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Bushfire and water update

Bushfire and water update

By email – 14 January 2020

Dear Shareholders,

We hope you all had a nice break over the festive season and that you were not directly impacted by any fires. 

Towards the end of February/early March we will send shareholders audited half yearly accounts as well as a comprehensive update on operations.  In the meantime, we wanted to update you on key issues that you may be concerned about.

FIRES

Fortunately, to date, Boundary Bend has not had any of its sites impacted by fire.  Although we do have a degree of fire risk and fires are certainly possible at our grove sites, we are lucky that our groves are in relatively low risk fire areas. This is due mostly to being located in medium to low rainfall zones combined with flat and accessible terrain.  In saying that, we spend considerable time and resources each year reducing fuel load within and around our groves.  This includes burning and slashing and/or ploughing headlands and vacant unplanted areas throughout and around the grove perimeters. 

We do have fire insurance cover for the groves, but it is only part cover due to the prohibitive cost and/ or unavailability of full cover.

Due to the extreme heat and weather conditions over the last few weeks, we have had some electricity interruptions and power surges which destroyed a pump and variable speed drive.  Fortunately, these have been fixed and we have had no productivity losses to the groves. We also expect to be reimbursed by power providers or insurance for the cost of repairs.

DONATION TOWARDS BUSHFIRE RECOVERY

We will soon be finalising our bushfire donation strategy in Australia but will likely focus our efforts on helping people rebuild their communities that have been devastated by fire.

Cobram Estate in the USA is finalising an arrangement with the Irwin family and Australia Zoo to donate 50 US cents from the sale of every bottle in the USA for the months of January, February and March. The donation will be made to Wildlife Warriors, originally called the Steve Irwin Conservation Foundation with the money specifically going towards their Australian wildlife hospital.   The Irwin family has a strong presence and following in the USA, started by Steve and more recently Bindi winning Dancing with the Stars.  This, combined with extensive bush fire media coverage in the USA and the empathy shown for the large numbers of injured and killed wildlife in recent weeks, convinced us of the merit in donating money to this cause.

WATER

Pleasingly, the price of temporary allocation water has dropped in Murray Zone 7 by about 15% since our AGM.  It is still extremely expensive at about $800 to $850 per megalitre.  This is the first time we have seen any sustained drop in the price of temporary water since late 2017. It may be unrelated, but interestingly this price drop coincides with the ACCC undertaking a comprehensive investigation into participants in the water market over the last few months.

Boundary Bend has taken some positive steps towards better securing our medium to long term water supply and related costs. This strategy is confidential at this stage however we hope to be able to share some news in coming months.

Please call or email me at any time if you have any questions or concerns.

Kindest regards

Rob McGavin