RIVCO AUSTRALIA LTD — Fund Information / Factsheet 2019

Nov 11, 2019

ASX CODE (Shares) D20 Shares on Issue (October) 120,802,101

The primary investment objective of Duxton Water is to build a portfolio of permanent water entitlements and utilise this portfolio to provide flexible water supply solutions to our Australian farming partners. The Company generates a return by offering irrigators a range of supply solutions including long term entitlement leases, forward allocation contracts and spot allocation supply.

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NET ASSET VALUE PER SHARE Entitlement Portfolio
Value by Region
Duxton Water’s NAV at 31 October 2019 was $1.72 per share.
The after tax NAV figure takes into account the provision for deferred tax on set-up costs and 12%
estimates of net tax provisions that may arise should the entire portfolio be disposed of on the above
date. The Company does not expect to trigger these tax provisions through the turnover of these 14%
assets and expects to maintain its low entitlement turnover ratio. The NAV excluding tax provisions
<5%
for unrealised capital gain is $1.95. NAV is calculated based on an independent monthly portfolio <1%
valuation performed by Aither Pty Ltd (“Aither”).
69%
NET ASSET VALUE PER SHARE – SINCE INCEPTION
September
1.750 Dividend 2.7 cents
1.700 @100% Franked Murray Lachlan
March
1.650 Dividend 2.6 cents Murrumbidgee Mallee
1.600 @100% Franked Goulburn
1.550
1.500 August
Dividend 2.5 cents Water Portfolio
1.4001.450 April @ 75% Franked April Diversification
Dividend 2.4 cents 10.1 million
1.350 November
@ 60% Franked Placement
1.300 Dividend 2.3 cents
@ 75% Franked October November
1.250 7.5 million 10.8 million
1.200 May & June Insto Offer Retail Offer May
16.4 million 2.45 million shares
1.150 March Options Exercised SPP 36%
1.100 1.7 million
1.050 Options Exercised
64%
1.000
PERFORMANCE Unleased Leased
1 Month 3 Months 6 Months 12 Months Inception
6.93% 12.59% 16.96% 31.55% 76.37%
These figures are based on NAV movements and include franked dividends for the period. Water Security
Breakdown
INVESTMENT UPDATE
<2%
At 31 October 2019, Duxton Water Ltd is invested in approximately ~$321.3 million of water assets with the 19%
remainder of the portfolio held in cash and net current assets. The Company has approximately 2,032ML
($10.6 million) of water entitlements in its acquisition pipeline at 31 October 2019.
The uplift in the value of the Company’s water assets portfolio is reflective of market pricing flowing
through to the independent valuation of the portfolio and a number of strategic entitlement acquisitions
through October. Irrigators collectively own the vast majority of entitlements on issue across the SMDB and 79%
as such continue to be the greatest beneficiaries of increases seen in water entitlement values.
The Company funded these strategic acquisitions through an extension to its secure loan facility with NAB.
The Murray Darling Basin Authority (MDBA) has continued the movement of stored water from the HS GS Bore Supp
Dartmouth Dam through the Murray system to meet irrigation demands. As we move into November
30/09/2016 31/11/201631/01/201731/03/201731/05/201731/07/201730/09/2017 30/11/20731/01/201831/03/201831/05/201831/07/201830/09/201830/11/201831/01/201931/03/2019 31/05/201931/07/201931/09/201931/10/2019
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DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

ASX CODE (Shares) D20 Shares on Issue (September) 120,802,101

we move out of the main inflow period and into summer storage drawdown. Current volume of water available within the MurrayGoulburn system is 42% of storage capacity levels; 14% lower than 12 months ago. Northern basin storage levels are currently 7%, 17% lower than 12 months ago.

Given the lower storages and winter/spring inflows levels, the 19/20 water year is shaping up to be one of collective constrained supply. Even with resource improvements and the potential to see increased allocation in SA and VIC, carryover levels were significantly lower than seen in the 18/19 water year.

Duxton Water continues to support its irrigation farming partners into the 19/20 water year. This involves the provision of leases to over 50 family farming and corporate businesses.

The Company continues to actively manage its allocation holding to be able to deliver on spot allocation sales, meet its obligation for the provision of forward allocation sales and to deliver on new entitlement leasing arrangements. With the continuing dry conditions, visible water supply through the provision of these products is a critical tool that irrigators use to risk manage their water requirement. In offering these products, the Company supports market liquidity and risk management options for our irrigation partners.

of NSW Murray high security entitlement. Having been previously used for industrial purpose, the acquisition of these assets will support Duxton Water’s capability to deliver further water supply to the Company’s agricultural partners.

