (days) 83 78 88 85 72 81 68 79 84 103
Debt Management
Debt Ratio 0% 0% 0% 0% 16% 0% 0% 0% 0% 2%
Times Interest Earned 24.56 87.41 188.48 183.47 18.67 81.00 140.37 150.35 198 13.75
Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.
Gross Margin 24.9% 28.5% 28.9% 25.9% 13.1% 22.0% 22.1% 22.5% 28.0% 21.3%
Return on Sales 6.7% 19.3% 24.9% 24.3% 3.9% 17.9% 19.0% 10.9% 24.6% 14.4%
Cash Earnings on Sales 5.5% 13.2% 12.9% 11.8% 2.8% 7.7% 9.2% 6.9% 13.3% 7.3%
ROI (cash-in - cash out) 1.3% 26.9% 51.6% 49.6% -1.8% 18.1% 36.9% 13.5% 47.9% 2.8%

NPV (@ 7%) -$394,692 $736,374 $2,806,185 $6,759,819 -$898,111 $330,186 $1,956,579 $3,253,619 $5,045,110 -$226,318
FIRR -11.3% 22.4% 33.9% 31.0% -21.9% 9.7% 19.5% 19.3% 22.9% -4.3%
NPV / Investment -0.66 0.92 2.16 1.99 -0.82 0.15 0.98 0.90 1.48 -0.48
Page 40
Table 21
Effectiveness of Environmental Strategies
Cage Production RH Waste Recovery Closed Containment Pump Ashore

Small Medium Large Medium Large Small Large Large
Production Scale 234,929 469,858 1,292,110 469,858 1,292,110 1,914,346 3,478,375 3,478,375
Feed Used 281,915 563,830 1,550,532 563,830 1,550,532 2,201,498 4,000,132 4,000,132
Total Solid Wastes Produced 51,437 102,874 282,904 102,874 282,904 401,677 729,849 729,849
Nitrogen - solids 2,300 4,600 12,649 4,600 12,649 17,960 32,633 32,633
Phosphorus - solids 1,434 2,869 7,889 2,869 7,889 11,201 20,352 20,352
Soluble Waste
Nitrogen - soluble 9,397 18,794 51,684 18,794 51,684 73,383 133,338 133,338
Phosphorus - soluble 420 841 2,312 841 2,312 3,283 5,965 5,965
Projected Solids Recovery 0% 0% 0% 80% 80% 85% 85% 90%
Total Solids Discharged 51,437 102,874 282,904 20,575 56,581 60,252 109,477 72,985
Nitrogen - solids 2,300 4,600 12,649 920 2,530 2,694 4,895 3,263
Phosphorus - solids 1,434 2,869 7,889 574 1,578 1,680 3,053 2,035
Total Waste Production (kg/year)

Solids 51,437 102,874 282,904 20,575 56,581 60,252 109,477 72,985
Nitrogen 11,697 23,394 64,333 19,714 54,214 76,077 138,233 136,601
Phosphorus 1,855 3,709 10,201 1,415 3,890 4,963 9,018 8,000
Total Waste Production (kg/tonne produced)

Solids 218.9 218.9 218.9 43.8 43.8 31.5 31.5 21.0
Nitrogen 49.8 49.8 49.8 42.0 42.0 39.7 39.7 39.3
Phosphorus 7.9 7.9 7.9 3.0 3.0 2.6 2.6 2.3
% Removal
Solids 0% 0% 0% 80% 80% 86% 86% 90%
Nitrogen 0% 0% 0% 16% 16% 20% 20% 21%
Phosphorus 0% 0% 0% 62% 62% 67% 67% 71%
Waste which could be captured with Closed

Containment
Solids 44,043.0 88,086.1 242,236.7
Nitrogen 464.2 4,721.6 12,984.3
Phosphorus 963.3 2,491.3 6,851.0
Page 41
As expected, there is a fairly substantial difference in the effectiveness of each production

technology to remove phosphorus since the bulk of phosphorus produced by fish production is in
the waste solids fraction. Phosphorus reduction ranges from 0% for cage production to 67% and
71% for floating containment and land-based pump ashore facilities. However since nitrogen is
largely excreted in a dissolved form, solids recovery has a much smaller impact on nitrogenous
wastes. Even floating containment and land-based production systems can only remove about
20% of the total nitrogenous wastes produced. Fortunately this is not as critical an issue in
freshwater as it would be in a marine environment, as in most freshwater ecosystems phosphorus
is the limiting nutrient. Freshwater ecosystems as a result are far more sensitive to phosphorus
inputs than to nitrogen.
3.4 ECONOMIC EVALUATION OF MARKET OUTLOOK
A number of market studies including H.M. Johnson, & Associates (2008) and Stechey, and
Linquist (2005) have assessed the market outlook for seafood and trout specifically generally
indicating a positive trend for seafood consumption and for trout specifically. The Johnson study
is the most recent and focuses on the export market for trout to the U.S. The study concluded
that U.S. imports of rainbow trout have increased sharply in recent years, but at 5,000 tonnes,
this represents a very small portion of the total U.S. seafood supply. At the same time Canadian
fresh trout exports to the U.S. declined to 700 tonnes due to the high value of the Canadian
dollar, still accounting for about 60% of us imports of fresh trout.
Table 22
U.S. Fresh Trout Imports
U.S. Fresh Trout Imports – Metric Tons Product Weight

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Canada 270 325 411 681 671 857 880 731 745 466 405 499 667
Ecuador 0 0 0 0 3 0 0 0 0 0 0 2 33
Colombia 1 4 9 0 0 91 221 201 188 196 221 210 152
Mexico 2 51 65 86 88 115 75 63 80 41 37 53 51
Peru 0 0 0 0 0 27 43 42 52 48 60 71 63
Other 24 270 47 107 184 307 225 263 438 324 216 192 172
Total 297 543 532 874 946 1397 1444 1300 1503 1075 939 1027 1138
Source: U.S. Bureau of the Census Customs Statistics
Page 42
About 4,000 tonnes of frozen trout are imported in the U.S., primarily from Chile and Argentina,
consisting of frozen fillets. The supply of South American trout is expected to continue to grow
with a focus on frozen products, but the supply will remain relatively small due to water issues
which include limits on effluent discharges (Johnson, 2008). Fresh and frozen trout fillets tend to
be distinct product categories and are generally not interchangeable.
U. S. Trout Imports by Product Form

6,000
5,000
4,000
Metric Tons
3,000
2,000
1,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Frozen Fillet* Not Specified Fresh Not Specified Frozen Fresh Farmed Rainbow Trout
Source: U.S. Bureau of the Census (from Johnson 2008)
Figure 4: U.S. Trout Imports by Product Form
The Johnston study concluded that the only possible new significant supply for fresh trout for the
U.S. market is likely to come from Canada, stating that Canadian trout producers can remain
competitive with the current U.S. market prices for fresh trout. The report concluded that the
regulatory limits and onerous permitting process make it exceedingly difficult for the Canadian
trout industry to expand.
Page 43
Fish consumption in Canada is similar to U.S. consumption, except that Canadians consume
about 30% more fish on a per capita basis than U.S. consumers (Canadian Aquaculture Systems,
2009). Canada also has a large growing immigrant population many of whom come from
countries with a tradition of consuming seafood. An aging and wealthier population is also
tending to consume more seafood. The long-term outlook for seafood consumption is for
increased consumption both on an absolute and per capita basis.
Despite this positive outlook and rising costs, the farmgate price paid by processors in Ontario for
whole trout have not changed substantially in over ten years. During this time the cost of fish
diets have increased substantially due to increasing ingredient costs and a shift to more energy
dense diets. However, it can be argued that more energy dense diets are cost effective and based
on a unit of gain are as good as or better than conventional diets with a reduced impact on the
environment. The Johnson study mentions that while over the last three years the cost of
production for Idaho trout, which represents about 70% of U.S. domestic trout production, have
risen about 25%; prices have only increased 10 to 20 percent. This still is more favourable than
in Ontario where market prices for trout have increased from $4.30/kg to $5.87/kg (37%), but
farmgate prices have not kept up. A producer who chooses to remain nameless has stated this is
due to two key influencing factors one is the fact that producers only have two options when
selling to processors in Ontario and the other is the overall influence of market conditions.
The Johnson study forecast an unsatisfied demand for 6,000 tonnes a year of live weight trout
over the next twelve years. To meet this additional U.S. demand Ontario production would have
to grow to 2½ times current production. When it is taken into consideration that Canadian
producers should be able to profitably supply this unsatisfied demand, there is a significant
opportunity to substantial increase export sales of Ontario produced trout to the U.S. market.
The Johnson study only projects U.S. trout consumption based on passive market demand to the
year 2020.
Page 44
There are many opportunities to expand markets beyond this rate of growth with an increased
supply of trout. The Johnson study was conducted at a time when Canadian Exchange rates
relative to the U.S. dollar were at a historic high. Since that time exchange rates have returned to
more moderate levels, making Ontario product much more competitive in the market place. The
Johnson study also stated that it is highly unlikely U.S. trout production will increase in the future
due to a lack of additional water in Idaho and the marginal economics for small scale operators
outside Idaho. The study also does not take into consideration the domestic market for trout.
Currently Ontario accounts for 70% of Canadian trout production and because of its proximity
to Northeastern U.S. markets the Ontario industry is in a preferred position to supply major
eastern and central markets.
The Canadian market for trout also has significant growth potential. One of the weakness with
using historic market data as an indicator of potential demand is that factors other than market
demand can be limiting sales. This is clearly the case for the Ontario industry. The industry has
flatlined for over 10 years, not due to a lack of markets for trout. Fresh trout fillets are highly
interchangeable with other red fleshed salmonid fillets. There is a significant opportunity to grow
the market if sufficient product is available to supply market demand. Fresh fish consumers tend
to purchase what they see on display, and if a product is not available they will tend to purchase
products that are available. As a result sales of trout can be readily increased in the short term
given sufficient supply. Both Ontario processors have stated that they could sell more trout if
more product is made available, however it is important that any increases in supply be
consistent and sustained, so that markets can be grown and maintained once they are established.
The opportunity for expanding the market for trout is likely far greater that the 2 ½ times
expansion projected by the Johnson report based on projected unsatisfied U.S. demand. With
increases in domestic consumption and new exports to the U.S., it is likely that the market could
sustain a 10 to 20% annual growth rate for fresh trout. Due to limited opportunities for an
expansion of U.S. production it is anticipated that this expansion can be sustained over the longer
term.
3.5 ECONOMIC EVALUATION OF SOCIETAL COSTS AND BENEFITS
Several studies have been done on the benefits of the cage aquaculture industry. The industry can
create significant employment in northern and rural communities where cage farms tend to be
located.
Page 45
The industry also has the potential to create a large number of jobs in supporting industries such
as fish processing, feed manufacture, equipment supply, transport and in marinas. There are also
the supporting jobs which people working in these sectors will provide. NOAA contracted a
recent study by Harry Cummings and Associates Inc. (2007) which assessed the benefits of that
the industry generates. The report concluded that in 2005 the cage industry produced 3,275
tonnes of fish resulting in a farm gate value of $12.5 million and generated 50 full-time
equivalent jobs. The study concluded that the businesses indirectly generated an estimated $38.2
million in cage culture related sales and sustained a total of 179 full-time equivalent jobs. The
study determined that the cage culture industry sustains employment in numerous Northern
Ontario communities including Little Current, Espanola, Manitowaning, Kagawong, Gore Bay,
Mindemoya, Evansville, Val Caron, Parry Sound, Sudbury and North Bay. The bulk of this
employment activity is linked to cage culture production and businesses that provide marina
supplies and service, cage fabrication and maintenance supplies and service, construction/building
materials, and processing.
The cage culture industry also provides employment in a number of communities in Southern
Ontario including Hanover, Fergus, Guelph, Kitchener, New Hamburg, St. Thomas, Woodstock,
Holland Centre, Dunnville, Embro, Elmira, New Dundee, Shelbourne, Coburg and Toronto.
The report concluded that the cage industry provides significant benefit to local communities and
to the province as a whole relative the size of the industry, with the potential to provide more
employment as the industry grows.
While the benefit of the industry has been fairly clearly demonstrated, little study has been
conducted of the environmental services the industry utilizes to in order to produce fish. Since
the quantity of water required to support the industry cannot be readily estimated, it is necessary
to find other methods of measuring the degree to which the industry relies on the environmental
services it utilizes.
Significant effort has been devoted to improving fish diets in an effort to reduce waste volume
and nutrient content. Data shows that commercial scale cage operations can potentially
contribute a significant phosphorus loading to the surrounding environment (Bolton, 2006) the
majority of which is delivered to the sediment (Bristow et al, 2008) and approximately 60% of it
is bioavailable (Yan, 2004; references therein). When the substantial cost of phosphorous
removal from municipal wastewater is taken into consideration, the phosphorous contribution of
cage production is not insignificant.
Page 46
It is also important to note that the phosphorus inputs to the Great Lakes are an important aspect
of the International Joint Agreement on the Great Lakes with strong commitments by
governments on both sides of the border to limit phosphorus discharges to the Great Lakes.
While the current industry is relatively small compared to marine salmon farming operations on
the East and West Coast, and its impact on the Great Lakes ecosystem is small; continued growth
of the cage industry has the potential to offset some of the significant reductions in phosphorus
loading that have been gained by substantial investments made by industry, agriculture and
municipalities to limit their phosphorus contributions.
The cage industry also relies on establishing land use permits for a defined area of the lake,
similar to permitted use of the lakebed for marina’s. In Ontario, lakes are a public resource that
are shared by all citizens. The creation of a water lot makes the water lot inaccessible to the
public and effectively puts a common property under temporary private control. The total area
occupied by aquaculture operations is very small, less that 0.00001 percent of surface area of
Lake Huron (NOAA, 2009). It is important to note that good fish husbandry relies on providing
fish a healthy environment, and that cage operations are generally sited in locations where good
growing conditions can be maintained and that the water quality within the water lot is unlikely
to be detrimental to fish.
3.5 SENSITIVITY ANALYSIS
A sensitivity analysis was carried out to assess the sensitivity of cage production to variations in
input and output costs, and growing conditions. The major cost inputs were evaluated in terms
of their impact on production costs and profitability. The large cage production scenario was
selected for the evaluation. The impact of variations in fish growth were also modeled. Two
types of growth variability were modeled. The first was a change in growth with a corresponding
change in feed consumption. This type of scenario would be representative of the type of
response which would be expected if temperatures were more favourable for growth than
expected with feed consumption varying proportionately with the decrease or improved growth.
The second type of growth variance is a scenario where growth or production is decreased
without the corresponding change in feed. This would represent the scenario that includes as
adverse environmental conditions, elevated mortalities, fish escapes or losses due to disease. The
reverse scenario where growth would increase without the corresponding increase in feed
consumption is not a likely scenario.
Page 47
Sensitivity to changes in minor inputs were not projected as even large changes in these inputs
will have little impact on the cost of production and profitability. The results of the sensitivity
analysis are summarized in Table 24.
As expected the profits of aquaculture operations are most sensitive to variations in the farmgate
price paid for fish. While farmgate price has no impact on production costs, it is the single largest
factor affecting profitability. Each 10% change in farmgate price affects profits by more than
46%. The second greatest factor affecting profitability would be a decrease in growth and
production without a corresponding decrease in feed usage. A 10% decrease in production
would result in a decrease of 40.6% in profitability, and an 11% increase in production costs. A
change in growth with a corresponding change in feed consumption has a far smaller impact on
profitability, with a 10% decrease resulting in a 13.6% decrease in profitability and 3.0% increase
in production costs.
Both labour and fingerling costs impact profitability with a 10% change resulting in
corresponding change in profitability of 2.7% and 4.2%, and a .78% and 1.2% in production
costs respectively.
While the sensitivity to a 10% change in interest rate results in no change in production costs and
a 0.73% change in profitability, it is important to note that interest rates can change fairly
significantly over a 10 year project horizon, and that substantial changes in interest rates are
possible.
In summary cage production is sensitive to many of the same factors as other livestock
production. Factors such as farmgate price and feed costs tend to have the greatest impact on
profitability. Fish are different from other types of livestock because they are a poikilothermic
animal, and their growth is highly dependent on water temperature. Seasonal and year to year
variations in water temperatures can have a significant effect on growth rates. Fish also take their
oxygen from water, where oxygen concentrations are far lower than in the atmosphere, making
fish production reliant on having access to a large quantity of clean well oxygenated water. Fish
growth is dependant on maintaining good oxygen conditions. The sensitivity analysis indicated
that after farmgate price and feed costs, growth is the third most significant factor affecting
profitability, and as a result site conditions in terms of temperature and oxygen concentration can
have a large impact on the profitability of a cage production operation, as summarized in Table
24.
Page 48
Table 23
Results of Sensitivity Analysis
% Change
Variable Production Cost Profit
Feed 10.00% 7.28% -24.35%

-10.00% -7.28% 24.35%
Fingerlings 10.00% 1.21% -4.22%

-10.00% -1.21% 4.22%
Labour 10.00% 0.78% -2.72%

-10.00% -0.78% 2.72%
Farmgate Price 10.00% 0.00% 46.58%

-10.00% 0.00% -46.58%
Interest Rate 10.00% 0.00% -0.73%

-10.00% 0.00% 0.73%
Growth 10.00% -3.02% 13.59%

(with corresponding change in feed) -10.00% 3.02% -13.59%
Growth 10.00% -11.11% 40.64%

