SOURCE: Edgewater Foods

December 07, 2005 08:29 ET

Edgewater Foods Announces Major Farm Expansion at Hindoo Creek Adding $1.48 Million in Appraised Value

GAITHERSBURG, MD -- (MARKET WIRE) -- December 7, 2005 -- Edgewater Foods International, Inc. (OTC BB: EDWT) announced today a major expansion of its scallop farm near Hindoo Creek in Baynes Sound. A Modification Agreement has been signed with the Government of British Columbia that will allow the company to increase the tenure area 2.5 times from 20 hectares (49.4 acres) to 50 hectares (123.6 acres). This makes the Hindoo Creek farm one of the largest deepwater shellfish operations in British Columbia.

The Agreement is the culmination of nearly a year's work satisfying application requirements and working with various government agencies involved in the licensing process. The successful expansion doubles the length of the farm, which in turn doubles the Company's capacity from 43 longlines to 86 longlines. At harvest, each new longline can hold 120,000 scallops, thereby increasing the production potential of the farm to over 10 million scallops. The expansion also increases the width of the farm 25% to increase the area for secure anchoring of the submerged longlines.

It is anticipated that the new longlines and anchors will be installed in early 2006 in order to be ready to hold scallop seed produced in the spring of 2006 at the company's hatchery in nearby Qualicum Bay. The longlines will be 100 m (328 ft) long and spaced approximately 23 m (75 ft) apart. Each will be secured with 2-tonne (4400-lb) cement anchors at the ends and submerged at about 7 m (25 ft) depth.

Island Scallops Ltd. has a total of five farm tenures for scallops. Three of these farms are located in Baynes Sound, 25 minutes north of the main facility. Baynes Sound, the marine waterway situated between eastern Vancouver Island and the western shore of Denman Island, is considered to be one of the most productive and richest shellfish growing areas in coastal British Columbia. With the expansion of the Hindoo Creek farm, the company now has over 63 hectares (156 acres) of deepwater culture area in Baynes Sound alone.

The Company's combined tenures currently have an estimated value of approximately US$10 million. This valuation is based on listings of tenures on the coast of British Columbia, discussions with local shellfish growers and individuals from the BC Assets and Land Corporation, and an independent appraisal (commissioned by Island Scallops). The estimated market value is based on the size, location and whether they are beach or deepwater in nature. However, given the variable nature of the shellfish tenures market, the actual value that we would receive from a sale of a tenure or a partial tenure could vary significantly from these estimated values.

The Company is also changing the management plan for its bottom tenure of 375 hectares (926 acres) located 10 minutes north of the main facility. Assuming that Island Scallops receives government approval for development of off-bottom culture, this site has the capacity to produce 100 million scallops annually. The fifth tenure, located on the west coast of Vancouver Island near Tofino, is currently under-developed.

The three Baynes Sound tenures (Hindoo Creek, Denman Point, and Deep Bay) and the Tofino tenure offer unique features. Splitting the tenures between the east and west shores of Baynes Sound as well as the east and west coasts of Vancouver Island allows continual accessibility to the product despite potential closures due to sanitary contamination or Paralytic Shellfish Poisoning (PSP or "red tide"). For example, seasonal closures caused by various environmental factors tend to be limited to the western shores of Baynes Sound. As a result, only two of the three tenures held by Island Scallops Ltd. in the Sound are affected at these times and product can be continually harvested from the third tenure on the eastern shore of Baynes Sound.

Edgewater is the parent company of Island Scallops Ltd, a Vancouver Island aquaculture company. ISL was established in 1989 and for over 15 years has successfully operated a scallop farming and marine hatchery business. ISL's scallop farms are situated along both the east and west coasts of Vancouver Island. These facilities represent the largest private marine research hatchery and the first fully integrated shellfish producer in Canada.

ISL is dedicated to the farming, processing and marketing of high quality, high value marine species: scallops and sablefish (or blackcod). Farmed scallops are relatively new to North America and ISL is the only producer of both live-farmed Pacific scallops and live sablefish. ISL has developed proprietary hatchery technology for the hybridization of Pacific Scallops and production of juvenile blackcod. These new husbandry techniques significantly increase growth yields, while strengthening the selected strain's ability to resist disease. In the case of blackcod, there were a number of technical difficulties associated with spawning that ISL has solved with its technological innovations. As such, there are no existing competitors that produce and/or harvest both scallops and blackcod. Edgewater seeks to become a leader in the highly profitable niche seafood industry.

Through ISL, Edgewater is an aquaculture and marine hatchery that provides consumers with healthy, environmentally friendly alternatives to the current market. The unique hatchery technologies held by Edgewater give it the advantage of being a "Green" environmentally friendly business. For additional information on Edgewater Foods International Inc, please visit http://www.edgewaterfoods.com or call (800) 793-0087.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this news release include certain predictions and projections that may be considered forward-looking statements under securities law. These statements involve a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, the performance of joint venture partners, as well as other economic, competitive and technological factors involving the Company's operations, markets, services, products and prices. With respect to Edgewater, except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, Edgewater's extremely limited operating history, uncertainties related to the Company's access to additional capital, competition and dependence on key management.

Contact Information

  • Contact:
    Tom Bostic
    (800) 793-0087

    Aurelius Consulting Group, Inc.
    (800) 644-6297