Ongoing maturity of permanent plantings is continuing to increase water demand from high value crop industries such as almonds and citrus. Demand for long-term water security such as high security entitlement ownership and long-term leases continues to increase. The Company’s view in this regard has been further supported by a new report released by the Victorian Government (www.waterregister.vic.gov.au/) which indicates that demand from horticultural industries is estimated to be ~55% greater at crop maturity than ABARES have previously estimated*.

Aither Pty Ltd values the Duxton Water Ltd portfolio on a monthly basis on a dry (without allocation) equivalent basis. There were notable movements in values and are shown below:

SOUTHERN BASIN

•  19.4% in NSW Murray 11 HS (~20.7% of portfolio)

•  7.7% in NSW Murray 10 HS (~6.8% of portfolio)

•  7.5% in Vic 6 Murray HR (~11.0% of portfolio)

•  7.0% in Vic 1A Goulburn HR (~12.3% of portfolio)

•  6.9% in Vic 7 Murray HR (~11.4% of portfolio)

ENTITLEMENT MARKET

Duxton Water is engaged in building a targeted portfolio of water entitlements predominantly across the southern Murray Darling Basin. The Company has invested in both surface and ground water assets and at 31 October 2019, the Company holds approximately 80,642 ML of water entitlements across 20 different asset types and classes. During the month of October, the Company contracted and settled a number of strategic acquisitions including 3,000ML

•  4.8% in SA 12 Murray HS (~8.2% of portfolio)

NORTHERN BASIN

There was no change in northern pricing.

* https://waterregister.vic.gov.au/images/documents/Water-Supply-and-DemandReport_Aither_FINAL.pdf

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Interstate Water Trading Zones

• 1 – Greater Goulburn 3 – Lower Goulburn 4a – Part Campaspe 4c – Lower Campaspe 5a – Part Loddon 6 – Vic Murray above Barmah Choke 6b – Lower Broken Creek 7 – Vic Murray from Barmah Choke to SA Border 10 – NEW Murray above Barmah Choke 11 – NSW Murray below Barmah Choke 12 – South Australia Murray 13 – Murrumbidgee 14 –Lower Darling 15 – Lachlan 16 – Lower Lachlan Groundwater 17 – SA Mallee Groundwater Murray Darling Basin River

DUXTON WATER PORTFOLIO – SMDB EXPOSURE

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

ASX CODE (Shares) D20 Shares on Issue (September) 120,802,101

ALLOCATION MARKET

Allocation market pricing rose through October on the back of increased irrigation demand and a deteriorating allocation supply outlook. Inflows into the southern Murray Darling Basin have been significantly below average through the 2019 winter and spring. With the fragmentation of the southern Murray Darling allocation market, pricing remains significantly higher in the below choke Murray at $950-$990/ML with pricing across the Murrumbidgee, Goulburn and above choke Murray trading at $650-$750/ML.

LEASES

Duxton Water executed three further lease agreements through October, backdated to commence on 1 July 2019. This saw the leased portion of the water entitlement portfolio increase to ~64%. This represents ~80% of the Company’s high security entitlement holding. The current weighted average lease expiry

(WALE) remains at 3.45 years and the company continues to work towards its long-term goal of having 70-80% of the portfolio under lease.

DIVIDENDS & BUY BACK

On 10 September 2019, the Company announced a share buyback. As of 31 October 2019, the Company has purchased 762,805 shares at an average price of $1.40/share. The Board believes the purchase of the Company’s shares at the current discount to NAV is in the interest of all shareholders.

The Board maintains its commitment to providing our shareholders with a bi-annual dividend and has reaffirmed a target of paying a fully franked final dividend of 2.8 cents ($0.028) in March 2020. With the increase in forward-looking lease revenue, the Company is now targeting a fully franked interim dividend of 2.9 cents ($0.029), payable in September 2020.