-10.00% 11.11% -40.64%
Due to the relatively low power consumption of pump ashore operations that are designed for
energy efficiency, pump ashore and closed containment operations are fairly insensitive to
variations in power costs. A 10% variation in power costs only changes production costs by
0.5% and profits by 1.4% for a pump ashore facility, then impact on closed containment facilities
is even less.
4. CONCLUSIONS
Based on an evaluation of the economics of cage production and environmental strategies to

reduce the impact of fish culture operations on the freshwater ecosystem, it is evident that
economical feasible opportunities to make significant improvements in the environmental
performance of cage production facilities are limited.
Page 49
Much has already been achieved through improvements in feed quality, feed management and
the selection of an operating site to minimize negative impacts on the local environment.
Through careful feed management, fallowing and ongoing site monitoring there will likely be
further incremental improvements reducing the impact of cage operations on the local
environment and ensuring there is no lasting impact from fish culture operations. However it is
unlikely that there will be any large scale improvements in cage technology which economically
reduce the quantity of waste released to the environment. One of the limitations of waste
recovery for cage operations, such as the RH Waste Recovery system, is that without a
corresponding improvement in productivity it results in added costs with little economic benefit
to the operation. With closed containment technologies where fish densities can be increased,
and water temperatures better controlled there can be offsetting benefits to balance out the
additional cost of the technology. This lack of an opportunity to economically intercept and
remove waste solids places very definite limits on the growth potential of the industry. The
current focus of environmental management for cage operations essentially becomes an exercise
of finding the best way to disperse wastes so that their impact on the local environment is
minimized, however very little can be done to further reduce loading into the receiving water.
An economic analysis of small, medium and large cage culture operations indicates that
operational scale has a large impact on profitability, and other than site selection, the scale of the
operation may be the single largest determinant of profitability. When the cost of implementing
water quality and benthic monitoring programs under the proposed MOE guidelines is evaluated
on a unit cost basis, the proposed programs are consistent with the monitoring programs
required for land based operations operating under a Certificate of Approval (0.03 to $0.36 per
kg of production for land-based farms). The monitoring costs, though not insignificant, range
from $0.01 to $0.07 per kg of production if samples are collected in house, and from $0.03 and
$0.14 per kg if both sample collection and analysis is contracted out. The greatest unit costs are
for smaller scale operations.
The proposed approach to manage the environment impacts of cage aquaculture in Ontario is
based on the best economically achievable technology. With contemporary practice for
wastewater treatment and treatment of effluent from other industries, there is lots of interest to
continue to explore new technologies to minimize environmental impacts from this industry as
source reductions should be the first line of defense where possible. Fish manure is a valuable
resource and the source of nutrients which should be managed and utilized much like any waste
product, which could help to facilitate a shift towards multi purpose productions.
Page 50
The results of this study clearly demonstrate that when operations are scaled appropriately there
are at least two alternatives to cage production (floating containment and land-based pump
ashore) that may be economically competitive, and may in fact eventually be even more
profitable than cage production once products and markets for collected fish wastes are
developed. The reason both floating containment and pump ashore facilities can be operated
economically is because the production technology can be operated in a manner which gives a
high degree of control and allows for management of water temperatures and dissolved oxygen.
The use of pure oxygen allows production densities which reduce volume of tankage required to
contain the fish, greatly reducing the cost of water pumping and solids removal. Oxygen
injection is an added production cost but allows the production facility to be about one quarter
of the size of conventional tank based farm. The added cost of oxygenation is substantially less
than cost of constructing and servicing a facility four times larger. Based on this analysis it may be
more accurate to state that a lack of access to capital and limited industry experience with
alternatives to cage production are currently the greatest barriers to adopting new aquaculture
technologies.
Based on earlier experiences with large scale intensive land-based production in Ontario,
alternative technologies may facilitate a more efficient vertically integrated development of the
industry, with a much greater potential for economic benefit and job creation than is currently
possible.
Experience in many other industries has also shown that once more environmentally compatible
alternatives are adopted, these can foster substantial growth and improvement in an industry due
to increased efficiency and the elimination of many of the constraints to growth.
5. RECOMMENDATIONS
While it is recognized that the aquaculture sector provides significant benefits to the province’s
economy and to northern and rural communities, it must also be recognized that there are finite
limits to the industry’s growth due to environmental constraints of current production
technology. Presently, the proposed approach attempts to balance adequate economic viability
while ensuring long term environmental sustainability. Based on the results of the current study it
is recommended that we embark on a path which provides both a more economically and
environmentally sustainable alternative which can optimize both environmental protection and
profitability. Two technologies were identified in the study that may provide such a solution.
There is sufficient existing experience with land-based production to be able to site and design
farms on the Great Lakes which are energy efficient and economical to operate.
Page 51
New floating containment technologies are now being tested and are projected to provide a high
degree of reliability, energy efficiency and environmental protection.
Implementing the proposed policy changes will give the industry an opportunity to meet short
term market demands and will provide a framework to move towards a more environmentally
sustainable industry. Significant sustained growth that meets the needs of a broad range of
stakeholder groups will require the industry to start thinking “outside of the cage” and to look at
the longer term development of more sustainable production technologies.
It is important to recognize that the industry’s growth has not only been limited by an
uncoordinated regulatory process, but by limited access to capital and a lack of good examples of
sustainable production technologies. The IPSFAD initiative to develop a model recirculating farm
based on the Danish experience of using model farms to demonstrate more sustainable
environmental technologies is a good example of what can be done to encourage industry
growth. A similar initiative may be required for the Great Lakes. A comparison of economic
projections indicates that the profit potential for both closed containment and large land-based
facilities is comparable with large cage operations, and could serve to substantially boost Ontario
trout productions while significantly limiting the quantity of waste solids released to the
ecosystem.
The chief recommendation of this study is for the development of a research facility and a test
site where new approaches to fish production can be tested and monitored; with the long term
objective of facilitating the adoption of more sustainable technologies as the technology matures.
The development of such a facility would require the contribution of industry and non-industry
stakeholder groups. Potential partners may include the Northern Ontario Aquaculture
Association, Aboriginal Communities, non-government Environmental Organizations such as the
Georgian Bay Association, Great Lakes United, FedNor, MNR, MOE, OMAFRA, DFO, University
of Guelph, industry operators and suppliers, and local communities.
A good example of such an initiative is the Middle Bay Sustainable Aquaculture Institute in British
Columbia. The Middle Bay Sustainable Aquaculture Institute was established to examine and
assist in the development of closed-containment salmon rearing technologies. MBSAI has a
marine site for research in Discovery Passage in Campbell River that has been licensed in
conjunction with the Middle Bay Limited Partnership (MBLP) for closed-containment salmon
aquaculture. MBLP is a limited partnership with the Comox Indian Band and other private
investors as limited partners and with AgriMarine Industries Inc. as the general partner. A similar
initiative in Ontario is recommended.
Page 52
6. CLOSING
This report has been prepared for the Ontario Ministry of the Environment. Any use of the
information contained in this report by a third party, any reliance on the report, or decisions
based upon the report, are the responsibility of those third parties unless authorized by WESA in
writing.
WESA accepts no responsibility for damages suffered by any unauthorized third party as a result
of decisions made or actions taken based upon this report.
Respectfully Submitted,
WESA Inc.
Gintas Kamaitis, B.Sc. (Hon.), B.Sc. (Eng.) C. Ronald Donaldson, M.Sc., P. Geo.
Senior Associate Vice President
Page 53
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APPENDIX A
Economic Scenarios for Open-

Open-Water Cage Production
Income Projections
Aquaculture Financial Projections

Cage Production 230 Tonne
Pro Forma Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 ($/kg)
Harvest (kg) 82,803 238,944 228,959 234,566 234,929 234,929 234,929 234,929 234,929 234,929 2,194,846 kg
Total Revenues $320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
%
Cost Of Production 10 Yr Total Yr 10 Farmgate
Opening Inventory $0 $149,175 $149,175 $152,662 $152,888 $152,903 $152,903 $152,903 $152,903 $152,903
Electricity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Feed $246,625 $478,529 $458,372 $467,586 $468,183 $468,183 $468,183 $468,183 $468,183 $468,183 $2.03 $1.99 51.5%
Fingerlings $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $0.39 $0.36 9.4%
Fish Health $1,078 $1,918 $2,088 $2,087 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $0.01 $0.01 0.2%
Labour (& Benefits) $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $0.25 $0.23 6.1%
Maintenance & Repairs $18,126 $36,251 $36,251 $36,251 $36,251 $36,251 $36,251 $36,251 $36,251 $36,251 $0.16 $0.15 4.0%
Supplies $9,818 $18,126 $18,126 $18,126 $18,126 $18,126 $18,126 $18,126 $18,126 $18,126 $0.08 $0.08 2.0%
Stock Insurance $6,218 $10,503 $11,624 $11,479 $11,449 $11,449 $11,449 $11,449 $11,449 $11,449 $0.05 $0.05 1.3%
$422,447 $835,085 $816,218 $828,773 $829,562 $829,577 $829,577 $829,577 $829,577 $829,577 $2.97 $2.88 74.5%
Closing Inventory $149,175 $149,175 $152,662 $152,888 $152,903 $152,903 $152,903 $152,903 $152,903 $152,903 $0.65
Cost Of Production $273,272 $685,910 $663,556 $675,885 $676,659 $676,674 $676,674 $676,674 $676,674 $676,674 $2.90 $2.23
Gross Margin $46,968 $238,205 $221,942 $231,297 $231,929 $231,914 $231,914 $231,914 $231,914 $231,914 $0.97 $0.99 25.5%
Indirect Costs
Depreciation $88,372 $75,491 $65,104 $56,539 $49,366 $43,291 $38,104 $33,649 $29,801 $26,463 $0.23 $0.21 5.4%
Professional Services $18,000 $16,850 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $0.08 $0.08 2.0%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.02 $0.02 0.5%
Interest $40,639 $37,534 $34,204 $30,633 $26,804 $22,698 $18,296 $13,575 $8,513 $3,085 $0.11 $0.11 3.0%
Telecommunications $4,200 $4,226 $4,422 $4,566 $4,710 $4,854 $4,998 $5,142 $5,286 $5,430 $0.02 $0.02 0.5%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.27 $0.26 6.6%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.03 $0.03 0.7%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.11 $0.10 2.6%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.1%
Environmental Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Total Indirect $246,611 $229,600 $217,129 $205,138 $194,280 $184,243 $174,798 $165,766 $157,000 $148,379 $0.88 $0.83 21.4%
PROFIT/(LOSS) before taxes ($199,643) $8,605 $4,813 $26,160 $37,650 $47,671 $57,116 $66,149 $74,915 $83,536 $0.09 $0.09 2.4%
Taxes $0 $0 $0 $0 $0 $0 $0 $8,006 $12,361 $13,783 $0.06 1.5%
PROFIT/(LOSS) after taxes ($199,643) $8,605 $4,813 $26,160 $37,650 $47,671 $57,116 $58,143 $62,554 $69,752 $0.09 $0.04 0.9%
Retained Earnings ($199,643) ($191,038) ($186,225) ($160,066) ($122,416) ($74,745) ($17,629) $40,514 $103,068 $172,820
3/9/2009 Financial Report Template - 10 Year - 230 t Cage Production.xlsx 1

Cash Flow Projections

Pro Forma Cash Flow Projections
Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 82,803 238,944 228,959 234,566 234,929 234,929 234,929 234,929 234,929 234,929
Sales $320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
$320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
Cash Disbursements
Direct Expenses ($422,447) ($685,910) ($667,043) ($676,111) ($676,674) ($676,674) ($676,674) ($676,674) ($676,674) ($676,674)
Indirect Expenses ($158,239) ($154,110) ($152,026) ($148,599) ($144,914) ($140,952) ($136,694) ($132,117) ($127,199) ($121,915)
(Increase) Decrease in Receivables ($26,687) ($50,323) $3,218 ($1,807) ($117) $0 $0 $0 $0 $0
Increase (Decrease) in Payables $35,204 $21,955 ($1,572) $756 $47 $0 $0 $0 $0 $0
Taxes $0 $0 $0 $0 $0 $0 $0 ($8,006) ($12,361) ($13,783)

Total Cash Disbursements ($572,169) ($868,387) ($817,423) ($825,762) ($821,658) ($817,626) ($813,368) ($816,797) ($816,234) ($812,373)
Operating Cash Flow ($251,929) $55,728 $68,075 $81,421 $86,930 $90,962 $95,221 $91,791 $92,354 $96,216
Capital Expenditures
Production Facility ($755,235) $0 $0 $0 $0 $0 $0 $0 $0 $0
Office Facilities $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Capital ($755,235) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,007,164) $55,728 $68,075 $81,421 $86,930 $90,962 $95,221 $91,791 $92,354 $96,216
Interest Accrued $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long Term Receivable $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Equity Investment $600,000 $600,000 $0 $0 $0 $0 0 0 0 0 0
New Financing (Loan 1) $600,000 $557,041 ($46,065) ($49,395) ($52,965) ($56,794) ($60,900) ($65,302) ($70,023) ($75,085) ($80,513)
New Financing (Loan 2) $0 $0 $0 $0 $0 0 0 0 0 0
Feed Supplier Financing $ - $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Funding $1,157,041 ($46,065) ($49,395) ($52,965) ($56,794) ($60,900) ($65,302) ($70,023) ($75,085) ($80,513)
Increase (Decrease) in cash position $149,877 $9,664 $18,680 $28,456 $30,136 $30,062 $29,918 $21,769 $17,269 $15,703
CASH (Deficiency) at beginning of period $0 $149,877 $159,541 $178,221 $206,677 $236,813 $266,876 $296,794 $318,563 $335,832
CASH (Deficiency) at end of period $149,877 $159,541 $178,221 $206,677 $236,813 $266,876 $296,794 $318,563 $335,832 $351,535

Balance Sheet

Pro Forma Balance Sheet
Initial Start-up Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
ASSETS
Current Assets
Cash $ 149,877 $ 159,541 $ 178,221 $ 206,677 $ 236,813 $ 266,876 $ 296,794 $ 318,563 $ 335,832 $ 351,535
Accounts Receivable $ - $ 26,687 $ 77,010 $ 73,791 $ 75,599 $ 75,716 $ 75,716 $ 75,716 $ 75,716 $ 75,716 $ 75,716
Inventory Production $ 149,175 $ 149,175 $ 152,662 $ 152,888 $ 152,903 $ 152,903 $ 152,903 $ 152,903 $ 152,903 $ 152,903
Total Current Assets $ - $ 325,739 $ 385,726 $ 404,675 $ 435,164 $ 465,432 $ 495,494 $ 525,413 $ 547,181 $ 564,451 $ 580,154
Capital Assets
Production Facility $ 666,863 $ 591,372 $ 526,268 $ 469,730 $ 420,364 $ 377,073 $ 338,969 $ 305,320 $ 275,520 $ 249,056
TOTAL ASSETS $ - $ 992,602 $ 977,098 $ 930,943 $ 904,894 $ 885,796 $ 872,568 $ 864,382 $ 852,502 $ 839,970 $ 829,210
LIABILITIES & SHAREHOLDERS EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ - $ 35,204 $ 57,159 $ 55,587 $ 56,343 $ 56,390 $ 56,390 $ 56,390 $ 56,390 $ 56,390 $ 56,390
Total Current Liabilities $ - $ 35,204 $ 57,159 $ 55,587 $ 56,343 $ 56,390 $ 56,390 $ 56,390 $ 56,390 $ 56,390 $ 56,390
Long-Term Liabilities
New Financing (Loan 1) $ 600,000 $ 557,041 $ 510,976 $ 461,582 $ 408,617 $ 351,823 $ 290,923 $ 225,621 $ 155,598 $ 80,513 $ 0
Feed Supplier Financing $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Long-Term Liabilities $ 600,000 $ 557,041 $ 510,976 $ 461,582 $ 408,617 $ 351,823 $ 290,923 $ 225,621 $ 155,598 $ 80,513 $ 0
Total Liabilities $ 600,000 $ 592,245 $ 568,136 $ 517,169 $ 464,959 $ 408,212 $ 347,312 $ 282,010 $ 211,987 $ 136,902 $ 56,390
Shareholder Equity
Equity Investment $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
Investment Capital $ - $ - $ - $ - $ -
Retained Earnings (Deficit) $ (199,643) $ (191,038) $ (186,225) $ (160,066) $ (122,416) $ (74,745) $ (17,629) $ 40,514 $ 103,068 $ 172,820
Total Equity $ - $ 400,357 $ 408,962 $ 413,775 $ 439,934 $ 477,584 $ 525,255 $ 582,371 $ 640,514 $ 703,068 $ 772,820
TOTAL LIABILITES & EQUITY $ 600,000 $ 992,602 $ 977,098 $ 930,943 $ 904,894 $ 885,796 $ 872,568 $ 864,382 $ 852,502 $ 839,970 $ 829,210

Capital Budget

Capital Budget Year 1
Infrastructure
Land-base (feed, storage,etc.) $15,000
Workshop and staff area $12,500
Envriornmental Assessment and Permitting $60,000
Engineering & Contingency (15%) $13,125
Sub-Total $100,625
Cage Culture System

