RIVCO AUSTRALIA LTD — Net Asset Value 2021

May 13, 2021

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ASX CODE: D2O
Shares on Issue (April) : 119,840,047
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The primary investment objective of Duxton Water (“the Company”) 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 longterm entitlement leases, forward allocation contracts and spot allocation supply.

NET ASSET VALUE PER SHARE

Duxton Water’s NAV at 30 April 2021 was $1.62 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 $1.79 per share. The Company’s NAV is primarily the fair value of its water asset portfolio at the stated date. The Company uses an independent Fair Market Unit Value for entitlement and allocations provided by Aither Pty Ltd (‘Aither”) to undertake the NAV assessment.

NET ASSET VALUE PER SHARE – SINCE INCEPTION

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1.800
April
1.750 Dividend 3.0 cents
1.700 March @100% Franked
1.650 Dividend 2.6 cents
1.600 @100% Franked March
1.550 Dividend 2.8 cents
August @100% Franked
1.5001.450 Dividend 2.5 cents @ 75% Franked Dividend 2.7 centsSeptember Dividend 2.9 cents@100% FrankedOctober
1.400 April @100% Franked
1.350 Dividend 2.4 cents
1.300 November @ 60% Franked 10.1 millionApril
1.250 Dividend 2.3 cents October Placement
1.200 @ 75% Franked 7.5 million May
Insto Offer 2.45 million shares
1.150 May & June SPP
1.100 1.7 millionMarch Options Exercised16.4 million November
1.050 Options Exercised 10.8 million
1.000 Retail Offer
Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 Apr-21
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PERFORMANCE*

1	Month	3	Months	6 Months	12 Months	Inception
	2.3%		3.6%	5.1%	3.1%	78.7%
				*These fgures are based on NAV movements and include franked dividends for the period.

INVESTMENT UPDATE

At 30 April 2021, Duxton Water is invested in approximately $311 million of water assets with the remainder of the portfolio held in cash and net current assets. The Company is currently rebalancing a portion of the portfolio, with negotiations taking place on a number of new permanent entitlement parcels for sale and acquisition.

Since May 2020, entitlement prices have remained relatively stable. This follows a 6% retracement in values from their peak in January 2020. Since January 2014, water entitlement values have increased over 250%, reflective of the long-term structural drivers, rather than short-term climatic 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 buyback purchases of between 20-22% of entitlements that were previously available to the consumptive pool.

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Entitlement Portfolio
Value by Region
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14%
14%
4%
<1%
68%
Murray Goulburn
Murrumbidgee Lachlan
Mallee
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Water Portfolio Diversification

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36%
64%
Unleased Leased
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Water Security Breakdown

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2%
20%
78%
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: D2O Shares on Issue (April) : 119,840,047

The combined impact has seen stronger demand for a reducing available water supply and subsequently 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.

April rainfall across the MDB was 82% below the long-term average. MDB active storage levels are higher than 12 months ago, however they are still approximately 23% below long-term averages. Below average rainfall has resulted in drier soil moisture across key agriculture areas in the sMDB, while above average soil moisture was experienced elsewhere. Recent floods experienced in late March throughout NSW and VIC have now reached the Menindee Lakes in north western NSW; the first water seen there in 5 years. The Murray-Goulburn system is currently at 51% of storage capacity; 16% higher than 12 months ago. Northern basin storage levels are currently 49%, 31% higher than 12 months ago.

Duxton Water continues to support its Irrigator partners as they prepare to finish one water year and enter into another. This involves the provision of leases to over 70 family farming and corporate businesses. Through June 2020, many Irrigators took advantage of seasonally low allocation pricing and acquired allocation to carry over into the new water year. The Company has further supported Irrigator water risk management through the provision of forward allocation contracts for the 21/22 water year. This provides Irrigators with visibility to water supply and assists Duxton Water in hedging pricing risk on the allocation received on the Company’s unleased portion of the portfolio.

