#1Land-based Salmon Aquaculture an economic opportunity for British Columbia extended presentation 1#2Global Expansion of Land-based Salmon Farms • . • • • Kuterra in Port McNeil pioneered viable land-based Atlantic Salmon sparked a decade of global development. Globally over 70 farms in various states of development Significant IPO activity for the leading companies, billions of dollars deployed 18 large scale farms of 10,000 Mtons scale are in construction 11 large scale and 9 small scale farms have delivered first harvests to market Grieg - recognizing the opportunity - joint investments in two 3000MT facilities Mowi and Leroy following too https://griegseafood.com/news/grieg-seafood-enters-joint-venture-for-post-smolt-and-land-based-salmon-farming- Investors have recognized Existing ocean farming practices have globally has reached "carrying capacity" because warming oceans, algal blooms and low dissolved oxygen are becoming increasing problematic Ideal global ocean farming locations are largely all allocated Social licence preventing net-pen expansion and actually forcing contraction in certain regions - Salmon farmers have realized that land-based farming provides a reliable "farmed environment" Alternative hybrid land/ocean and offshore farming technologies could also expand ocean farming British Columbia is missing this opportunity 2#3IntraFish Report Highlights Land-base Salmon: Aquacultures New Disrupter • Over 70 projects globally, many financed and in construction, many just plans • 18 farms providing fish to market, 11 of the facilities greater than 1000MT production Globally an acute shortage of skilled workforce is a major issue and a major barrier to success Significant investment inflows from private capital and institutional sources is occurring Nordic expertise and monies driving expansion Driven by global surge due to a huge gap between supply and demand in the salmon market Major US Projects Project Atlantic Sapphire Whole Ocean Size (Planned Max Capacity) 220,000 Production Investment/Backers First harvest 2020 $275m 20,000 In development Operations 2022 First Harvest 2024 $250m Nordic Aqua Farms 33,000 east coast AquaCon 100,000 construction 2021 $500m raised Construction starts 2021 $1 Billion raised Pure Salmon 20,000 AquaBounty 55,000 planned $250m raised First Harvest 2020 $100m Expansion Construction started AquaBanq 3,600 Construction complete 2021 N/A First harvest 2022 West Coast Salmon 50,000 First Harvest 2024 Nordic Aqua Farms west coast 33,000 planned N/A $500m raised 3#4Recent News Clippings IntraFish Land-based Salm Your monthly land-based salmon update 2021 is proving to be just as much a landmark year for the land-based salmon farming segment as traditional salmon farmers enter the space. Beyond these hand-picked stories below, you can find our comprehensive coverage of the sector on IntraFish.com, as well as webinars, podcasts, opinions and more. Enjoy! --Demi Korban, Business Reporter, IntraFish Mowi reconsidering land-based salmon farming: 'Everything we see that can be profitable, we will do' In a landmark shift, Mowi, the world's largest salmon farmer, is reconsidering its involvement in land-based salmon farming. Grieg becomes first 'traditional' salmon farming giant to enter land-based arena The Oslo-listed player is not ruling further investments in the space. Atlantic Sapphire hikes up production plan for Miami Under the new plan, the company's Phase 2 expansion will produce an additional 5,500 metric tons of salmon. Mowi and Leroy just upended land-based salmon farming The segment has so far been a niche blazed only by risk-taking start-ups. That may be about to change. Another land-based salmon farmer jumps on IPO bandwagon for funding Smart Salmon is planning to list on the Oslo Stock Exchange's lower cap Euronext Growth by the second quarter of 2021. Per Grieg-backed group becomes Norway's fifth land-based salmon IPO Nutreco is among the investors taking a stake in Proximar Seafood, which is planning a project in Mount Fuji, Japan. 