SFG - Seafarms Group

[Love Zn]

I don't know very much about them. I notice they were recommended in the last Smart Inverstor magazine.

Looking at the chart they had a big jump in early Feb and are now up and down, not knowing what to do. There is a lot of hype around for CO2 trading, but it doesn't have the same impact as mentioning Uranium.

Personally I think CO2 trading has huge potential, but Australia seems slow on the up take. Doing some research on the company I came across a submission they did for Task Group on Emission Trading, which I believe is due to report at the end of May. http://www.pmc.gov.au/emissionstrading/submissions/43_sub_emissionstrading.pdf

I found it interesting reading giving, information about the company and their views on CO2 trading.

Just wondering what others here think? Is CO2 trading likely to take off in a big way in Australia? And will a company like COZ benefit since they are already established?

Look like one to add to the watchlist for me. Will be interesting to see if anything happens when the report is released.

 

[brendan87]

Re: COZ - CO2 Group

Hey Love, I was also looking at this stock as well, it's had some good write ups around the place and the "idea" is good. Big companies pay them to plant trees around the edges of farms. Big company wins: they don't have to plant the trees themselves and they can go "carbon neutral". (battling) farmer wins: CO2 pays them for the land they use. Does CO2 win? That's the question I've had trouble answering when reasearching this company. As I understand it, they create a carbon credit (they are the only company able to do so legally, at the moment) but it belongs to the company that commissioned CO2 to plant the trees I think (??). On the plus side, there is a first mover advantage and high barriers to entry (short-term, until other firms apply for licenses). But it seems to me that CO2 is the "middle man" and it is bleeding cash at the moment, reliant on 'one-offs' like the Big Day Out going 'carbon neutral', costs are high, revenue is dismal. As much as I'd like to "get in on the ground floor" and don't get me wrong, I love a govt. supported industry (eg. healthcare, childcare .... etc) - I'm a bit scared to put my hard earned into this company. I'd like to see cash flows and I'd like to see them prove their business model works. While the industry "dynamics" and bigger picture are amazing for this company, I think it's a little to early to jump in here. Those with a high risk tolerance and some patience (the two don't always go hand in hand) could jump in at ground level - although check out how long the company has been around (and under 50c a share, and so many false starts). In any case, certainly one to watch.

 

[Love Zn]

Re: COZ - CO2 Group

I'd like to see cash flows and I'd like to see them prove their business model works.

Agree.

They might have gotten some extra help from yesterday's budget. From today's Herald Sun

The government is expected to announce a carbon trading scheme linked to the Australian Securities Exchange soon, which could see businesses forced to pay more than $50,000 in an open market for every 100 tonnes of CO2 they emit.
But there was little hint in yesterday's Budget as to the timing of the announcement, with just $2.2 millon allocated to fund the work undertaken by the government's task group on emissions trading.
The group is due to present its final report to the Prime Minister at the end of this month.
The goveernment did announce new depreciation arrangements yesterday to encourage the establishment of "carbon sink forests".
The forests, planted to absorb carbon dioxide from the air, are becoming increasing popular as offets for emissions-intensive industries.

So end of May might see this move some more.

 

[ideaforlife]

Re: COZ - CO2 Group

EU has the largest Carbon Trading System in the world. This has been proved an efficient way to facilitate a country to control CO2 emission and reach the standard level.

CO2 certainly in the pioneer in the field in Australia. I've had research into this company's operation principal. I've a good feel of them and quite confident.

But what concerns me a bit is their extremly low debt level. - can anyone help to explain or how to justify it?

 

[Riesling]

Re: COZ - CO2 Group

report is due on Thursday so will be in the weekend papers for sure.

regardless of the fundamentals, media attention will draw buyers in early next week and the sp will go up, in the short term anyway.

SP has weakened over the last week on very low volume, so worth a buy now in order to trade next week.

 

[ideaforlife]

Re: COZ - CO2 Group

Hi Riesling, it seems the committment from PM is bit disappointing, how would the SP move now? Should we exit or remain a believer? Somehow I have a feel that the ann from PM will lead to a SP drop.