DAILY INFLOWS TO THE MDB

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Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) -
5 day rolling average
260,000
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2016-17 2017-18 2018-19 2019-20 Long term average
I-Jun I-Jul I-Aug I-Sep I-Oct I-Nov I-Dec I-Jan I-Feb I-Mar I-Apr I-May I-Jun
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DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

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ASX CODE (Shares) D20
Shares on Issue (September) 120,802,101
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STORAGE LEVELS IN MAJOR DAMS

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Total Murray Goulburn 43% 57%
Lake Eildon 46% 60%
Menindee Lakes 1% 7%
Lake Victoria 74%
66%
Hume 39% 47%
Dartmouth 55% 80%
Total Murrumbidgee 47%51%
Blowering 56%56%
Burrinjuck 34% 42%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2019 2018
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CHANCE OF ABOVE-AVERAGE RAINFALL DECEMBER 2019 – FEBRUARY 2020

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80
75
70
65
60
55
50
45
40
35
30
25
20
Chance of exceeding median rainfall (%)
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MARKET UPDATE & OUTLOOK

Daytime temperatures are very likely to be above average across Australia over the next 3 months. Soil moisture remains significantly below average across key agricultural regions through the Basin as a result of below average rainfall and high temperatures.

The respective state natural resource managers have released further allocations through October and early November with SA Murray moving to 94% up from 87%, Victorian Murray HR to 42% and Goulburn HR to 53%, both up from 38% and 48% allocation respectively. NSW Murrumbidgee HS entitlements remain at 95% allocation, while NSW Murray HS remains at 97%. Murrumbidgee and Murray general security entitlements, which are currently 6% and 0% respectively, look likely to deliver no further allocation for the remainder of the 19/20 water year.

The BoM’s recent outlook forecast indicates average to drier than average conditions for much of Australia, with a 65-75% chance of not exceeding the median rainfall in November through to January across the key agricultural regions of the MDB. The SMDB is now beyond the peak inflow period with storages at a much lower level compared to this time last year.

A very strong positive Indian Ocean Dipole (IOD) is likely to continue well into December, several weeks longer than normal. A positive IOD typically means a hotter and drier spring over Central and Southern Australia. Australia is also likely to continue to be affected by a negative Southern Annular Mode with South Eastern Australia likely to see more dry and warm air from the inland and less cool air off the Tasman sea, leading to a lower chance of rainfall and increased chances of spring heatwaves.

VALUATION METHODOLOGY

Aither undertake a monthly valuation of the Duxton Water portfolio. Total assets of the Company are valued based on an assessment of fair market value. Aither has adopted the Australian Accounting Standards Board (AASB) 13 Fair Value Measurement definition of fair value. Further information can be found on www.duxtonwater.com.au

DISCLAIMER: This factsheet is prepared by Duxton Capital (Australia) Pty Ltd [ACN: 164 225 647; AFSL no. 450218] (“Duxton Capital (Australia)”). Duxton Capital (Australia) is the Investment Manager of Duxton Water Limited [ACN 611 976 517] (“Duxton Water”). This factsheet has been prepared for the purposes of providing general information only and does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities in Duxton Water. Information from this factsheet must not be issued in any jurisdiction where prohibited by law and must not be used in any way that would be contrary to local law or regulation. The terms of Duxton Water are set out in the prospectus of Duxton Water (“Prospectus”), and should there be any conflict between the terms set out in this factsheet and the Prospectus, the terms in the Prospectus shall prevail. The forecasts provided are based upon our opinion of the market as at this date and are subject to change, dependent on future changes in the market. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. Investments are subject to risks, including possible loss of principal amount invested. The value of shares/ units and their derived income may fall as well as rise. Past performance or any prediction or forecast is not necessarily indicative of future performance. No assurance is given that the investment objective or the targets will be met. This document does not constitute investment, tax, legal or any other form of advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. Investors should study all relevant information and consider whether the investment is appropriate for them. If you require investment or financial advice please contact a regulated financial adviser. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this presentation. The Duxton Group or its affiliates may hold positions in the securities referred. Where stocks are mentioned, it should not be construed that these are recommendations to buy or sell those stocks. You are not authorized to redistribute this document nor qualified to make any offer, representation or contract on behalf of Duxton Capital (Australia) or its affiliates. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by Duxton Capital (Australia) or its affiliates or any of their directors or employees. The information and opinions contained may also change. Copyright protection exists in this presentation. To the extent permitted by applicable law, none of the Duxton Group, their affiliates, or any officer or employee of the Duxton Group accepts any liability whatsoever for any direct or consequential loss arising from any use of this factsheet or its contents, including for negligence.

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500