The Company actively manages its allocation holding in order to deliver on demand for spot allocation sales, meet its obligation for the provision of forward allocation sales and deliver on entitlement lease arrangements. In offering these products, the company supports market liquidity and risk management options for it’s Irrigator partners.

ENTITLEMENT MARKET

Duxton Water is engaged in building a targeted portfolio of water entitlements predominantly located across the southern MDB. The Company has invested in both surface and ground water assets. At 30 April 2021, the Company holds approximately 79.2 GL of water entitlements across 18 different asset types and classes.

Entitlement pricing across the southern MDB strengthened during April, with a weighted average increase of 1.3%. The Company has continued to benefit from its exposure to its high and general security NSW entitlement and its high and low reliability Victorian entitlements, which continued to appreciate throughout April.

* https://waterregister.vic.gov.au/about/news/330-new-analysis-on-trends-anddrivers-of-marker-prices-for-allocation

On 20 November 2020, the Victorian Government released a report* on water market trends and drivers in the southern MDB. This report delivered further analysis on the future market pricing impacts on allocation prices of both the increased horticulture development as well as past and future government water recovery. The key findings of this report were that with the impact of these structural demand and supply shifts, and a repeat of the last 15 years of resource availability, it is likely the weighted average price of water will be significantly above what has been experienced over the last 15 years.

The Company uses an independent Fair Market Unit Value for allocations and dry entitlements (without allocation) provided by Aither to undertake the NAV assessment.

Notable Entitlement pricing movements through April 2021:

•  5.0% in NSW Murray (below choke) GS (5% of portfolio)

•  2.5% in NSW Murray (above choke) HS (20% of portfolio)

•  2.3% in NSW Murrumbidgee (above choke) GS (6% of portfolio)

•  2.3% in VIC Murray (above choke) HS (10% of portfolio)

•  4.2% in VIC Goulburn (below choke) GS (<1% of portfolio)

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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 – NSW 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

ALLOCATION MARKET

Allocation prices firmed through April with trades in the lower Murray occurring between $90-100/ML. In the Goulburn, prices traded between $90-100/ML, while in the Murrumbidgee allocation traded around $65-75/ML. This is on the back of irrigators looking to fill carry over space ahead of the next water season. Demand for Murrumbidgee allocation strengthened as further water was pushed through the Murrumbidgee IVT to the lower Murray in April, reducing the available allocation for Murrumbidgee irrigators.

Demand for forward allocation contracts has continued to strengthen towards the end of the 20/21 water year. The Company has continued to lock in forward allocation contracts and has further opportunities in the pipeline.

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

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ASX CODE: D2O
Shares on Issue (April) : 119,840,047
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In mid-March, the New South Wales Resource Manager provided first outlooks for the 21/22 season. In this announcement, opening allocations were forecast to be 97% for high security and 0% for general security in the Murray, and 95% for high security and 10% for general security in the Murrumbidgee.

In mid-February, the Victorian Resource Manager provided first outlooks for the 21/22 season. It is noted that without average flows into major storages by the end of June 2021, opening allocations will be less than 25% for the Murray and Goulburn systems. Further outlooks for Victoria will be provided on 17 May 2021.

In mid-April, the South Australian Resource Manager projected the 21/22 season minimum opening allocation to be 98%.

LEASES

At 30 April 2021, Duxton Water has leased 64% of its permanent water portfolio to Australian farming businesses. This represents 78% of the Company’s high security entitlement holding. Throughout April, the Company locked in 1 new lease to commence at the beginning of the 21/22 water year. With the addition of this new lease, this takes the leased portion of the portfolio to 65% at 1 July 2021. The Company is working with a number of irrigators ahead of the 21/22 water year which will include establishing new lease arrangements.

The current weighted average lease expiry (“WALE”) is 2.0 years. Inclusive of renewal options this increases the WALE to 4.2 years. The Company continues to work towards its long-term goal of having 70-80% of the portfolio under lease.

