Ann: D2O Acquires $39 million of Water Entitlements, page-10

I have held for a few years now and like that there is a link to a finite natural commodity, with a trend to see water diverted to environmental flows by a government buy-back scheme that as a tax payer I resent, but it does provide some additional tightness to the market for entitlements.

In the case of the actual use of the water, there are large plantings of almonds and other trees that must be watered regardless of demand for product (which is increasing, look at the supermarket shelves) and thus in times of drought, the price spikes, so almond growers are inclined to hedge in advance with high security entitlements, through longer term leases, rather than buying water opportunistically like rice or irrigated pasture growers who can simply sit on the sidelines andnot use water, without damage to their asset base. Leasing a businesses water needs preserves working capital for other uses, and in many cases the water entitlement is worth more than the land.

The natural restriction of the Barmah Choke limits the ability to sell water from upper Murray and Goulburn catchments as it simply cannot get to the almond growing areas in the volumes required, where Duxton mainly operate. I se they have started work on building a business in the Murrumbidgee Irrigation Area, around Griffith which is a good move, and the have a bright young bloke from that area, fronting the business, makes sense when you are dealing with conservative people diverse ethnic backgrounds.

I am from the regions myself, and trust is a big deal.

I am still making up my mind about this offer, but had recently descided to top-up, whereas I expect that $1.50 offer price will set an anchoring bias for a lot of people, limiting what the S/P will do in short term.

I appreciate the discussion of the details of the offer and risks to Shareholders.

The audio on the last AGM was sub-audible for the most part, so I did not get the insight I had hoped for as a remote attendee.