Cages (50' x 50') - 8 cages $240,000
Anchors, Mooring and Installation $80,000
Marker Buoys & Anchors (8) $1,600
Nets (for cages) $44,000
Bird / Predator Nets $8,000
Centre Float for Bird Nets $6,800
Fingerling Nets $4,000
Walkways and decking (12' wide, assume 150' long) $45,000
Sub-Total $493,810
Fish Culture Equipment

Monitoring System with Alarms $2,000
Hydraulic Harvesting System $0
Tractor (4WD) & Trailer $12,000
Tractor equiped with lifting forks $20,000
Pick-up Truck $35,000
Powered Feed Blower $20,000
Back-up Genset $15,000
Snow Blower $4,000
Feed Monitoring System (Underwater Video) $6,000
Oxygen Meters (handheld) $3,000
Nets, Totes, Tools Etc. $12,000
Contingency (20%) $25,800
Sub-Total $154,800
$ -
Other Equipment
Computer & Office Equipment $5,000
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 755,235
Contingencies Included
TOTAL $ 755,235
3/9/2009 Initial Profit Loss Projections Page 4

Financial Performance Projections
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 10 Year
Average
RATIOS
Liquidity
Quick Ratio 5.02 4.14 4.53 5.01 5.54 6.08 6.61 6.99 7.30 7.58
Assets Management
Debt Management
Debt Ratio 56% 52% 50% 45% 40% 33% 26% 18% 10% 0%
Times Interest Earned (3.91) 1.23 1.14 1.85 2.40 3.10 4.12 5.87 9.80 28.08
Profitability
Gross Margin 14.7% 25.8% 25.1% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 24.4%
Return on Sales -22.1% 13.2% 11.8% 12.5% 12.5% 10.0% 10.5% 11.0% 11.5% 12.1% 8.3%
Cash Earnings on Sales 46.8% 1.0% 2.1% 3.1% 3.3% 3.3% 3.3% 2.4% 1.9% 1.7% 6.9%
ROI (cash-in - cash out) -33.3% 1.4% 0.8% 4.4% 6.3% 7.9% 9.5% 9.7% 10.4% 11.6% 2.9%

NPV -$324,334 at 7.0%
FIRR -11.3%
Income Projections

Cage Production 460 Tonne Nominal
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858 4,389,692 kg
Total Revenues $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
%
Feed $487,538 $945,976 $906,129 $924,342 $925,523 $925,523 $925,523 $925,523 $925,523 $925,523 $2.01 $1.97 50.9%
Fingerlings $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $0.35 $0.33 8.5%
Fish Health $3,115 $5,336 $5,491 $5,480 $5,469 $5,469 $5,469 $5,469 $5,469 $5,469 $0.01 $0.01 0.3%
Labour (& Benefits) $190,034 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $0.45 $0.42 10.9%
Supplies $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $0.05 $0.04 1.1%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Stock Insurance $20,083 $31,737 $33,059 $32,688 $32,613 $32,613 $32,613 $32,613 $32,613 $32,613 $0.07 $0.07 1.8%
$914,247 $1,693,172 $1,654,801 $1,679,606 $1,681,155 $1,681,184 $1,681,184 $1,681,184 $1,681,184 $1,681,184 $3.03 $2.93 75.7%
Cost Of Production $615,897 $1,394,822 $1,349,477 $1,373,830 $1,375,349 $1,375,378 $1,375,378 $1,375,378 $1,375,378 $1,375,378 $2.96 $2.28
Gross Margin $24,583 $453,409 $421,519 $440,535 $441,828 $441,799 $441,799 $441,799 $441,799 $441,799 $0.91 $0.94 24.3%
Indirect Costs
Depreciation $128,580 $110,273 $95,301 $82,846 $72,360 $63,454 $55,840 $49,293 $43,639 $38,736 $0.17 $0.15 4.0%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.01 $0.01 0.3%
Interest $54,185 $50,045 $45,605 $40,844 $35,739 $30,264 $24,395 $18,100 $11,351 $4,114 $0.07 $0.08 2.0%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.14 $0.13 3.3%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.01 $0.01 0.3%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.05 $0.05 1.3%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Vehicle Expenses & Travel $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $0.03 $0.03 0.8%
Total Indirect $315,365 $291,894 $273,727 $256,656 $241,209 $226,973 $213,632 $200,935 $188,676 $176,679 $0.54 $0.51 13.3%
Taxes $0 $0 $3,057 $30,340 $33,102 $35,446 $37,648 $39,742 $41,765 $43,745 $0.09 2.4%
Retained Earnings ($290,781) ($129,266) $15,468 $169,008 $336,525 $515,905 $706,424 $907,545 $1,118,903 $1,340,277
3/9/2009 Financial Report Template - 10 Year - 460 tonne Cage.xlsx 1


OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858
Sales $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
$640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
Cash Disbursements
Direct Expenses ($914,247) ($1,394,822) ($1,356,451) ($1,374,282) ($1,375,378) ($1,375,378) ($1,375,378) ($1,375,378) ($1,375,378) ($1,375,378)
Increase (Decrease) in Payables $76,187 $40,048 ($3,198) $1,486 $91 $0 $0 $0 $0 $0
Taxes $0 $0 ($3,057) ($30,340) ($33,102) ($35,446) ($37,648) ($39,742) ($41,765) ($43,745)

Total Cash Disbursements ($1,078,218) ($1,637,040) ($1,534,696) ($1,580,560) ($1,577,472) ($1,574,343) ($1,570,818) ($1,566,763) ($1,562,181) ($1,557,067)
Production Facility ($1,103,270) $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Capital ($1,103,270) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,541,008) $211,190 $236,300 $233,805 $239,705 $242,834 $246,359 $250,414 $254,996 $260,110
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $1,542,721 ($61,419) ($65,859) ($70,620) ($75,725) ($81,200) ($87,070) ($93,364) ($100,113) ($107,350)
CASH (Deficiency) at beginning of period $0 $1,713 $151,484 $321,924 $485,109 $649,089 $810,723 $970,012 $1,127,062 $1,281,945
CASH (Deficiency) at end of period $1,713 $151,484 $321,924 $485,109 $649,089 $810,723 $970,012 $1,127,062 $1,281,945 $1,434,705

Balance Sheet

ASSETS
Current Assets
Cash $ 1,713 $ 151,484 $ 321,924 $ 485,109 $ 649,089 $ 810,723 $ 970,012 $ 1,127,062 $ 1,281,945 $ 1,434,705
Total Current Assets $ - $ 353,437 $ 603,853 $ 774,832 $ 942,083 $ 1,106,326 $ 1,267,960 $ 1,427,249 $ 1,584,299 $ 1,739,182 $ 1,891,942
Capital Assets
TOTAL ASSETS $ - $ 1,328,127 $ 1,468,271 $ 1,543,949 $ 1,628,354 $ 1,720,237 $ 1,818,417 $ 1,921,866 $ 2,029,623 $ 2,140,868 $ 2,254,892
Current Liabilities
Shareholder Equity
Retained Earnings (Deficit) $ (290,781) $ (129,266) $ 15,468 $ 169,008 $ 336,525 $ 515,905 $ 706,424 $ 907,545 $ 1,118,903 $ 1,340,277
Total Equity $ - $ 509,219 $ 670,734 $ 815,468 $ 969,008 $ 1,136,525 $ 1,315,905 $ 1,506,424 $ 1,707,545 $ 1,918,903 $ 2,140,277
TOTAL LIABILITES & EQUITY $ 800,000 $ 1,328,127 $ 1,468,271 $ 1,543,949 $ 1,628,354 $ 1,720,237 $ 1,818,417 $ 1,921,866 $ 2,029,623 $ 2,140,868 $ 2,254,892

Capital Budget

Infrastructure
Environmental Assessment and Permitting $60,000
Sub-Total $143,750
Cage Culture System

Cages (50' x 50') - 8 cages $360,000
Sub-Total $723,120

Hydraulic Harvesting System $35,000
Snow Blower $6,000
Sub-Total $230,400
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 1,103,270
TOTAL $ 1,103,270

Average
RATIOS
Liquidity
Quick Ratio 0.72 2.63 4.15 5.56 6.98 8.39 9.78 11.15 12.51 13.84
Assets Management
Debt Management
Debt Ratio 56% 46% 40% 33% 27% 21% 16% 10% 5% 0%
Profitability
Gross Margin 3.8% 24.5% 23.8% 24.3% 24.3% 24.3% 24.3% 24.3% 24.3% 24.3% 22.2%
Return on Sales -16.9% 17.4% 16.3% 17.0% 17.0% 15.3% 15.6% 16.0% 16.3% 16.7% 13.1%

NPV $173,162 at 7.0%
FIRR 10.95%
Income Projections

Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 12,071,653 kg
Total Revenues $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
%
Feed $1,340,730 $2,601,435 $2,491,854 $2,541,940 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2.01 $1.97 50.9%
Fingerlings $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $0.35 $0.33 8.5%
Fish Health $22,129 $36,496 $35,798 $35,664 $35,611 $35,611 $35,611 $35,611 $35,611 $35,611 $0.03 $0.03 0.7%
Fuel $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $0.01 $0.01 0.4%
Labour (& Benefits) $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $0.23 $0.21 5.5%
Supplies $43,798 $43,798 $43,798 $43,798 $43,798 $43,798 $43,798 $43,798 $43,798 $43,798 $0.04 $0.03 0.9%
Stock Insurance $47,517 $71,134 $70,104 $69,401 $69,265 $69,265 $69,265 $69,265 $69,265 $69,265 $0.06 $0.05 1.4%
$2,255,654 $4,374,806 $4,263,496 $4,331,925 $4,336,227 $4,336,307 $4,336,307 $4,336,307 $4,336,307 $4,336,307 $2.79 $2.71 69.9%
Closing Inventory $820,463 $820,463 $839,642 $840,885 $840,966 $840,966 $840,966 $840,966 $840,966 $840,966
Cost Of Production $1,435,191 $3,554,343 $3,423,854 $3,491,040 $3,495,261 $3,495,341 $3,495,341 $3,495,341 $3,495,341 $3,495,341 $2.72 $2.71
Gross Margin $326,130 $1,528,291 $1,446,383 $1,498,465 $1,501,976 $1,501,896 $1,501,896 $1,501,896 $1,501,896 $1,501,896 $1.14 $1.16 30.1%
Indirect Costs
Depreciation $252,780 $231,216 $202,806 $178,590 $157,781 $139,792 $124,165 $110,534 $98,604 $88,130 $0.13 $0.07 1.8%
Insurance $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Interest $155,505 $131,372 $105,495 $77,746 $58,075 $49,180 $39,641 $29,413 $18,445 $6,685 $0.06 $0.01 0.1%
Management $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $0.06 $0.06 1.4%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.00 $0.00 0.1%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $560,085 $514,414 $460,323 $408,502 $368,166 $341,426 $316,404 $292,689 $269,936 $247,845 $0.31 $0.19 5.0%
PROFIT/(LOSS) before taxes ($233,955) $1,013,878 $986,061 $1,089,963 $1,133,810 $1,160,470 $1,185,492 $1,209,206 $1,231,960 $1,254,051 $0.83 $ 0.83 21.5%
Taxes $0 $261,274 $325,400 $359,688 $374,157 $382,955 $391,212 $399,038 $406,547 $413,837 $0.32 8.3%
Retained Earnings ($233,955) $518,649 $1,179,309 $1,909,584 $2,669,237 $3,446,752 $4,241,032 $5,051,200 $5,876,613 $6,716,827


OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110
Sales $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
$1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
Cash Disbursements
Direct Expenses ($2,255,654) ($3,554,343) ($3,443,034) ($3,492,283) ($3,495,341) ($3,495,341) ($3,495,341) ($3,495,341) ($3,495,341) ($3,495,341)
Taxes $0 ($261,274) ($325,400) ($359,688) ($374,157) ($382,955) ($391,212) ($399,038) ($406,547) ($413,837)
Total Capital ($2,433,245) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($3,193,689) $815,267 $852,711 $901,787 $916,964 $917,307 $918,444 $920,703 $924,017 $928,344
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Equity Investment $1,300,000 $1,300,000 $0 $0 $0 $0 0 0 0 0 0
New Financing (Loan 1) $1,300,000 $1,206,922 ($99,806) ($107,021) ($114,758) ($123,054) ($131,950) ($141,488) ($151,716) ($162,684) ($174,444)
Feed Supplier Financing $ 1,072,584 $831,825 ($258,163) ($276,825) ($296,837) $0 $0 $0 $0 $0 $0
Total Funding $3,338,748 ($357,969) ($383,847) ($411,595) ($123,054) ($131,950) ($141,488) ($151,716) ($162,684) ($174,444)
CASH (Deficiency) at beginning of period $0 $145,059 $602,357 $1,071,221 $1,561,413 $2,355,322 $3,140,679 $3,917,635 $4,686,622 $5,447,955
CASH (Deficiency) at end of period $145,059 $602,357 $1,071,221 $1,561,413 $2,355,322 $3,140,679 $3,917,635 $4,686,622 $5,447,955 $6,201,855

Balance Sheet

ASSETS
Current Assets
Cash $ 145,059 $ 602,357 $ 1,071,221 $ 1,561,413 $ 2,355,322 $ 3,140,679 $ 3,917,635 $ 4,686,622 $ 5,447,955 $ 6,201,855
Total Current Assets $ - $ 1,112,298 $ 1,846,372 $ 2,316,716 $ 2,818,090 $ 3,612,724 $ 4,398,082 $ 5,175,038 $ 5,944,024 $ 6,705,358 $ 7,459,257
Capital Assets
Production Facility $ 2,180,466 $ 1,949,250 $ 1,746,444 $ 1,567,854 $ 1,410,073 $ 1,270,282 $ 1,146,117 $ 1,035,583 $ 936,978 $ 848,849
TOTAL ASSETS $ - $ 3,292,764 $ 3,795,622 $ 4,063,160 $ 4,385,944 $ 5,022,798 $ 5,668,363 $ 6,321,155 $ 6,979,607 $ 7,642,336 $ 8,308,106
Current Liabilities
New Financing (Loan 1) $ 1,300,000 $ 1,206,922 $ 1,107,116 $ 1,000,094 $ 885,336 $ 762,282 $ 630,333 $ 488,845 $ 337,128 $ 174,444 $ 0
Feed Supplier Financing $ 1,072,584 $ 831,825 $ 573,663 $ 296,837 $ 0 $ - $ - $ - $ - $ - $ -
Total Long-Term Liabilities $ 2,372,584 $ 2,038,748 $ 1,680,778 $ 1,296,931 $ 885,336 $ 762,282 $ 630,333 $ 488,845 $ 337,128 $ 174,444 $ 0
Total Liabilities $ 2,372,584 $ 2,226,719 $ 1,976,974 $ 1,583,851 $ 1,176,360 $ 1,053,561 $ 921,611 $ 780,123 $ 628,407 $ 465,723 $ 291,278
Shareholder Equity
Equity Investment $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000 $ 1,300,000
Retained Earnings (Deficit) $ (233,955) $ 518,649 $ 1,179,309 $ 1,909,584 $ 2,669,237 $ 3,446,752 $ 4,241,032 $ 5,051,200 $ 5,876,613 $ 6,716,827
Total Equity $ - $ 1,066,045 $ 1,818,649 $ 2,479,309 $ 3,209,584 $ 3,969,237 $ 4,746,752 $ 5,541,032 $ 6,351,200 $ 7,176,613 $ 8,016,827
TOTAL LIABILITES & EQUITY $ 2,372,584 $ 3,292,764 $ 3,795,622 $ 4,063,160 $ 4,385,944 $ 5,022,798 $ 5,668,363 $ 6,321,155 $ 6,979,607 $ 7,642,336 $ 8,308,106
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
RATIOS
Current Ratio 5.92 6.23 8.07 9.68 12.40 15.10 17.77 20.41 23.02 25.61
Quick Ratio 1.55 3.46 5.15 6.79 9.52 12.21 14.88 17.52 20.13 22.72
Debt:Equity 2.09 1.09 0.64 0.37 0.27 0.19 0.14 0.10 0.06 0.04
Debt Ratio 62% 44% 32% 20% 15% 11% 8% 5% 2% 0%

Capital Budget

Infrastructure
Wharf Facilities $40,000
Field Office/Staff Room $80,000
Sub-Total $322,000
Cage Culture System

Submersible Cages (50' x 50') - 8 cages $950,000
Anchors, Mooring, Rigging and Installation $60,000
Cover Nets $36,000
Sub-Total $1,545,945
Boats & Motors

Crew Boat $18,000
Feed Barges $18,000
Service Boat $60,000
Work Barge $50,000
Engines $44,000
Sub-Total $218,500

Powered Feed Blowers $80,000
Snow Blower $3,000
Forklift $30,000
Tractor (with bucket and hydrulic lift) $25,000
Sub-Total $340,800
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 2,433,245
TOTAL $ 2,433,245

Average
RATIOS
Liquidity
Quick Ratio 1.55 3.46 5.15 6.79 9.52 12.21 14.88 17.52 20.13 22.72
Assets Management
Debt Management
Debt Ratio 62% 44% 32% 20% 15% 11% 8% 5% 2% 0%
Profitability
Gross Margin 18.5% 30.1% 29.7% 30.0% 30.1% 30.1% 30.1% 30.1% 30.1% 30.1% 28.9%
Return on Sales 9.9% 27.1% 26.6% 27.0% 27.0% 26.0% 26.2% 26.4% 26.6% 26.9% 25.0%