4#5The Vision:- To Catalyze Land-based Salmon Farming in BC • Supporting land-based salmon fish farming in B.C provisions - ― Expands and secures the farmed fish industry (sites and tonnage) Continues to secure fish processing, transportation and fish feed industries ― ― Increasing jobs Increasing retained earnings in B.C. Increasing profit margins for the industry and parent companies Enables growth in an established but constrained industry sector Reconciliation in Action by provisioning opportunity for First Nations | 5#6Land-based Salmon Farming - Two Economic Models Small scale - - - - - 1000MT- Superior Fresh (700MT) the leading example 100MT -500MT salmon farm coupled with aquaponics green house for vegetable production Proven success case - rapid ROI and short time frame to first revenue Investments are 1/50 of the mega scale facilities Provides food security through geographically diversified locally grown produce and salmon Economic multiplier when co-located with communities that have fish processing facilities that service the seasonal wild fisheries - seasonal to full time job transmission Requires reliable hydro Caveat - still requires technically astute workforce Large Scale > 5000MT+ farms comprised of modules of the 1000MT/3000MT /5000MT scale. - - Atlantic Sapphire's Blue House 220,000MT facility is now shipping food fish to market from its first 8500MT module Whole Ocean's 20,000MT planned facility in Maine Significant investments > 100M$ typically funded through private capital, investment banks and public IPO's Many successful 1000MT+ modules now operating world wide Scale is critical to success 6#7British Columbia's Fading First Mover Advantages • . • Low cost, low carbon intensity hydro Aquaculture trained workforce a major factor for global competitors is the lack of qualified workforce Feed mills, fish processing and supporting industries all present and at scale Leading feed research expertise for alternative diets at DFO and Taplow Fish health and veterinary science professionals trained and present Land-based salmon farm equipment and service suppliers already at scale due to land-based brood stock and stocking facilities AKVA and ScaleAQ . Perfect temperate coastal locations with ideal ground and ocean water temperatures support low cost operation Multiple brood stocks and genetic strains available and raised in farms Steelhead, Atlantic salmon, Artic Char and Coho and Sockeye • Workforce training at VIU and UBC already in place Close to US market with low distribution costs As with many industries the value of these first mover advantages becomes diminished as "industry 7 clusters" form in other locations#8• B.C's Conflict Politics Signal We Are Closed for Business B.C needs to send a strong signal that we are open for business The wild vs. ocean farmed public conflict has signalled we are closed to investment Social licence is preventing net-pen expansion and actually forcing contraction in certain geographies (Washington state, Discovery Islands) Federal Discovery Island decision has - Downloaded job losses to the province – a non-just transition for the workforce Dissuades further investment by the majors (Mowi, Cermaq, Grieg) which will ripple into adjunct industries such a feed mills and fish processing house which will refrain from on going capital improvement investments and R&D Creates a perception that "signals the beginning of the end" with no material transition plan Significant impact to coastal economies that could avalanche will have an impact on the individual FN's whom have working agreements with Fish Farm Companies Trudeau's documented private commentary1 that land-base salmon farming is not viable slams the door on investment and encourages the majors to age out their farms and leave the province 1 Land-Based Salmon Aquaculture: Aquacultures New Disrupter -Intrafish Business Intelligence report October 2020 NHST Checkout (onfastspring.com) 8#9A Strong Signal Supporting Land-based Aquaculture is Required If sent, it will help secure the current industry • Promotes job growth in rural and First Nation communities in numerous • geographical areas province wide Catalyzes entrepreneurial growth in support businesses by local entrepreneurs with modest financing 9#10Land-based Aquaculture Industry Economic Outcomes • The Fraser Basin Council sponsored report RAS Atlantic Salmon Industry on Vancouver Island Financial Model & Economic Impact Analysis Dr Edwin Blewett Mr Stuart Nelson Counter Point Consulting Base-case financial model paints a picture of an industry with the following