PROPOSAL FOR AN OFFSHORE FISH FARM WITH A HATCHERY IN MAUI AND A CAGE FACILITY OFF LANAI BY MAUI FRESH FISH, LLC PRELIMINARY SCOPING MEETING JANUARY 17, 2008 BACKGROUND The Company Maui Fresh Fish, LLC Registered in Hawaii Edward V. Cichon, Founder and Managing Member Education: Rochester Institute of Technology – B.S - Economics Monroe Community College – AAS - Business Administration Skills & Experience Owner / operator of a homebuilding and general contracting company Former Series 7, Series 63 registered representative Extensive Great Lakes fishing experience Certified Scuba Diver Chad Yokouchi, Co-founder and Managing Member Skills & Experience Native of Maui. Assistant Engineer Experience with seawater systems Extensive ocean fishing experience with vast knowledge of Hawaiian waters Certified scuba diver Licensed commercial fisherman in the State of Hawaii Mitchell Redlo, Chief Financial Officer Education: SUNY College at Buffalo - B.A. – Economics SUNY Buffalo - M.A. - Economics SUNY Albany - M.P.A. specializing in Public Finance (Nelson A. Rockefeller College of Public Affairs and Policy) Monroe Community College - Professor of Economics Bryce Kozak, Live Feeds Manager Education: Grant McEwan College - Accelerated Management Studies Diploma University of Alberta – Bachelor of Science, Zoology Specialization Robert D. Howerton Ph.D, Advisor Education: University of Hawaii - B.A. Aquaculture University of Hawaii - M.Sc. Zoology Auburn University - Ph.D Aquaculture and Fisheries Syd Kraul, Advisor Education / Experience: University of Maine - M.S. Zoology Owner and Chief Scientist of Pacific Planktronics, Consultant to Unlimited Aquaculture, LLC. Dr. Dale J. Sarver PhD, Advisor Education / Experience: University of California Santa Barbara - B.Sc. With honors, Marine Biology Emphasis University of Hawaii - Ph.D. Marine Ecology President and Co-founder of Deep Blue Research, LLC, Co-Founder and COO of Kona Blue Water Farms, LLC. Board of Directors (N.A.) Owners (N.A.) No investor has more than a 20% stake in the company. THE PROJECT Locations Maui was chosen for the farm headquarters for a variety of reasons including access to a large commercial harbor, adequate fish processing facilities, large air freight capacity with wide-bodied jets, and excellent general infrastructure and logistical support. Hatchery – The hatchery, which is currently under construction, is located in Waiehu, Maui about 1500 feet from the shoreline. Cage Farm Site - The cages will be located off the South-West coast of Lanai. Site Criteria Several offshore sites were considered around Maui and Lanai. Physical characteristics such as water depth, current, exposure to wind and storms, bottom type, and access to harbors and land bases were considered. In addition, potential user conflicts, and other environmental considerations were evaluated. The presence of humpback whales during the winter months, and issues associated with operating within the Hawaii Humpback Whale Sanctuary were significant concerns. The following charts show the compilation of whale sightings around Molokai, Lanai, and Maui. In order to avoid conflicts with other stakeholders and complications associated with the dense whale aggregations, MFF decided to locate the cage facility off the southwest shore of Lanai. There have been few if any whale sightings in this location, and this general area satisfies other site-specific concerns. CAGE SITE Extensive surveys were conducted along this coast of Lanai. Some areas were too exposed to the trade winds, the water was too deep close to shore in others, and some had too little current and poor bottom conditions. A final site was chosen that had good conditions and it is shown in the chart below. The bottom is silty sand with no rocks or coral in the area, and depth of around 200 ft. The site is a half mile from shore, and there is only a thin reef right up next to the cliffs. The site is protected from the trade winds and the average current is about 0.25 knots. Apart from an occasional diver or kayaker along the reef, there is little activity in this area. There is essentially no fishing in the area LAND BASE – There will be an operations land base located in Kaumalapau Harbor on Lanai, a short distance from the farm. Food stores, maintenance workshop, equipment storage, and a general office will be located there. CAGE SYSTEM – The cages will be secured in a sub-surface grid system that is vertically held in place at a depth of 30 ft by a series of relatively small anchors and subsurface steel buoys. There will be 10 cages and a feeding barge within the grid. The grid is held in place horizontally by a series of 14 large anchors (likely concrete blocks) and connecting lines. The grid lines and anchor lines are large diameter ropes and are held rigid by the submerged buoys. CAGE DESIGN – The farm will employ Aquapod cages supplied by Ocean Farm Technologies Inc. located in Searsmont, Maine. They are an innovative design incorporating the strong attributes of a geodesic sphere. Each cage will be approximately 7000 cubic meters in volume. They are slightly negatively buoyant and will settle to 15-20’ below the surface. Inflatable sections on the cage will bring them to the surface or up to 20% of the surface area above the water. They are made from 8’ high triangle frames and heavy duty plastic coated wire. Individual sections bolt together to make the sphere. Any one section can be replaced with another section modified for a specific purpose such as doors, feeding hose connections, floatation modules etc. On the surface the cages can be rotated or “rolled” to expose any portion of the cage for air or spray drying. These cages require very little SCUBA diver time as most day to day activities are done on the surface. The cages can be assembled inside the harbor and easily towed into place. If that is not practical, partial sections can be towed into deeper calm water and assembled there. These cages are completely shark proof and there is never a danger of escapes from holes bitten in the netting. In addition the rigid mesh poses no entanglement threat to seals, porpoises, or turtles. OPERATIONS Hatchery Operations The hatchery will pump its seawater from a deep well beneath the brackish water lens. Water will be stored in tanks above the hatchery and gravity fed throughout the buildings. After use the water will be filtered through drum filters and drained into an adjacent dry gulch. This gulch eventually leads to the shore where it will empty into the ocean. At peak production the hatchery will use up to 300 Gallons/minute of seawater. Broodstock fish will be caught within the main Hawaiian Islands, hopefully around Maui