African Mahogany Australia - Half Yearly Management Report December 2022

African Mahogany Australia

1.OperationsSummary

ThisHalfyearlyReportforthefirsthalfofthe2022-23financialyearispresentedinaccordancewiththe requirementsoftheManagementAgreement.Itencompassestheperiodfrom1July,2022to31December, 2022.

Themainoperationsperformedduringthereportingperiodincludedwild-firemanagementnearthe Whatforproperty,salesofthejarrahaycrop,continuationofthethinningprogram,grazing,jarracrop maintenancesprayingandgeneralpropertymaintenanceactivities.

MeanDouglasDalyRainfall(1968-2022):

RainfallrecordedintheDouglasDalyforthe2022/23wetseason:

AbnormallyhighrainfallwasreceivedinJuly,withtypicalrainfalllevelsbeingobservedinAugustand September.Theout-of-seasonrainwasreflectedbynewshootgrowthinmanystandsacrosstheWhatfor estate.

ModellingbytheAustralianBureauofMeteorology(BOM)andotherinternationalmeteorologicalagencies predictedthatAustraliawillexperienceanotherLaNinaeventatendofyear2022,withaboveaverage rainfalls.AstheNTenteredtheofficial“wetseason”(October-March)theearlyseasonrains(Octoberand November)were2-3timesgreaterthanthelong-termmedianrainfall.Therainswerequiteevenly distributedacrosstheestatewiththestandsofAfricanMahoganyrespondingwelltotherains,withearly leafflushandfullcanopydevelopment.

Theearlyandpersistingrainsshouldcontinuethroughtheremainderofthewetseason,resultingingreater soil-moisturelevels,whichinturnshouldbereflectedinbettertreehealthandextendedphasesofgrowth.

2. AreaStatement

The area of the Whatfor property is 3207 ha. Land use is summarised in table 1 below

Table1

2.1 2007AgeClass

The 2007 age class is generally in good health, although some areas are showing signs of (moisture) stress due to the below average wet seasons experienced over the last 3-4 years.

Weed management is being maintained in these areas through the grazing routine of the agistee, with approximately 250headofcows (plusoff-spring) beingmaintained acrossthe Whatfor property.

Further thinning of selected 2007 stands is programmed for H1FY23.

2.2 2008AgeClass

Like the 2007 age class, all stands that have had recent intervention and fertilisation have responded well and continue to grow and occupy the site well. Grazing has limitedweeds, fire riskand increased nutrient cycling in the plantation.

General plantation health is reasonable to good, with areas established on lighter-sandier soils or with a limited rocky soil profile – exhibiting some early signs of water stress. Thinning is required in unthinned stands to improve stand composition, reduce water stress and accelerate tree growth.

: Land-use summary, Whatfor Station.

*Areas as per the Margules Groome valuation undertaken in June 2021.

3. OperationalActivities

3.1 Thinning

Once the stand is established, thinning is the main method of influencing growth and development, and it is therefore crucial that thinning practice continues to help achieve management objectives.

Thinning is the removal of a number of trees from a plantation to reduce competition and provide increased room into which the remaining trees can extend their canopies and grow faster.

Thinning occurs naturally in all broadleaf woodlands and plantations, but in a haphazard fashion. By carrying out thinning operations, the best quality trees can be selected and favoured. The concept of thinning as a silvicultural treatment is to increases light, water, nutrients, and space available to the remaining trees. It will increase the stem volume of the selected trees over time and reduce the rotation length (time to final harvest).

Based on long-term research trial in the AMA mahogany estate, the Whatfor stands are being thinned down to a stocking of approximately 250-300 sph. Prior to thinning, tree marking is undertaken to assist in the selection of quality trees and even distribution within the stand – this is a critical operation which will determine which trees will grow on to be final crop trees. This operation also aids in increasing the speed in which manual falling crews can complete thinning in any given area.

Table1: Thinning completed at Whatfor Station to 250-300 sph.

3.2 Hayoperations

The 2021/22 jarra hay crop which was harvested in April was all sold at the end of the dry season to the Katherine feed mill. The sale price of $190/t (ex gst) delivered to Katherine ($144/t farmgate) was ~18% lower than the budgeted $170t (ex gst) farmgate. A depressed market for jarra, combined with high material costs (fertilizer and herbicides) and elevated transport costs (diesel prices causing an addition fuel levy for transport) resulted in a small loss on the jarra.

Following discussions with HVT CC board members, because of the extreme increase in fertiliser prices - $920/t (2021) versus $1450/t (2022); it was opted not to undertake fertilising of the 2022/23 hay crop. It was agreed that weed management would be undertaken as deemed necessary to improve the jarra quality and decrease broadleaf weed infestations. The mowing and baling of hay will be assessed in April 2023.

Cattle grazing in the Whatfor Mahogany stands.

Herbicide spraying to control broadleaf weeds November 2022.

Yellowing and death of broadleaf weeds 2 weeks after spraying (December 2022).

3.3 Firemanagement

The good maintenance of firebreaks and early dry season control burns along the vulnerable boundaries surrounding Whatfor undertaken by AMA, NT Parks& Wildlife, the Douglas Daly Volunteer Fire Brigade and local landholders proved essential during dry season wildfires in the region.

The wildfire that threatened Whatfor in August did not enter the property. AMA aided the neighbouring property (Whynot) to help control spot fires and decrease chances of further fire damage.