 

[moneymajix]

Re: COZ - CO2 Group

In the news.
http://www.news.com.au/dailytelegraph/story/0,22049,22442939-5001024,00.html


Ann.

Leading carbon offsetting company CO2 Australia today announced that it has signed an agreement with Qantas Limited to offset the emissions of around 100,000 passengers on its 'Fly Carbon Neutral Day'.
Qantas will offset the emissions for all passengers flying on a Qantas, QantasLink or Jetstar flight departing on Wednesday 19 September, anywhere in the world, as part of the Company's commitment to saving more than two million tonnes of carbon dioxide by June 2011.

"Qantas is one of many organisations that have come to us, looking to reduce their
environmental impact in a real and credible way. CO2 Australia is proud to have been
selected by one of Australia's most recognised companies, both domestically and
internationally, as its accredited carbon sink offset program provider," said Andrew
Grant, CO2 Group's Chief Executive Officer.
Under this carbon offset agreement, CO2 Australia will partner with rural farming
communities to establish and manage mallee environmental plantings in the mid to low
rainfall agricultural regions of southern Australia. These trees remove global warming
greenhouse gases from the air. These contractual arrangements are for a 30 year time
frame.

"Qantas has chosen to offset with CO2 Australia because it is the only current
Greenhouse FriendlyTM approved tree planting organisation. CO2 Australia will plant at
least 90,000 mallee Eucalyptus trees on our behalf that will sequester approximately
40,000 tonnes of carbon dioxide over time," said Rob Kella, Qantas Chief Risk Officer.
The Qantas sponsored mallee environmental plantings will be accredited under the
Federal Government's Greenhouse FriendlyTM Program (Program). This Program ensures
that the plantings meet strict compliance obligations. They have to be permanent and
undergo rigorous third-party auditing.

CO2 Australia remains the only forest carbon sink offset provider accredited under this
Program. The Company also remains the only forest carbon sink offset provider with dual
accreditations under both the Greenhouse FriendlyTM Program and the NSW Greenhouse
Gas Abatement Scheme (NSW GGAS).
"We are chosen by companies like Qantas because they know how rigorous and thorough
the accreditation process is. They are confident that they are getting what they pay for,"
said Mr Grant.
"Reafforestation forms an important part of our carbon abatement mix. We are committed
to Australia's long term future in this area and believe that the multiple benefits accrued
from supporting CO2 Australia's environmental mallee plantings are significant for
reafforesting Australia and reducing emissions in the long term” said Mr Kella..

 

[Aussiejeff]

Re: COZ - CO2 Group

COZ shares UP 17+% as I type....

This excerpt from the company Sep Qtr report is also interesting...

"The Company believes that ratification of the Kyoto Protocol by Australia will have significant implications to the commericalisation of its CO2 AUSTRALIA (TM) Carbon Sequestration Program, as it provides the opportunity for ratified developed countries to undertake carbon offset programs in Australia and recognise the carbon credits generated in Australia in offshore carbon jurisdictions".

My comment: I hadn't considered that ratification of Kyoto could have an immediate major beneficial impact on accredited CO2 reduction businesses in Oz. So, it would appear the SP for COZ might move significantly further north if Labor gets in...

Disclaimer: I don't hold any shares in this company.

AJ

 

[Purple XS2]

COZ - CO2 Group Limited

Being a tree-hugger and all , this stock has a certain appeal, and there have been some promising announcements of late which indicate the big and dirty end of town sees some advantage in forming a relationship with a carbon-offset trader.

Stock price has spiked significantly this week.

That being said, I have a profound mistrust of the environmental usefulness of carbon offsets, so I've kept my distance.

Carbon offset trading however, may have its day in the economic sun.

ASF members' opinions appreciated.

 

[chops_a_must]

Re: COZ - CO2 Group Limited

My comment: I hadn't considered that ratification of Kyoto could have an immediate major beneficial impact on accredited CO2 reduction businesses in Oz. So, it would appear the SP for COZ might move significantly further north if Labor gets in...