parameters: - - - 50,000 tonnes of annual Atlantic salmon production, comprised of individual farms operating at a 3,000 tonne scale. A capital cost of $1.1 billion to set-up the industry. $400 million in annual revenue. $208 million in production (variable) expenses, $28 million in fixed (overhead) expenses, and $97 million in combined depreciation, interest, and income taxes. Annual net income of $79 million for the farming sector. Annual processing, trucking, and sales & marketing charges associated with handling the farmed salmon production totaling $114 million per year. · The base-case financial model utilized the BC Input-Output Model (BCIOM) to assess the economic impacts - direct, indirect, and induced - associated with this level of industrial activity. 10#11A Strong Signal Supporting Land-based Aquaculture is Required • Results - significant returns for B.C RAS Atlantic Salmon Industry on Vancouver Island Financial Model & Economic Impact Analysis Dr Edwin Blewett Mr Stuart Nelson Counter Point Consulting Economic Impacts from Ongoing Farm and Processing Operations ($millions) Direct Indirect Induced Total Expenditures $515 $290 $32 $837 GDP $211 $116 $20 $348 Jobs 1413 1080 191 2,685 Employment 1465 1094 173 2,732 Household $59 $69 $15 $142 Incomes Tax Revenues $40 $26 $3.2 $70 One Time Economic Impact due to Construction ($millions) Direct Indirect Induced Total Expenditures $1028 $574 $77 $1678 GDP $72 $286 $47 $407 Jobs 765 2,762 463 3,989 Employment 858 2,974 418 4,250 Household $59 $212 $36 $307 Incomes Tax Revenues $49 $56 $56 $113 11#12BC has Significant Success B.C has significant success land-base fish farming stories to celebrate and build upon, notably - - - - - Kuterra Taste of BC, Miracle Springs, Target Marine, Sumas Lake Pr Aqua, Organic Ocean Atlantic Salmon Steelhead Steelhead, Artic Char Coho and Sturgeon Live Tilapia Land-base farm architecture and construction Sustainable seafood distributor • East Coast for Reference Sustainable Blue - 1000MT Nova Scotia Cape d'Or Sustainable Seafoods 226Mt Aquabounty 12#13Local Canadian Successes - Kuterra • · • - Kuterra the farm that inspired global change • • The first commercial scale land-based salmon production facility in North America and the second in the world Open-source farm – knowledge shared globally Proved biological, technical and economically viability Industry questions were answered and myths busted Conceived by The SOS Marine Conservation Foundation and built in partnership with the 'Namgis First Nation, SDTC, DFO, Tides Canada (Make way), Ritchie Foundation and the Province of B.C Achieves 250MT/year of premium grade fish, total sales to date 2.5 million pounds and growing Now leased and operated by Emergent Holdings as a training and R&D facility for its planned Maine US 20,000 MT facility - the province has an opportunity to invite them to invest in B.C KUTERRA LAND RAISED f♥ BLOG Search Site a KUTERRA SUSTAINABILITY HAS LANDED OUR STORY OUR SALMON FACTS WHY KUTERRA CONTACT 13 Healthy KUTERRA Atlantic salmon#14PR Aqua based in Nanaimo, British Columbia • PR Aqua is a world leading aquaculture design and technology provider. A single source provider, supplying a broad range of services that include: • Project planning and engineering design Delivery of specialty equipment Construction management & Startup and training services Designer of the Kuterra land-based salmon Farm in Port McNeill on Vancouver Island. . the first commercial scale land-based salmon production facility in North America and the second in the world PR Aqua is the lead process design and technology provider to a 20,000 MT land- based salmon farm currently being developed in Maine. CENTAR Pr Aqua 25+ years delivering Recirculating Aquaculture Systems 14#15Local Canadian Successes - Land-based Salmon Farms in BC to "Taste of BC (Steelhead) is expecting commence development of a 1500 Tonne (50 Million) expansion in BC this year. Blue Star Foods is expecting to up list from the OTC to Amex or Nasdaq as soon as Q2 2021 to facilitate this growth. Further aggressive plans to reach 21,000 MT by 2028" BLUE STAR Steve Atkinson CEO Taste of BC Aquafarms / Blue Star Blue Star Foods Corp. Signs Term Sheet to Acquire Taste of BC Aquafarms, Inc. Acquisition Would Signify a Strategic Investment into the