LARK DISTILLING CO. LTD — Capital/Financing Update 2018

Feb 27, 2018

==> picture [595 x 192] intentionally omitted <==

ASX Release

28 February 2018

• Significant expansion of whisky production planned for Australian Whisky Holdings award winning Nant Estate

• Stage 1 expansion requires small investment to increase production by 75% to 14 barrels per week (~700 barrels/year) commencing July 2018

• Increased production provides significant uplift in inventory value during 5 year maturation cycle

Australian Whisky Holdings Limited (ASX: AWY) is pleased to announce that it is finalising plans for the staged expansion of the whisky distilling operations at its 100% owned Nant Whisky Estate in Bothwell Tasmania. Nant Whisky Estate, which comprises 300 pristine acres in the Highlands of Tasmania, produces Tasmania’s only multi award-winning Single Malt Highland Whisky.

==> picture [391 x 213] intentionally omitted <==

The existing Nant Estate facilities currently produce 8, 100 litre barrels of single malt whisky per week or approximately 400 barrels per year. In the first stage of expansion,

==> picture [594 x 41] intentionally omitted <==

AUSTRALIAN WHISKY HOLDINGS LIMITED Level 1, 283 George Street, Sydney, NSW 2000 ASX AWY ABN 6210 4600 544 W australianwhiskyholdings.com P +61 (2) 8188 1491

==> picture [595 x 192] intentionally omitted <==

AWY intends to utilise the current Nant infrastructure with minor reconfiguration of the existing stills to improve efficiency and increase production to 14, 100 litre barrels per week or approximately 700 barrels per year or a 75% increase. The expansion should take approximately three to four months and add significantly to Nant inventory from FY19 onwards. The estimated capital expenditure required to complete the production expansion is approximately $450,000 to $500,000 delivering a significant return on investment.

Table 1 below outlines the indicative level of inventory assuming the current rate of production of 8 barrels per week and Table 2 outlines the indicative level of inventory assuming the proposed expansion to 14 barrels per week is implemented from 1 July 2018.

Table 1

Nant Estate 100L barrel age/wholesale value profile & weighted wholesale value of mature barrels $(m)

==> picture [417 x 273] intentionally omitted <==

----- Start of picture text ----- 3,000 $50.02,500$40.0401 416 4162562,000 383401 416 416 416 $30.01341,500 366 401 416 416 416 416134$20.03141,000 401 416 416 416 416 416134166 401 416 416 416 416 416 416 $10.0500 134401 416 416 416 416 416 416 4160 $0.0FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY250-1 years 1-2 years2-3 years 3-4 years4-5 years Total Mature for sale (including buybacks)Wholesale Value of Matured Barrels ($m) Weighted Wholesale Inventory Value $(m)Barrels $ (M)----- End of picture text -----

==> picture [594 x 41] intentionally omitted <==

AUSTRALIAN WHISKY HOLDINGS LIMITED Level 1, 283 George Street, Sydney, NSW 2000 ASX AWY ABN 6210 4600 544 W australianwhiskyholdings.com P +61 (2) 8188 1491

==> picture [595 x 192] intentionally omitted <==

Table 2 Nant Estate 100L barrel age/wholesale value profile & weighted wholesale value of mature barrels $(m)

==> picture [417 x 263] intentionally omitted <==

The second stage of the planned expansion involves the construction of an additional distillery on site at the Nant Estate. AWY has already acquired two additional stills which were built in Scotland to a replica of the existing still on site. These stills are housed on site in 40ft containers. Once commissioned this will enable Australian Whisky Holdings to operate distilling 24 hours a day in three 8-hour shifts. Assuming operations over a 5-day week, production can be increased to 30 x 100 litre barrels per week, or 1,500 barrels per year, in effect more than doubling the expanded stage 1 production again. Subject to future sales, AWY will have the flexibility to operate over a 7-day week and increase production to 42 x 100 litre barrels per week.

==> picture [594 x 41] intentionally omitted <==

AUSTRALIAN WHISKY HOLDINGS LIMITED Level 1, 283 George Street, Sydney, NSW 2000 ASX AWY ABN 6210 4600 544 W australianwhiskyholdings.com P +61 (2) 8188 1491

==> picture [595 x 192] intentionally omitted <==

Final costings and timing for the second stage expansion are still being assessed but the Board’s view is that the project can be completed for approximately $2.5 million.

All expansions are subject to securing funding and AWY are assessing various financing options for the expansions.

With the Nant Estate operations now stabilised under the management of AWY and the barrel buyback programme progressing to increase inventory available for sale, the focus of AWY management is now to increase future production of single malt whisky.

The recent market update provided by AWY on 6[th] December 2017 provided indicative production information, based on the current level of production. Once completed the stage 1 expansion will result in additional inventory of single malt whisky from July 2018.

Yours faithfully,

==> picture [153 x 45] intentionally omitted <==

Gary Stewart Company Secretary

==> picture [117 x 169] intentionally omitted <==

==> picture [118 x 171] intentionally omitted <==

==> picture [118 x 174] intentionally omitted <==

==> picture [594 x 41] intentionally omitted <==

AUSTRALIAN WHISKY HOLDINGS LIMITED Level 1, 283 George Street, Sydney, NSW 2000 ASX AWY ABN 6210 4600 544 W australianwhiskyholdings.com P +61 (2) 8188 1491