Disclaimer: I don't hold any shares in this company.

AJ

Yes, because companies registered in ratified nations would be able to buy credits here, and have them counted in the international arena. Australia is at a natural advantage given our massive land mass and soon to be very vacant ex-farming areas.

Being a tree-hugger and all , this stock has a certain appeal, and there have been some promising announcements of late which indicate the big and dirty end of town sees some advantage in forming a relationship with a carbon-offset trader.

Stock price has spiked significantly this week.

That being said, I have a profound mistrust of the environmental usefulness of carbon offsets, so I've kept my distance.

Carbon offset trading however, may have its day in the economic sun.

ASF members' opinions appreciated.

Useful or not, they are one of the key methods in CO2 reduction in the international arena.

The only thing I don't like about this company, is its apparent weak cash flow. However, this seems to be improving slightly as the chances of a Labor win is factored in by companies.

Eventually, what is needed is liquidity in this market, which will come. But one of the very few, perhaps only, fully accredited CO2 offset providers, and the only exchange listed company of this type, makes it open to getting more cash (if needed), and a good punt if you're into this thing.

The cash should see it through most of next year, if it hasn't had significant orders by then. But I may look to get in sometime before the weekend.

 

[tony73]

Re: COZ - CO2 Group Limited

Whats up with the 12% lift in this stock today, no ann, can anyone explain! It seems like a promising break out looking at the volume. Can it hold the high?

 

[chops_a_must]

Re: COZ - CO2 Group Limited

Whats up with the 12% lift in this stock today, no ann, can anyone explain! It seems like a promising break out looking at the volume. Can it hold the high?

Technicals mate. I missed an entry on the open by half a cent. And couldn't adjust my order because of work. Ahhhh.... it's been one of those days.

Was looking at it yesterday and saw a very nice pattern on it. I'd expect this to do very well next week.

 

[chops_a_must]

Re: COZ - CO2 Group Limited

Technicals mate. I missed an entry on the open by half a cent. And couldn't adjust my order because of work. Ahhhh.... it's been one of those days.

Was looking at it yesterday and saw a very nice pattern on it. I'd expect this to do very well next week.

After pulling that order, I ended up deciding to go in, again, as it looks to have held the bottom of the breakout bar. First target is about 1.10. Given the strength it has shown, I'd say it has a fair chance of getting there.

Was watching Landline today, and it appears as if CO2 credits will effectively be tracking the price of Wheat. Of course that may change, but in the short term, it may be an interesting agricultural play.

Anyway, here is that transcript: (Video available at the link address below)

Cleared land replanted for 'carbon farming'
Reporter: Chris Clark

First Published: 24/06/2007

SALLY SARA, PRESENTER: While the major political parties debate the shape for a national trading system of greenhouse gases, many businesses aren't waiting. They've already started buying carbon credits to offset their greenhouse emissions, and most of those credits will come from the planting of trees - so-called carbon sinks.

In some parts of the country, land which was cleared generations ago is now being replanted for a different sort of farming. You might call it carbon farming.

CHRIS CLARK, REPORTER: When the weather changes out near Condobolin, in central-west New South Wales, you get plenty of warning. And each time there's a drought, farmers watch their land disappear. This time, thankfully, rain's on the way, and Paddy Reardon's trying to get the last of his wheat in the ground before it hits.

PADDY REARDON, FARMER: That's No. 4. So, that will make about eight.

CHRIS CLARK: After a shocking run of seasons, it's the best start in years.

PADDY REARDON: Swing around here, go back up there, two alleys, you'll see where I pulled out last night.

DRIVER: Righto.

PADDY REARDON: Just keep at it. Now, that machine will be empty when you've done 20 hectares.

CHRIS CLARK: Four generations of Reardons have farmed in this area, dutifully ripping out the native mallee. Now, Paddy Reardon's putting some of the mallee back and being paid to do it.

PADDY REARDON: In 2002, I just sat here and watched this place blow away in the worst drought we've ever seen, and there wasn't a blade of grass left and the whole countryside was just blowing continuously day after day, and I just wanted to do something to stop that.

