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Mystery Surrounds Clean Seas Stock Jump

Successful spawning would have to be one of the more novel explanations for a share price run.
Pursuing the aquaculture Holy Grail of breeding southern bluefin tuna in captivity, Clean Seas Tuna said yesterday it was not aware of any undisclosed information that could be driving its share price higher. The stock almost doubled in value in 3 months.

But it did concede that the regular updates on its tuna breeding program “may be attracting renewed interest from investors". The next update was due on April 30, but a "please explain” from the Australian Securities Exchange prompted an early missive from directors.

Founder, chairman and controlling shareholder Hagen Stehr said yesterday the “continuing successful southern bluefin tuna spawning/larval rearing trial is a significant milestone in this company's achievements”.

If Clean Seas is successful in breeding tuna, it will be able to avoid strict quotas on wild catches and produce unlimited quantities of the prized southern bluefin tuna for overseas markets, particularly Japan.

Shares in Clean Seas, based at Port Lincoln, west of Adelaide, have doubled from 38c at the start of the year to 75c yesterday, as the trial updates have rolled in.

But the shares, recently added to the All Ordinaries index, remain a long way short of the $2.10 highs struck in 2007. Since then, the company prematurely announced the world-first hatching of live and active larvae - the larvae died. Clean Seas, which also sells kingfish and mulloway, has also continued to run in the red, losing $6.6 million in the December half-year despite a 46 per cent rise in sales.

It is the breeding trials that have excited shareholders. Two weeks ago, the company said the trials were “consistently achieving high levels of quality fertilized eggs and larvae for propagation”, but cautioned investors about risks inherent in “this complex research and development phase”.

The company is hopeful of producing the first farmed tuna for commercial markets by 2011.