SEAFARMS GROUP LIMITED — Call Transcript 2011

Jul 11, 2011

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Our Ref: CO2 ASX Announce Media Release – Carbon Price Discussion Broadcast (302)

12 July 2011

ANNOUNCEMENT 302

Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

By ASX Online Number of pages: 3 (including this page)

Dear Sir

CO2 Group Limited Carbon Price Opportunities - Broadcast

CO2 GROUP LIMITED (COZ) provides the opportunity to view a webcast with Mr Andrew Grant, CEO in a presentation titled "Carbon pricing creates new opportunities for CO2".

To view, copy the following details into your web browser: brr.com.au/event/82169

The presentation details are as follows:

• Carbon pricing creates new opportunities for CO2

• Presented by Mr Andrew Grant, CEO

• Tue, 12 Jul 2011 10:00am AEST

Yours faithfully CO2 Group Limited

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Harley Whitcombe Company Secretary

CO2 Group Limited Level 11, 225 St Georges Terrace Perth WA 6000 PO Box 7312 Cloisters Square Perth WA 6850

Tel. 08 9321 4111 ABN 50 009 317 846 Fax. 08 9321 4411 www.co2australia.com.au

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TRANSCRIPT

Board Room Radio - Andrew Grant Interview ‘Carbon price major driver for CO2 Group growth’ 12 July 2011

Tom: Today I am pleased to be joined by Mr. Andrew Grant, who is the CEO of CO2 Group. Andrew, great to have you back on the line.

Andrew Grant: Thank you, Tom. Nice speaking.

Tom: Andrew, today CO2 stated that the federal government's policy on carbon pricing will provide substantial commercial opportunities for the company. Can you give us a brief overview of some of these opportunities?

Andrew: Well, the policy we're very excited about because we already have 10 blue chip companies where we're managing carbon offsets for them, and what the legislation does is grow that potential customer base from 10 to 500. So you can quickly appreciate what the upside for the company is in that. And the other great feature about the legislation is that it gives priority to the Carbon Farming Initiative and carbon forests, and it enables companies to reduce their tax liability by up to five percent.

We'd already seen some increasing enquiries leading up to this legislation, so we think the rate in which we should be able to convert those opportunities will grow.

In the last 12 months we've expanded our business in a range of other areas such as carbon advisory, and we're doing work on landscape rehabilitation, mine site rehabilitation, and environmental markets trading. I think the market for that is going to grow.

Last but not least, it's been a long journey. We've been investing in our business for eight years now. We've built I think the best brand in the market. We're highly respected by our current customer base, and this is just a fantastic opportunity for us.

Tom: Why does this legislation underpin your existing business? Do you expect organic growth within your current customer base?

Andrew: We do most definitely because the projects that we have with our current customers represent a very small proportion of their liability under this scheme. So we're not only looking to acquire new customers, but we're confident that our current customers will look at their investments and see the benefit of the approach they're taking. There's been a bit of a question mark more recently as to whether their investments will prevail with the uncertainty in the market, and what this does is it provides the certainty.

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And independent of that, we're growing anyway. We're growing in scale. We've got another 25 percent of our planting season. Our growth this season alone is 25 percent higher in terms of hectares.

Tom: Andrew, you stated that the legislation places special importance on carbon forestry, allowing liable companies to reduce their carbon tax by five percent. Can you give us perhaps some details on this and let us know if it indicates that CO2's product is likely to be more aggressively sought when compared with other carbon offset strategies?

Andrew: Most definitely, because what the legislation says is that companies can reduce their tax liability by five percent if they purchase credits from the Carbon Farming Initiative. So you then need to look at what are the dynamics within the Carbon Farming Initiative, and the most proven and most mature technology is carbon forestry. And given that we've got the strongest accreditation history. For example, under the New South Wales Greenhouse Gas Abatement Scheme we're the only private sector company in eight years to create an accredited carbon forestry credit.

The big companies want to partner with organisations that have a proven track record, particularly with a proven accreditation and credit creation track record, to gain confidence in their projects. Really, they want to make sure that there's a quality performance history and a quality company sitting on the other side of the contract.

Tom: Absolutely. Andrew, finally, can you give us some details on CO2's current pipeline of opportunities, both domestically and internationally?

Andrew: I can. Well, the other exciting thing about this legislation is it enables us for the first time to export, so we have expanded into New Zealand. We've formed an excellent partnership with the largest commercial Maori institutions there. We've had a fantastic response to that. We've got a strong pipeline of enquiries at the moment which we're processing, and this just gives the confidence for liable parties to invest in carbon forestry.

For the first time, I think, in the carbon market it should give the confidence to third party investors, because one of the other great features of this policy is that it provides a price signal going forward. The government's put in a carbon floor of initially $23 in a fixed price period, and then after three years a $15 price floor.

That means that, given that you've got medium to long term return in upfront capital in a carbon forest, you do need to have the confidence that there's certainty in terms of your return. By putting a floor, that provides it, along with clear and certainty.

Tom: OK, Andrew. Well, thank you very much for joining us today. This is obviously great news for the company, and we wish you all the best.

Andrew: Thanks, Tom. Thanks for your time today. Much appreciated.

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