CHRIS CLARK: He's leased part of his property to a company that will grow mallee for carbon credits. The carbon the trees store is sold to industries, which set it against their greenhouse gas emissions.

PADDY REARDON: There's gonna be approximately 260,000 trees planted over approximately 1,600 hectares. And that has to help reduce erosion immensely.

CHRIS CLARK: And he readily concedes Reardons long-departed would be aghast.

PADDY REARDON: I think they'd be horrified, in a way, to see what we're doing, because it was mallee trees that they pulled out, which covered most of this land, and it's mallee that we're planting.

CHRIS CLARK: Paddy Reardon's not alone. A couple of hours down the road near West Wyalong, the same thing's happening. Trevor Stever's had good rain too.

TREVOR STEVER, FARMER: We've had an incredible start. It's been an absolutely perfect start.

CHRIS CLARK: Apart from good rain, the other difference this year is the layout of his paddocks. The ground's ripped, ready for tiny mallee trees to be planted. Half a dozen lines, a couple of metres apart, 100m between each belt.

So, this year, for the first time, he's having to steer the air seed between the rows that have been ripped, ready for the mallee plantings.

TREVOR STEVER: The paddocks are going to be... they're approximately 1km run, so, 1km by 100m, so they're long, long runs, which makes it easier on the operator and easier on the machinery.

CHRIS CLARK: For years, Trevor Stever wanted to put some trees back onto his farm, but didn't have the money to do it. With demand for carbon credits, though, he found people willing to pay him to use his land to do exactly that. He's leased 44 hectares of his property and sold another 270, which will go under mallee entirely. (To Trevor Stever) And on the left-hand side, you used to own this?

TREVOR STEVER: Yes, we did. This is now owned by someone else, and they're putting a total plantation area in there.

CHRIS CLARK: So, hundreds of thousands of trees, presumably?

TREVOR STEVER: Probably about 600,000 on the... about 670 acres. Be approximately 600,000 I'm told. So, it's a lot of mallee.

CHRIS CLARK: And it gets bigger still. Go further north in New South Wales, and the same company which is preparing Trevor Stever's land is ripping another large property. Mallee, fence to fence, all for carbon credits.

On a day like today, with the topsoil blowing away in the wind, the idea of planting trees seems to have a lot to commend it, but the whole business of growing trees to store carbon is also a stunning example of how the value of land can change over time. So, what has been a grazing property for generations, now looks more profitable as 1,000 hectares of mallee.

ANDREW GRANT, MD, CO2 AUSTRALIA LTD.: When I started my career 20 years ago, I worked with an arm of government that was about reserving Crown land for national parks, and another arm of government was paying mallee farmers $40 a hectare to clear their mallee farms.

CHRIS CLARK: Andrew Grant runs a company that plants mallee to sell as carbon credits.

ANDREW GRANT: So, in my lifetime I've seen it go from a mandated action that you had to clear country, to now, a mad scramble to try and raise public funds to help farmers restore and shore up the sustainability of their operations, so, this is an industry in transition.

CHRIS CLARK: Mallee trees, by nature, are well-adopted to low rainfall. They're long-lived, which is important for people who want to buy carbon credits.

PADDY REARDON: The broad-leaf mallee is commonly known as blue mallee.

CHRIS CLARK: Native to here?

PADDY REARDON: They're native to this area.

CHRIS CLARK: So, what exactly's involved in becoming a carbon farmer? Paddy Reardon doesn't own the mallee trees planted on his property - the company which planted them has to look after them.

PADDY REARDON: They have to do all the soil preparation, they do the planting, they do any weed control, maintenance on trees. They... if trees die out due to drought or dry season or whatever, it's their problem to replant them.

CHRIS CLARK: And how much money's in it? Well, that depends on the value of your land and how much you want to give over to trees, but, in Paddy Reardon's case, it's in the tens of thousands of dollars for a 150-year lease.

PADDY REARDON: The money is fairly close to what land is selling for around the area, but unless you were prepared to sell them a large chunk of your land, I don't think you would make much money out of it. We did it for other reasons.