Recirculating Aquaculture Systems (RAS) Industry Miami, Florida - December 28, 2020-Blue Star Foods Corp., (OTC: BSFC) ("Blue Star"), a sustainable seafood company, announced today that it has signed a term sheet to acquire Taste of BC Aquafarms, Inc. ("Taste of BC Aquafarms"), a family-owned and operated land-based Recirculating Aquaculture Systems (RAS) salmon farming operation, based in Nanaimo, British Columbia, Canada, subject to certain closing conditions. "We believe land-based salmon farming can be part of the solution of healing our environment and will meet the gap between the growing global demand of salmon and a supply that is limited by its environmental impact, as well as geographical and governmental constraints," said the Company's Chairman and CEO, John Keeler. Mr. Keeler added, "While there are other public companies pursuing a similar business strategy, including Aquabounty Technologies, Inc. (NASDAQ:AQB) and Atlantic Sapphire AS (OB:ASA- ME)(OTC:AASZF), we believe this opportunity is massive and has plenty of space for several participants." Mr. Keeler continued, "We are very thrilled to partner with the Atkinson family, the founders and operators of Taste of BC Aquafarms, who have been pioneers in RAS farming since 2010. They've built a proven and scalable model and we are excited to strategically fund their next level of growth and use our sales platform to market their delicious, sashimi-grade, Steelhead Salmon." "We are delighted to be joining Blue Star Foods through this acquisition. From the beginning, I wanted to create a RAS model that we could easily replicate in multiple locations, with predictable outcomes, and leave a legacy of a new Industry of land-based salmon production in British Columbia and beyond," said Steve Atkinson, President of Taste of BC Aquafarms. He added, "We took a different approach than others in developing RAS for salmon production. First, we wanted to develop a proven, successful culture system, and now we are looking to deploy this system in multiples. Our modular design strategy works and is highly scalable. I see no reason why the RAS Salmon production in BC cannot potentially exceed 100,000 metric tons annual production in the next two decades. Along with Blue Star, we intend to be leaders in this new industry." Growing Demand for Marine Protein and RAS Technologies Growing Importance According to the United Nations' estimates, by 2050, the world will have an estimated 9.8 billion people, a 2 billion increase in population from 2020. With a growing population, it is expected that there will be an increase in demand for protein food sources, and a significant amount of that demand will be for marine LITTLE CEDAR#16Miracle Springs - Mission 100Mt production 50% Artic Char 50% Steelhead Genetic brood stock of both species • - Key to building an industry Provides food fish production for the white table cloth restaurant market Provides eggs and fry production for other production companies 16#17Positive Activity in B.C • BlueStar • - Upcoming NYSE IPO raising $50 Million Funds fully directed for development in BC. Securing property now for farm expansion. One site in negotiation and two others in progress. 1,500MT farm development starts April 2021. 21,000 MT production by 2028 -$500 million of investment. Gold River Aquafarms actively seeking investment for 3000MT farm in Gold River Miracle Springs - expanding land-based salmon facility for 150-200MT of production 17#18Organic Ocean - sustainable sea food distributor Intercity, Sea Agra, Blundel, Seven Seas industry scale distributors • Organic Ocean distributes sustainable wild harvest and responsible cultured sea food Organic Ocean observe that for seafood distributors, land-base salmon has customer appeal for • • • • Land raised seafood typically has a milder flavour profile Fish texture is firm due to quality animal welfare conditions Healthier - free from therapeutants, antibiotics, pesticides, growth hormones Most Sustainably ranked - Seafood Watch, Ocean Wise • Minimal local environmental impact And retailers, food service and processors appeal for • No Kudoa, less spoiled waste fish • Shorter supply chain yielding fresher fish • Eliminate marine based pollution • ● Most sustainably ranked Stable pricing year round availability - Organic SHOP