download WA Blue Gum Project Product Disclosure Statement 2013

Date of PDS: This PDS is dated 14 June 2013Issued By:Project Name:W.A. BLUE GUM LIMITEDACN 060 179 982AFS Licence Number: 246264Level 21385 Bourke StreetMelbourne Vic 3000AustraliaTelephone: 1300 888 511Facsimile: (03) 9642 4435Email: info@wabluegum.com.auWebsite: www.wabluegum.com.auW.A. BLUE GUM PROJECT 2013 ARSN 164 105579The Project:The Project involves the Establishment and tendingof Tasmanian Blue Gum (Eucalyptus globulus)plantations for the Harvesting and sale of timber.The sale of harvested timber is a managedinvestment scheme registered under theCorporations Act. WABG, the Responsible Entityand the Project Manager, has been involved inforestry operations for over 10 years and currentlymanages thousands of hectares of eucalyptplantations in Western Australia on behalf ofsubscribers to previous offer documents.Pursuant to the Project Agreements the ProjectManager will arrange the Establishment, tending,felling and Harvesting of Blue Gum plantations tobe known as the "W.A. Blue Gum Project 2013".The duties of the Project Manager include thefollowing:Establishing the Plantations within theEstablishment Period for the purposes offelling and Harvesting; andtending the Plantations until felling andHarvesting take place.The Project is to be established on land in thesouth-west of Western Australia between Bunburyand Albany by raising $3,125,000 in initialApplications Fees based on the present landavailability outlook. Oversubscription may beaccepted, the amount of which will be subject to theavailability of land of the desired quality. EachGrower will sub-lease a specific and identifiablearea of the Project Land from the Project Managerpursuant to a Sub-lease.The Project Manager leases the Project Land fromvarious farmers or alternatively, sub-leases fromW.A. Chip & Pulp Co. or WACAP Treefarms. In allinstances, the head lease between the ProjectManager and the farmer, or alternatively, the subleasebetween the Project Manager and W.A. Chip& Pulp Co. or WACAP Treefarms is to be registeredwith Landgate, the Western Australian Office ofTitles thereby protecting the Project Manager's andultimately the Grower's interest in the Project Land.Each Grower will enter into Project Agreements.The Project Agreements consist of a Sub-lease(and/or an Agreement to Sub-lease), a ProjectManagement Contract and a Wood PurchaseAgreement.Where not all the Project Land is available for aparticular Grower on or before 30 June 2013, theResponsible Entity may still accept the Grower'sApplication subject to a Sub-lease being enteredinto on behalf of the Grower and lodged forregistration by 30 September 2014.In these circumstances, the Grower will be requiredto enter into an Agreement to Sub-lease with theProject Manager.It is anticipated that the Blue Gum trees Establishedand maintained under this Project will be availablefor Harvesting as woodchips in about ten years.However, the timber may be sold at any timebetween 2021 and 2025.Under the terms of the Wood Purchase Agreement,W.A. Chip & Pulp Co. will buy the wood unlessWABG can negotiate better terms with a reputablethird party after first allowing the Purchaser theopportunity to match the price offered by the otherparty interested in purchasing the wood (seeSection 9.6 of Part B of this PDS). The precisedate of purchase will depend upon both the growingconditions that have existed during the term of theProject and an assessment by the Purchaser of themarket conditions at the relevant time. It is likelythat the date of purchase will vary from one block ofProject Land to another.It is a possibility that the whole or part of the woodgrown will be suitable for a higher value use suchas flooring. If this turns out to be the case then theGrowers and the Purchaser will decide together onthe best way to deal with the grown wood. It cannotbe predicted with any accuracy whether (and, if so,to what extent) it would be wise or necessary toallow a longer rotation in order to take advantage ofthe higher value. This PDS ignores completely thepossibility of a use with a higher value than aswoodchips.All net income on the sale of a Grower's interest inthe Plantations (plus any carbon and environmentalcredits) will be paid progressively to the Custodianfor distribution to each Grower. The proceeds fromthe sale of the wood will be pooled and the netproceeds distributed to Growers on a pro ratabasis, i.e. in the same proportion that the number ofhectares held by each Grower bears to the total ofall hectares comprising the Project.If unforeseen expenses in relation to things such asfertiliser and/or insect issues arise, a meeting of allGrowers may be convened. The Growers may, bymajority vote, agree to meet such expenses, inwhich case these expenses will be borne betweenall the Growers in proportion to the number ofhectares held in the Project by each Grower.It is the intention of the Responsible Entity toterminate the Project upon the distribution of the