MURRAY COD AUSTRALIA LIMITED — Investor Presentation 2019

Feb 25, 2019

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ASX Code: MCA
Murray Cod Australia Ltd
LIFE TASTES BETTER OUR WAY
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Disclaimer

This presentation has been prepared by Murray Cod Australia Limited (the “Company”). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents of this presentation, or any information provided in connection with it, as financial advice, financial product advice or advice relating to legal, taxation or investment matters.

No representation or warranty (whether express or implied) is made by the Company or any of its officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in connection with it, or any omission from this presentation, nor as to the attainability of any estimates, forecasts or projections set out in this presentation. This presentation is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the presentation and make your own independent decisions about the affairs, financial position or prospects of the Company. The Company reserves the right to update, amend or supplement the information at any time in its absolute discretion (without incurring any obligation to do so). Neither the Company, nor its related bodies corporate, officers, their advisers, agents and employees accept any responsibility or liability to you or to any other person or entity arising out of this presentation including pursuant to the general law (whether for negligence, under statute or otherwise), or under the Australian Securities and Investments Commission Act 2001, Corporations Act 2001, Competition and Consumer Act 2010 or any corresponding provision of any Australian state or territory legislation (or the law of any similar legislation in any other jurisdiction), or similar provision under any applicable law. Any such responsibility or liability is, to the maximum extent permitted by law, expressly disclaimed and excluded. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in the Company.

Future Matters | This presentation contains reference to certain intentions, expectations, future plans, strategy, revenue forecasts and prospects of the Company. Those intentions, expectations, future plans, strategy, revenue forecasts and prospects may or may not be achieved and may be forward looking statements. They are based on certain assumptions, which may not be met or on which views may differ and may be affected by known and unknown risks. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company, or any of its directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved. Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to be materially different from those expected, planned or intended, recipients should not place undue reliance on these intentions, expectations, future plans, strategy, revenue forecasts and prospects. The Company does not warrant or represent that the actual results, performance or achievements will be as expected, planned or intended.

All figures included in this presentation are in AUD$ unless otherwise stated.

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TABLE OF CONTENTS

A Unique Opportunity 4 Differences as a Company 5 Land Based Production 6 Land Based Model 7

AQUNA a Luxury Product 9 What is AQUNA Cod 10 AQUNA Cod Suited to Aquaculture 11

Major Farmed Species in Australia 12 Barriers to Entry 13

Limited Competition 14 Location Advantage 15 Global Luxury Food Brand 18 Smoked Fish – Sales and Margin 20 Product Differentiation 21 MCA – Investment Proposition 22 Business Model 23 Numbers – The Basics 24 Current Capitol

Structure 25 Numbers – Share Price History 26 Global Aquaculture Production 27 Research and Development 28 Summary 29 View of Our Operations 30 More of a View 31 View of Our Pen Systems 32 For More Information 33

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A UNIQUE OPPORTUNITY – LAND BASED AQUACULTURE

Climate Change, Global Population Pressure on oceans and declining wild fish stocks

Global demand for protein – especially for high quality fish protein

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Innovation via existing local infrastructure and a rare premium native fish

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WE HAVE 2 DISTINCT DIFFERENCES AS A LISTED AQUACULTURE COMPANY

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1. Land Based
Production Model
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2. Aquna Cod is one of the
world’s rarest luxury seafoods
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LAND BASED PRODUCTION

Land Based Model reduces costs and risk considerably

• No bad weather issues

• No Seals or Sharks

• Easy access on land vehicles and by foot

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• Risk issues are usually limited to one pond

• Very low water usage

• Fresh water does not rust our equipment as rapidly as salt water

• Rising ocean Temperatures not an issue

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LAND BASED MODEL

Lower Capital Requirements

• Lease model is ‘Capital Lite’

• Farmer builds the site including all earthworks, plumbing and electrical

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• Operating costs borne by us until fish are saleable – 18 months approx

• We operate the site

• We use our Pen Systems and fish stock

• 15 year leases

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LAND BASED MODEL

Environmental Risks Alleviated

• No waste water leaves the property

• Risk of disease transfer to native populations almost non existent

• Purpose built ponds are not near any native waterways

• Nutrient enriched water irrigates adjoining crops or pastures

• No fish can escape

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AQUNA COD IS NOT A COMMODITY IT’S A LUXURY FOOD PRODUCT

Will therefore always command higher margins

Top chefs (Domestic and International) have told us it’s the “best freshwater fish in the world”

Example of Rare Species: Patagonian Toothfish: Wild catch 25,000 tonnes per annum from Antartica retails at US$34/lb or AUD$105 per kg

No commercial fishing allowed

Does not grow anywhere else in the world or Australia (just the Murray Darling Basin)

No other farms of any significance

One of the rarest and best tasting fish in the world

Quality influenced by unique technology and IP used in production system

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WHAT IS AQUNA COD

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• One of the world’s largest freshwater fish

• Historically it was a Premium Table Fish

• It has a creamy white flesh with firm texture and mild taste (similar to Soon Hock)

• In 1880’s highly profitable commercial fisheries sprang up in the Murray-Darling Basin and Australia consumed estimated >500 tonnes per annum.