CHRIS CLARK: Strictly speaking, Paddy Reardon still owns this land - he's just leased it to let someone else grow trees. He has to keep stock out of the plantings for the first three years, and, ultimately, he thinks the mallee will work perfectly with his long-term plan for the farm, which centres less on cropping and more on livestock.

PADDY REARDON: From the point of view of livestock management in years to come, as the trees mature, those long, thin tree belts will be a nice spot for old ewes to go to lamb in cold weather. It'll be a beautiful spot. You'll find them all in the summertime - they'll all be in the shade.

CHRIS CLARK: Above all, being a carbon farmer means being in it for the long haul.

ANDREW GRANT: They have to be comfortable with the long-term nature, because once those trees are in they then, become a fixed asset of the property, and it runs with the land, so, when the property's sold, the purchaser can't come in and remove the trees, because the trees have to continue to sequester carbon.

CHRIS CLARK: But if you don't want to sell or lease your land for others to grow trees, you might still be able to take advantage of the new market in carbon credits. Garth Strong started planting trees years ago on the family farm at Neranderra, in southern New South Wales. And the farm's about to become the first to be accredited under a system for claiming carbon credits from Landcare tree plantings. It's called the Landcare CarbonSMART plan.

GARTH STRONG, FARMER: Well, at the moment we've got about 20, 21 hectares in the plan. That's out of a total of about 90 hectares that we've planted.

CHRIS CLARK: Under the scheme, trees put in after 1990 on land that was cleared before that date can attract carbon credits.

GARTH STRONG: From what trees we've got in the system, they seem to think we'll probably get about $40 a hectare a year, which is not a huge amount of money, but it's better than nothing.

...

http://www.abc.net.au/landline/content/2006/s1958816.htm

 

[chops_a_must]

Re: COZ - CO2 Group Limited

Continued:

CHRIS CLARK: Landcare's chief executive Brian Scarsbrick sees a huge future in the carbon credit market.

BRIAN SCARSBRISK, CEO, LANDCARE: I'm calling it carbon farming. It's part of Landcare farming. They can have a regular income stream from trees on their property, helps with the biodiversity on property, but also get a regular alternative income as a result.

GARTH STRONG: This is a seed-collecting site, as well, so...

JAN STRONG, FARMER: We went round and looked for species that, well, occurred here commonly, and then we got seed from those, but we also looked at areas where there were... within, say, a 10km radius of this place.

CHRIS CLARK: The Strongs of Narrandera didn't start planting trees in expectation of carbon credits. They want birds and other animals back on their farm. They want shelter for their stock. They want to change the way they farm. Carbon credits from trees are an unexpected bonus.

GRAHAM STRONG: We've got some biodiversity benefits here, and now we've got some carbon credit benefits here. And, so, what we're gonna do is just extend this tree corridor right down the end of our property boundary.

CHRIS CLARK: If you have trees, this might just be a seller's market. The inquiry from our clients for carbon offsets is, "Is it going to outstrip the supply?" No doubt about it. We're gonna have trouble filling the demand. So, therefore, the old story, if the demand is higher than the supply, then the price will go up. We believe that's going to happen.

CHRIS CLARK: With carbon at about $15 a tonne, when does it become more profitable to plant mallee trees rather than wheat?

ANDREW GRANT: Our view would be now. Wheat's had 10 really tough years, certainly in the regions of New South Wales, where we've been, and there's a kind of false situation where land values have escalated but actual revenue has been negative.

CHRIS CLARK: This really could be the start of something very big. The sort of money that people might be prepared to pay farmers for the land that they need to grow the mallee trees to store the carbon is going to depend very much on the price that they ultimately get for the carbon credit at the end of the process. And that, in turn, is going to depend a lot on the sort of national emissions trading regime that Australia adopts.

CARMEN STEVER: How are you?

VISITOR: Good, Carmen. How are you?

CARMEN STEVER: Good thank you.

TREVOR STEVER: Good to see ya.

VISITOR: G'day, Trevor.

TREVOR STEVER: Good thanks.