NPV $2,809,817 at 7.0%
FIRR 33.96%
APPENDIX B
Scenarios for Assessing the Economic Impact of Environmental Management

Alternatives for Cage Production
Income Projections
Cage Production 460 Tonne with RH Waste Recovery System
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858 4,389,692 kg
Total Revenues $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
%
Feed $487,538 $945,976 $906,129 $924,342 $925,523 $925,523 $925,523 $925,523 $925,523 $925,523 $2.01 $1.97 50.9%
Fingerlings $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $0.35 $0.33 8.5%
Fish Health $3,115 $5,336 $5,491 $5,480 $5,469 $5,469 $5,469 $5,469 $5,469 $5,469 $0.01 $0.01 0.3%
Fuel $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Waste Treatment Supplies $33,414 $178,293 $170,783 $174,216 $174,438 $174,438 $174,438 $174,438 $174,438 $174,438 $0.37 $0.37 9.6%
Labour (& Benefits) $190,034 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $0.45 $0.42 10.9%
Supplies $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $0.05 $0.04 1.1%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Stock Insurance $20,083 $31,737 $33,059 $32,688 $32,613 $32,613 $32,613 $32,613 $32,613 $32,613 $0.07 $0.07 1.8%
$947,661 $1,871,465 $1,825,584 $1,853,822 $1,855,593 $1,855,622 $1,855,622 $1,855,622 $1,855,622 $1,855,622 $3.39 $3.30 85.3%
Gross Margin ($8,831) $275,116 $250,736 $266,320 $267,390 $267,361 $267,361 $267,361 $267,361 $267,361 $0.54 $0.57 14.7%
Indirect Costs
Depreciation $135,287 $132,078 $118,270 $106,143 $95,379 $85,766 $77,152 $69,418 $62,467 $56,216 $0.21 $0.20 5.2%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.01 $0.01 0.3%
Interest $54,185 $50,045 $45,605 $40,844 $35,739 $30,264 $24,395 $18,100 $11,351 $4,114 $0.07 $0.08 2.0%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.14 $0.13 3.3%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.01 $0.01 0.3%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.05 $0.05 1.3%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $322,072 $313,699 $296,697 $279,953 $264,228 $249,285 $234,945 $221,060 $207,504 $194,159 $0.59 $0.56 14.5%
PROFIT/(LOSS) before taxes ($330,903) ($38,583) ($45,961) ($13,634) $3,162 $18,076 $32,416 $46,300 $59,857 $73,201 ($0.04) ($0.04) -1.2%
Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 0.0%
PROFIT/(LOSS) after taxes ($330,903) ($38,583) ($45,961) ($13,634) $3,162 $18,076 $32,416 $46,300 $59,857 $73,201 ($0.04) ($0.04) -1.2%
Retained Earnings ($330,903) ($369,486) ($415,448) ($429,081) ($425,919) ($407,843) ($375,427) ($329,127) ($269,271) ($196,069)
09/03/2009 Financial Report Template - 10 Year - 460 tonne Cage with Waste Recovery.xlsx 1
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858
Sales $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
$640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
Cash Disbursements
Direct Expenses ($947,661) ($1,573,115) ($1,527,234) ($1,548,498) ($1,549,817) ($1,549,817) ($1,549,817) ($1,549,817) ($1,549,817) ($1,549,817)
Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Capital ($1,444,070) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,912,438) $44,970 $67,948 $90,216 $98,387 $103,842 $109,568 $115,718 $122,324 $129,417
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
New Financing (Loan 1) $1,000,000 $942,721 ($61,419) ($65,859) ($70,620) ($75,725) ($81,200) ($87,070) ($93,364) ($100,113) ($107,350)
Total Funding $2,042,721 ($61,419) ($65,859) ($70,620) ($75,725) ($81,200) ($87,070) ($93,364) ($100,113) ($107,350)
Increase (Decrease) in cash position $130,284 ($16,449) $2,088 $19,595 $22,662 $22,642 $22,498 $22,354 $22,210 $22,066
Balance Sheet
ASSETS
Current Assets
Cash $ 130,284 $ 113,835 $ 115,923 $ 135,518 $ 158,180 $ 180,822 $ 203,321 $ 225,675 $ 247,885 $ 269,952
Capital Assets
Production Facility $ 1,308,783 $ 1,176,705 $ 1,058,434 $ 952,291 $ 856,912 $ 771,146 $ 693,993 $ 624,575 $ 562,108 $ 505,893
TOTAL ASSETS $ - $ 1,790,790 $ 1,742,908 $ 1,627,264 $ 1,544,782 $ 1,472,329 $ 1,409,205 $ 1,354,551 $ 1,307,488 $ 1,267,231 $ 1,233,082
Current Liabilities
New Financing (Loan 1) $ 1,100,000 $ 942,721 $ 881,302 $ 815,443 $ 744,822 $ 669,097 $ 587,897 $ 500,827 $ 407,464 $ 307,350 $ 200,000
Total Long-Term Liabilities $ 1,100,000 $ 942,721 $ 881,302 $ 815,443 $ 744,822 $ 669,097 $ 587,897 $ 500,827 $ 407,464 $ 307,350 $ 200,000
Total Liabilities $ 1,100,000 $ 1,021,693 $ 1,012,395 $ 942,712 $ 873,864 $ 798,248 $ 717,048 $ 629,979 $ 536,615 $ 436,502 $ 329,151
Shareholder Equity
Retained Earnings (Deficit) $ (330,903) $ (369,486) $ (415,448) $ (429,081) $ (425,919) $ (407,843) $ (375,427) $ (329,127) $ (269,271) $ (196,069)
Total Equity $ - $ 769,097 $ 730,514 $ 684,552 $ 670,919 $ 674,081 $ 692,157 $ 724,573 $ 770,873 $ 830,729 $ 903,931
Capital Budget
Infrastructure
Sub-Total $143,750
Cage Culture System

Cages (50' x 50') - 8 cages $360,000
Sub-Total $723,120

Snow Blower $6,000
Oxygen storage (pad, fencing, gates, etc.)
Sub-Total $230,400
Solid Waste Recovery System Unit Cost Units

Sludge Collection Diapers $ 25,000 8 $200,000
Air-lift pumps $ 750 8 $6,000
Solids Filter $ 45,000 1 $45,000
Polymer Addition System $ 15,000 1 $15,000
Service Barge (with Building and Power) $ 120,000 - $0
Biofiltration $ 40,000 $0
Compressor $ 3,000 1 $3,000
Solid Waste Collection Bag $ 30,000 - $0
Piping & Misc $15,000
$ 340,800
Other Equipment
Pick-upTruck
Interior preparation (carpeting, painting, decorating)
Installation labour and miscellaneous costs
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 1,444,070
TOTAL $ 1,444,070

Average
RATIOS
Liquidity
Quick Ratio 2.33 2.04 2.07 2.22 2.40 2.57 2.75 2.92 3.09 3.26
Assets Management
Debt Management
Debt Ratio 53% 51% 50% 48% 45% 42% 37% 31% 24% 16%
Times Interest Earned (5.11) 0.23 (0.01) 0.67 1.09 1.60 2.33 3.56 6.27 18.79
Profitability
Gross Margin -1.4% 14.9% 14.2% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 13.1%
Return on Sales -22.1% 7.8% 6.7% 7.3% 7.4% 5.7% 6.0% 6.4% 6.7% 7.1% 3.9%
Cash Earnings on Sales 20.3% -0.9% 0.1% 1.1% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 2.8%
ROI (cash-in - cash out) -30.1% -3.5% -4.2% -1.2% 0.3% 1.6% 2.9% 4.2% 5.4% 6.7% -1.8%

NPV -$894,388 at 7.0%
FIRR -21.60%
Income Projections
Cage Production 1260 Tonne with RH Waste Recovery
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 12,071,653 kg
Total Revenues $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
%
Feed $1,340,730 $2,601,435 $2,491,854 $2,541,940 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2.01 $1.97 50.9%
Fingerlings $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $0.35 $0.33 8.5%
Fish Health $22,129 $36,496 $35,798 $35,664 $35,611 $35,611 $35,611 $35,611 $35,611 $35,611 $0.03 $0.03 0.7%
Fuel $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $0.01 $0.01 0.4%
Waste Treatment Supplies $91,889 $178,293 $170,783 $174,216 $174,438 $174,438 $174,438 $174,438 $174,438 $174,438 $0.14 $0.14 3.5%
Labour (& Benefits) $327,189 $327,189 $327,189 $327,189 $327,189 $327,189 $327,189 $327,189 $327,189 $327,189 $0.27 $0.25 6.5%
Supplies $70,161 $70,161 $70,161 $70,161 $70,161 $70,161 $70,161 $70,161 $70,161 $70,161 $0.06 $0.05 1.4%
Stock Insurance $47,517 $71,134 $70,104 $69,401 $69,265 $69,265 $69,265 $69,265 $69,265 $69,265 $0.06 $0.05 1.4%
$2,481,163 $4,686,719 $4,567,899 $4,639,761 $4,644,285 $4,644,365 $4,644,365 $4,644,365 $4,644,365 $4,644,365 $3.04 $2.94 76.1%
Gross Margin $100,621 $1,216,378 $1,141,981 $1,190,629 $1,193,918 $1,193,837 $1,193,837 $1,193,837 $1,193,837 $1,193,837 $0.90 $0.92 23.9%
Indirect Costs
Depreciation $408,365 $361,397 $320,473 $284,713 $253,381 $225,858 $201,622 $180,233 $161,318 $144,556 $0.21 $0.11 2.9%
Insurance $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Interest $213,077 $184,545 $153,950 $121,143 $96,048 $81,336 $65,560 $48,644 $30,506 $11,056 $0.08 $0.01 0.2%
Management $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $0.06 $0.06 1.4%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.00 $0.00 0.1%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $773,242 $697,768 $626,445 $558,022 $501,739 $459,647 $419,780 $381,620 $344,709 $308,642 $0.42 $0.24 6.2%
PROFIT/(LOSS) before taxes ($672,621) $518,610 $515,536 $632,607 $692,179 $734,190 $774,057 $812,218 $849,128 $885,196 $0.48 $ 0.48 12.3%
Taxes $0 $0 $59,652 $208,760 $228,419 $242,283 $255,439 $268,032 $280,212 $292,115 $0.23 5.8%
Retained Earnings ($672,621) ($154,011) $301,873 $725,720 $1,189,480 $1,681,388 $2,200,006 $2,744,192 $3,313,108 $3,906,189
09/03/2009 Financial Report Template - 10 Year - 1260 tonne Cage - with waste recovery.xlsx 1
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110
Sales $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
$1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
Cash Disbursements
Direct Expenses ($2,481,163) ($3,866,256) ($3,747,437) ($3,800,119) ($3,803,399) ($3,803,399) ($3,803,399) ($3,803,399) ($3,803,399) ($3,803,399)
Taxes $0 $0 ($59,652) ($208,760) ($228,419) ($242,283) ($255,439) ($268,032) ($280,212) ($292,115)

Operating Cash Flow ($1,024,732) $718,656 $764,976 $701,768 $716,690 $717,765 $720,240 $724,419 $730,233 $737,637
Total Capital ($3,897,845) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($4,922,577) $718,656 $764,976 $701,768 $716,690 $717,765 $720,240 $724,419 $730,233 $737,637
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $4,977,889 ($423,227) ($453,822) ($486,629) ($203,512) ($218,224) ($234,000) ($250,915) ($269,054) ($288,504)
CASH (Deficiency) at beginning of period $0 $55,312 $350,740 $661,894 $877,032 $1,390,210 $1,889,751 $2,375,991 $2,849,495 $3,310,674
CASH (Deficiency) at end of period $55,312 $350,740 $661,894 $877,032 $1,390,210 $1,889,751 $2,375,991 $2,849,495 $3,310,674 $3,759,807
Balance Sheet
ASSETS
Current Assets
Cash $ - $ 55,312 $ 350,740 $ 661,894 $ 877,032 $ 1,390,210 $ 1,889,751 $ 2,375,991 $ 2,849,495 $ 3,310,674 $ 3,759,807
Capital Assets
Production Facility $ 3,489,481 $ 3,128,083 $ 2,807,610 $ 2,522,897 $ 2,269,516 $ 2,043,658 $ 1,842,036 $ 1,661,803 $ 1,500,485 $ 1,355,929
TOTAL ASSETS $ - $ 4,512,032 $ 4,722,839 $ 4,714,999 $ 4,656,606 $ 4,917,128 $ 5,190,811 $ 5,475,430 $ 5,768,700 $ 6,068,562 $ 6,373,139
Current Liabilities
New Financing (Loan 1) $ 2,150,000 $ 1,996,064 $ 1,830,999 $ 1,654,002 $ 1,464,210 $ 1,260,698 $ 1,042,473 $ 808,474 $ 557,558 $ 288,504 $ 0
Total Long-Term Liabilities ` $ 2,827,889 $ 2,404,662 $ 1,950,839 $ 1,464,210 $ 1,260,698 $ 1,042,473 $ 808,474 $ 557,558 $ 288,504 $ 0
Total Liabilities $ 3,034,653 $ 2,726,850 $ 2,263,126 $ 1,780,886 $ 1,577,648 $ 1,359,423 $ 1,125,424 $ 874,508 $ 605,454 $ 316,950
Shareholder Equity
Retained Earnings (Deficit) $ (672,621) $ (154,011) $ 301,873 $ 725,720 $ 1,189,480 $ 1,681,388 $ 2,200,006 $ 2,744,192 $ 3,313,108 $ 3,906,189
Total Equity $ - $ 1,477,379 $ 1,995,989 $ 2,451,873 $ 2,875,720 $ 3,339,480 $ 3,831,388 $ 4,350,006 $ 4,894,192 $ 5,463,108 $ 6,056,189
TOTAL LIABILITES & EQUITY $ - $ 4,512,032 $ 4,722,839 $ 4,714,999 $ 4,656,606 $ 4,917,128 $ 5,190,811 $ 5,475,430 $ 5,768,700 $ 6,068,562 $ 6,373,139
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
RATIOS
Current Ratio 4.95 4.95 6.11 6.74 8.35 9.93 11.46 12.96 14.41 15.83
Quick Ratio 0.98 2.40 3.42 4.08 5.70 7.28 8.81 10.30 11.76 13.18
Debt:Equity 2.05 1.37 0.92 0.62 0.47 0.35 0.26 0.18 0.11 0.05
Debt Ratio 63% 51% 41% 31% 26% 20% 15% 10% 5% 0%
Capital Budget
Infrastructure
Sub-Total $322,000
Cage Culture System

Cover Nets $36,000
Boats & Motors

Crew Boat $18,000
Feed Barges $18,000
Work Barge $50,000
Engines $44,000
Sub-Total $218,500

Snow Blower $3,000
Forklift $30,000
Oxygen storage (pad, fencing, gates, etc.)
Sub-Total $340,800
Solid Waste Recovery System Unit Cost Units

Sludge Collection Diapers $ 30,000 30 $900,000
Air-lift pumps $ 750 30 $22,500
Solids Filter $ 45,000 1 $45,000
Polymer Addition System $ 15,000 1 $15,000
Service Barge (with Building and Power) $ 120,000 1 $120,000
Biofiltration $ 40,000 1 $40,000
Compressor $ 3,000 1 $3,000
Solid Waste Collection Bag $ 30,000 2 $60,000
Piping & Misc $15,000
$ 1,464,600
31250
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 3,897,845
TOTAL $ 3,897,845

Average
RATIOS
Liquidity
Quick Ratio 0.98 2.40 3.42 4.08 5.70 7.28 8.81 10.30 11.76 13.18
Assets Management
Debt Management
Debt Ratio 63% 51% 41% 31% 26% 20% 15% 10% 5% 0%
Profitability
Gross Margin 5.7% 23.9% 23.4% 23.9% 23.9% 23.9% 23.9% 23.9% 23.9% 23.9% 22.0%
Return on Sales -2.9% 20.9% 20.3% 20.8% 20.8% 19.2% 19.5% 19.9% 20.2% 20.6% 17.9%