and Lanai. The intention is to produce exclusively opakapaka. However, commercial production of this fish has not been achieved, although recent breakthroughs at the Hawaiian Institute of Marine Biology on Oahu, and Pacific Planktonics in Kona have been encouraging. The farm may need to produce other species such as moi or amberjack if opakapaka broodstock cannot be induced to spawn year around. The farm may produce any or all of these species. Juvenile fish will be transported by truck to the Kahuliu Harbor and loaded on a boat for the trip to the cage site off Lanai. The channel crossing will be done at night when sea conditions are calmer. Juvenile fish will be pumped into nursery net cages suspended inside the Aquapod cages. They will stay in these cages for several weeks, and then be released into the growout cage. Cage Farm Operations Feeding – Feeding is the biggest single activity on a cage farm. There will be a large feeding barge moored within the grid system with feeding hoses connected to each cage. Feeding pumps will deliver pellet food to each cage. Video cameras will monitor the feeding activity of each cage, and feeding will cease as soon as aggressive feeding slows down. Very little if any food will be lost. Eventually this activity will be automated and controlled remotely from the land base located in Kaumalapau Harbor on Lanai. Feed will be shipped in containers and stored at the harbor. Occasionally the feeding barge will come inside the harbor for restocking. Cleaning – Fouling can grow rapidly on the cage mesh and framework. Fortunately in Hawaii the fouling is primarily soft forms of algae, hydroids, and sea squirts, which can be easily removed. The majority of cleaning will be done by air drying sections of the cage. The cages will be rotated to routinely dry all surfaces of the cage. Fouling that does not fall off after drying can be spray cleaned while standing on the exposed sections, or from a small boat along side. Cleaning may also be important in controlling parasite buildup on the fish. It is not known if there will be an ecto-parasite problem with snappers. Moi seem to be resistant to the common forms, although with amberjack it is a significant issue. It may be necessary to bath treat the fish with a dilute oxygen peroxide solution to remove parasites. The cage will be temporarily tarped on the outside and peroxide added for a short time. Low levels of peroxide is highly effective against parasites but relatively benign to fish and other animals. It is used to sterilize drinking water and food handling equipment, and quickly breaks down to oxygen and water. Other farms use this method successfully, and monitoring by the Clean Water Branch shows it to be safe to use. Harvesting – Harvesting will take place 1-3 times per week, depending on sales demand. A harvest boat will come from Maui loaded with ice and fish bins. Fish will be concentrated in a harvest cone inside the cage and pumped out to a harvest boat. There they will be directed into an ice slurry. The fish cool quickly and become inactive within a minute or two. There will be no fish processing on-board. The harvest boat will return to Maui to unload the fish bins onto a truck for deliver to one or more of the processing plants. The fish will be unloaded at Maalaea Harbor. It will take several years to build up production capacity. Cages will be added in pairs over approximately 2 years until the full complement of 10 cages is in place. Cages will be stocked with the first fingerlings within 6 months of attaining the appropriate permits and approvals. Harvesting will start approximately 16-18 months after the first stocking. Production will ramp up over 2-3 years, eventually reaching steady state at about 560,000 kg per year, or 10,000 kg per week. Environmental Monitoring Monitoring the two existing offshore farms over the past several years has resulted in a vast amount of information about how offshore farms affect the surrounding water, substrate, animals and plants. Certainly site-specific criteria such as current speed and direction, substrate type, and depth will influence overall impacts. Water Quality – Consistent moderate current through this site will disperse effluent sufficiently to prevent any significant buildup of metabolic wastes. MFF will propose a water quality monitoring program to match the environmental data presently being collected on the site. It will be similar to the monitoring criteria taking place at the other farms so comparison of different systems and environments can be made. Benthic Monitoring – While current will effectively disperse particulate matter, some components of undigested feed, feces, and fouling from cleaning the cages will settle to the bottom around the farm. The areas directly under the cages will be affected the most, and decrease rapidly as distance from the farm increases. The bottom is silty sand with no rock or coral anywhere within the projected lease area. Consequently there is very little in the way of macro plant or animal life. Additional organic input over background will raise the Total Organic Content of the substrate and increase the metabolism of the micro-organisms on the surface layer and oxygen demand, which can be measured by REDOX potential. These two chemical tests are the best direct and indirect indicators of how the farm is affecting the nearby substrate. MFF will propose a benthic monitoring program based primarily on these two chemical tests. Samples throughout the lease area will be taken quarterly with a standard grab sampler. Reef Monitoring The cage array is located about a half mile from the shoreline. In this area there is a very narrow rocky and coral reef next to the cliffs. Even though it is unlikely that the farm will have any impacts on this area, it is prudent to monitor the plants and animals in this area. Shallow and deep permanent transects will be established on the reef adjacent to the farm. Periodic surveys of the plants and animals will be taken to determine any long-lasting changes in this environment. Environmental Monitors MFF has established a good working relationship with the College system and schools in Maui and other islands. The Marine Options Programs on several UH and community colleges have been contacted regarding joint projects to carry out the environmental monitoring of the farm. Indications are good that the majority of the monitoring can be integrated into the MOP training programs. Some of the chemical testing will have to be sent out to outside laboratories, but the physical collecting and interpretation of the data can be done within their programs.
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