• By 1950’s wild catch was down to 311 tonnes and declined to less than 30 tonnes by late 1960’s and it became forgotten by Australian metropolitan consumers

• Currently listed a vulnerable species and commercial fishing of the species is prohibited in Australia

• Current growth in demand for our farmed cod is outstripping growth in supply

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AQUNA COD WELL SUITED TO AQUACULTURE

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High stocking density tolerance

Tolerance for handling and grading

Medium – fast growth rate (1kg in 12 month) Easy to wean to artificial diets

Have relatively broad water quality requirements Efficient food conversion (1.1 to 1)

Existing/latent domestic and export potential

Similar species to marine groupers and mandarin fish (Asian markets)

Existing R&D and extension networks and infrastructure in commercialisation of Murray Cod

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OTHER MAJOR FARMED SPECIES IN AUSTRALIA

Aquna Murray Cod – Premium White Flesh

Barramundi – White Flesh

Only exists in Murray Darling Basin of Australia - Grows nowhere else in the world

Widely Spread throughout Northern Australia and Asia

22,000 tonnes pa consumed in Australia alone* 2,000 tonnes pa wild caught

No wild catch to compete with

No other significant farms to compete with.

5,000 tonnes pa farmed in Australia

Wholesale price $23-$25/kg*

15,000 tonnes pa imported from South East Asia Wholesale price $8- $10/kg

• Based on HOG equivalent

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Salmon – Pink Flesh

Widely spread around Northern Hemisphere

60,000+ tonnes of production in Australia (Tasmania)

Large Wild Catch worldwide

Farmed in Northern and Southern Hemispheres (Norway alone produces est 1.2 million tonnes)

Wholesale price $12-$14 kg*

BARRIERS TO ENTRY

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Murray Cod is globally unique to Murray Darling River System. These fish grow in no other river system in the world

Commercial fishing in the river system is banned, listed by EPBC as Vulnerable*

• http://www.environment.gov.au/cgi-bin/sprat/public/publicspecies.pl?taxon_id=66633

Difficulty in sourcing brood stock

Ideal environmental growing conditions are limited to the Murray Darling basin.

Intellectual property of “cage/pond system” is unique

Limited spawning production facilities in existence

The region’s availability of good quality water and land suitable for dam construction make it unique.

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LIMITED COMPETITION

Market is in infancy stage with existing production limited to small scale private enterprises and “backyard” producers (Except for MCA)

It was estimated in 2018, aquaculture production of Murray Cod was less than 265 tonnes per annum in NSW*

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• http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0004/638068/aquaculture-production-report-2017-2018.pdf

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Quality and taste of Aquna cod is better than wild caught fish due to technology and innovation.

Re-introduction of Cod in Australia to raise market awareness is showing significant increases in demand by consumers

Unique IP

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LOCATION ADVANTAGE

Irrigation supply network of Murrumbidgee Irrigation Area (MIA)

Benerembah Irrigation District Wah Wah Irrigation District Towns Mirrool Irrigation Area Yanco Irrigation Area Storages or wetland Tabbita Irrigation District Murrumbidgee Irrigation Area Irrigation supply canals Wah Wah Stock & Domestic Area River or creek Major roads

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www.mirrigation.com.au

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LOCATION ADVANTAGE Where is the Murrumbidgee irrigation area?

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LOCATION ADVANTAGE MIA – INFRASTRUCTURE READY FOR AQUACULTURE

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GLOBAL LUXURY
FOOD BRAND
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We believe the best product comes from the best approach. We want to make an impact on peoples plates and their wider lives by inspiring a better way to deliver the future of food production.

Our premium taste Innovation always at our credentials are built core to ‘find better way’ on real substance

People will value a Our story is built around our product with integrity impact on planet earth

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GLOBAL LUXURY FOOD BRAND

3 Product Lines this year

Fresh Fish (not frozen)

Sashimi

Future Development

Fish Skin

• Cooked

Fish Fat -Cooking Product with high Omega fats Fish Stock

• Health Product

Hot Smoked

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SMOKED FISH – SALES GROWTH AND MARGIN

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High Fat Content with white flesh creates a luxury smoked product

Production outsourced now but Processing facility currently underway

Potential to take more than half our output

Europe smoked salmon 300,000 tonnes pa

US smoked salmon $350 million pa and growing 13% pa

There is very little high quality white fleshed smoked fish available in the world

Increase Margin over fresh fish

Establish Brand outside fresh fish

Logistics – 6 week shelf life in the fridge

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PRODUCT DIFFERENTIATION SAME MARKET ON SAME DAY IN MELBOURNE April 2017

Competitor’s Fish RAS Produced Fish.

