The W.A. Blue Gum Project 2013

The W.A. Blue Gum 2013 Project

The Investment

W.A. Blue Gum Limited (W.A. Blue Gum) is offering investors the opportunity to participate in the plantation pulpwood industry through the offer of 500 Woodlots in the W.A. Blue Gum Project 2013. W.A. Blue Gum has the capacity to accept oversubscriptions, depending on the availability of suitable land. W.A. Blue Gum advises that the plantation services agreements with WACAP incorporate a minimum stocking guarantee of 90% of the original stocking rate for a period of approximately one year from planting.

The Project involves the establishment of Tasmanian blue gums for the production of hardwood chips for export and, potentially, domestic pulp markets. The units will be located in south-west
Western Australia, in the forestry region between Albany and Bunbury.

The Project has an expected term of 10 years from the planting date, which must occur before 31
December 2014. W.A. Blue Gum has indicated that it will aim to establish 100% of the trees in the
2013 calendar year. However, this will be dependent on seasonal conditions and the ability to
secure land within the 2013 planting window. Historically, between 30% and 100% of trees have been planted within six months of the Project commencement date, with the remainder planted in the winter following the Project commencement. The plantations are forecast to be harvested in 2023 and the Project agreements provide some flexibility regarding the timing of the harvest, with the timber able to be sold at any time between 2022 and 2025. Net proceeds from the harvest will be pooled and distributed to investors on a pro-rata basis.

W.A. Blue Gum will outsource the management of the plantations to WACAP Tree Farms Pty Ltd (WACAP), a subsidiary of WA Plantation Resources Pty Ltd (WAPRES). WACAP will be responsible for all management operations required, from land preparation and sourcing seedlings, right through to the management of harvesting. W.A. Blue Gum has entered into a Wood Purchase Agreement with another WAPRES subsidiary, WA Chip and Pulp Company, for the purchase of all timber grown in the Project.

Current WA Blue Gum Projects

See Our Current Projects

Cash Rebate	6.25%
Closing Date	CLOSED
Minimum Investment	17,045.46 (ex GST)
Term of Project	Approx. 10 years
Finance available	Yes
ATO Product Ruling	2013/4

	Adviser Edge Research
	Product Disclosure Statement

W.A. Blue Gum will sub-lease land from WA Chip and Pulp Company or WACAP, or will lease land directly from farmers. In all instances W.A. Blue Gum will register the head-lease or sub-lease with Landgate (the WA land titles office). While the average lease cost for the Project is not expected to be known until all the land has been secured for the Project, it is expected that the rental fee paid by investors will closely match the ongoing obligations throughout the life of the Project.

Given the ongoing fee structure of the Project, investors have a very limited exposure to the major counterparties, W.A. Blue Gum and WACAP, over the life of the Project. The fee structure incorporates sufficient cash flow to provide payments to a replacement Responsible Entity (RE) or third-party contractor over the life of the Project. The rental fee should be sufficient to cover the ongoing lease payments to either WA Chip and Pulp Company,
WACAP or various farmers, and to ensure investors’ tenure over the land throughout the rotation, irrespective of the ongoing solvency of the RE.

Uncomplicated Finance

All participating Growers may borrow up to 80% of the Application Money (including GST) from Albany Financial Pty Ltd, a company associated with the Project Manager. Amounts borrowed are to be repaid in equal monthly instalments (which include both principal and interest) by way of direct debit over the period ending on 15 June 2018. Each instalment is of both principal and interest. Interest is charged on the reducing principal at an indicative fixed rate of 12.45% per annum. There is no loan establishment fee payable in respect of this finance package. Growers will not be required to submit any financial information in order to obtain this finance. No security (other than a charge of the Grower's interest in the Project and the proceeds of sale of wood) will be required. Albany Financial Pty Ltd is entitled to pass on to a Grower the appropriate merchant's fee on the use of a credit card.

Growers will not be required to submit any financial information in order to obtain this finance. No security (other than a charge over the Grower's interest in the Project and the proceeds of sale of wood) will be required.

The outstanding principal may be repaid earlier at any time without penalty.