THE STUFF OF AGRICULTURE – WATER, SOIL, SUNSHINE, MARKETS

1. If you do what you always did, you will get what you always got!Hon Keith DeLacy AMChairman Integrated Food and Energy developments Pty Ltd (IFED) AIEA JULY 2014

2. THE STUFF OF AGRICULTURE – WATER, SOIL, SUNSHINE, MARKETS THE NORTH HAS IT ALL WATER: Gulf rivers total average run-off is 90 million megalitres (ML) per annum – cf Murray Darling 32 million ML. The Gilbert River system 5.5 million ML - cf the Ord 3.8 million ML. SOIL: “The results of this analysis indicate that very large areas of the Gilbert River catchment (1 to 2 million ha) are moderately suitable (class 3) for a wide range of crops and irrigation methods.” (CSIRO assessment study FGARA 2014) SUNSHINE: Few agricultural regions in the world have greater solar exposure (sunshine, the essence of plant life) than Cape York Peninsula. AIEA JULY 2014

3. AND FINALLY MARKETS:More than half the world’s population live in the circle, and71% of projected growth in global food demand in next 40 years will occur inside circle AIEA JULY 2014

4. Nevertheless NORTHERN DEVELOPMENT- a Litany of Failures! • Lakeland Downs (Cooktown) • Territory Rice Ltd (Darwin) • Tipperary Land Corporation (Darwin) • Northern Agricultural Development Corporation (Katherine) • Ord River Project (Kununurra) AIEA JULY 2014

5. A NEW MODEL THE IFED PROPOSAL Etheridge Integrated Agriculture Project (EIAP) A greenfield development of a privately funded, large-scale, world-class, vertically integrated and sustainable agribusiness. AIEA JULY2014

6. PROJECT LOCATION AND SIZE IFED has secured long-term options over the key properties required for water diversion, water storage, cropping and infrastructure. Flow rate in megalitres /year 5,400,000 (Ord River =3,870,000) Einasleigh R Project area comprises: 5 properties – 326,000 ha Cropping land – 65,000 ha Water storage – 18,000 ha Infrastructure – 2,000 ha Grazing – 241,000 ha Gilbert R AIEA JULY 2014

7. PROJECT DESIGN Water is flood harvested into lakes and gravity fed to the co-located farming and processing facilities. AIEA JULY 2014

8. OVERVIEW:Integration of Water, Farm and Processing Activities. Redclaw 7.5 kt/y Aquaculture Redclaw ponds Biomass Pellets - 400 kt/y Pellet Mill Cane Trash at 8% moisture Off-river Water Storage Raw sugar – 535 kt/y Ethanol – 100 ML/y Farm Sugar - 40,000 ha Guar – 25,000 ha Sugar Mill 662kt/y of sugar Sugar cane 4.8 Mt/y Steam and Electricity - 43MW Cogen – 90MW Bagasse/biogas Cane Tops 120kt/y dry Bagasse 164kt/y dry Guar bean Feed Mill 400 kt/y + purchased molasses Gum Plant Guar gum - 32 kt/y Hull and germ 65 kt/y ng cattle operations Existing cattle operations Existing cattle operations Existing cattle operations Existing cattle operations 200,000 / year Cattle Purchased from local graziers Meat Processing Plant Meat products 53 kt/y Hides and offal

9. PROJECT COST ESTIMATE: AIEA JULY 2014

10. PROJECT FORECAST FINANCIALS The vertically integrated farming and processing model delivers revenue diversity and high EBITDA. Typical year from 2020: AIEA JULY 2014

11. SUSTAINABILITY Unlike extractive industries which are finite, EIAP will deliver truly sustainable environmental, social and economic outcomes. • Carbon sustainability • Operates completely on renewable electricity (Cogen); • Exports renewable electricity into the grid; and • 400,000 tonnesbiomas pellets – stored carbon • Ethanol produced equals 9 times volume of liquid fuel consumed in the business. • Ecological sustainability • Propose to harvest just 10% of Gilbert River system average annual discharge (0.55% of Gulf Rivers discharge) • Off-river water storage – much more ecologically sustainable than on-river dams; • Reduced sediment loss due to better farm design and management; • Negligible nutrient run-off due to state-of-the-art trickle tape irrigation; and • Improved pest management (weeds and destructive feral animals). AIEA JULY 2014

12. Social Sustainability • The Etheridge shire is classified as ‘very remote and disadvantaged’ – unemployment rate 16.2% (March 2012); • EIAP will create 1,200 direct jobs; • EIAP will underwrite local business and create new business opportunities; • Investment in housing and services will multiply benefits; and • An indigenous employment program will provide a pathway to economic independence for the local indigenous population. • Positive animal welfare outcomes • Reduction of stock losses in dry season (water and feed availability); and • Local processing eliminates long distance transport of cattle. AIEA JULY 2014

