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Feedstock Solutions

for

Biofuels / Bioenergy / Biochemicals

AGAVE Sugars & Fibres

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Commercial opportunity

• Ethanol – world’s largest biofuel replacement of fossil fuels

• Over 100 countries have an ethanol mandate

• Global ethanol demand will outstrip supply through 2020

• Supplement existing sugar cane production systems

• New industries and technologies

• Bio-energy

• Bio-fuel

• Bio-chemicals

• Additional regional areas – Australia, Brazil and Asia

Agave can provide sustainable feedstock for increased biofuel demand

THE COMPANY

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Australian Agave Pty Ltd

• Company incorporated to commercialise agaves in Australia/Global

• Trading as AusAgave

• Developed IP and know-how in propagation, agronomy and cropping systems

• Exclusive access to selected varieties – high sugar and fibre

• Progressed mechanisation for harvesting, crushing and processing

• Recognised for global leadership in producing low cost sugars

Specialist biomass business producing feed-stocks for biofuels

Progress

Tissue culture

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Plant nursery

3YO Pilot scale plantation

3 years agronomy & yield data

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0

20

40

60

80

100

120

0 1 2 3 4 5 6 7 Plant age (years)

Bio

ma

ss (

ton

s d

ry w

eig

ht

ha

-1)

Sources of information

Nobel PS, Valenzuela AG. 1987. Environmental responses and productivity of the CAM plant, Agave

tequilana. Agricultural and Forest Meteorology 39 (4), 319-334.

Ausagave Kalamia trial (JCU)

Comparison of the accumulation of biomass by Agave tequilana in Jalisco, Mexico ,

and northern Queensland, Australia (next to sugar cane).

AusAgave System

Base System

Mexico

Further Progress

THE OPPORTUNITY

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Its all about Sugar ......

AGAVES (uh-gah-vay)

– Sugar and fibre rich crops

– Drought proof (CAM) perennials

– Non-invasive

– No pests or diseases in Australia

Product / process Corn Sugarcane Agave

Demand as food Very high High None

Agricultural value of land Very high Very high None - medium

Water requirements High Very high None - low

Environmental impact

(fertilisers-insecticides) Very high High None - low

Sugars (and starch) 16% - 20% 10% - 14% 20% – 28%

Ethanol yield L/ha/annum 3,000 6,000 10,000

Years to first harvest 1 1 5

Feedstock comparison

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Current Feedstock demand

Sucrogen –

•Extra 60 ML ethanol

MacKay Sugar –

•60 ML ethanol

•fibre to replace 30,000

tonnes coal

Zhongfu –

•40 ML ethanol

NQBE –

•60 ML ethanol

Current feedstocks in

Australia are food or

feed crops

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Agave agro-economics

Harvest

t/ha Revenue AUS$/ha

Costs AUS$/ha

Gross Margin AUS$/ha

Cane 100 6,000 3,600 2,400

Agave* 150 6,600 2,360 4,240

Current exchange rate AUS$1 = R$2 (approximately)

* Annualised 5 year harvest system for 2 selections

Commercial Product Supply only (business model “A”)

1,000 ha annual contract for sale of juice and fibre

sale price juice $220/t and fibre $40/t

Forecasts

projected annual income $33 million at YR 5

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Financial Potential

AgTrans independent economic assessment

2,000 ha/year fully integrated bioenergy production model

Based on a 5 year harvest cycle – annual rotation

• Inputs: CAPEX $110 million, OPEX $7.5 million p.a.

• Outputs per annum:

– 100 ML ethanol

– 200 GWh electricity

• Investment analysis:

– NPV $161 million

– IRR 25%

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Commercialisation Strategy

Commercial Scale

• 1,000 hectare annual planting/harvesting

• Supply juice & fibre

• Profitability

Demo Scale

• 10 hectares

• Harvesting/processing

• Off-take agreements

• First revenue

Pilot Scale Plots

• 1 hectare

• Varieties

• Yields

• Agronomy

• Product specification

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Pathway to Market

Commercial Scale

•Commercial Funding

•Debt finance

•Equity investment

•Sales

Demo Scale

•Series A Investment

•Equity finance

•Govt grants

Current Pilot Scale Plots

•Development Funding

•Self-funded

•RIRDC, BioSA grants

Company Start-up

Feasibility data

Off-take Contracts

Scale-up Plan

Plant licences

• appoint agents to grow and sell plants

• licensed for territory or field of use

Service provider

(franchise model)

• service growers ($/t or $/ha)

• interest established

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AusAgave Business Model

Product supplier

• sugar & fibre

• interest from major ethanol producers

• 10 ha off-take agreement

A B C

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YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9

1000 1000

1000 1000

1000 1000

1000 1000

1000 1000

• Basis of current business plan and financials

• 1,000 ha/yr - 5,000 ha total

• 5 year harvest cycle with leaf harvest at yr 2 and 3, complete plant at yr 5

A – Commercial Product Supply

1,000 ha → 50 ML ethanol plus 100 GWh electricity / year

B – Franchise Model

• Business model in development – e.g Mackay Sugar Co-op

• Real interest from ‘off-grid’