DIVIDENDS

The Company paid a final 2020 dividend of 3.0 cents per share (franked to 100%) on 30 April 2021. The Board maintains its commitment to providing shareholders with a bi-annual dividend, franked to the maximum extent possible. With the Company’s high percentage of leased entitlements, the Directors reaffirm its target for the next four dividends.

The Company has provided the following fully franked dividend targets:

• 3.1 cents ($0.031) as the interim 2021 dividend;

• 3.2 cents ($0.032) as the final 2021 dividend;

• 3.3 cents ($0.033) as the interim 2022 dividend; and

• 3.4 cents ($0.034) as the final 2022 dividend.

The dividend targets are to be paid in the following reporting periods.

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 2018-19 2019-20 2020-21 Long term average
for comparison to a wet water year
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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Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) - 5 day rolling average

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

ASX CODE: D2O Shares on Issue (April) : 119,840,047

CHANCE OF ABOVE-AVERAGE RAINFALL JUNE – AUGUST 2021

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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

The Bureau of Meteorology (“BOM”) has indicated that warmer winter sea surface temperatures to the north of Australia are likely to result in a wetter than average winter for inland Australia (depicted above). Streamflows are expected to be high to near-median at some locations over the coming 3 months. Day-time temperatures are likely to be warmer than average in the north and south of the country, remaining average across the MDB area. However, night-time temperatures are expected to be warmer than average across the country.

Rainfall for the MDB during April was 82% below the long-term average. In the northern and southern MDB, storages are now at 49% and 51%, compared to 18% and 35% this time last year.

STORAGE LEVELS IN MAJOR DAMS

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Total Murray Goulburn 35% 51%
Lake Eildon 41% 56%
Menindee Lakes 20% 35%
Lake Victoria 29% 42%
Hume 18% 42%
Dartmouth 49% 64%
Total Murrumbidgee 46% 79%
Blowering 50% 80%
Burrinjuck 40% 77%
2020 2019 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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ACCC

On 26 March 2021, the ACCC released the final report into the southern Murray Darling Basin Water Market. The ACCC has spent almost a year reviewing the markets operation and engaging with key stakeholders. The Commission has had an ongoing role in monitoring the Australian Water Markets, having issued reports on its operation since 2012.

Duxton Water actively participated in the ACCC inquiry and supports any efforts to provide further transparency and benefits to participants of the Australian water market. Duxton Water believes the report is a thorough and well-balanced report.

The Final Report has identified opportunities to improve the governance, regulatory and operational frameworks that support the Australian water market. We believe that a consistent and committed focus in these areas will benefit all stakeholders.

We note the ACCC has stated that:

”Investors provide benefits to water markets. They provide new sources of capital to irrigated agriculture, increase water market liquidity and provide a range of water products which help irrigators to manage water supply risks.

The ACCC also stated it does not support a return to the system where water ownership was tied to land.

Duxton Water is managed by the Australian owned Duxton Group, which actively manages farms throughout Australia, producing a variety of agricultural commodities including wine grapes, dairy, walnuts, dried fruit, apples and grain. As an agricultural producer, irrigator and water product supplier, the Duxton Group understands the importance of water in the development of the Australian agricultural sector. 100% of the Company’s water is actively used by farmers.

The Final Report can be found on the ACCC website via the URL below.

https://www.accc.gov.au/focus-areas/inquiries-finalised/murray-darlingbasin-water-markets-inquiry/final-report

VALUATION METHODOLOGY

The Company uses an independent Fair Market Unit Value for entitlement and allocation provided by Aither Pty Ltd (‘Aither”) to undertake the NAV assessment. Aither’s definition of fair market value is consistent with the principles of the Australian Accounting Standards Board (AASB) 13 Fair Value Measurement. It is a non IFRS measure that is not reviewed or audited by the Company’s auditor. Further information can be found at www.duxtonwater.com.au

This announcement has been authorised for release by the Chairman 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