RIVCO AUSTRALIA LTD — Net Asset Value 2020

Jun 14, 2020

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ASX CODE (Shares) D20
Shares on Issue (May) 119,375,450
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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.

NET ASSET VALUE PER SHARE

Duxton Water’s NAV at 31 May 2020 was $1.60 per share.

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. The Company does not expect to trigger these tax provisions through the turnover of these assets and expects to maintain its low entitlement turnover ratio. The NAV excluding tax provisions for unrealised capital gain is $1.78. NAV is calculated based on an independent monthly portfolio valuation performed by Aither Pty Ltd (“Aither”).

NET ASSET VALUE PER SHARE – SINCE INCEPTION

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1.800
1.750
1.700 March
1.650 Dividend 2.6 cents
1.600 @100% Franked March
1.550 August Dividend 2.8 c@100% Frankedents
1.500 Dividend 2.5 cents September
1.450 April @ 75% Franked Dividend 2.7 cents@100% Franked
1.400 Dividend 2.4 cents @ 60% Franked April
1.350 10.1 million
1.300 November Placement
Dividend 2.3 cents October
1.250 @ 75% Franked 7.5 million
1.2001.150 March May & June 16.4 million Insto Offer 2.45 million sharesSPP May
1.100 1.7 million Options Exercised November
1.050 Options Exercised Retail Offer10.8 million
1.000
Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20
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PERFORMANCE*

Entitlement Portfolio Value by Region

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13%
14%
4%
69%
Murray Goulburn
Murrumbidgee Lachlan
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Water Portfolio
Diversification
37%
63%
Unleased Leased
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1 Month	3 Months	6 Months	12 Months	Inception
-3.14%	-7.28%	-6.89%	11.12%	69.03%

*These figures are based on NAV movements and include franked dividends for the period.

Water Security Breakdown

INVESTMENT UPDATE

At 31 May 2020, Duxton Water Ltd is invested in approximately $315.1 million of water assets with the remainder of the portfolio held in cash and net current assets. The Company currently has approximately 212ML ($0.94 million) of water entitlements in its acquisition pipeline at 31 May 2020.

Whist we have seen retracement in permanent entitlement values over the last couple of months, the value uplift experienced over the last 36 months reflects long-term drivers rather than the recent drought conditions. Irrigators have over the last 10 years significantly enhanced their marginal return per megalitre through both more efficient use of water and conversion to higher value commodities. At the same time, we have seen significant steps taken to return water to the environment with Government purchases of between 20-22% of entitlements that were previously available to the consumptive pool. The combined impact has seen stronger demand for a reducing available water supply and subsequent increased asset prices. Irrigators themselves have been the greatest beneficiaries from this capital appreciation as they collectively own the majority of water entitlement on issue in the market.

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1%
18%
81%
HS GS Bore
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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 (May) 119,375,450

May rainfall was 50% below the long-term average. However, despite the lower rainfall, River Murray system inflows for the month were well above average, with the Murray, Goulburn and Murrumbidgee storages seeing a welcome increase of 1,097GL collectively. The above average inflow was a result of a large rainfall event in late April over the upper catchments coupled with previous smaller rain events that had increased soil moisture levels, priming catchments for improved rainfall runoff. The Menindee Lakes saw a 151GL increase through May, and reached the projected 470GL of resource, however as this is below the 640GL MDBA control trigger, the majority of this volume is likely to be quarantined for operation of the Lower Darling and environmental flow over the next 12-18 months, and will deliver little addition resource to Murray irrigators. The current volume of water available within the Murray-Goulburn system is 40% of storage capacity levels; 5% higher than 12 months ago. Northern basin storage levels are currently 18%, 8% higher than 12 months ago.

Duxton Water continues to support its irrigating farming partners as they prepare for the 20/21 water year. This involves the provision of leases to over 70 family farming and corporate businesses. Irrigators attention has moved to balancing 19/20 water use and the emerging conditions and supply into 20/21 water year.

The Company actively manages its allocation holding in order to deliver on demand spot allocation sales, meet its obligation for the provision of forward allocation sales and deliver on new entitlement lease arrangements. With low storage levels, visible water supply through the provision of these products are a critical tool that irrigators use to risk manage their water requirement. In the offering of these products, the Company supports market liquidity and risk management options for our irrigation partners.

ENTITLEMENT MARKET

Duxton Water Ltd is engaged in building a targeted portfolio of water entitlements predominantly across the southern MDB. The Company has invested in both surface and ground water assets. At 31 May 2020, the Company holds approximately 83,740ML of water entitlements across 19 different asset types and classes.

Through May we have seen a further retracement in the value of the Company’s permanent portfolio on the back of relatively low levels of entitlement trade.