SEAFOOD CHEF TIPS FAQ SOUGHT AFTER BY THE WORLD'S TOP CHEFS SHOP NOW 18 Q &#19• Enabling B.C Via Policy Incentives - Key Recommendations Promote open for business to global community Encourage Companies like Atlantic Sapphire, Blue Star and Emergent to invest locally by actively inviting them Offer tax exemptions, access to crown land invest and workforce training credits at VIU and UBC for personnel Expedite permitting and environmental assessment process - - Currently a long process up to 2 years with no assured outcome - undermines investor confidence Land-based farms have a low environmental impact - they are good to go . . - the need for a clear (who has jurisdiction - BC or feds), stable and timely regulatory regime is also critical key point for investment that should be driven home Goal permits issued in less than 2 months Push Feds for rapid adoption of the Salmonid Alternative Production Technologies Working Group's May 21, 2020 report and recommendations Champion access to global genetic seed/egg for Atlantic Salmon in closed containment Enable Reconciliation in Action - - - - Advance UNDRIP and Free Prior and Informed Consent by facilitating FN partnerships in land-based farming Extend development of land-based in partnership with FN's throughout the province Addresses economic development needs for FN employment Signal to all FNB's of BC another substantial step to further advance protection of wild salmon across the Province and thus advancing Food Security enjoyment of constitutionally protect ted aboriginal rights Create a co-managed (FN & BC Gov) governance entity that ensures aquaculture companies stable longitudinal agreements and ensure farm de-commissioning is prefunded should the venture fail. • Provides mutually assured confidence to investors and First Nations alike. 19 * Caveat - small scale land farming does not imply low complexity- dedicated skilled and trained workforce still very much required#20Enabling B.C Via Policy Recommendations (i) • • BC investor tax credit for farm investments - similar to the high tech program - Appropriate for the Superior Fresh small scale model farm Enables local investors to engage Pushes investment into rural populations not tech centric city populations Consider joint supportive funding with the federal government for aquaculture business development funding - - - Similar to what has just been announced on the east coast Similar to the joint funding of the Salmon Restoration program Appropriate for the Superior Fresh small scale model farm which builds both fish and vegetable food security on the coast Offer Crown land at low or lease free until profitability or time window expiration - (5-8% of capital required is land costs) 20#21Enabling B.C Via Policy Recommendations (ii) . • Create an Aqua-(agri)-culture development bank much like what was done for the chicken industry to fund the small farm model and encourage local entrepreneurs Support re-training programs to extend provincial expertise and provide a future employment pathway for Discovery Island workers Build a trade/apprenticeship land-based Aquaculture technologist program Provide access for fish farmers to the suite of financial tools such as loan guarantees, income stabilization, and business risk insurance available to terrestrial farmers Commission invite bids for discovery island projects for large scale and small scale land-based farms from international companies and investors Potential market size, opportunity for a grown in BC marketing strategy (similar to VQA for wine), that could encompass the wild commercially fishery as well (i.e. land raised complements vs competes with wild fishery) 21#22B.C's Kobayashi Maru Moment No-Win scenario defined by Net pen industry in retraction Wild fishery diminished /closed - Sport fishery closed - Job and industry loses appear inevitable with potential to avalanche towards 2025 BC Canada closed to business Change the playing field - Change the rules . Immediate time frame (0-1 year) - - Promote cultured seaweed FN and community farming - fast job creation Promote wild fishery, farmed salmon and land-base salmon production volumes to be integrated into the processing and transportation sector to sustain ancillary jobs Utilize VIU and UBC to retrain and apprentice Discovery Island