Good clean firebreaks and early season control burns reduces chances of wildfire.

4. OtherActivities

4.1 ESGactivity–July-December2022.

Environment

Fire Mitigation – AMA personnel attended a wildfire suppression training course held by BF NT. Fire Mitigation – AMA personnel continue to participate and coordinate with the local volunteer bushfire brigade assisting in the containment of wildfires within the district and near Whatfor Station. Feral animal control – AMA coordinated access to Whatfor Station to registered recreational hunters to assist in feral animal (buffalo, pig and wild dog) control.

Hazardous materials storage and handling – AMA personnel organized and attended a Chemcert course held in the Douglas Daly for contractors and community members.

Social

Inter-Industry Collaboration – CO continuing to work with NT Farmers to promote further education and training in agriculture and forestry industries. AMA supported NT Farmers with a chainsaw training course being held at Kumbyechants Station.

Community Fire Protection – AMA’s M Standish will remain on as the Douglas Daly Volunteer Bushfire Brigade Captain (2023) and will also act as a Fire Warden in the Douglas Daly. Inter-Industry Collaboration – CO and MS continuing to work with NT Farmers, FWPA, FIANT and NTOVFH to promote further education and training in agriculture and forestry industries, identifying infrastructure and supply chain needs and progressing the importance of forestry in the NT and the Douglas Daly.

Community Interaction – participation of AMA staff with the Douglas Daly community. MS elected as a TDDCDAI committee member for 2023.

Intra-Industry Collaboration – CO and MS hosted sawmillers from Victoria investigating the potential of the AM resource for future development. MS visited their operations in Victoria to gain a better understanding of the current structure and requirements.

Governance

Business Development – CO met with suppliers to discuss 2022 fertilizer pricing and logistics prior to awarding tenders for the supply of fertilizer for post-thinning application.

Business Development – CO participated in several research and working group meetings with FWPA, FIANT and the NTOVFH.

Business Development – CO presented information to FIANT as part of the NT Forest Industry Infrastructure, Supply Chain and Training needs analysis.

Government/Regulatory – CO participated in a meeting with the Northern Lands Council (NLC) and Parks & Wildlife re: access to the Stray Conservation Area.

Supplier/Contractor relations – CO has been in discussion with contractors and suppliers to assess difficulties in supply of equipment and materials and labour availability during 2022-23.

Business Development – CO meet with the Australian Manufacturing Growth Centre re: opportunities to develop processing of the AM resource in the NT.

Business Development – The members of the AMA board met with FM (TRG) to discuss strategies for AMA-TRG marketing and product development, which will include the AM resource on Whatfor.

availability and AMA requirements.

DevelopmentBusiness

Chris Oliver CO visited Max Correy (KTC) to review their thinning program and

MS hosted and particpiated in the NT Farmers Ag Careers3/08/2022

discuss silvicultural activities, product development and markets

Mark 12/07/2022 interactionCommunity PTT

CollaborationIndustryInter/intraCrop performancePTT

Chainsaw course at KBC.

cropping activies in the DD.

CollaborationIndustryInter/intra-

All

resource. 11/07/2022

discuss the AM estate development, agistment program and

Chris Oliver CO and Kelly Hart (Thomson Forestry) talked about opportunities in

management of fire within the district.

discuss the AM developments in the Douglas Daly region and the

MS met with CDU Environmantal Studies students and lectures to

sales development of FNQ Khaya resource and development of DD

MS attended a soil field day held at Tipperary Station

MS participaed in the Douglas Daly community cricket day

and protect Whatfor, Whynot, Gypsy Springs, and Mentabie.

MS coordinated the control of wildfire which came in from Jindare

MS assisted in controlling wildfires along Dorat Rd.

DVVBB and community members.

MS and CO attended a fire at Middle Creek station, assisting the

Canberra.

CO attended the Gottstein Wood scince course in Albury and

product development strategy.

Oliver

Mark

CO presented information to FIANT as part of the NT Forest

volunteers

MS organized and attended a First aid course for the community

generator driven bore.

Installation of solar bore at Mentabie sheds to replace the diesel

Access was given to Mentabie for the NT Dept of Water Resources 8/11/2022 RegulatoryGovernment/ AMA Chris

Chris Oliver CO and MS hosted FM and Mike Claridge (TRG) in the Douglas Daly

to visit the AM estate.

to access the water monitoring bores.

Douglas Daly for a site visit to gain a better understanding of the the Standish

AM resource, inventory measurements and property development.

CollaborationIndustryInter/intraCrop

Chris

Oliver CO particpiated in the FWPA Grower Research Advisory Committee

Oliver CO held a meeting with Australian Manufacturing Growth Centre re:

opportunities to develop processing of the AM resource in the NT.

Rocktear undertaking site visits for the annual valuations

hosted Con Psiroukis (Indufor) in the Douglas Daly and at

the estate.

Chris Oliver Registered hunters from Darwin and the local community

undertook feral animal control (pigs and buffalo) activities across

discussions around timber processing

Mark Standish

Oliver

MS meet with Harold Fox at Powelltown Sawmills for a tour and

Assocation.

Mark Standish was nominated and accepted as a committee

Christmas dinner.

CO participated in the NTOVFH meeting.

CO attaended the NT Farmers 2022 AGM.

Fuel reduction burns in collaboration with Wagaman Rangers, NLC, NT Gov Parks & Wildlife and Douglas Daly Community members June 2022, Whatfor Station