NPV $334,165 at 7.0%
FIRR 9.69%
Income Projections
Cage Production 230 Tonne with Improved Feed Management
Harvest (kg) 82,803 238,944 228,959 234,566 234,929 234,929 234,929 234,929 234,929 234,929 2,194,846 kg
Total Revenues $320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
%
Electricity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Feed $234,294 $454,603 $435,454 $444,206 $444,774 $444,774 $444,774 $444,774 $444,774 $444,774 $1.93 $1.89 49.0%
Fingerlings $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $85,500 $0.39 $0.36 9.4%
Fish Health $1,078 $1,918 $2,088 $2,087 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $0.01 $0.01 0.2%
Labour (& Benefits) $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $55,082 $0.25 $0.23 6.1%
Supplies $10,364 $19,134 $19,134 $19,134 $19,134 $19,134 $19,134 $19,134 $19,134 $19,134 $0.08 $0.08 2.1%
Stock Insurance $6,218 $10,503 $11,624 $11,479 $11,449 $11,449 $11,449 $11,449 $11,449 $11,449 $0.05 $0.05 1.3%
$411,670 $814,182 $796,324 $808,418 $809,177 $809,192 $809,192 $809,192 $809,192 $809,192 $2.88 $2.79 72.2%
Cost Of Production $262,495 $665,007 $643,661 $655,530 $656,274 $656,289 $656,289 $656,289 $656,289 $656,289 $2.81 $2.14
Gross Margin $57,745 $259,108 $241,836 $251,653 $252,314 $252,300 $252,300 $252,300 $252,300 $252,300 $1.06 $1.07 27.8%
Indirect Costs
Depreciation $96,772 $82,211 $70,480 $60,840 $52,806 $46,043 $40,306 $35,410 $31,210 $27,591 $0.25 $0.22 5.8%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.02 $0.02 0.5%
Interest $40,639 $37,534 $34,204 $30,633 $26,804 $22,698 $18,296 $13,575 $8,513 $3,085 $0.11 $0.11 3.0%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.27 $0.26 6.6%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.03 $0.03 0.7%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.11 $0.10 2.6%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.1%
Total Indirect $255,011 $236,320 $222,505 $209,439 $197,720 $186,996 $177,000 $167,527 $158,409 $149,506 $0.89 $0.84 21.8%
Taxes $0 $0 $0 $0 $0 $1,149 $12,424 $13,987 $15,492 $16,961 $0.07 1.9%
Retained Earnings ($197,266) ($174,478) ($155,147) ($112,933) ($58,339) $5,816 $68,691 $139,476 $217,874 $303,707
09/03/2009 Financial Report Template - 10 Year - 230 t Cage Production - Feed Control.xlsx 1
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 82,803 238,944 228,959 234,566 234,929 234,929 234,929 234,929 234,929 234,929
Sales $320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
$320,240 $924,115 $885,498 $907,183 $908,589 $908,589 $908,589 $908,589 $908,589 $908,589
Cash Disbursements
Direct Expenses ($411,670) ($665,007) ($647,149) ($655,756) ($656,289) ($656,289) ($656,289) ($656,289) ($656,289) ($656,289)
Increase (Decrease) in Payables $34,306 $21,111 ($1,488) $717 $44 $0 $0 $0 $0 $0
Taxes $0 $0 $0 $0 $0 ($1,149) ($12,424) ($13,987) ($15,492) ($16,961)

Total Capital ($797,235) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,039,285) $75,787 $88,054 $101,738 $107,313 $110,198 $103,181 $106,195 $109,608 $113,423
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $1,157,041 ($46,065) ($49,395) ($52,965) ($56,794) ($60,900) ($65,302) ($70,023) ($75,085) ($80,513)
Balance Sheet
ASSETS
Current Assets
Cash $ 117,756 $ 147,479 $ 186,138 $ 234,911 $ 285,429 $ 334,728 $ 372,607 $ 408,779 $ 443,303 $ 476,213
Capital Assets
TOTAL ASSETS $ - $ 994,081 $ 991,916 $ 960,364 $ 950,330 $ 948,174 $ 951,429 $ 949,002 $ 949,764 $ 953,078 $ 958,398
Current Liabilities
Shareholder Equity
Retained Earnings (Deficit) $ (197,266) $ (174,478) $ (155,147) $ (112,933) $ (58,339) $ 5,816 $ 68,691 $ 139,476 $ 217,874 $ 303,707
Total Equity $ - $ 402,734 $ 425,522 $ 444,853 $ 487,067 $ 541,661 $ 605,816 $ 668,691 $ 739,476 $ 817,874 $ 903,707
TOTAL LIABILITES & EQUITY $ 600,000 $ 994,081 $ 991,916 $ 960,364 $ 950,330 $ 948,174 $ 951,429 $ 949,002 $ 949,764 $ 953,078 $ 958,398
Capital Budget
Infrastructure
Envriornmental Assessment and Permitting $60,000
Sub-Total $100,625
Cage Culture System

Cages (50' x 50') - 8 cages $240,000
Sub-Total $493,810

Hydraulic Harvesting System $0
Snow Blower $4,000
Sub-Total $196,800
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 797,235
TOTAL $ 797,235

Average
RATIOS
Liquidity
Quick Ratio 4.21 4.05 4.82 5.68 6.60 7.50 8.20 8.86 9.49 10.09
Assets Management
Debt Management
Debt Ratio 56% 52% 48% 43% 37% 31% 24% 16% 8% 0%
Profitability
Gross Margin 18.0% 28.0% 27.3% 27.7% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 26.8%
Return on Sales -18.7% 15.4% 14.0% 14.7% 14.8% 12.3% 12.7% 13.2% 13.8% 14.4% 10.7%

NPV -$246,202 at 7.0%
FIRR -4.6%
Income Projections
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858 4,389,692 kg
Total Revenues $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
%
Feed $463,161 $898,677 $860,822 $878,125 $879,247 $879,247 $879,247 $879,247 $879,247 $879,247 $1.91 $1.87 48.4%
Fingerlings $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $0.35 $0.33 8.5%
Fish Health $3,115 $5,336 $5,491 $5,480 $5,469 $5,469 $5,469 $5,469 $5,469 $5,469 $0.01 $0.01 0.3%
Labour (& Benefits) $190,034 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $198,297 $0.45 $0.42 10.9%
Supplies $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $0.05 $0.04 1.1%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Stock Insurance $20,083 $31,737 $33,059 $32,688 $32,613 $32,613 $32,613 $32,613 $32,613 $32,613 $0.07 $0.07 1.8%
$889,870 $1,645,873 $1,609,495 $1,633,389 $1,634,879 $1,634,908 $1,634,908 $1,634,908 $1,634,908 $1,634,908 $2.93 $2.83 73.1%
Gross Margin $48,960 $500,708 $466,825 $486,752 $488,104 $488,075 $488,075 $488,075 $488,075 $488,075 $1.01 $1.04 26.9%
Indirect Costs
Depreciation $128,580 $110,273 $95,301 $82,846 $72,360 $63,454 $55,840 $49,293 $43,639 $38,736 $0.17 $0.15 4.0%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.01 $0.01 0.3%
Interest $54,185 $50,045 $45,605 $40,844 $35,739 $30,264 $24,395 $18,100 $11,351 $4,114 $0.07 $0.08 2.0%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.14 $0.13 3.3%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.01 $0.01 0.3%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.05 $0.05 1.3%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $315,365 $291,894 $273,727 $256,656 $241,209 $226,973 $213,632 $200,935 $188,676 $176,679 $0.54 $0.51 13.3%
Taxes $0 $0 $22,359 $37,966 $40,738 $43,082 $45,283 $47,378 $49,401 $51,380 $0.11 2.8%
Retained Earnings ($266,405) ($57,590) $113,149 $305,279 $511,437 $729,457 $958,617 $1,198,379 $1,448,377 $1,708,392
09/03/2009 Financial Report Template - 10 Year - 460 tonne Cage with Improved Feeding.xlsx 1
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858
Sales $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
$640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
Cash Disbursements
Direct Expenses ($889,870) ($1,347,523) ($1,311,145) ($1,328,065) ($1,329,102) ($1,329,102) ($1,329,102) ($1,329,102) ($1,329,102) ($1,329,102)
Taxes $0 $0 ($22,359) ($37,966) ($40,738) ($43,082) ($45,283) ($47,378) ($49,401) ($51,380)

Total Capital ($1,163,270) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,578,663) $256,579 $262,470 $272,320 $278,341 $281,475 $284,999 $289,055 $293,637 $298,751
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $1,592,721 ($61,419) ($65,859) ($70,620) ($75,725) ($81,200) ($87,070) ($93,364) ($100,113) ($107,350)
CASH (Deficiency) at beginning of period $0 $14,059 $209,218 $405,829 $607,529 $810,144 $1,010,419 $1,208,349 $1,404,039 $1,597,563
CASH (Deficiency) at end of period $14,059 $209,218 $405,829 $607,529 $810,144 $1,010,419 $1,208,349 $1,404,039 $1,597,563 $1,788,964
Balance Sheet
ASSETS
Current Assets
Cash $ 14,059 $ 209,218 $ 405,829 $ 607,529 $ 810,144 $ 1,010,419 $ 1,208,349 $ 1,404,039 $ 1,597,563 $ 1,788,964
Total Current Assets $ - $ 365,782 $ 661,588 $ 858,736 $ 1,064,503 $ 1,267,381 $ 1,467,656 $ 1,665,586 $ 1,861,276 $ 2,054,800 $ 2,246,201
Capital Assets
Production Facility $ 1,022,691 $ 902,818 $ 799,837 $ 710,847 $ 633,572 $ 566,185 $ 507,200 $ 455,391 $ 409,738 $ 369,392
TOTAL ASSETS $ - $ 1,388,473 $ 1,564,405 $ 1,658,573 $ 1,775,350 $ 1,900,953 $ 2,033,842 $ 2,172,786 $ 2,316,667 $ 2,464,539 $ 2,615,593
Current Liabilities
Shareholder Equity
Retained Earnings (Deficit) $ (266,405) $ (57,590) $ 113,149 $ 305,279 $ 511,437 $ 729,457 $ 958,617 $ 1,198,379 $ 1,448,377 $ 1,708,392
Total Equity $ - $ 558,595 $ 767,410 $ 938,149 $ 1,130,279 $ 1,336,437 $ 1,554,457 $ 1,783,617 $ 2,023,379 $ 2,273,377 $ 2,533,392
Capital Budget
Infrastructure
Sub-Total $143,750
Cage Culture System

Cages (50' x 50') - 8 cages $360,000
Sub-Total $723,120

Snow Blower $6,000
Sub-Total $290,400
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 1,163,270
TOTAL $ 1,163,270

Average
RATIOS
Liquidity
Quick Ratio 0.91 3.23 5.06 6.86 8.68 10.49 12.28 14.04 15.79 17.52
Assets Management
Debt Management
Debt Ratio 54% 44% 37% 31% 24% 19% 14% 9% 4% 0%
Profitability
Gross Margin 7.6% 27.1% 26.4% 26.8% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% 24.9%
Return on Sales -13.1% 20.0% 18.9% 19.5% 19.5% 17.9% 18.2% 18.5% 18.9% 19.3% 15.8%

NPV $390,598 at 7.0%
FIRR 15.21%
Income Projections
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 12,071,653 kg
Total Revenues $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
%
Feed $1,273,693 $2,471,363 $2,367,261 $2,414,843 $2,417,928 $2,417,928 $2,417,928 $2,417,928 $2,417,928 $2,417,928 $1.91 $1.87 48.4%
Fingerlings $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $0.35 $0.33 8.5%
Fish Health $22,129 $36,496 $35,798 $35,664 $35,611 $35,611 $35,611 $35,611 $35,611 $35,611 $0.03 $0.03 0.7%
Fuel $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $0.01 $0.01 0.4%
Labour (& Benefits) $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $272,658 $0.23 $0.21 5.5%
Supplies $45,634 $45,634 $45,634 $45,634 $45,634 $45,634 $45,634 $45,634 $45,634 $45,634 $0.04 $0.04 0.9%
Stock Insurance $47,517 $71,134 $70,104 $69,401 $69,265 $69,265 $69,265 $69,265 $69,265 $69,265 $0.06 $0.05 1.4%
$2,194,125 $4,250,242 $4,144,412 $4,210,336 $4,214,475 $4,214,556 $4,214,556 $4,214,556 $4,214,556 $4,214,556 $2.70 $2.61 67.5%
Gross Margin $387,658 $1,652,855 $1,565,468 $1,620,054 $1,623,728 $1,623,647 $1,623,647 $1,623,647 $1,623,647 $1,623,647 $1.24 $1.26 32.5%
Indirect Costs
Depreciation $273,180 $247,536 $215,862 $189,034 $166,137 $146,476 $129,512 $114,813 $102,027 $90,868 $0.14 $0.07 1.8%
Insurance $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Interest $152,133 $128,870 $103,925 $77,177 $58,075 $49,180 $39,641 $29,413 $18,445 $6,685 $0.05 $0.01 0.1%
Management $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $0.06 $0.06 1.4%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.00 $0.00 0.1%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $577,112 $528,231 $471,809 $418,378 $376,522 $348,110 $321,751 $296,967 $273,358 $250,583 $0.32 $0.19 5.0%
PROFIT/(LOSS) before taxes ($189,454) $1,124,624 $1,093,659 $1,201,676 $1,247,205 $1,275,537 $1,301,896 $1,326,680 $1,350,289 $1,373,064 $0.92 $ 0.92 23.8%
Taxes $0 $313,282 $360,907 $396,553 $411,578 $420,927 $429,626 $437,804 $445,595 $453,111 $0.35 9.1%
OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110
Sales $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
$1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
Cash Disbursements
Direct Expenses ($2,194,125) ($3,429,779) ($3,323,949) ($3,370,694) ($3,373,590) ($3,373,590) ($3,373,590) ($3,373,590) ($3,373,590) ($3,373,590)
Taxes $0 ($313,282) ($360,907) ($396,553) ($411,578) ($420,927) ($429,626) ($437,804) ($445,595) ($453,111)
Operating Cash Flow ($700,670) $885,072 $938,315 $986,870 $1,001,281 $1,001,086 $1,001,782 $1,003,688 $1,006,720 $1,010,821
Total Capital ($2,535,245) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($3,235,915) $885,072 $938,315 $986,870 $1,001,281 $1,001,086 $1,001,782 $1,003,688 $1,006,720 $1,010,821
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $3,297,156 ($345,061) ($370,006) ($396,753) ($123,054) ($131,950) ($141,488) ($151,716) ($162,684) ($174,444)
CASH (Deficiency) at beginning of period $0 $61,242 $601,253 $1,169,562 $1,759,679 $2,637,906 $3,507,042 $4,367,336 $5,219,308 $6,063,344
CASH (Deficiency) at end of period $61,242 $601,253 $1,169,562 $1,759,679 $2,637,906 $3,507,042 $4,367,336 $5,219,308 $6,063,344 $6,899,721
Balance Sheet
ASSETS
Current Assets
Cash $ 61,242 $ 601,253 $ 1,169,562 $ 1,759,679 $ 2,637,906 $ 3,507,042 $ 4,367,336 $ 5,219,308 $ 6,063,344 $ 6,899,721
Capital Assets
Production Facility $ 2,262,066 $ 2,014,530 $ 1,798,668 $ 1,609,634 $ 1,443,497 $ 1,297,020 $ 1,167,508 $ 1,052,695 $ 950,669 $ 859,801
TOTAL ASSETS $ - $ 3,290,546 $ 3,859,798 $ 4,213,725 $ 4,625,990 $ 5,338,805 $ 6,061,465 $ 6,792,247 $ 7,529,406 $ 8,271,415 $ 9,016,924
Current Liabilities
Shareholder Equity
Total Equity $ - $ 1,110,546 $ 1,921,888 $ 2,654,640 $ 3,459,762 $ 4,295,390 $ 5,150,000 $ 6,022,270 $ 6,911,145 $ 7,815,838 $ 8,735,792
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
RATIOS
Current Ratio 5.62 6.46 8.72 10.74 13.86 16.95 20.01 23.04 26.04 29.02
Quick Ratio 1.14 3.59 5.69 7.74 10.86 13.96 17.02 20.05 23.05 26.02
Debt:Equity 1.96 1.01 0.59 0.34 0.24 0.18 0.13 0.09 0.06 0.03
Debt Ratio 61% 43% 30% 19% 14% 10% 7% 4% 2% 0%
Capital Budget
Infrastructure
Sub-Total $322,000
Cage Culture System

Cover Nets $36,000
Boats & Motors

Crew Boat $18,000
Feed Barges $18,000
Work Barge $50,000
Engines $44,000
Sub-Total $218,500

Snow Blower $3,000
Forklift $30,000
Sub-Total $442,800
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 2,535,245
TOTAL $ 2,535,245

Average
RATIOS
Liquidity
Quick Ratio 1.14 3.59 5.69 7.74 10.86 13.96 17.02 20.05 23.05 26.02
Assets Management
Debt Management
Debt Ratio 61% 43% 30% 19% 14% 10% 7% 4% 2% 0%
Profitability
Gross Margin 22.0% 32.5% 32.1% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 31.4%
Return on Sales 13.4% 29.5% 29.0% 29.4% 29.4% 28.5% 28.6% 28.8% 29.1% 29.3% 27.5%

