Tassal Group Strategic Thoughts, page-494

Excellent research there @bug1

The application is for environmental considerations, not planning. They already have 455ha of Proserpine approved by the local council. As of 30 June 2021, they had 270ha fully stocked (but not necessarily being fully harvested yet). The development of the ponds take some time, but hopefully the 210ha additional hectares will take them to their full capacity in Prosperine. This should be around 10,000t p/a once it is mature and operating at the appropriate productivity levels. But that will still take a bit of time to construct (6-12mo?), stock (6mo), then harvest (6mo).

But any which way you look at it - this is VERY POSITIVE. This is Tassal restarting their prawn expansion strategy, which they stalled in FY21 due to balance sheet limitations. Essentially, highly indebted and free cash flow tanked with Covid. We're now on the other side of that, so this demonstrates that management is now happy to ramp up their prawn CAPEX.

A side note on the prawn CAPEX which I believe @McQuade has touched on. The main CAPEX (buying land) is already done and on our books, and the cost of pond production is relatively small in comparison. Further, the depreciation rate is much lower for prawn infrastructure (land, ponds, etc) than it is for salmon infrastructure (pens in the oceans, etc). Moreover, margins are higher. So what you will see is a ramping up in the return on assets and relatively lower depreciation rates.