13. Government & Community Benefits • Bringing Government policy to life (State and Federal); • Federal Government revenue – company and income taxes; • State Government revenues – payroll tax, port usage fees, vehicle registrations, fees and charges; • Reduces social outlays – unemployment benefits, subsidies, disaster relief, etc; • Electricity grid enhancement with renewable electricity, RET contribution; • Larger rate base for local council; • Improved community facilities; and • Jobs, jobs, jobs… AIEA JULY 2014

14. PROJECT MILESTONES • Reaching negotiated agreements with five land owners that secures 326,000 hectares under long term options; • Completion of detailed technical and commercial feasibility analysis; • “Development Protocol” for a water allocation agreed with the Queensland Government; • Declaration of a “Co-ordinated Project” by the Queensland government; and • Well progressed with Pre-Construction Phase capital raising. AIEA JULY 2014

15. A LITANY OF FAILURES? What’s changed this time? A NEW MODEL - WHERE EIAP IS DIFFERENT • SCALE • BIO-MASS = ENERGY • INTEGRATION • DE-RISKED CLIMATE • INNOVATIVE WATER STORAGE • OFF-THE SHELF AGRICULTURE AND PROCESSING AIEA JULY 2014

16. WHAT’S CHANGED THIS TIME? SCALE • Scale delivers local processing infrastructure – vital in isolated regions • Economies of scale in production • Market power – both selling and purchasing • In-house research and development • Strong capital base In isolated areas small or fragmented water allocations do not bring about real economic development. Water must be allocated on the basis of jobs/economic benefit per litre – not on the basis of political expediency. AIEA JULY 2014

17. WHAT’S CHANGED THIS TIME? ENERGY The tropics have an extraordinary capacity to produce bio-mass – and hence electricity and steam via co-generation. EIAP will produce 90 mw of electricity – 43 mw will be exported into the grid for net $23 million, the rest powering the project - free renewable energy, underwriting the economics of all processes. INTEGRATION (i) • EIAP is a single entity, privately funded, • Water storage, farming and processing are fully integrated and aligned AIEA JULY 2014

18. INTEGRATION (ii)The waste from one process becomes the feedstock for the next process. Redclaw 7.5 kt/y Aquaculture Redclaw ponds Biomass Pellets - 400 kt/y Pellet Mill Cane Trash at 8% moisture Off-river Water Storage Raw sugar – 535 kt/y Ethanol – 100 ML/y Farm Sugar - 40,000 ha Guar – 25,000 ha Sugar Mill 662kt/y of sugar Sugar cane 4.8 Mt/y Steam and Electricity - 43MW Cogen – 90MW Bagasse/biogas Cane Tops 120kt/y dry Bagasse 164kt/y dry Guar bean Feed Mill 400 kt/y + purchased molasses Gum Plant Guar gum - 32 kt/y Hull and germ 65 kt/y ng cattle operations Existing cattle operations Existing cattle operations Existing cattle operations Existing cattle operations 200,000 / year Cattle Purchased from local graziers Meat Processing Plant Meat products 53 kt/y Hides and offal

19. WHAT’S CHANGED THIS TIME? DE-RISKED CLIMATE • DROUGHT PROOF – based on the project’s water storage and consumption metrics, 100 years of river flow data demonstrates that EIAP would have harvested a full crop each year. • CYCLONE PROOF – THE PROJECT IS 330 KM INLAND FROM THE TROPICAL COAST INNOVATIVE WATER STORAGE Off-river water storage is more efficient and more sustainable than in-river dams. • Compared to the CSIRO FGARA proposal EIAP can store three times the volume of water at half the cost – utilising the special local terrain • In-river dams harvest all the small flows, off-river storage tends to harvest the big flows, greatly enhancing ecological sustainability. • Average depth much greater minimising evaporation. AIEA JULY 2014

20. WHAT’S CHANGED THIS TIME? OFF-THE-SHELF FARMING AND PROCESSING, AND TROPICAL CROPS IN A TROPICAL ENVIRONMENT • All of the processing technology is off-the-shelf – sugar mill, co-gen, ethanol, meat processing etc • Queensland can grow sugar cane (the Mareeba district has a similar climate, is 150 km away on a similar latitude and grows quality sugar) • But the opportunity is there to deploy all of the accumulated wisdom of the last century AIEA JULY 2014

21. THE WAY FORWARD AUSTRALIA NEEDS A CHANGE IN: • Mind set – particularly in relation to scale and water allocation • Policy – water, tenure, land clearing… • Regulations – still a nightmare out there! • Incentives – particularly tax incentives, for patient, start-up, venture capital in the agri sector. IF WE DO WHAT WE ALWAYS DID WE WILL GET WHAT WE ALWAYS GOT! AIEA JULY 2014