NPV $3,264,189 at 7.0%
FIRR 36.61%
Income Projections

Cage Production 460 Tonne with Fallowing
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858 4,389,692 kg
Total Revenues $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
%
Feed $487,538 $945,976 $906,129 $924,342 $925,523 $925,523 $925,523 $925,523 $925,523 $925,523 $2.01 $1.97 50.9%
Fingerlings $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $153,900 $0.35 $0.33 8.5%
Fish Health $3,115 $5,336 $5,491 $5,480 $5,469 $5,469 $5,469 $5,469 $5,469 $5,469 $0.01 $0.01 0.3%
Labour (& Benefits) $198,297 $206,559 $198,297 $206,559 $206,559 $206,559 $206,559 $206,559 $206,559 $206,559 $0.47 $0.44 11.4%
Supplies $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $19,859 $0.05 $0.04 1.1%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Stock Insurance $20,083 $31,737 $33,059 $32,688 $32,613 $32,613 $32,613 $32,613 $32,613 $32,613 $0.07 $0.07 1.8%
$922,509 $1,701,434 $1,654,801 $1,687,869 $1,689,417 $1,689,446 $1,689,446 $1,689,446 $1,689,446 $1,689,446 $3.04 $2.94 76.1%
Gross Margin $16,321 $445,147 $421,519 $432,273 $433,566 $433,536 $433,536 $433,536 $433,536 $433,536 $0.89 $0.92 23.9%
Indirect Costs
Depreciation $128,580 $110,273 $95,301 $82,846 $72,360 $63,454 $55,840 $49,293 $43,639 $38,736 $0.17 $0.15 4.0%
Insurance $4,800 $4,900 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.01 $0.01 0.3%
Interest $54,185 $50,045 $45,605 $40,844 $35,739 $30,264 $24,395 $18,100 $11,351 $4,114 $0.07 $0.08 2.0%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.14 $0.13 3.3%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.01 $0.01 0.3%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.05 $0.05 1.3%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $315,365 $291,894 $273,727 $256,656 $241,209 $226,973 $213,632 $200,935 $188,676 $176,679 $0.54 $0.51 13.3%
Taxes $0 $0 $330 $28,977 $31,739 $34,083 $36,284 $38,379 $40,402 $42,381 $0.09 2.3%
Retained Earnings ($299,044) ($145,791) $1,670 $148,311 $308,929 $481,409 $665,030 $859,251 $1,063,710 $1,278,185
3/9/2009 Financial Report Template - 10 Year - 460 tonne Cage - FAllowing.xlsx 1


OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 165,606 477,888 457,917 469,131 469,858 469,858 469,858 469,858 469,858 469,858
Sales $640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
$640,480 $1,848,231 $1,770,996 $1,814,365 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177 $1,817,177
Cash Disbursements
Direct Expenses ($922,509) ($1,403,084) ($1,356,451) ($1,382,544) ($1,383,641) ($1,383,641) ($1,383,641) ($1,383,641) ($1,383,641) ($1,383,641)
Taxes $0 $0 ($330) ($28,977) ($31,739) ($34,083) ($36,284) ($38,379) ($40,402) ($42,381)

Total Capital ($1,294,860) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($1,740,172) $202,928 $238,338 $227,594 $232,806 $235,935 $239,460 $243,515 $248,097 $253,211
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $1,742,721 ($61,419) ($65,859) ($70,620) ($75,725) ($81,200) ($87,070) ($93,364) ($100,113) ($107,350)
CASH (Deficiency) at beginning of period $0 $2,549 $144,058 $316,536 $473,510 $630,591 $785,326 $937,716 $1,087,867 $1,235,851
CASH (Deficiency) at end of period $2,549 $144,058 $316,536 $473,510 $630,591 $785,326 $937,716 $1,087,867 $1,235,851 $1,381,712

Balance Sheet

ASSETS
Current Assets
Cash $ 2,549 $ 144,058 $ 316,536 $ 473,510 $ 630,591 $ 785,326 $ 937,716 $ 1,087,867 $ 1,235,851 $ 1,381,712
Total Current Assets $ - $ 354,273 $ 596,427 $ 769,444 $ 930,484 $ 1,087,828 $ 1,242,563 $ 1,394,953 $ 1,545,104 $ 1,693,088 $ 1,838,949
Capital Assets
Production Facility $ 1,149,709 $ 1,024,392 $ 915,429 $ 820,171 $ 736,528 $ 662,815 $ 597,641 $ 539,853 $ 488,478 $ 442,693
TOTAL ASSETS $ - $ 1,503,982 $ 1,620,820 $ 1,684,873 $ 1,750,655 $ 1,824,356 $ 1,905,378 $ 1,992,594 $ 2,084,957 $ 2,181,566 $ 2,281,643
Current Liabilities
Shareholder Equity
Retained Earnings (Deficit) $ (299,044) $ (145,791) $ 1,670 $ 148,311 $ 308,929 $ 481,409 $ 665,030 $ 859,251 $ 1,063,710 $ 1,278,185
Total Equity $ - $ 600,956 $ 754,209 $ 901,670 $ 1,048,311 $ 1,208,929 $ 1,381,409 $ 1,565,030 $ 1,759,251 $ 1,963,710 $ 2,178,185

Capital Budget

Infrastructure
Sub-Total $195,500
Cage Culture System

Cages (50' x 50') - 8 cages $360,000
Sub-Total $862,960

Snow Blower $6,000
Sub-Total $230,400
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 1,294,860
TOTAL $ 1,294,860

Average
RATIOS
Liquidity
Quick Ratio 0.73 2.55 4.11 5.42 6.78 8.12 9.45 10.75 12.03 13.30
Assets Management
Debt Management
Debt Ratio 52% 44% 38% 32% 26% 21% 15% 10% 5% 0%
Profitability
Gross Margin 2.5% 24.1% 23.8% 23.8% 23.9% 23.9% 23.9% 23.9% 23.9% 23.9% 21.7%
Return on Sales -18.2% 17.0% 16.3% 16.5% 16.5% 14.9% 15.2% 15.5% 15.9% 16.3% 12.6%

NPV $38,565 at 7.0%
FIRR 7.82%
Income Projections

Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 12,071,653 kg
Total Revenues $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
%
Feed $1,340,730 $2,601,435 $2,491,854 $2,541,940 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2,545,187 $2.01 $1.97 50.9%
Fingerlings $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $423,225 $0.35 $0.33 8.5%
Fish Health $22,129 $36,496 $35,798 $35,664 $35,611 $35,611 $35,611 $35,611 $35,611 $35,611 $0.03 $0.03 0.7%
Fuel $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $0.01 $0.01 0.4%
Labour (& Benefits) $284,019 $284,019 $284,019 $284,019 $284,019 $284,019 $284,019 $284,019 $272,658 $284,019 $0.23 $0.22 5.7%
Supplies $46,676 $46,676 $46,676 $46,676 $46,676 $46,676 $46,676 $46,676 $46,676 $46,676 $0.04 $0.04 0.9%
Stock Insurance $47,517 $71,134 $70,104 $69,401 $69,265 $69,265 $69,265 $69,265 $69,265 $69,265 $0.06 $0.05 1.4%
$2,275,646 $4,394,798 $4,283,489 $4,351,918 $4,356,219 $4,356,300 $4,356,300 $4,356,300 $4,344,939 $4,356,300 $2.81 $2.72 70.3%
Gross Margin $306,137 $1,508,299 $1,426,391 $1,478,472 $1,481,984 $1,481,903 $1,481,903 $1,481,903 $1,493,264 $1,481,903 $1.13 $1.15 29.7%
Indirect Costs
Depreciation $264,452 $241,936 $212,660 $187,652 $166,123 $147,475 $131,246 $117,066 $104,633 $93,699 $0.14 $0.07 1.9%
Insurance $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Interest $158,892 $134,500 $108,345 $80,299 $60,309 $51,071 $41,166 $30,544 $19,155 $6,942 $0.06 $0.01 0.1%
Management $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $0.06 $0.06 1.4%
Office Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $0.00 $0.00 0.1%
Lease $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $0.02 $0.02 0.5%
Bank Charges $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $0.00 $0.00 0.0%
Total Indirect $575,144 $528,262 $473,026 $420,117 $378,741 $351,000 $325,010 $300,352 $276,674 $253,671 $0.32 $0.20 5.1%
PROFIT/(LOSS) before taxes ($269,007) $980,036 $953,364 $1,058,355 $1,103,242 $1,130,903 $1,156,893 $1,181,551 $1,216,589 $1,228,232 $0.81 $ 0.81 20.9%
Taxes $0 $238,195 $314,610 $349,257 $364,070 $373,198 $381,775 $389,912 $401,475 $405,317 $0.31 8.1%
3/9/2009 Financial Report Template - 10 Year - 1260 tonne Cage - Fallowing.xlsx 1


OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 455,416 1,314,191 1,259,273 1,290,111 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110 1,292,110
Sales $1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
$1,761,321 $5,082,634 $4,870,238 $4,989,505 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237 $4,997,237
Cash Disbursements
Direct Expenses ($2,275,646) ($3,574,336) ($3,463,026) ($3,512,276) ($3,515,334) ($3,515,334) ($3,515,334) ($3,515,334) ($3,503,973) ($3,515,334)
Increase (Decrease) in Payables $189,637 $108,224 ($9,276) $4,104 $255 $0 $0 $0 ($947) $947
Taxes $0 ($238,195) ($314,610) ($349,257) ($364,070) ($373,198) ($381,775) ($389,912) ($401,475) ($405,317)
Total Capital ($2,593,095) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($3,375,252) $815,226 $840,658 $889,672 $904,825 $905,180 $906,364 $908,705 $918,802 $917,561
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Total Funding $3,435,168 ($361,808) ($387,963) ($416,009) ($127,787) ($137,024) ($146,930) ($157,552) ($168,941) ($181,154)
CASH (Deficiency) at beginning of period $0 $59,916 $513,334 $966,029 $1,439,692 $2,216,730 $2,984,885 $3,744,319 $4,495,473 $5,245,333
CASH (Deficiency) at end of period $59,916 $513,334 $966,029 $1,439,692 $2,216,730 $2,984,885 $3,744,319 $4,495,473 $5,245,333 $5,981,741

Balance Sheet

ASSETS
Current Assets
Cash $ 59,916 $ 513,334 $ 966,029 $ 1,439,692 $ 2,216,730 $ 2,984,885 $ 3,744,319 $ 4,495,473 $ 5,245,333 $ 5,981,741
Capital Assets
Production Facility $ 2,328,643 $ 2,086,707 $ 1,874,047 $ 1,686,395 $ 1,520,272 $ 1,372,797 $ 1,241,551 $ 1,124,485 $ 1,019,852 $ 926,153
TOTAL ASSETS $ - $ 3,355,798 $ 3,844,056 $ 4,085,571 $ 4,382,764 $ 4,994,404 $ 5,615,084 $ 6,243,273 $ 6,877,360 $ 7,522,587 $ 8,165,296
Current Liabilities
Shareholder Equity
Total Equity $ - $ 1,080,993 $ 1,822,835 $ 2,461,589 $ 3,170,686 $ 3,909,859 $ 4,667,564 $ 5,442,682 $ 6,234,321 $ 7,049,436 $ 7,872,351
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
RATIOS
Current Ratio 5.42 5.90 7.66 9.21 11.86 14.48 17.07 19.64 22.27 24.71
Quick Ratio 1.09 3.15 4.75 6.34 8.99 11.61 14.20 16.77 19.39 21.84
Debt:Equity 2.10 1.11 0.66 0.38 0.28 0.20 0.15 0.10 0.07 0.04
Debt Ratio 62% 45% 33% 21% 16% 12% 8% 5% 2% 0%

Capital Budget

Infrastructure
Sub-Total $408,250
Cage Culture System

Cover Nets $36,000
Boats & Motors

Crew Boat $18,000
Feed Barges $18,000
Work Barge $50,000
Engines $44,000
Sub-Total $218,500

Snow Blower $3,000
Forklift $30,000
Sub-Total $340,800
$ -
Other Equipment
Sub-Total $ 6,000
Currency Exchange
Sub-Total $ 2,593,095
TOTAL $ 2,593,095

Average
RATIOS
Liquidity
Quick Ratio 1.09 3.15 4.75 6.34 8.99 11.61 14.20 16.77 19.39 21.84
Assets Management
Debt Management
Debt Ratio 62% 45% 33% 21% 16% 12% 8% 5% 2% 0%
Profitability
Gross Margin 17.4% 29.7% 29.3% 29.6% 29.7% 29.7% 29.7% 29.7% 29.9% 29.7% 28.4%
Return on Sales 8.8% 26.7% 26.2% 26.6% 26.6% 25.6% 25.8% 26.0% 26.4% 26.5% 24.5%

NPV $2,591,132 at 7.0%
FIRR 30.84%
APPENDIX C
Economic Scenarios for Large-Scale Aquaculture Operations (Closed Containment and Pump Ashore)
Income Projections
Four Tank Closed Containment System (1,900 tonnes)
Harvest (kg) 373,439 1,176,324 1,747,915 1,853,511 1,914,346 1,914,346 1,914,346 1,914,346 1,914,346 1,914,346 16,637,268 kg
Total Revenues $1,444,276 $4,549,434 $6,760,061 $7,168,452 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735
% Farmgate
Cost Of Production 10 Yr Total Yr 10 Price
Opening Inventory $0 $596,700 $928,200 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800
Electricity $23,191 $35,281 $45,440 $46,701 $47,465 $47,587 $47,465 $47,465 $47,465 $47,587 $0.03 $0.02 0.6%
Feed $1,048,942 $2,428,539 $3,428,335 $3,543,599 $3,656,011 $3,656,011 $3,656,011 $3,656,011 $3,656,011 $3,656,011 $1.95 $1.91 49.4%
Fingerlings $463,178 $688,242 $729,820 $753,774 $753,774 $753,774 $753,774 $753,774 $753,774 $837,527 $0.44 $0.44 11.3%
Fish Health $3,590 $7,116 $9,753 $10,137 $10,320 $10,320 $10,320 $10,320 $10,320 $10,320 $0.01 $0.01 0.1%
Fuel $2,400 $3,000 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $0.00 $0.00 0.0%
Labour (& Benefits) $246,048 $652,786 $944,812 $989,066 $1,020,985 $1,020,985 $1,020,985 $1,020,985 $1,020,985 $1,020,985 $0.54 $0.53 13.8%
Supplies $32,855 $32,855 $32,855 $32,855 $32,855 $32,855 $32,855 $32,855 $32,855 $32,855 $0.02 $0.02 0.4%
Stock Insurance $12,450 $22,608 $30,235 $31,271 $31,709 $31,709 $31,709 $31,709 $31,709 $31,709 $0.02 $0.02 0.4%
$1,898,365 $4,532,836 $6,218,760 $6,537,512 $6,683,230 $6,683,353 $6,683,230 $6,683,230 $6,683,230 $6,767,105 $3.03 $2.98 77.1%
Closing Inventory $596,700 $928,200 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800 $1,060,800
Gross Margin $142,611 $944,797 $1,602,101 $1,691,740 $1,781,305 $1,781,182 $1,781,305 $1,781,305 $1,781,305 $1,697,430 $0.90 $0.93 24.1%
Indirect Costs
Depreciation $136,521 $254,565 $222,166 $197,270 $177,351 $160,927 $147,078 $135,205 $124,889 $115,831 $0.10 $0.09 2.4%
Insurance $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.00 $0.00 0.1%
Interest $182,830 $162,495 $140,690 $117,309 $92,238 $71,878 $57,937 $42,988 $26,959 $9,770 $0.05 $0.05 1.2%
Management $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $0.04 $0.03 0.8%
Office Expense $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $0.00 $0.00 0.0%
Lease $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Vehicle Expenses & Travel $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Environmental Measures $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Total Indirect $424,350 $522,060 $467,857 $419,580 $374,590 $337,805 $310,015 $283,193 $256,848 $230,602 $0.21 $0.19 4.9%
PROFIT/(LOSS) before taxes ($281,739) $422,737 $1,134,244 $1,272,160 $1,406,715 $1,443,377 $1,471,290 $1,498,112 $1,524,457 $1,466,828 $0.68 $0.68 17.7%
Taxes $0 $23,265 $374,301 $419,813 $464,216 $476,315 $485,526 $494,377 $503,071 $484,053 $0.25 6.5%
PROFIT/(LOSS) after taxes ($281,739) $399,472 $759,944 $852,347 $942,499 $967,063 $985,764 $1,003,735 $1,021,386 $982,775 $0.68 $0.43 11.1%
Retained Earnings ($281,739) $117,734 $877,677 $1,730,024 $2,672,524 $3,639,586 $4,625,351 $5,629,086 $6,650,472 $7,633,247
09/03/2009 Financial Report Template - 10 Year - Four Tank Closed Containment.xlsx 1

OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 373,439 1,176,324 1,747,915 1,853,511 1,914,346 1,914,346 1,914,346 1,914,346 1,914,346 1,914,346
Sales $1,444,276 $4,549,434 $6,760,061 $7,168,452 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735
$1,444,276 $4,549,434 $6,760,061 $7,168,452 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735 $7,403,735
Cash Disbursements
Direct Expenses ($1,898,365) ($3,936,136) ($5,290,560) ($5,476,712) ($5,622,430) ($5,622,553) ($5,622,430) ($5,622,430) ($5,622,430) ($5,706,305)
(Increase) Decrease in Receivables ($120,356) ($258,763) ($184,219) ($34,033) ($19,607) $0 $0 $0 $0 $0
Increase (Decrease) in Payables $158,197 $169,814 $112,869 $15,513 $12,143 $10 ($10) $0 $0 $6,990
Taxes $0 ($23,265) ($374,301) ($419,813) ($464,216) ($476,315) ($485,526) ($494,377) ($503,071) ($484,053)
Operating Cash Flow ($704,077) $233,589 $778,160 $1,031,098 $1,112,387 $1,128,000 $1,132,832 $1,138,940 $1,146,276 $1,105,596
Total Capital ($3,650,568) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($4,354,645) $233,589 $778,160 $1,031,098 $1,112,387 $1,128,000 $1,132,832 $1,138,940 $1,146,276 $1,105,596
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Feed Supplier Financing $ 839,153 $693,898 ($155,756) ($167,016) ($179,089) ($192,036) $0 $0 $0 $0 $0
Total Funding $4,457,861 ($301,627) ($323,432) ($346,813) ($371,884) ($192,849) ($206,790) ($221,739) ($237,769) ($254,957)
Increase (Decrease) in cash position $103,216 ($68,038) $454,728 $684,285 $740,503 $935,151 $926,042 $917,201 $908,507 $850,639
CASH (Deficiency) at begining of period $0 $103,216 $35,177 $489,905 $1,174,190 $1,914,693 $2,849,844 $3,775,886 $4,693,086 $5,601,593

