RIVCO AUSTRALIA LTD — Fund Information / Factsheet 2019

May 8, 2019

==> picture [112 x 19] intentionally omitted <==

----- Start of picture text -----

ASX CODE (Shares) D20
Shares on Issue (April) 118,813,521
----- End of picture text -----

The primary investment objective of Duxton Water is to generate annual income through capitalising on the increasing demand for scarce water resources. Duxton Water derives its income from a diversified portfolio of Australian Water Allocations and Water Entitlements.

==> picture [548 x 562] intentionally omitted <==

----- Start of picture text -----

NET ASSET VALUE PER SHARE Entitlement Portfolio
Value by Region
Duxton Water’s NAV as at 30 April 2019 was $1.50 per share.
The after tax NAV figure takes into account the provision for deferred tax on set-up costs and estimates 16%
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 assets and 12%
expects to maintain its low entitlement turnover ratio. The NAV excluding tax provisions for unrealised
capital gain is $1.64 per share. NAV is calculated based on an independent monthly portfolio valuation 4% < 1%
performed by Aither Pty Ltd (“Aither”).
68%
NET ASSET VALUE PER SHARE – SINCE INCEPTION
March
Dividend 2.6 cents
@100% Franked
Murray Lachlan
1.500 August Murrumbidgee Mallee
Dividend 2.5 cents Goulburn
1.450
@ 75% Franked
1.400 April April
1.3001.350 Dividend 2.3 cents November Dividend 2.4 cents @ 60% Franked Placement10.1 million Water Portfolio
1.250 @ 75% Franked 7.5 millionOctober 10.8 millionNovember Diversification
1.200 May & June Insto Offer Retail Offer
1.150 March Options Exercised 16.4 million
1.100 1.7 million
1.050 Options Exercised
1.000
35%
0.950
65%
EARNINGS PER SHARE
Unleased Leased
YTD * 2018 2017 Inclusive of contracted leases, commencing
1 July 2019, the leased portfolio is 41%.
3.4 cents 8.5 cents 3.2 cents
YTD (Year to Date) for the period of 1 Jan 2019 to 30 Apr 2019.
PERFORMANCE Water Security
Breakdown
1 Month 3 Months 6 Months 12 Months Inception
1%
1.47% 4.06% 12.87% 26.99% 52.56%
These figures are based on NAV movements and include franked dividends for the period. 25%
INVESTMENT UPDATE
The Company is pleased to advise that it has successfully completed a share Placement which raised
AUD$15 million at an issue price of AUD$1.48, increasing total shares on issue to 118.8 million. There is 74%
also a Share Purchase Plan (“SPP”) in place which enables eligible shareholders to purchase up to
AUD$15,000 of new shares at AUD$1.48/share, a price in line with the NAV at 31 March 2019. The funds
from these capital raisings will be used to continue to acquire water entitlements and cover costs
associated with the Placement and SPP. Excess funds, if any, will be used to pay down debt, and for High security General security
general working capital requirements.
30/09/2016 31/11/2016 31/01/2017 31/03/2017 31/05/2017 31/07/2017 30/09/2017 30/11/207 31/01/2018 31/03/2018 31/05/2018 31/07/2018 30/09/2018 30/11/2018 31/01/2019 31/03/201930/04/2019
----- End of picture text -----

==> picture [114 x 176] intentionally omitted <==

----- Start of picture text -----

Water Security
Breakdown
1%
25%
74%
High security General security
Groundwater Supplementary
----- End of picture text -----

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

ASX CODE (Shares) D20 Shares on Issue (April) 118,813,521

At 30 April 2019, Duxton Water Ltd is invested in approximately $239.4 million of water assets with the remainder of the portfolio held in cash and net current assets. The Company currently has approximately 1,648 ML ($4.4 million) of water entitlements in its acquisition pipeline at 30 April 2019.

Below average rainfall was received through the key agricultural regions along the Murray Darling Basin over the month and total inflows into the Murray system remain below the long-term average. The volume of water available in active storages within the total Murray Goulburn system of 34%, is 19% lower than the same time last year, and 30% lower than in April 2017. Volumes within the northern Basin of 8% are now below the lowest levels experienced during the Millennium Drought (9%).

Lake Eildon and the Hume reservoir continue to be drawn down to support irrigation demand and have reduced by a combined ~296GL over the month and are now at ~37% and ~15% capacity respectively.

which will help support agricultural production in the new water year. Duxton Water is now examining its strategic positioning for the close of this water year and the opening of the new water year.

ENTITLEMENT MARKET

Duxton Water Ltd 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. At 30 April 2019 the Company holds ~69,700 ML of entitlement across 19 different asset types and classes.

Ongoing maturity of permanent plantings has seen greater 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.