CHRIS CLARK: Today, Trevor and Carmen Stever have some visitors to their West Wyalong property. They're from the electricity company, which is buying the carbon credits from the soon-to-be-planted mallee.

TREVOR STEVER: Yeah, the crops are all there now and we've just got to wait for a decent spring.

CHRIS CLARK: Electricity generators have a huge stake in a national emissions trading system.

PETER JACKSON, MD, ERARING ENERGY: Clearly, it has to give a price signal of the cost of carbon. The conflict is if it gives too strong a signal, then it sort of could actually have a cost of increasing electricity. So, obviously, it will increase electricity inevitably, but the question is at what pace and at what sort of level. And that's something for governments and, really, for people to decide.

CHRIS CLARK: It's likely that storing carbon in trees will form an important part of a national emissions trading scheme, but there's another way of farming carbon; one with huge potential. It's called soil carbon, or organic carbon, and it's the amount of carbon stored on and in the ground. Bob Wilson runs cattle on the sandy coastal plain north of Perth, in Western Australia. He's moving away from his unreliable annual pasture regime to one using perennial shrubs and grasses.

BOB WILSON, FARMER: Obviously, we... We're trying to increase our productivity with those, but, also, now, we've started looking at their potential to increase the soil carbon with those subtropical perennials.

CHRIS CLARK: The perennials sink deep roots to survive, and that's what makes them such good storers of carbon.

BOB WILSON: So, if $25 a tonne...

CHRIS CLARK: With the help of Tim Wiley, from the State Department of Agriculture, Bob Wilson has already done a few measurements to see how much extra carbon the perennials store.

TIM WILEY, WA DEPARTMENT OF AGRICULTURE: Well, those samples that I took, which were actually down here - down to the 2.5 metres - it's looking like we can probably sequester about six tonnes per hectare of carbon dioxide in the soil. So, that's a remarkable achievement on those sorts of sands and much more than anyone, actually, I think, suspected.

CHRIS CLARK: So, with money from different sources, including a coal mining company, there will be a pilot study to measure soil carbon. Participating farmers will get $25 a tonne for the carbon in their soils.

TIM WILEY: The difference in carbon between the old farming system, the annuals, and the new perennial one is what it classed as being sequestered. So, we're talking about how much extra carbon we could store in those soils compared to a traditional farming system.

CHRIS CLARK: At present, Australian laws don't recognise soil carbon as a way of getting a carbon credit. Even soil carbon enthusiasts concede it's not the easiest thing to measure. So, the pilot study will be a step in building up the science, because if soil carbon can one day be traded, then the price of carbon will be like any other farm commodity.

TIM WILEY: People are talking anywhere from $5 to $50 a tonne. At those higher prices, it will be a bit of an economic revolution for our farmers. And it would be possible, I think, to develop schemes where they're paid enough money right upfront to actually fund putting the perennials in.

CHRIS CLARK: In the meantime, expect to see a lot more mallee sprouting in central-west New South Wales.

TREVOR STEVER: Of an evening, just on sunset, we'll look over and we'll say, "Well, gee, in five years that's going to be belts of trees right across there. My God, I hope we've done the right thing!"

CHRIS CLARK: What Australia decides on carbon trading could help shape the future of agriculture as well.

 

[tony73]

Re: COZ - CO2 Group Limited

Thanks for the post, very informative. I hold for the long term and watch with interest. I like the concept and believe it will gain more interest through the year.

 

[drlog]

Re: COZ - CO2 Group Limited

Hi,

I am pretty new to the share market. Looking at the COZ annual report, there is a diluted EPS of 0.38.

Since the closing price today was 0.32, that puts the P/E at 0.32/0.38=0.842. Is that right?

I mean, its really cool that they made a profit last year - how come the share price hasn't jumped vertically up?

Perhaps I missed something important in the annual report? The current ratio is about 3 and the quick ratio is about 1.2. Both of those values put them in good financial standing.

Oh well, see how their price changes


Ok, looking more into the annual report: There was about $3m of cash flow from issuing shares. So that means, as I interpret it, they really made a loss?

