Salmon Evolution ASA (“Salmon Evolution” or the “Company”, OSE: SALME) is pleased to announce that it has entered into a Heads of Terms with Artec Aqua for the planning of the phase 2 build-out at Indre Harøy. Phase 2 is expected to in principle be identical to phase 1 and add a further 7,900 tons HOG of annual production, bringing the total planned production volume to 15,800 tons HOG per annum.

Artec Aqua is the turnkey supplier for Salmon Evolution’s phase 1 project at Indre Harøy where the first smolt is expected to be released during March 2022 and with the full facility currently expected to be completed in Q4 2022.

The purpose of the Heads of Terms is to enable Salmon Evolution to be in a position to swiftly commence construction of phase 2 following the completion of phase 1. Such timeline requires significant preparatory activities, including but not limited to, planning, concept and detailed engineering and structuring of subcontractor tender processes.

Additionally, this preparatory phase will focus on leveraging the know-how and experiences gained from phase 1, facilitating implementation of identified areas of improvement, both from a biological, operational and financial perspective. Given the timeline with first groundworks commencing after completion of phase 1, the parties should also be able to implement learning effects obtained during the first 12 months of production.

Mr. Håkon André Berg, CEO of Salmon Evolution comments:

“As the phase 1 build out at Indre Harøy now is nearing completion, we are very pleased to start the preparations for phase 2 construction. Phase 2 will stand on the shoulders of a successful phase 1 ramp-up and together with Artec Aqua we expect to realize significant efficiency gains while at the same time being able to continue optimizing the facility.”

The Heads of Terms further sets out the main commercial terms to be reflected in a final design and construction agreement between the parties. Capex for phase 2 is currently estimated to NOK 1.3 – 1.4 billion, reflecting both copy effects from phase 1 as well as general inflation and increased raw material prices, with final capex target expected to be set in 2H 2022.

The final design and construction agreement is expected to be effectuated during first half of 2022 and will include financing reservations providing Salmon Evolution with the necessary flexibility to align the phase 2 build out with the Company’s overall financing plan.