Duxton Water continues to support its customers as their focus turns towards the new water year. Duxton Water provides a range of risk management tools such as leases and forward allocation contracts

==> picture [391 x 270] intentionally omitted <==

Interstate Water Trading Zones

==> picture [95 x 186] intentionally omitted <==

----- Start of picture text -----

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
----- End of picture text -----

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 (April) 118,813,521

LEASES

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

•  3.5% in NSW Murray 11 HS (~21.1% of portfolio)

•  3.3% in NSW Murrumbidgee 13 HS (~8.7% of portfolio)

•  5.5% in SA Murray 3 HS (~8.7% of portfolio)

•  2.9% in NSW Murray GS (~15.0% of portfolio)

NORTHERN BASIN

No notable movements were recorded in the northern basin.

ALLOCATION MARKET

Increasing demand for allocation has seen prices increase throughout April to $600/ML, up from $500/ML in March. This demand stems from irrigators as they balance the overuse within their accounts, fertigate and strengthen their water security by purchasing allocation to carry over into the new water year. Small pockets of rainfall have provided little relief going into the new water year.

Allocation pricing within the Lachlan Valley decreased slightly from $350/ML to $325/ML.

Duxton Water has entered into 2 further leases in April which will commence in the new water year (1 July 2019), increasing the leased proportion of the portfolio to 41% (based off current portfolio valuations), with a weighted average lease expiry of 3.9 years. As new capital was continually deployed into the acquisition of further water entitlements, the leased portion of the portfolio has continued to dilute. Increased interest for longer term water supply solutions has seen the yields on leases better align with the Company’s targets against the back-drop of increasing water entitlement values. The Company is currently in discussion with irrigators and expects to enter into further leases commencing 1 July 2019, increasing the proportion of the portfolio under lease to 55% - 60% at their commencement.

DIVIDENDS

The Company is pleased to have paid its most recent dividend of 2.6 cents (fully franked) on 27 March 2019.

Given the current allocation market conditions, and demand for water entitlement leasing, the Company has reaffirmed its targeted dividend of 2.7 cents ($0.027), fully franked, to be paid in September 2019.

The Board maintains its commitment to providing our shareholders with a bi-annual dividend. It is also targeting a fully franked final dividend of 2.8 cents ($0.028), payable in March 2020.

DAILY INFLOWS TO THE MDB

==> picture [405 x 213] intentionally omitted <==

----- Start of picture text -----

Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) - 5 day rolling average
100,000
80,000
2017-18
60,000
2018-19
40,000
Long term
average
20,000
0
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
ML/day
----- End of picture text -----

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

ASX CODE (Shares) D20 Shares on Issue (April) 118,813,521

STORAGE LEVELS IN MAJOR DAMS

==> picture [265 x 172] intentionally omitted <==

----- Start of picture text -----

Total Murray Goulburn 34% 53%
Lake Eildon 37% 56%
Menindee Lakes 1% 14%
Lake Victoria 26%29%
Hume 15% 32%
Dartmouth 63% 89%
Total Murrumbidgee 28% 45%
Blowering 27% 47%
Burrinjuck 30% 40%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2019 2018
----- End of picture text -----

CHANCE OF ABOVE-AVERAGE RAINFALL MAY – JULY

==> picture [11 x 137] intentionally omitted <==

==> picture [15 x 119] intentionally omitted <==

----- Start of picture text -----

80
75
70
65
60
55
50
45
40
35
30
25
20
Chance of exceeding median rainfall (%)
----- End of picture text -----

==> picture [235 x 123] intentionally omitted <==

MARKET UPDATE & OUTLOOK

Key agricultural regions through the Basin remain hot and dry as they await rainfall from the autumn break. Little to no rainfall has been recorded through the major horticultural regions downstream of the river, making it one of the driest starts to the year on record as long-term drought conditions remain. These conditions have contributed to reduced levels of lower layer soil moisture and resulted in continued below average inflow into the major storages. Water storage levels continue to fall, with total water storages in the northern MDB at 8% and 43% in the southern, compared to 29% and 60% respectively this time last year.

SA’s Department for Environment and Water have announced that opening allocations for SA high security entitlements could be as low as 14%, which would be the lowest levels since the 2009-2010 Millennium Drought. The extreme dry conditions have prompted the Department to issue the early warning for irrigators to prepare for the worst. The NSW and VIC authorities will provide further estimates regarding opening water availability and allocations on the 15th of May.

The BoM’s recent outlooks forecast a 60% - 80% chance of below average rainfall in May across the key agricultural regions of the MDB suggesting a weak or late autumn break. Their temperature outlook is forecasting an 80% - 90% chance of higher than average temperatures alongside continued low streamflows.

BoM’s El Niño-Southern Oscillation outlook remains at ‘Alert’ as the Pacific Ocean continues to warm, forecasting a 70% likelihood of an El Niño developing in May. Six of the eight surveyed climate models suggest El Niño thresholds being exceeded through til July. The Indian Ocean Dipole is currently neutral with three of the six surveyed climate models forecasting a positive IOD will form towards the end of winter. El Niño’s typically results in below average rainfall and above average temperatures across eastern Australia. A positive Indian Ocean Dipole event typically reduces winter rainfall in southern Australia and can further exacerbate the effects of an El Niño when in phase.

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