Balance Sheet
ASSETS
Current Assets
Cash $ 103,216 $ 35,177 $ 489,905 $ 1,174,190 $ 1,914,693 $ 2,849,844 $ 3,775,886 $ 4,693,086 $ 5,601,593 $ 6,452,232
Inventory Production $ 596,700 $ 928,200 $ 1,060,800 $ 1,060,800 $ 1,060,800 $ 1,060,800 $ 1,060,800 $ 1,060,800 $ 1,060,800 $ 1,060,800
Total Current Assets $ - $ 820,272 $ 1,342,497 $ 2,114,044 $ 2,832,361 $ 3,592,471 $ 4,527,622 $ 5,453,664 $ 6,370,864 $ 7,279,371 $ 8,130,010
Capital Assets
TOTAL ASSETS $ - $ 4,334,319 $ 4,601,978 $ 5,151,359 $ 5,672,406 $ 6,255,164 $ 7,029,388 $ 7,808,352 $ 8,590,348 $ 9,373,965 $ 10,108,772
Current Liabilities
Accounts Payable and Accured Liabilities $ - $ 158,197 $ 328,011 $ 440,880 $ 456,393 $ 468,536 $ 468,546 $ 468,536 $ 468,536 $ 468,536 $ 475,525
New Financing (Loan 1) $ 1,000,000 $ 1,763,963 $ 1,618,092 $ 1,461,676 $ 1,293,953 $ 1,114,105 $ 921,256 $ 714,465 $ 492,726 $ 254,957 $ 0
Feed Supplier Financing $ 839,153 $ 693,898 $ 538,141 $ 371,125 $ 192,036 $ - $ - $ - $ - $ -
Total Long-Term Liabilities $ 1,839,153 $ 2,457,861 $ 2,156,233 $ 1,832,802 $ 1,485,989 $ 1,114,105 $ 921,256 $ 714,465 $ 492,726 $ 254,957 $ 0
Total Liabilities $ 1,839,153 $ 2,616,058 $ 2,484,245 $ 2,273,682 $ 1,942,381 $ 1,582,641 $ 1,389,802 $ 1,183,001 $ 961,262 $ 723,493 $ 475,525
Shareholder Equity
Retained Earnings (Deficit) $ (281,739) $ 117,734 $ 877,677 $ 1,730,024 $ 2,672,524 $ 3,639,586 $ 4,625,351 $ 5,629,086 $ 6,650,472 $ 7,633,247
Total Equity $ - $ 1,718,261 $ 2,117,734 $ 2,877,677 $ 3,730,024 $ 4,672,524 $ 5,639,586 $ 6,625,351 $ 7,629,086 $ 8,650,472 $ 9,633,247

Capital Budget

Infrastructure
Manure Storage Tank $150,000
Manure Pump (Mixing & Loading) $20,000
Water Supply (Well Servicing) $8,000
Washrooms and Septic $12,500
Field Office $20,000
Site Refurbishment $5,000
Backup Generator Set $150,000
Electical Service $80,000
Environmental Assessment & Permits (PTTW, C of A) $210,000
Sub-Total $753,825
Fish Culture System

Tanks with anchoring hardware $1,250,000
Pumps & Controls $250,000
Controls
Oxygen Injection System

Oxygen Generators $450,000
Back-up Liquid Oxygen Storage Tank
Monitoring Package (DO/Termp/CO2/ORP)

Motor Control Panel
Technical Assitance w Installation
Sub-Total $517,500

Feeders $5,600
Feed Storage $2,000
Feed Cart (motorized) $5,000
Totes $20,000
Mechanized grader $100,000
Pnuematic Feeders $120,000
Fish Pumps $125,000
Sub-Total $487,920
Waste Handling System

Hydrotech Drum microscreen $150,000
High-Pressure Rinse System
Piping
Sludge Pumps and Controls
Installation labour and miscellaneous costs $15,000

$189,750
Other Equipment
Office equipment (photocopier, fax, phone system, etc.) $5,000
Pick-upTruck $30,000
Sub-Total $ 38,500
Currency Exchange
Sub-Total $ 3,650,568
TOTAL $ 3,650,568

Average
RATIOS
Liquidity
Quick Ratio 1.41 1.26 2.39 3.88 5.40 7.40 9.38 11.33 13.27 14.87
Assets Management
Debt Management
Debt Ratio 41% 35% 28% 23% 18% 13% 9% 6% 3% 0%
Profitability
Gross Margin 9.9% 20.8% 23.7% 23.6% 24.1% 24.1% 24.1% 24.1% 24.1% 22.9% 22.1%
Return on Sales 2.6% 18.5% 22.1% 22.1% 22.6% 21.7% 21.9% 22.1% 22.3% 21.4% 19.7%

NPV $2,118,466 at 7.0%
FIRR 20.28%
Income Projections
Large 8 Tank Pump Ashore Facility (3,500 tones)
Harvest (kg) 373,439 1,146,956 2,052,919 2,410,330 3,533,567 3,478,375 3,478,375 3,478,375 3,478,375 3,478,375 26,909,088 kg
Total Revenues $1,444,276 $4,435,852 $7,939,665 $9,321,953 $13,666,071 $13,452,617 $13,452,617 $13,452,617 $13,452,617 $13,452,617
Farmgate
Cost Of Production 10 Yr Total Yr 10 Price
Opening Inventory $0 $596,700 $1,060,800 $1,491,750 $1,963,279 $2,212,512 $2,212,512 $2,212,512 $2,212,512 $2,212,512
Electricity $163,754 $215,908 $311,631 $373,664 $481,243 $482,853 $481,243 $481,243 $481,243 $482,853 $0.15 $0.14 3.6%
Feed $944,047 $2,213,173 $3,748,533 $4,393,076 $6,202,780 $6,202,780 $6,202,780 $6,202,780 $6,202,780 $6,202,780 $1.80 $1.78 46.1%
Fingerlings $451,614 $808,337 $949,068 $1,391,342 $1,369,610 $1,369,610 $1,369,610 $1,369,610 $1,369,610 $1,521,789 $0.44 $0.44 11.3%
Fish Health $3,588 $7,357 $12,089 $14,832 $19,713 $19,713 $19,713 $19,713 $19,713 $19,713 $0.01 $0.01 0.1%
Fuel $2,400 $3,000 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $0.00 $0.00 0.0%
Labour (& Benefits) $155,399 $410,033 $713,061 $836,413 $1,202,917 $1,193,621 $1,194,396 $1,194,396 $1,194,396 $1,194,396 $0.35 $0.34 8.9%
Supplies $34,271 $34,271 $34,271 $34,271 $34,271 $34,271 $34,271 $34,271 $34,271 $34,271 $0.01 $0.01 0.3%
Stock Insurance $12,450 $23,690 $38,103 $47,261 $61,185 $61,185 $61,185 $61,185 $61,185 $61,185 $0.02 $0.02 0.5%
$1,836,066 $4,381,009 $6,939,698 $8,654,750 $11,407,139 $11,648,687 $11,647,851 $11,647,851 $11,647,851 $11,801,641 $2.80 $2.76 71.3%
Closing Inventory $596,700 $1,060,800 $1,491,750 $1,963,279 $2,212,512 $2,212,512 $2,212,512 $2,212,512 $2,212,512 $2,212,512
Gross Margin $204,910 $1,115,643 $2,491,717 $2,630,481 $4,471,444 $4,016,441 $4,017,277 $4,017,277 $4,017,277 $3,863,488 $1.15 $1.27 32.7%
Indirect Costs
Depreciation $382,164 $348,742 $322,337 $300,106 $280,578 $262,967 $246,840 $231,939 $218,100 $205,208 $0.10 $0.08 2.1%
Insurance $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $0.00 $0.00 0.0%
Interest $327,063 $290,695 $251,698 $209,882 $165,044 $128,624 $103,677 $76,926 $48,242 $17,484 $0.06 $0.05 1.2%
Management $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $0.04 $0.03 0.7%
Office Expense $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $0.00 $0.00 0.0%
Site Lease $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $0.02 $0.01 0.3%
Environmental Measures $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0.00 $0.00 0.0%
Total Indirect $896,227 $826,437 $761,035 $696,989 $632,621 $578,591 $537,516 $495,865 $453,342 $409,692 $0.23 $0.18 4.6%
PROFIT/(LOSS) before taxes ($691,317) $289,206 $1,730,682 $1,933,492 $3,838,823 $3,437,851 $3,479,761 $3,521,412 $3,563,936 $3,453,796 $0.91 $0.91 23.6%
Taxes $0 $0 $529,880 $638,053 $1,266,812 $1,134,491 $1,148,321 $1,162,066 $1,176,099 $1,139,753 $0.33 8.5%
PROFIT/(LOSS) after taxes ($691,317) $289,206 $1,200,801 $1,295,440 $2,572,011 $2,303,360 $2,331,440 $2,359,346 $2,387,837 $2,314,043 $0.91 $0.58 15.1%
Retained Earnings ($691,317) ($402,111) $798,690 $2,094,130 $4,666,141 $6,969,501 $9,300,941 $11,660,287 $14,048,124 $16,362,167
09/03/2009 Financial Report Template - Large Pump Ashore 3500 tonnes.xlsx 1

OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 373,439 1,146,956 2,052,919 2,410,330 3,533,567 3,478,375 3,478,375 3,478,375 3,478,375 3,478,375
Sales $1,444,276 $4,435,852 $7,939,665 $9,321,953 $13,666,071 $13,452,617 $13,452,617 $13,452,617 $13,452,617 $13,452,617
$1,444,276 $4,435,852 $7,939,665 $9,321,953 $13,666,071 $13,452,617 $13,452,617 $13,452,617 $13,452,617 $13,452,617
Cash Disbursements
Direct Expenses ($1,836,066) ($3,784,309) ($5,878,898) ($7,163,000) ($9,443,860) ($9,436,175) ($9,435,339) ($9,435,339) ($9,435,339) ($9,589,129)
(Increase) Decrease in Receivables ($120,356) ($249,298) ($291,984) ($115,191) ($362,010) $17,788 $0 $0 $0 $0
Increase (Decrease) in Payables $153,005 $162,354 $174,549 $107,009 $190,072 ($640) ($70) $0 $0 $12,816
Taxes $0 $0 ($529,880) ($638,053) ($1,266,812) ($1,134,491) ($1,148,321) ($1,162,066) ($1,176,099) ($1,139,753)

Operating Cash Flow ($873,203) $86,903 $974,753 $1,115,835 $2,431,417 $2,583,474 $2,578,210 $2,591,285 $2,605,937 $2,532,067
Total Capital ($6,346,418) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($7,219,621) $86,903 $974,753 $1,115,835 $2,431,417 $2,583,474 $2,578,210 $2,591,285 $2,605,937 $2,532,067
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Feed Supplier Financing $ 1,500,000 $1,240,353 ($278,417) ($298,544) ($320,125) ($343,267) $0 $0 $0 $0 $0
Total Funding $7,796,919 ($539,449) ($578,446) ($620,262) ($665,101) ($345,099) ($370,046) ($396,797) ($425,481) ($456,239)
Increase (Decrease) in cash position $577,298 ($452,546) $396,307 $495,574 $1,766,317 $2,238,375 $2,208,164 $2,194,489 $2,180,456 $2,075,828
CASH (Deficiency) at begining of period $0 $577,298 $124,752 $521,059 $1,016,632 $2,782,949 $5,021,325 $7,229,488 $9,423,977 $11,604,433

Balance Sheet
ASSETS
Current Assets
Cash $ 577,298 $ 124,752 $ 521,059 $ 1,016,632 $ 2,782,949 $ 5,021,325 $ 7,229,488 $ 9,423,977 $ 11,604,433 $ 13,680,262
Accounts Receivable $ - $ 120,356 $ 369,654 $ 661,639 $ 776,829 $ 1,138,839 $ 1,121,051 $ 1,121,051 $ 1,121,051 $ 1,121,051 $ 1,121,051
Inventory Production $ 596,700 $ 1,060,800 $ 1,491,750 $ 1,963,279 $ 2,212,512 $ 2,212,512 $ 2,212,512 $ 2,212,512 $ 2,212,512 $ 2,212,512
Capital Assets
TOTAL ASSETS $ - $ 7,258,607 $ 7,170,717 $ 7,967,622 $ 8,749,808 $ 10,846,791 $ 12,804,412 $ 14,765,736 $ 16,728,286 $ 18,690,641 $ 20,561,261
Current Liabilities
Accounts Payable and Accured Liabilities $ - $ 153,005 $ 315,359 $ 489,908 $ 596,917 $ 786,988 $ 786,348 $ 786,278 $ 786,278 $ 786,278 $ 799,094
New Financing (Loan 1) $ 3,400,000 $ 3,156,566 $ 2,895,533 $ 2,615,631 $ 2,315,495 $ 1,993,661 $ 1,648,563 $ 1,278,517 $ 881,720 $ 456,239 $ 0
Feed Supplier Financing $ 1,500,000 $ 1,240,353 $ 961,936 $ 663,393 $ 343,267 $ - $ - $ - $ - $ -
Total Long-Term Liabilities $ 4,900,000 $ 4,396,919 $ 3,857,470 $ 3,279,024 $ 2,658,762 $ 1,993,661 $ 1,648,563 $ 1,278,517 $ 881,720 $ 456,239 $ 0
Total Liabilities $ 4,900,000 $ 4,549,924 $ 4,172,829 $ 3,768,932 $ 3,255,679 $ 2,780,650 $ 2,434,911 $ 2,064,795 $ 1,667,998 $ 1,242,517 $ 799,094
Shareholder Equity
Retained Earnings (Deficit) $ (691,317) $ (402,111) $ 798,690 $ 2,094,130 $ 4,666,141 $ 6,969,501 $ 9,300,941 $ 11,660,287 $ 14,048,124 $ 16,362,167
Total Equity $ - $ 2,708,683 $ 2,997,889 $ 4,198,690 $ 5,494,130 $ 8,066,141 $ 10,369,501 $ 12,700,941 $ 15,060,287 $ 17,448,124 $ 19,762,167

Capital Budget

Infrastructure
Manure Storage Tank $150,000
Manure Pump (Mixing & Loading) $20,000
Washrooms and Septic $12,500
Field Office $20,000
Backup Generator Set $450,000
Environmental Assessment & Permits (PTTW, C of A) $210,000
Fish Culture System

Tanks with anchoring hardware $1,756,000
Pumps & Controls $250,000
Piping and Intake $1,000,000
Oxygen Injection System

Oxygen Generators $450,000
Back-up Liquid Oxygen Storage Tank
Monitoring Package (DO/Termp/CO2/ORP) $120,000

Motor Control Panel
Technical Assitance w Installation
Sub-Total $655,500

Feeders $5,600
Feed Storage $2,000
Feed Cart (motorized) $5,000
Totes $20,000
Mechanized grader $100,000
Pnuematic Feeders $120,000
Fish Pumps $125,000
Sub-Total $487,920
Waste Handling System

Hydrotech Drum microscreen $150,000
High-Pressure Rinse System
Piping
Sludge Pumps and Controls
Treatment Wetland $180,000
Installation labour and miscellaneous costs $33,000
$417,450
Other Equipment
Office equipment (photocopier, fax, phone system, etc.) $10,000
Sub-Total $ 43,500
Currency Exchange
Sub-Total $ 6,346,418
TOTAL $ 6,346,418

Average
RATIOS
Liquidity
Quick Ratio 4.56 1.57 2.41 3.00 4.98 7.81 10.62 13.41 16.18 18.52
Assets Management
Debt Management
Debt Ratio 43% 40% 33% 26% 18% 13% 9% 5% 2% 0%
Profitability
Gross Margin 14.2% 25.2% 31.4% 28.2% 32.7% 29.9% 29.9% 29.9% 29.9% 28.7% 28.0%
Return on Sales 1.2% 20.9% 29.0% 26.2% 31.4% 27.5% 27.7% 27.9% 28.1% 27.2% 24.7%

NPV $5,090,334 at 7.0%
FIRR 23.07%
APPENDIX D
Economic Scenario for Model Recirculation