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Aquna Cod MCA Pond Grown fish – Now Branded Aquna

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MCA - INVESTMENT PROPOSITION

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Luxury Product: highly High Growth: Green & sustainable:
sought after as a table fish Production capacity Grown in natural habitat,
by consumers and chefs 40 tonnes pa in 2017 now strong synergies with
over 1000 tonnes. Aiming irrigated agriculture,
Price premium: Higher for 10,000 tonnes before and low environmental
wholesale prices paid for 2030 footprint
Murray cod HOG
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Equivalent ($24kg/kg)
growing demand, high
profit margin and high
barriers to entry
HOG is generally referred to in the salmon industry meaning “head on gutted” fish. We sell whole fish including the gut at around $20 per kg
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BUSINESS
35mm Stock is kept in recirculated tanks Cages Sold
MODEL Hatchery Nursery with environment controlled until
to Contract
100 grams in size
Growers
Fingerlings
Fingerlings to sold to Contract
MCA ponds In 18 Mths 1.5-2Kg Growers for
for grow-out Murray Cod is grow-out est.
harvested by MCA @ $4 each
Distributor
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NUMBERS – THE BASICS

$18.00 - $22.00 per KG*

Premium Murray Cod Sale Price

$7.70 per KG Growing Cost

Processing & $1.50 per KG Selling Costs

AVERAGE SALE WEIGHT 1.66KG

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Current number of fish in stock 1.5
million
Current Pond Stock is 850,000 fish
Targeting 10 thousand tonnes by
2030
Adding Contract growers is not a
priorty as quality and consistency of
the brand is paramount
Economies of scale are continuing to
lower production cost
Next Development site to hold 1.6
million fish in ponds
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CURRENT CAPITAL STRUCTURE

NUMBERS

Deferred Current Market Cap Shares Options Consideration Shares approx. $70 million AUD on issue & Performance Rights TOTAL 392,659,015 90,350,000 41,428,571 Fully Diluted 524,437,586

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NUMBERS - SHARE PRICE HISTORY

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GLOBAL AQUACULTURE PRODUCTION

• Aquaculture 80 million tonnes 53%

• Wild Catch 71 million tonnes 47%

• Aquna Cod 10 thousand tonnes target

• Australia total Aquaculture production 97 thousand tonnes

Alaskan Pollock Catch 1.5 million tonnes

Australia’s entire production 97,000 tonnes

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• Source: State of World Fisheries an Aquaculture 2018 FOA of United Nations 9 Jul 2018

On a global scale Aquna cod will remain so scarce that it will always be a luxury food product with a premium price.

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RESEARCH AND DEVELOPMENT

Genetic Improvement

• Aquna Cod will be a sub species just like Wagyu beef or Angus beef

• Improve growth rates

• Improve fillet recovery

Stocking Densities

• have already moved from 2,500 to 4,000 fish per pen

• But Now Dynamic Stocking will improve throughput of existing infrastructure by as much as 2 to 3 times

Energy Efficiency

• Solar, better pumps and aerators, Stock management

Feed Production

• Currently using a feed designed for barramundi

• Our own ration will improve FCR and quality

Product Value Adding

• Fish Fat, skin products, fish stock

Fingerling Husbandry

• removing the bottleneck of a nursery

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SUMMARY

Global consumption of fish is rising while wild catch is falling. Aquaculture must grow!

Strong demand and premium pricing for the Aquna Cod.

Eco friendly & sustainable operations supported Government and Environmentalists.

Presently high profit margin business with high barriers to entry.

Huge growth potential for Aquna Cod with company now having proven its capacity to grow.

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VIEW OF OUR OPERATIONS

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Fish being Processed for market.

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Overhead view of our Bilbul Site

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Staff undertaking daily check on fish health and water quality.

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MORE OF A VIEW

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Mathew Ryan our Managing View of the cage systems we Director on the ponds. manufacture.

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Inside our nursery. We built most of it ourselves.

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A VIEW OF OUR PEN SYSTEMS IN ACTION

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FOR MORE INFORMATION Ross Anderson Chairman of Murray Cod Australia Phone +61 269 625 470 Email ross@auscod.com.au Website aquna.com

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