Share prices of Seafarms Group (SFG) could be heading for another dive, after falling 81 per cent since the start of this year, as its largest investor called for newly appointed CEO Mick McMahon to be removed from the board.

Since Mr McMahon’s appointment last November, SFG’s shares plummeted to $0.017 per share from $0.04 per share, with the move to oust him coming within a month after a report confirming SFG’s planned $1.45 billion Project Sea Dragon was seen as unfeasible in its proposed form.

SFG, one of the county’s largest aquaculture operators, had been working on an extensive prawn farm development called Project Sea Dragon in the NT.

In November last year, Mr McMahon and CFO Ian Brannan, began a review of Project Sea Dragon—Seafarm’s plan to develop 10,000 hectares of ponds near Kununurra to grow 180,000 metric tonnes of black tiger shrimp.

Sea Dragon was started last year at an expected cost of around $380 million, but after being appointed, Mr McMahon paused the project’s development, indicating that he did not consider it feasible to finalise debt and equity funding arrangements.

A review released last month pointed to the failure of SFG to raise enough funds needed for the second phase of Project Sea Dragon. The report pointed out that the business model was unproven in Australia, and the present farming processes have “fundamentally underperformed”.

In June last year, SFG had raised $92.5 million for the project, which was reinforced by Ian Trahar—SFG’s chairman and largest shareholder. Mr Trahar subscribed $20 million under the placement and settled to convert all loans owed to his company Avatar, worth $14.8 million, to equity on the same terms as the placement.

The NT Government had already spent $56 million on the project, made up of $32.2 million to upgrade Gunn Point Road to a two-lane sealed standard to the entrance of the project site, $7 million to provide an access road to the Point Ceylon, Bynoe Harbour site, and $17.5 million to upgrade the Keep River Plains Road to ensure year-round access between Kununurra and Legune Station.

While part of Project Sea Dragon was proposed near Broome, the largest part would be Legune Station in the Northern Territory, northeast of Kununurra, where juvenile prawns would be hatched at a Bynoe Harbour breeding facility.

Project Sea Dragon was awarded major project status by the Federal Government in 2015.

Chief Minister Michael Gunner said in January 2020, that Project Sea Dragon was the new industry the NT needed.

“Project Sea Dragon is exactly the kind of major project the NT needs,” he said, claiming it would create “up to 1500 jobs”.