Moppa Springs Estate

NATIONAL VINEYARD FUND OF AUSTRALIA LIMITED

THE VINEYARD

The Moppa Springs Estate vineyard, owned by NVFAL, is now developing into a super-premium A & B grade vineyard producing fruit for famous brands such as St Hugo and Grant Burge.

The property is located in the north western region of the famous Barossa Valley region approximately 70km northeast of Adelaide in South Australia. Moppa Springs Estate is located approximately 4 km north of Greenock township and 10km from the heart of the region around Nuriootpa.

The 104.8ha property is located on the western side of Moppa Springs Road and Spring Grove Road, Moppa Springs and is approximately 300m above sea level.

Part of the original vineyard (15ha) was originally planted from the 1960’s to 1980’s a mixture of Grenache, Shiraz and white varieties. The balance of the property, owned by the Materne family, was traditionally a broad acre farm used for cereal cropping.

The land is undulating and is serviced by a stream that runs into Greenock Creek. The soils are rich loams over an ironstone base and provide ideal growing conditions for premium wine grapes.

In addition to the onstream winter dam the vineyard is supplemented with water from the Barossa Infrastructure Limited (“BIL”) water scheme. Irrigation is discussed in the Water section below.

VINEYARD LAYOUT

Today, Moppa Springs Estate is planted to 88 ha, exclusively red varieties of Cabernet Sauvignon, Grenache, Merlot and Shiraz. The key variety of Shiraz is the most desired variety for the region. Cabernet Sauvignon and Grenache are the other main varieties planted.

The mix of wine grape varieties planted on Moppa Springs Estate were chosen by FABAL Operations in conjunction with the major purchaser of grapes from the property, Pernod Ricard Winemakers, the owner of the famous Jacob’s Creek and St Hugo wine brands.

Shiraz dominates the planting on the Estate because of its notable reputation in the Barossa Valley region. It is also projected that demand will continue in the long term.

A significant quantity of Cabernet is also present of the Estate and this is being used to form part of the blends for both St Hugo and Grant Burge ultra-premium blends.

The average rainfall of the northern region of the Barossa Valley is approximately 530mm per annum. More importantly, the majority falls in the winter and spring (May to October) periods with lower likelihood of summer rain during the growing season. This results in reduced disease pressure from post rain events. There is low likelihood of hail but frost may affect the lower part of the site in some years. There is approximately 1,800 hours of sunshine from October to April of each (the heat degree index).

The site is open and has an undulating terrain. The soil on the property varies from red sandy clay loam to grey brown sandy loam. There is an iron stone base subsoil. The vineyard was established around this information (row orientation, dripper systems, planting density available water/drainage) based upon detailed research and investigation by experts in vineyard design and soil mapping.

Soil nutrition is another important factor that can affect growth and FABAL Operations implemented (pre-planting) and maintains a regime for management of this input.

CLIMATE AND SOIL

WATER AND IRRIGATION

Grapevines require regular watering to supplement the natural annual rainfall. To produce the quality of wine grapes expected for this business, the Moppa Springs Estate vineyard requires approximately 1.4ML of water per hectare of supplementary irrigation give the regions annual rainfall.

The northern region of the Barossa Valley has limited ground water for use in irrigation. Accordingly, the Moppa Springs vineyard has never relied on this source for its supplementary irrigation. NVFAL considers irrigation and its management to be the most important aspect of its operations. Considerable time was spent on the design of the irrigation system for the Moppa Springs Estate vineyard but a risk still exists that the irrigation system may malfunction.

Irrigation System: The water is delivered to the grapevines through a series of pumps and mainlines according to the irrigation designed for the vineyard. The sophisticated ‘in-line’ drip irrigation system, supplied by Netafim Australia in 2002, is considered the most effective supply of irrigation. The irrigation system is controlled by a computer network which enables the efficient application of the water through centralised control.

South Australian Water Entitlements: As has been seen in past years (and in particular between 2003 and 2010), potential risk exists that the vineyard may have an insufficient water supply in periods of drought. Accordingly, NVFAL has secured rights to 130ML of Barossa Infrastructure Limited (“BIL”) via the ownership of 227,500 shares in BIL. Since 2002, NVFAL has paid infrastructure charges (to pay off the scheme capital) and annual usage charges. Accordingly, water is the 2nd most expensive cost to the vineyard on an annual basis (after labour). Whilst NVFAL is satisfied that it has secured sufficient water and that the method of delivery via the BIL pipeline will be sufficient to provide water for the vines in most years, it is a reality that supply can be restricted due to extremely dry conditions or other unforeseen events.

Barossa Infrastructure Limited Shares: BIL is an unlisted public company with capacity to supply 10,000 ML per annum of supplementary irrigation water to viticulture in the Barossa Valley. Commencing 1 Oct 2015, the Scheme can supply 9,000 ML from entitlements held and therefore has latent capacity of 1,000 ML. SA Water provides the connection to the Warren Reservoir, supplemented with water supplied via the Mannum Adelaide Pipeline and Warren Transfer Main, from the River Murray.

“To provide a high quality water supply in the Barossa which, when applied in environmentally and viticulturally appropriate quantities, sustains crop yield and quality through dry periods at a cost that is lower than other quality water sources.”

BIL is required to have River Murray Water Allocations for the water supplied by SA Water. This water comes from Water Access Entitlements, either purchased or in the form of long term leases, and annual Water Allocations purchased on the market.

MOPPA SPRINGS ESTATE