– mining industry

– isolated towns and regions

– isolated industries requiring energy eg irrigation

– existing grower groups

• Will drive the adoption of numerous conversion technologies

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C – AusAgave licensing opportunity

Brazil Government – EMBRAPA project cooperation; germplasm export label

Minister Fernando Bezerra Coelho (Brazil) at Ayr site with Don Chambers on 26 August 2011

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MEMORANDUM OF UNDERSTANDING

BETWEEN EMPRESA BRASILEIRA DE PESQUISA AGROPECUÁRIA (EMBRAPA)

AND

AUSTRALIAN AGAVE PTY LTD (AUSAGAVE) The Empresa Brasileira de Pesquisa Agropecuária, a public company within the scope of the federal government,

under the Ministry of Agriculture, Livestock and Food Supply (MAPA) of the Federative Republic of Brazil, created by Law number 5.851, of 12 February 1972, as modified by Federal Law number 12.383, of March 1, 2011, with its current bylaws approved by

Federal Decree nº 7.766, of June 25, 2012, , registered in the National Corporate Register (CNPJ) under nº 00.348.003/0001-10,

with headquarters in Brasília, DF, at Parque Estação Biológica – PqEB s/n, final da Avenida W/3 Norte, hereinafter called EMBRAPA, represented in this MoU by its President Dr. Maurício Antônio Lopes;

Australian Agave Pty Ltd, (ABN 93 153 149 734) Level 1, 214 Greenhill Road, Eastwood, South Australia 5063, Australia, hereinafter called AusAgave, represented in this MoU by its Managing Director Dr. Don Chambers;

which in this MoU shall also be designated, individually, as the/a “Party” and, jointly, as the “Parties”, declare their mutual interest and will to start a cooperative program in the fields of

agricultural research and technology with the aim of developing sustainable technologies, based on laboratory and field tests and assays with Agave tequilana Weber in a few Brazilian regional

environments, with the final purpose of identifying and/or developing and introducing adapted Agave plants and cultivars, and the respective production system, apt to be used in the Brazilian

production of ethanol.

Next Steps

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Stage 1 Focus on Commercial Product Sales

• obtain finance and resources for 10 ha demonstration site

• build prototype machinery (planter, pruner, harvester)

• 3 year old plants from Pilot characterised (proof of concept)

• off-take agreements secured to enable commercial funding

Stage 2 Expansion of Business Model

• expand and build on stage 1 know-how

• demonstration sites in NT, SA, WA, NSW

• franchise agreements secured (township, mining, irrigation)

• overseas R&D licensing/collaboration (Brazil Government)

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Investment Opportunity

• Demo-scale operation - $1.8 million

• Enables matching, non-dilutive Federal Govt grant (CA)

• Investment will position AusAgave to: – secure off-take agreements

– obtain debt financing of $25 million

– set-up and operate commercial-scale facility to profitability

Commercial scale ABF feedstock production generates

revenues of $33 million per annum

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Australian Agave Pty Ltd (AusAgave)

Thank you

Don Chambers

AUSAGAVE IN BRAZIL

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Of all the new bio feedstock crops,

agave is arguably the best prepared and closest to commercialisation and rapid

scale-up

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Implementation Strategy

Commercial Scale

• ? Ha plant & harvest

• Supply juice & fibre to existing operators

• JV with Biofuel & Biochemical companies

Demo Scale

sugar cane supplement

• 2x50 hectares

• Harvesting/processing

• Off-take agreements for supply of juice and fibre

Pilot Scale Plots

EMBRAPA

CODEVASF

• 10x5 hectare

• Varieties

• Yields

• Agronomy

• Product specification

Next Steps in Brazil

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1 MOU with EMBRAPA

• Extent of research vs development

• Fast track with AusAgave in Australia

• Funding & Resources

2 Commercial Negotiations

• identified 3 potential partners (sugar, A.sisal, bioplastics)

• licence, strategic partnership, joint venture?

• mechanisation (planter, pruner, harvester, separation)

3 Business Models for Commercial Scale

• existing sugar & ethanol industry

• existing agave industry

• biochemical industries

SISAL PRODUCING COUNTRIES

--- Haiti

México ---

El Salvador----

Venezuela ----

--- Brasil

--- China

--- Quênia

--- Tanzânia

--- Madagascar

---------- Moçambique

--- África do Sul

--- Cuba

SISAL LEAF CONSTITUTION (W/W)

FIBER: 5%

MUCILAGE: 15%

JUICE: 80%

LEAF DECORTICATING (W/W)

FIBER: 4% (strings and other products)

WASTE: 96% (usually wasted)

- MUCILAGE: 15% (fertilising, feed)

- SMALL FIBERS: 1% (special papers)

- JUICE: 80% (potential products)

FIBER DRYING

SEPARATION OF WELL-DECORTICATED FIBERS AND

BAD-DECORTICATED FIBERS

TRANSPORT TO INDUSTRY OR PORT

Spinner: twine production

Pallets ready for export