PRSENTATION TO APC FISHERIES CONFERENCE 2021 - Presented by: Eric Christmas Fisheries Advisor Tobique First Nation

PRSENTATION TO APC
FISHERIES CONFERENCE
                 2021
                Presented by: Eric Christmas
        Fisheries Advisor Tobique First Nation

Eric Christmas Bio

Tobique First Nation Commercial Fisheries

• Total licences lobster (Grand Manan)      10
• Annual income from lobster (2019)         $ 1.3 million
• Sea urchin (drag)                         $ 50,000
• Full Bay Scallops                         $ 350,000.00
• Two main partners fish for Tobique: CR Lobsters (Grand Manan
  lobster/sea urchin)
• Scotia Harvest (Digby) 5 full bay scallop
• Mid-Bay licenses (6)

Commercial Fisheries Con’t

• Grand Manan Accommodations and Training Centre
• Original fisheries building built back in 2002 (Marshall program)
• Destroyed in 2014. Damage included all wiring pulled, sheet rock destroyed,
  plumbing fixtures destroyed, flooring, lighting destroyed, etc.
• Fisheries Committee decides to renovate and create 16 accommodations units and a
  training facility at Grand Manan
• Costs $ 675k. Renovations began in Oct 2019. Work delayed due to Covid in March
  and procurement issues directly impacted by the pandemic. Renovations begin again
  in August, 2020. Scheduled completion Christmas 2020. (Just waiting on firedoors)
• Facility to have 7 security cameras and a local Island resident to manage the facility.
• Grand Manan Fisherman's association very interested to utilize the facility for rentals
  (rooms) and training.
• Building to house all TFN harvesters when fishing on Grand Manan

TFN: New Vessel 2021

• TFN has already acquired a vessel in 2018 (725k + 100k in new
  lobster gear)
• TFN to acquire a new vessel in 2021. Committee will have the
  opportunity to view all vessels and decide the best fit for TFN
• Potential financial impact (increase on revenues) from 2021 vessel
  is $ 384,000 k. (80,000 lbs X $ 8.00 X .60)

TFN: Glass Eels

• TFN entered in a partnership with Novaeel back in 2017. Novaeel is a
  consortium of 5 glass eel licenses holders who want to develop a
  specialized hormone to feminize eels (female eels grow faster and larger
  and are thus what the market wants). Annual exports: $15-25 million
• Hormone drug tests are 1 year from completion
• TFN is leading an effort on behalf of all 6 Maliseet Nations to acquire a
  2000 kg quota to compliment the partnership. A 2000 kg quota has an
  estimated market value of 10 million-15 million CDN.
• A kg of glass eels (in pre-covid markets) would be $ 5000 per kg. $ 10
  million CDN for the full sold quota. This year prices were at 25% of normal
  rates and fishery closed down early due to disputes around rights based
  fishing and covid
• Novaeel to construct a glass eel farm and grow out glass eels in the
  maritimes rather than sell all their quotas to China. TRFN and the
  Maliseets will be postioned to benefit from farm

Novaeel Research and Development: Eel farming

• All elvers purchased in the Atlantic region primarily go to China
  for their aquaculture sector.
• Chinese first to develop a hormone to feminize elvers. Female
  eels grow faster than male eels and reach market size in approx.
  18 months.
• Novaeel looking to replicate the process in North America.
• In 2016 Novaeel (in partnership with Dalhousie) and (UPEI) began
  to research a comparable hormone for glass eels.
• Since 2016 Novaeel has invested over $6.25 million into the R&D
  process and report that an FDA and Canadian federal approval is
  forthcoming in 12-16 months.

Global Eel Sample Financial Data

• NovaEel shareholders export $15-25M of glass eels from Nova Scotia
• annually to China, where the eels are farmed and processed. The eels
• are then subsequently sold at a 10-15X multiplier a year later. ($ 1.00 elver to $ 15 dollar
  adult eel)

•   1 estimated $3B global market for farmed, grilled eel “Unagi
•   Kabayaki” is 70% controlled by Chinese suppliers. Japan is 65% of the
•   global market demand and depends on China for 50% of their supply.
•   • North America’s Unagi market is $300M/year, all sourced from Ponds
•   in China, and is listed as “Avoid” by Seafood Watch® so distribution is
•   limited (not available in Bento, Sobeys, Whole Foods, Kroger,
•   Universities...)

• • NovaEel plans to build local farms for American eels caught by its
• shareholders and supply a Seafood Watch® “Good Alternative”

Eel Farming: Market Size and Rationale

Glass eel landing volume in Canada and the U.S. are expected to continue to
remain flat, primarily on account of the harvesting quotas put in place in the
U.S.

Based on a range of current retail prices and baseline import volume, the
size of the North America Unagi Kabayaki retail market in 2017 is estimated
to be between $159.2M and $200.8M. Assuming baseline volumes are
projected to grow at a CAGR of 3.9% per year and assuming constant retail
prices, the projected size of the North America Unagi Kabayaki retail market
in 2020 would be estimated to be between $178.7M and $225.5M.

• Total eel imports to North America increased by a CAGR of 18.2% from 2659
tons in 2012 to 6130 tons in 2017, driven by 23.9% increase in volume of
imports of prepared ‘Unagi Kabayaki’ for domestic consumption.

• Chinese Unagi Kabayaki accounts for the majority of imports into Canada
and the U.S. by volume, despite concerns over quality and sustainability

Eel Farming: Quick Facts

• NovaEel’s Access to Supply for Glass Eels:

• Construction of an RAS eel farm built over 24 months will cost
• approximately $17M after provincial and federal investment tax
• credits.

• By 2025, the farm should generate $36M in annual sales of 2 product
• forms:

• Live eel for Chinese restaurants in USA and Canada

• Processed Unagi Kabayaki, sushi-ready for food service and grocery store
• distribution in USA, Japan and Canada

Quick Facts Cont…

•   Canada’s harvest typically ranges from 5.5 to 7 metric tons of glass
•   eels per year. The number is trending up as quote holders become
•   more efficient in utilizing their quota. NovaEel’s shareholders hold
•   4.8 tons or 48% of the Canada’s total quota.

• NovaEel’s U.S. Shareholder, Maine Eel Trade & Aquaculture (META) is
• the predominant buyer/trader of glass eels with approximately 55%
• market share of the eels harvested in Maine

• Shareholder owned quota is sufficient to scale production to
• generate in excess of $200M/year