RIVCO AUSTRALIA LTD — Net Asset Value 2018

Jun 11, 2018

$1.23

Net Asset Value per Share

DUXTON WATER LIMITED Monthly Update – 31 May 2018

DUXTON WATER

ASX Code (Shares)	D2O
Shares on Issue	86,125,006

ENTITLEMENT PORTFOLIO VALUE BY REGION

==> picture [129 x 173] intentionally omitted <==

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

1% 0% 1%
8%
9%
5%
76%
Murray Goulburn
Murrumbidgee Lachlan
Mallee Loddon
----- End of picture text -----

WATER PORTFOLIO DIVERSIFICATION

==> picture [137 x 149] intentionally omitted <==

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

45%
55%
Leased Unleased
----- End of picture text -----

WATER SECURITY BREAKDOWN

==> picture [137 x 146] intentionally omitted <==

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

2% 0%
22%
76%
HS GS BORE SUPP
----- 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.

NET ASSET VALUE PER SHARE

Duxton Water’s NAV as at 31 May 2018 was $1.23 per share.

The 31[st] May NAV is reflective of 13,030,723 Shares issued upon the excise of $1.10 Options in May. Further shares were issued in early June which will be reflected in the June Monthly Update. In all approximately 28% of issued Options were excised prior to their expiry on the 31[st] of May. The after tax NAV figure takes into account the provision for deferred tax on set-up costs and estimates of net tax provisions that may arise should the entire portfolio be disposed of on the above date. NAV is calculated based on an independent monthly portfolio valuation performed by Aither Pty Ltd (“Aither”).

NET ASSET VALUE PER SHARE – SINCE INCEPTION

==> picture [331 x 167] intentionally omitted <==

PERFORMANCE

GAIN/LOSS

1 Month*	-0.35%
3 Months	2.17%
6 Months	4.45%
12 Months	13.07%
Inception	15.28%
Inception (+ franked distributions Nov & April)	20.56%

*Exercised of ~ 13m Options at $1.10 resulted in a dilution of Net Asset Value per Share from April’s $1.24/share

MARKET UPDATE

Market Summary

Storage levels of major dams within the Murray Darling Basin (MDB) increased by just 0.43% through May. Total MDB storage levels are 19% lower than they were at the end of May 2017.

As we move towards the 18/19 Water Season the lower storage volumes and drier forecast conditions are pointing towards significantly lower water availability than seen throughout the 17/18 Water Season.

High Security Entitlements in South Australia Murray, NSW Murray and Murrumbidgee have had their opening allocations confirmed at 100%, 97%, & 95% respectively. Victorian High Security Entitlements may open lower based on current conditions. Victorian Murray and Goulburn High Security Entitlements will open at least 40% and 20% respectively with resource improvements occurring as further water becomes available.

Southern Basin

The Hume and Dartmouth reservoirs closed the month at 36% and 89% of capacity respectively. Entitlement demand remained strong. NSW Murrumbidgee HS (8.06% of portfolio) and GS (0.77% of portfolio) increased by 8.5% and 5.3% through May.

Temporary water continued to increase as irrigators purchased to cover overuse and for carryover. Prices in both the Murray and Murrumbidgee have increased to $200/ML at the end of May (season peak). Forward allocation prices for 18/19 are at $215/ML in the Murray and $250/ML in the Murrumbidgee.

Northern Basin

A further 6.3% increase in Lachlan General Security Entitlement Values was achieved on top of last months uplift of 7% (6.3% of portfolio).

DUXTON CAPITAL (AUSTRALIA) PTY LTD // DUXTON HOUSE, 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 // (+61) 8 8130 9500

$1.23

Net Asset Value per Share

DUXTON WATER LIMITED

Monthly Update – 31 May 2018

DUXTON WATER PORTFOLIO – SMDB EXPOSURE

INVESTMENT UPDATE

==> picture [224 x 166] intentionally omitted <==

Permanent Water Acquisitions and Divestments

At 31 May 2018, Duxton Water is invested in approximately $105.3 million of water entitlements with the remainder of the portfolio held in cash and net current assets. As previously advised the company has used a debt facility to acquire entitlement, preempting the capital inflow expected from Option take up. As a result of this it expects little to no income dilution from the capital injection. Duxton Water holds contracts over a further $11 million of water entitlements at the 31 May 2018.

Temporary Water Sales

Duxton Water presently holds approximately 5.5GL of unleased water allocations. The Company has sold down water allocations as the temporary water market strengthened toward the end of the water year. The Company has positioned its allocation holding to take advantage of stronger pricing into the new water year. The allocation sales to date for 2018 amount to 33,033 ML.

Leases

No new leases were entered into in May.

55% of the Company's portfolio is leased with a weighted average yield of 6.20% and a weighted average lease duration of 5.10 years.

INFLOWS TO THE MDB

==> picture [238 x 169] intentionally omitted <==

Dividends

In line with the company's goals of paying a dividend to shareholders biannually, on the 18[th] April 2018 the company paid its second dividend to its shareholders of 2.4 cents per share payable in Australian dollars. The dividend was franked to 60% for Australian taxation purposes.

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.

MARKET OUTLOOK

The latest Bureau of Meteorology outlooks continue to suggest a drier winter with a below-average chance of median rainfall over the next quarter along with high probability of above average temperatures within the Southern Murray Darling Basin ( see chart below ). Coupled with the lower inflows observed through the 2017/2018 water year (chart to the right) water availability may be significantly lower than this time last year. At this stage market indications are for high temporary water prices through the 2018/2019 water year than seen through the current year.

Storage Levels

==> picture [248 x 122] intentionally omitted <==

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

The chance of above-median rainfall for June – August 2018
----- End of picture text -----

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 CAPITAL (AUSTRALIA) PTY LTD // DUXTON HOUSE, 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 // (+61) 8 8130 9500