workforce Short time frame (0-3 year) - Catalyze land-base salmon aquaculture Incent small scale coupled salmon and aquaponic faculties for communities • Caveat:- committed and technically astute workforce essential Incent the majors to invest in large scale land-based as net-pen infrastructure ages out Long time frame (present and onward) invest in wild salmon rehabilitation to rebuild wild fisheries 22#23Discussion Contacts Andrew S. Wright SFU / former Advisor Kuterra / Former Aquaculture Innovation fund advisor 604 612 8599 [email protected] [email protected] Land-based Producers Mike Cunning Steve Atkinson Gary Robinson Garry Ullstrom Steve Summerfelt Eric Hobson Miracle Springs Little Cedar Falls / Taste of BC Kuterra Whole Ocean / Eventia Kuterra - Whole Ocean / Eventia Superior Fresh Former Chair of the board of Kuterra 604-349-2083 [email protected] 250 755 4077 [email protected] 250 850 9455 [email protected] 250 974 7183 [email protected] 240 217 7456 [email protected] 403 681 7595 [email protected] Seafood Sustainable Purchasers Dane Chavel Guy Dean Organic Ocean Organic Ocean 604.312.8884 [email protected] 604-454-8857 [email protected] Independent Advisors and Industry Observers Eric Patel John Madden Tony Allard Catherine Emrick Pamela Goldsmith Jones Former Aquaculture Innovation Fund advisor Wild Salmon Forever Wild Salmon Forever Former Aquaculture Innovation Fund director Former MP Liberal Party 2014-2018 604 805 1936 [email protected] 604 738 3335 [email protected] 604 922 6870 [email protected] 403 630 4924 [email protected] [email protected] 23#24Land-based Salmon Farming Fills The Central Job Void IMPACTED COMMUNITIES 215 INDUCED JOBS * IN FOCUS Taken from the BC Salmon Farmers blast radius infographic T HARDY CAMPBELL RIVER-DISno HEALTHCARE Hospital Services Dental Services Optometrical Services Integrated Health Services 630 INDIRECT JOBS EXCEL CAREER COLLEGE Excel Career College has been training up the next wave of salmon farmers for more than 20 years. Pauline Stevenson has seen the innovative changes across the sector. * IN FOCUS IN FOCUS CAMPBELL RIVER TOYOTA Hundereds of salmon farming company and personal vehicles. are leased by Campbell River Toyota. Jim and his wife are integrated into the community IN FOCUS INWATER TECHNOLOGIES A local technology start-up company that's servicing producers on the island. TRANSPORT Ocean Taxis Air Travel Trucking Fleet Vehicles Barge Companies Marian Fees MAINTENANCE CONTRACTORS Feed & Feed Systems Suppliers Professional Trades Technology Consultants Diving Companies Engineering Firms Net Washing & Repair Services Equipment Suppliers 690 DIRECT JOBS FISH PROCESSING Management Fish Processing Staff Boating & Transportation Contractors LAND-BASED HATCHERIES Technicians Feed Companies Engineering Services Services, Supplies, Maintenance SKILLS & TRAINING Aquaculture Training Programs Research Institutes Veterinarian Colleges Skis Certification Programs Universities & Colleges SALMON FARMERS Management Fish Health Teams. Production Managers Aquaculture Technicians Farm Manager Assistant Manager Area Manager OCEAN SUPPLIERS VETERINARIANS Meet Terra MacDonald, certified Veterinarian and Mowi Canada West's Fish Health expert. Fuel Storage & Delivery Wharf Facilities Rentals PUBLIC SERVICE Ship Building & Repair Services Clothing & Equipment Municipal Admin Staff Facility & Engineering Staff Government Agents SAYWARD-NANAIMO - COMOX-COURTNAY-CUMBERLAND FISH HEALTH Professional Laboratories SMALL BUSINESSES IN FOCUS BADINOTTI A global company with a footprint in Campbell River, Badinotti is a service company helping salmon farmers clean and repair netting on farms. COMMUNITY PROGRAMS Wild Salmon Restoration Community & Youth Programming Associations & Not-Profits. PROFESSIONAL SERVICES Financial Institutions Accounting & Bookkeeping Communications Firms Engineering Firms Legal Firms Insurance Certification Agencies Research Programs Environmental Monitoring Technical Suppliers Veterinarians & Scientists IN FOCUS SALISH SEAFOODS & ST. JEAN'S CANNERY First Nations owned and operated businesses that support the processing and canning of BC farmed salmon. EDUCATION Administrators: Teachers & Assistants Maintenance & Support Services Tourism Local Businesses Hotels & Restaurants Entertainment Venues 24