From a TA perspective SFG price action was very bullish today - an upside breakout from a consolidating triangle, on relatively good volume, and then breaking above 10.0 cents, to finish at 10.5 cents after testing 11 cents briefly.
Momentum seems to be building for Seafarms, on a trading basis. Until recently it's been relatively illiquid. With increased trading volume the share price is moving up, and both may be pointing to some possible funding arrangement being announced. Just my interpretation though.
SFG copped its second ASX price/volume query in 4 months, which immediately arrested a surge in the share price. It is quite clear that investors are becoming more aware of the likelihood for the company to finalise a debt funding package soon, that would be a filip for an immediate re-rating in the share price.
It remains a speculative investment, but with considerable potential upside, and there's likely to be increasing investor interest in the coming months.
SFG appears to be in a Medium-term rally confirmed by multiple indicators. Most importantly, the 5-day moving average is above both the 20 and 50-day moving averages.
A couple of weeks ago SFG announced the appointment of an (un-named) financial institution as an Arranger, for a 6 month period, for provision of $150 million debt package, as part of a total funding requirement of $280 million to commence Step 1 Stage 1 of Project Sea Dragon. This will entail the development of capital works, including the construction of 1,120 Ha of grow-out ponds.
If the Arrangement of debt funding is completed in the next couple of months this should see a major re-rating of SFG in the eyes of investors, and likely result in a substantial share price increase.
Last week the share price began to build, in anticipation of something positive developing on the funding front.
SFG is currently a major prawn aquaculture producer with 3 land-based farms located in Northern QLD. Annual production for current year is forecast at 1,450 tonnes - a decrease from 1,700 tonnes previous year. The company has reported losses around $20 - 30 million in past years, and this reflects in its low share price.
The company is planning to develop, in multiple stages, a substantially larger prawn operation in the NT, based on state of the art genomic research, and benefiting on an ultra-remote location to minimise bio-security risk.
To commence major capital development the company is seeking to raise $280 million, with first production planned in early 2022. The advent of a successful funding of this Project
Sea Dragon should see the share price move upwards .