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

Ongoing maturity of permanent plantings has seen greater water demand from high value crop industries such as almonds and citrus. The Company remains engaged with a number of largescale producers as they plan and manage for increased water requirement over the next 2-3 years. The Company’s view is supported by analysis undertaken by the Victorian Government (www.waterregister.vic.gov.au/) which indicates that demand by the horticultural industries is estimated to be 55% greater at crop maturity than ABS 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 as shown below:

SOUTHERN BASIN

•  2.7% in NSW Murrumbidgee 13 GS (~4.7% of portfolio)

•  4.8% in VIC Goulburn 1A HR (~12.9% of portfolio)

•  4.3% in SA Murray HS (~8.1% of portfolio)

•  3.4% NSW Murray 11 HS (~20.6% of portfolio)

•  3.2% in VIC Murray 7 HR (~11.3% of portfolio)

NORTHERN BASIN

There was no change in northern pricing.

ALLOCATION MARKET

Allocation prices soften through early May however have rebounded somewhat through June on a movement in the rainfall outlooks by the BOM back toward more average rainfall conditions over key catchments from wetter previous forecasts through winter. Without significant above average rainfall to reset storages water supply may still be constrained through the 20/21 water year. As we come to the end of the water year, we have seen price parity across most systems. As of mid-June, allocation is trading between $250-270/ML.

Contracts for Forward allocation delivered in the 20/21 water year are currently completing at between $400-450/ML

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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

DUXTON WATER PORTFOLIO – SMDB EXPOSURE

17 – SA Mallee Groundwater Murray Darling Basin River

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

ASX CODE (Shares) D20 Shares on Issue (May) 119,375,450

LEASES

The leased portion of the water entitlement portfolio is ~63%. This represents ~75% of the Company’s High Security Entitlement holding. Approximately 66% of the Company’s entitlement portfolio and ~78% High Security portfolio is committed from 1 July 2020.

The current weighted average lease expiry (WALE) remains at 2.8 years. Inclusive of renewal options this pushes the WALE to 5.1 years. The Company continues to work towards its long-term goal of having 70-80% of the portfolio under lease.

DIVIDENDS

The Board maintains its commitment to providing shareholders with a bi-annual dividend. With the Company’s continued focus on building its leasing revenue, the Board has provided dividend targets for the four dividends , to the March 2022.

The Company is pleased to reaffirm its intention to pay a fully franked 2.9 cent dividend in September 2020, and a fully franked 3.0 cent dividend in March 2021. In addition, the Company has advised of a target of fully franked 3.1 cents to be paid in September of 2021 and 3.2 cents fully franked to be paid in March 2022, providing shareholders 24 Months of dividend visibility.

DAILY INFLOWS TO THE MDB

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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
Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) -
5 day rolling 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 (May) 119,375,450
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MARKET UPDATE & OUTLOOK

While rainfall in May was below average, the residual impacts of the rainfall through April delivered improved storage inflows.

As we moved into June however, a strong positive Southern Annual Mode (SAM) has delivered drier than expected conditions across southern Australia. This resulted in the BOM down grading their outlook rainfall outlook through to Spring. Whilst conditions across much of the MDB are still indicating increased chances of above average rainfall, the probability has reduced significantly over key catchments. Daytime temperature is likely to be between average and above average for the MDB while the wetter soils and increased cloud cover should result in above average night-time temperatures over the region.

While inflows have tracked significantly below average throughout 19/20, we have seen a reprieve in May. This has delivered a welcome improvement in resource availability and we have seen net increase in storage levels since April. In the northern and southern MDB, storages are now at 18% and 40%, compared to 11% and 35% this time last year. Whilst rainfall and storage inflows have improved, with dams operating at a low starting base, supply for the upcoming water year still appears to be limited.

CHANCE OF ABOVE-AVERAGE RAINFALL JULY 2020 – SEPTEMBER 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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STORAGE LEVELS IN MAJOR DAMS

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Total Murray Goulburn 35 % 40 %
Lake Eildon 44 %
36%
Menindee Lakes 1% 27 %
Lake Victoria 60 %
3 5%
Hume 16 % 25 %
Dartmouth 50 % 64 %
Total Murrumbidgee 32 % 47 %
Blowering 33 % 50 %
Burrinjuck 30% 41 %
2020 2019 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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COVID-19 UPDATE

The Investment manager and Board of Duxton Water Ltd continue to monitor the on-going Covid-19 pandemic. The Investment manager has put in place measures to ensure staff are able to continue to operate effectively whilst adhering to Government

recommendations. This has enabled the day to day operations of the Company to continue with little impact and while the Board will continue to monitor and advise of any change, it does not currently foresee any significant operational impact to the business.

ALL ORDINARIES INDEX

The Company is pleased to have been included for the first time in the most recent re-balancing of the S&P All Ordinaries Index. The Company will form part of the index effective at market open on 22 June 2020.

ACCC

The Company looks forward to the release of the long awaited ACCC report sometime in July. The report will now be presented to the Treasurer by 30 June 2020 with an expectation of public release some time after this. Duxton Water Ltd has actively participated and has been supportive of the review into the southern basin water market. With the significant demand and supply changes over the last 10 years, the Company believes the review and any

recommendations for enhancement of the market will be important in ensuring stakeholders have the confidence that the market is operating effectively in the support of sustainable agricultural production across the Basin.

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

This announcement has been authorised for release by the Board of Duxton Water Limited.

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