 

[drlog]

Re: COZ - CO2 Group Limited

Heh, if anyone is interested, I see the huge error in my PE calculation now that commsec have reported it.

My current and quick ratio calculations were about right (I was rough with them anyway).

The EPS is actually $0.0038 not $0.38!!

So really, the PE ratio should be closer to 0.3/0.0038 = 78.947

That explains why there hasnt been a huge price jump. Nevertheless, COZ could be worth watching.

Cool

 

[drlog]

Re: COZ - CO2 Group Limited

Over the last few weeks, COZ has been going up.

Is this because the whole market is going up or is it in anticipation of increased EPS? Does anyone have any insight?

Either way, I don't mind

 

[beatle]

COZ - CO2 Group Limited

COZ has broken through recent resistance levels and starting to look very exciting. Clearly with the likelihood of a carbon price due to be introduced COZ will be a major beneficiary, and finally the market has realised it! Mind its taken its time to show some buying strength, but once again slow and steady wins the race - the last time the ETS loomed on the horizon COZ hit a dollar. Its possible once again ...

 

[beatle]

Re: COZ - CO2 Group

Since my first (and only) post on COZ (CO2 Group) there has been a major change to the environment that the company works in. Since that first post the legislation to allow a carbon price has already successfully gone through the Lower House, and is due to go through the Senate in the coming weeks (can someone tell me the exact date please). Since the Senate is dominated by Labour and the Greens, each of whom have already agreed on this carbon pricing arrangement, the Senate will approve the legislation.

That legislation comes into effect on 1 July 2012 such that Australia will have the world's largest carbon pricing scheme, the impact of which will force a major change in Australian industries involved with high carbon emissions, such as the power stations, secondary industries including steel and alumina, and airlines, amongst others.

COZ has been heavily involved in discussions with policymakers and legislators for that Federal Govt legislation to ensure that COZ's carbon credit scheme is tailored to accomodate that legislation. This ensures that COZ can provide carbon credits as those high emitting industries begin to prepare for that July1 2012 deadline. It is approved and authorised to trade in carbon credits by both State and Federal Governments.

In addition under existing State legislation COZ already has begun to negotiate contracts with some major groups, such as NSW power stations, Woodside, Qantas etc, but in recent months the major companies have sat back waiting the outcome of the political debate and whilst this has happened COZ has been getting its house in order, plus adding new business divisions to provide a full carbon credit service to industry. This has resulted in it developing Carbon Banc, effectively a carbon broking service which aggregates smaller amounts of carbon credits from various parties and sells them on to high emitters. This business has been going only since April 2011 and resulted in revenue of $11 million in the past 6 months. The Carbon Banc business is in its infancy and should increase appreciably as industry gets set for July 1 next year, as will its core carbon credit business that covers the planting of specialty trees that sequestre carbon underground.

In addition COZ has also started to develop an ancillary business related to the reafforestation of mine sites.

Tomorrow is another important date, as options in COZ, (ie COZO) end their trading (and expire on 12 Nov 2011), and therefore the trading activities of COZ will not be affected by the side games involving COZO. Therefore, it is likely that COZ share price will start to build in the coming months, bearing in mind that within the first 6 months of next year all carbon emitting industries need to buy carbon credits, which COZ can provide from its various activities.

Now is a strategic time and opportunity for investors to start acquiring COZ, ahead of when the main surge is anticipated to begin for carbon credits. As with most strategic investments COZ is at a pivotal point, and therefore anyone seeking to enter now will not be able to get positive support from charting interpretation, this is too early for such support. But for those who want a ground position in COZ I suggest you look at it now.

Unfortunately due to its business activities COZ is constrained in its news flow, so patience is recommended, its not a company that will maintain huge PR at this point. But once the next big carbon credit deal is done and announced by COZ, with whomever, COZ will be effectively confirming my view that its in an exciting space, and its growth prospects are substantial.

There probably is time to slowly accumulate (provided no new deal is announced!), but IMO it won't be long before the market starts to appreciate COZ's potential.