Recirculation Aquaculture System
Income Projections
Model Canadian Aqua‐Farm
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Harvest (kg) 32,700 130,800 130,800 130,800 130,800 130,800 130,800 130,800 130,800 130,800
Total Revenues $129,762 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048
Cost Of Production
Feed $113,475 $219,125 $219,125 $219,125 $219,125 $219,125 $219,125 $219,125 $219,125 $219,125
Fingerlings/Eggs $44,437 $44,437 $44,437 $44,437 $44,437 $44,437 $44,437 $44,437 $44,437 $44,437
Electricity $50,224 $50,224 $50,224 $50,224 $50,224 $50,224 $50,224 $50,224 $50,224 $50,224
Heating $9,653 $9,653 $9,653 $9,653 $9,653 $9,653 $9,653 $9,653 $9,653 $9,653
Labour $31,200 $31,200 $31,200 $31,200 $31,200 $31,200 $31,200 $31,200 $31,200 $31,200
Maintenance & Repairs $4,725 $9,259 $9,259 $9,259 $9,259 $9,259 $9,259 $9,259 $9,259 $9,259
Supplies $11,813 $23,148 $23,148 $23,148 $23,148 $23,148 $23,148 $23,148 $23,148 $23,148
Stock Insurance $4,475 $6,319 $5,821 $5,795 $5,793 $5,793 $5,793 $5,793 $5,793 $5,793
$270,002 $533,497 $505,690 $504,217 $504,138 $504,138 $504,138 $504,138 $504,138 $504,138
Cost Of Production $129,870 $420,674 $394,314 $392,918 $392,843 $392,843 $392,843 $392,843 $392,843 $392,843
Gross Margin ($108) $98,374 $124,734 $126,130 $126,205 $126,205 $126,205 $126,205 $126,205 $126,205
Indirect Costs
Depreciation $153,704 $110,316 $79,780 $58,253 $43,042 $31,246 $22,826 $16,675 $12,181 $8,899
Professional Services $15,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000
Insurance $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Interest $31,902 $29,464 $26,850 $24,047 $21,041 $18,234 $15,426 $12,619 $9,811 $7,004
Telecommunications $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Management $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Office Expense $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Lease $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Marketing and Distribution

Vehicle Expense $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Total Indirect $212,606 $160,780 $127,630 $103,300 $85,083 $70,480 $59,252 $50,294 $42,993 $36,903
PROFIT/(LOSS) before taxes ($212,714) ($62,406) ($2,896) $22,830 $41,122 $55,725 $66,953 $75,911 $83,212 $89,302
Taxes $0 $0 $0 $0 $0 $0 $0 $0 $11,177 $14,735
PROFIT/(LOSS) after taxes ($212,714) ($62,406) ($2,896) $22,830 $41,122 $55,725 $66,953 $75,911 $72,036 $74,567
Retained Earnings ($212,714) ($275,120) ($278,016) ($255,186) ($214,064) ($158,339) ($91,386) ($15,474) $56,561 $131,129
09/03/2009 Financial Report Template - 10 Year - Model Canadian Aqua-Farm.xlsx 1

OPERATING CASH FLOW

Cash Receipts
Harvest (kg) 32,700 130,800 130,800 130,800 130,800 130,800 130,800 130,800 130,800 130,800
Sales $129,762 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048
$129,762 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048 $519,048
Cash Disbursements
Direct Expenses ($270,002) ($393,365) ($392,867) ($392,841) ($392,839) ($392,839) ($392,839) ($392,839) ($392,839) ($392,839)
(Increase) Decrease in Receivables ($43,254) $0 $0 $0 $0 $0 $0 $0 $0 $0
Increase (Decrease) in Payables $33,033 ($856) ($233) ($242) ($242) ($242) ($242) ($242) ($242) ($242)
Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Processing Facility $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Capital ($693,080) $0 $0 $0 $0 $0 $0 $0 $0 $0
NET CASH ($902,443) $74,363 $78,099 $80,918 $83,908 $86,975 $89,779 $92,586 $95,394 $98,201
Interest Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Funding Sources
Equity Investment $471,000 $471,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Financing (Loan 2) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Feed Supplier Financing
Total Funding $908,277 ($36,161) ($38,777) ($41,578) ($44,583) ($47,390) ($50,198) ($53,005) ($55,813) ($58,620)
CASH (Deficiency) at begining of period $0 $5,834 $44,036 $83,358 $122,698 $162,023 $201,608 $241,189 $280,770 $320,351

Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
ASSETS
Current Assets
Cash $ 5,834 $ 44,036 $ 83,358 $ 122,698 $ 162,023 $ 201,608 $ 241,189 $ 280,770 $ 320,351 $ 359,932
Accounts Receivable $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254 $ 43,254
Total Current Assets $ 189,220 $ 200,113 $ 237,988 $ 277,251 $ 316,572 $ 356,157 $ 395,738 $ 435,319 $ 474,900 $ 514,481
Capital Assets
TOTAL ASSETS $ 728,595 $ 629,173 $ 587,268 $ 568,278 $ 564,557 $ 572,896 $ 589,651 $ 612,557 $ 639,957 $ 670,639
Current Liabilities
Accounts Payable and Accured Liabilities $ 33,033 $ 32,177 $ 31,944 $ 31,702 $ 31,444 $ 31,444 $ 31,444 $ 31,444 $ 31,444 $ 31,444
Total Current Liabilities $ 33,033 $ 32,177 $ 31,944 $ 31,702 $ 31,444 $ 31,444 $ 31,444 $ 31,444 $ 31,444 $ 31,444
New Financing (Loan 1) $ 437,277 $ 401,117 $ 362,342 $ 320,764 $ 276,181 $ 228,791 $ 178,593 $ 125,588 $ 69,775 $ 11,155
Feed Supplier Financing $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Long-Term Liabilities $ 437,277 $ 401,117 $ 362,342 $ 320,764 $ 276,181 $ 228,791 $ 178,593 $ 125,588 $ 69,775 $ 11,155
Total Liabilities $ 470,310 $ 433,294 $ 394,286 $ 352,466 $ 307,625 $ 260,235 $ 210,037 $ 157,032 $ 101,219 $ 42,599
$ 258,285 $ 195,879 $ 192,982 $ 215,812 $ 256,932 $ 312,661 $ 379,614 $ 455,526 $ 538,738 $ 628,040
Shareholder Equity
Investment Capital $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Retained Earnings (Deficit) $ (212,715) $ (275,121) $ (278,018) $ (255,188) $ (214,068) $ (158,339) $ (91,386) $ (15,474) $ 56,561 $ 131,129
Total Equity $ 258,285 $ 195,879 $ 192,982 $ 215,812 $ 256,932 $ 312,661 $ 379,614 $ 455,526 $ 527,561 $ 602,129
TOTAL LIABILITES & EQUITY $ 728,595 $ 629,173 $ 587,268 $ 568,278 $ 564,557 $ 572,896 $ 589,651 $ 612,557 $ 628,780 $ 644,728
RATIOS
Current Ratio 5.73 6.22 7.45 8.75 10.07 11.33 12.59 13.84 15.10 16.36
Quick Ratio 1.49 2.71 3.96 5.23 6.53 7.79 9.05 10.30 11.56 12.82
Debt:Equity 1.82 2.21 2.04 1.63 1.20 0.83 0.55 0.34 0.19 0.07
Debt Ratio 60% 64% 62% 56% 49% 40% 30% 21% 11% 2%

Capital Budget
Capital Budget
Budget
Infrastructure
Manure Pond Excavation $0
Water Heater $3,500
Purge Tank Shelter $21,000
Sub-Total $46,200
Raceway and Purge Tanks

Excavation $15,000
Forms $43,000
Concrete Work $78,000
Purge Tank (2-8'x60'x6' raceways) $19,000
Purge Tank Circulation / Aeration $2,500
Sub-Total $173,000
Water Reconditioning System

FRP Drop Sump Assembly $2,700
Drum Filter (Hydrotech Model 1607) $53,000
High-Pressure Rinse System $4,500
CO2 Stripper (16' x 4') $11,600
CO2 Pumps (v - 150) $9,900
Biofilter Media (MB3) $96,600
Biofilter Retaining Screens $7,500
Biofilter Aeration Grids $8,400
Biofilter Aeration Blowers & Accessories $8,000
LHO (316 SS) $9,500
Oxygen Generator $22,500
Ozone Generator $25,000
Recirculation Pumps $37,200
Motor Control Panel $13,000
Technical Assitance w Installation $10,000
Sub-Total $371,140

Feeders $5,600
Dividers $2,000
Fish Grader Screen $5,000
Sub-Total $30,360
Other Equipment
etc.) $5,000
Back-up Generator (60kW) $30,000
Manure Handling Equipment
Pick-upTruck
Sub-Total $ 38,500
Currency Exchange $ 33,880
Sub-Total $ 693,080
TOTAL $ 693,080

Capital Budget
Capital Budget
Budget
Infrastructure
Manure Pond Excavation $0
Water Heater $3,500
Purge Tank Shelter $21,000
Sub-Total $46,200
Raceway and Purge Tanks

Excavation $15,000
Forms $43,000
Concrete Work $78,000
Purge Tank (2-8'x60'x6' raceways) $19,000
Purge Tank Circulation / Aeration $2,500
Sub-Total $173,000
Water Reconditioning System

FRP Drop Sump Assembly $2,700
Drum Filter (Hydrotech Model 1607) $53,000
High-Pressure Rinse System $4,500
CO2 Stripper (16' x 4') $11,600
CO2 Pumps (v - 150) $9,900
Biofilter Media (MB3) $96,600
Biofilter Retaining Screens $7,500
Biofilter Aeration Grids $8,400
Biofilter Aeration Blowers & Accessories $8,000
LHO (316 SS) $9,500
Oxygen Generator $22,500
Ozone Generator $25,000
Recirculation Pumps $37,200
Motor Control Panel $13,000
Technical Assitance w Installation $10,000
Sub-Total $371,140

Feeders $5,600
Dividers $2,000
Fish Grader Screen $5,000
Sub-Total $30,360
Other Equipment
etc.) $5,000
Back-up Generator (60kW) $30,000
Manure Handling Equipment
Pick-upTruck
Sub-Total $ 38,500
Currency Exchange $ 33,880
Sub-Total $ 693,080
TOTAL $ 693,080

Average
RATIOS
Liquidity
Quick Ratio 1.49 2.71 3.96 5.23 6.53 7.79 9.05 10.30 11.56 12.82
Assets Management
Debt Management
Debt Ratio 60% 64% 62% 56% 49% 40% 30% 21% 11% 2%
Times Interest Earned (5.67) (1.12) 0.89 1.95 2.95 4.06 5.34 7.02 9.48 13.75
Profitability
Gross Margin -0.1% 19.0% 24.0% 24.3% 24.3% 24.3% 24.3% 24.3% 24.3% 24.3% 21.3%
Return on Sales -20.9% 14.9% 20.0% 20.3% 20.3% 16.8% 17.3% 17.8% 18.4% 18.9% 14.4%
ROI (cash-in - cash out) -45.2% -13.2% -0.6% 4.8% 8.7% 11.8% 14.2% 16.1% 15.3% 15.8% 2.8%

NPV -$226,318 at 7.0%
FIRR -4.3%
APPENDIX E
Glossary of Terms
Appendix E
Glossary of Terms
Financial Terms
Term Significance Calculation
Net Present Value (NPV) The present value of an initial
investment and series of future
cash flows at a given interest
t - the time of the cash flow
rate i - the discount rate (the rate of
return that could be earned on
an investment in the financial
markets with similar risk.)
Rt - the net cash flow (the amount
of cash, inflow minus outflow)
at time t (for educational
purposes, R0 is commonly
placed to the left of the sum to
emphasize its role as (minus
the) investment)
Current Ratio An indication of a company's = Current Assets / Current
ability to meet short-term debt Liabilities
obligations; the higher the
ratio, the more liquid the
company is
Quick Ratio Also known as the acid-test it =( Current Assets – ( Inventories +
measures the ability of a Prepayments )) / Current
company to use its near cash Liabilities
or quick assets to immediately
meet its current liabilities
Inventory Turnover The ratio of a company's = (Inventory / Cost of Sales) x
annual sales to its inventory; or 365 days
the fraction of a year that an
average item remains in
inventory. Low turnover is a
sign of inefficiency.
Debt Ratio The ratio shows the percent of = (cash flow from operations -
debt that current cash flow can dividends) / total debt.
retire. A cash debt coverage
ratio of 1:1 (100%) or greater
shows that the company can
repay all debt within one year.
Financial Internal Rate of The FIRR is an indicator to The FIRR is obtained by equating
Return measure the financial return on the present value of investment
investment of an income costs (as cash out-flows) and the
present value of net incomes (as
generation project and is used
cash in-flows) and thus finds out
to make the investment
the break-even interest rate, i*
decision.
Ratio of NPV to Equity The net present value in = NPV / Shareholders Equity
relation to the equity invested
1
Appendix E
Glossary of Terms
Financial Terms
Term Significance Calculation
Gross margin Gross margins reveal how = Revenue – Cost of Sales
much a company earns taking
into consideration the costs
that it incurs for producing its
products
Return on Sales A measure of a company's = Pre-tax Income / Total Sales
profitability, equal to a fiscal
year's pre-tax income divided
by total sales
Cash Earnings on Sales Cash revenues minus cash = Cash Revenues – Cash Expenses
expenses. This differs from
earnings in that it does not
include non-cash expenses such
as depreciation.
Return on Equity The amount of net income = Net Income / Shareholders
returned as a percentage of Equity
shareholders equity. Return on
equity measures profitability
by revealing how much profit
a business generates with the
money shareholders have
invested.
2
Appendix E
Glossary of Terms
Technical Terminology
Open Cage (Aquaculture) Fish production in net pens hung from some
type of floating pock or frame, with passive
water exchange due to current flowing through
cage
Pump Ashore Tanks or raceways located on land near a large
water body with a pumped water supply and
solids separation and removal
Closed Containment An aquaculture system where fish are contained
within a secure tank or bag with pumps
supplying water flow to the fish culture unit and
solids separation and removal. For the
purposes of this report the containments are
assumed to be located in water.
RAS – Recirculation Aquaculture System An aquaculture system where the most of the
water utilized for fish production is reused. The
system filters water to remove solids, and uses
biofiltration to remove ammonia, the process
can also include oxygenation or aeration, CO2
stripping and pH control
Fingerlings Small trout normally 5 to 75 grams that are
stocked into a growout facility. Fingerlings are
generally raised in separate facilities where the
water quality is very high and the environment
closely controlled
Growout The growout stage is the production phase
where fingerlings are stocked into a facility to
be grown to a marketable size. At this stage the
fish are generally less vulnerable to disease and
can do well in surface waters
Land-based Any farm located on land. Traditionally these
have been utilized water from relatively pristine
streams, springs and wells.
Sustainable In the context of this study sustainability is
defined as the ability to maintain the state of
environmental, social and economic processes
for the long-term future.

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WESA

ADVANCING ENVIRONMENTAL SUSTAINABILITY OF CAGE AQUACULTURE IN ONTARIO:

MINISTRY OF THE ENVIRONMENT

MINISTRY OF THE ENVIRONMENT

WESA Project Number W-B7717-00

Ref: WB7717 Advancing Environmental Sustainability of Aquaculture.doc

1. To assess the financial feasibility of existing cage aquaculture operations

An economic evaluation of three scales of cage production operations was conducted to

260 tonne 460 tonne 1260 tonne

Other Ratios to Consider

Scenario 260 tonnes 460 tonnes 1260 tonnes

Cost per kg of Production

In House $0.06 $0.03 $0.02

Contracted $0.14 $0.07 $0.03

Based on an evaluation of the economics of cage production and environmental strategies, it is

Table 1: Expected Feed Conversion Rates Based on Fish Size

Figure 1: Comparison of Ontario land-base and cage aquaculture production between

Appendix A: Economic Scenarios for Open-Water Cage Production

2. CURRENT STATUS OF KNOWLEDGE

Expected Conversion Rate

Cost per kilogram of

Recently an initiative was undertaken by the Interprovincial Partnership for Sustainable

3.1 FINANCIAL FEASIBILITY OF EXISTING CAGE AQUACULTURE OPERATIONS

Figure 2: Rainbow Trout Temperature Growth Relationship (Kamaitis, 1999)

Modeling Assumptions (Cage Production Scenarios)

SGR=-1.81336x10-10T10 + 2.06312x10-8T9 - 9.9774x10-7T8 + 0.00002682T7 -0.00043876T7

Cage Production Scenarios

Scenario 260 tonnes 460 tonnes 1260 tonnes

260 tonne 460 tonne 1260 tonne

Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Other Ratios to Consider

3.2 ASSESSMENT OF THE COSTS OF IMPLEMENTING MOE’S CAGE AQUACULTURE MONITORING

Water Quality Monitoring Program

Tied to Shore Off-shore

Sample Analysis - Water Chemistry and in situ Profiles

Time required for a full series and to deliver samples to lab

Cost of Water Quality Monitoring $7,043 $8,088

Water Quality Monitoring Program

Tied to Shore Off-shore

Sample Analysis - Water Chemistry and in situ Profiles

Time required for a full series and to deliver samples to lab

Vessel for sample collection

Cost of Water Quality Monitoring $21,780 $22,825

Benthic Monitoring Program

Time required for a full series and to deliver samples to lab

Cost of Benthic Monitoring $5,135 $7,681 - $10,103

Benthic Monitoring Program

Time required for a full series and to deliver samples to lab

Vessel for sample collection

Cost of Benthic Monitoring $7,530 $10,670 - $13,330

Scenario 260 tonnes 460 tonnes 1260 tonnes

Scenario 260 tonnes 460 tonnes 1260 tonnes

A land-based operation discharging to a receiving water at a single point source under a

3.3 ECONOMIC EVALUATION OF IMPLEMENTING TECHNOLOGIES AND/OR OPERATIONAL STRATEGIES

To determine the feasibility and economic implications of implementing technologies and

3.3.1 RH Waste Retrieval System

with RH Waste Recovery Comparison (%

Profitability 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg. 10 Yr Avg.

Other Ratios to Consider

3.3.2 Improved Feed Delivery and Monitoring

With Improved Feed Monitoring and

Other Ratios to Consider

3.3.3 Fallowing of Production Sites

Scenario 460 tonnes 1260 tonnes