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Oak Valley Truffles Project 2008

Oak Valley Truffles Project 2008
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $13,626 (ex GST)
Term of Project 20 years
Research Adviser Edge 3 stars
ATO Product Ruling 2008/1
 
Telephone: (08) 9758 8633
Fax: (08) 9757 3999

** Oak Valley advise that as June 15 falls on a Sunday applications received for Trufferies under the PDS/Prospectus for the Oak Valley Truffle Project 2008, lodged with the ASIC on 10 March 2008, received by post from Monday, 16 June 2008 and for two working days thereafter shall be accepted conditional upon the applications being dated on or before Sunday, 15 June 2008. In addition any applications received by facsimile or by email on Monday, 16 June 2008 (the next business day) will also be accepted.

"This is a fully integrated Truffle and hazelnut investment opportunity in Manjimup, Western Australia, providing investors with land ownership and participation in all aspects of Truffle and hazelnut production and sale.

This offer invites investors to participate in cultivation and harvesting of up to 45 hectares of oak and hazelnut trees, inoculated with French Black Truffle (Tuber melanosporum), at Manjimup in Western Australia.

The oak and hazelnut trees which have already been planted are fully irrigated and will be cultivated over a number of years under specific conditions as they grow and mature. As the root system on the trees expand so the fungus develops in symbiotic harmony. Eventually the tree and fungus reach a “critical mass” and the “mature” fungus creates fruit bodies; these are the highly sought after French Black Truffle.

The Oak Valley Trufferie (plantation) is on land situated on Seven Day Road, Manjimup and this location is approximately three kilometres from the Hazel Hill Trufferie, which is also located on Seven Day Road. The planting of the Hazel Hill Trufferie was undertaken in late 1997 and 1998 and comprises twenty-one hectares of oak and hazelnut trees.

Dr Nicholas Malajczuk is the scientific expert who was responsible for establishing the Hazel Hill Trufferie. He is a former CSIRO scientist with more than twenty-five years experience in studying fungi, including the black truffle fungus.

Wally Edwards has been the Managing Director of Hazel Hill Pty Ltd since its inception.

The Hazel Hill Trufferie has provided an excellent opportunity to continue a scientific study of the truffle fungus with particular emphasis on studying the commercial production factors and issues. The plantings at Hazel Hill are large enough to facilitate large scale research. In September 2007 the Hazel Hill Trufferie was awarded a Federal Government Research Grant for $755,000 to be expended on truffle research over 3 years.

This is a fully integrated investment opportunity, giving investors participation in the production and sale of Truffles and hazelnuts and ownership in the Land owning entity. Based upon the extensive research that has been undertaken at the nearby Hazel Hill trufferie over the past 11 years, and the resultant Truffle and hazelnut production, I view the Oak Valley Truffle Project 2008 with great pride and hold tremendous enthusiasm for its future. I invite and welcome your participation in this exciting venture."

Geoff Barrett
Managing Director, Watershed Premium Wines Ltd (issuer of the Trufferies)
Chairman, Truffle Properties Limited (issuer of the Land Shares)

ABOUT TRUFFLES

The truffle is an edible fungus that grows underground through a symbiotic relationship with the roots of specific host trees. When the tree and the fungal filaments reach maturity, usually after about five years, the fruiting body or truffle is produced and occurs seasonally thereafter.

Truffles have always existed in their natural habitat in Europe and are highly-prized. The Greeks and Romans attributed them as having healing and aphrodisiac powers, while today they are regarded as the pinnacle of haute cuisine and are revered by gourmons worldwide.

Truffles can be described as ‘gourmet mushrooms’. They have a pungent, intense, earthy fragrance and lend a unique flavour to food. They occur naturally, mainly in France and Italy, and are sometimes referred to as ‘black gold’ or ‘black diamonds’ because of their scarcity and worth.

Fresh truffles are available in Europe between December and February, and the Western Australian production season is the opposite of the European season offering marketing and exporting opportunities. The gourmet’s dream of extended availability of fresh truffle is now a reality.

TRUFFLE GROWTH CONDITIONS

In contrast to most edible fungi in the market place, the truffle fungus grows completely underground, developing from the mycelium, a network of filaments invisible to the naked eye. The truffle fungus represents a mushroom that develops underground. It lives symbiotically in association with roots of trees, nourishing its tree partner with minerals such as phosphorus while receiving organic substances such as sugars in return. Only hazelnut and some varieties of oak trees can support the black truffle, which in turn has limited their distribution to the natural occurrence of the species to areas of southern Europe. Black truffles grow in soil that is shallow, free draining and with a high limestone content.

The climate must have distinct seasons, hot in summer and cold in winter. Only when these conditions are met will the black truffle grow and produce its subterranean mushrooms.

The French Black Truffle occurs naturally on calcareous soils in France and limited occurrences in Italy, Spain and Portugal at an elevation of 100 to 1000 metres between latitude 40N and 47N.

TRUFFLE INDUSTRY

The Manager believes that the time is right to expand the plantings of truffle producing plantations based on current significant research results relating to the increased production level of Truffles at Hazel Hill.

The world market and demand for truffles is huge. World supply from native areas has steadily declined since World War II from around one-thousand tonnes to a reported eight tonnes in 2004.

Historically, very little research or science has been applied to truffle production in Europe. Production is typically from small scale farmers who take a very “traditional” approach to the art of production.

The spectacular growth rates being achieved in trial areas at the Hazel Hill property give enormous encouragement that commercial truffle production is a reality.

The product is high value and has a fresh shelf life of approximately four weeks. Air-freight transport is very cost effective and efficient. The product can also be tinned and bottled. Second and third class product can also be made into processed products such as salsas with a considerable increase in value.

Truffle Projects Pty Ltd have an agreement with Hazel Hill Pty Ltd that will allow a complete and open transfer of information and knowledge. Dr Malajczuk will continue to consult to Hazel Hill and continue to expand on his research into the commercialisation of truffle production. All information gained at Hazel Hill will be available to Truffle Projects Pty Ltd and will be implemented at the Oak Valley Trufferies.

MARKETING OF TRUFFLES

The Manager will adopt a wait and see approach as to how approach the marketing of the Truffles. The agreement with Hazel Hill will allow all marketing information to be made available to Truffle Projects Pty Ltd. Hazel Hill are now actively marketing truffles both in and outside Australia.

They have been approached by a number of truffle dealers from France, Spain and Italy. They are also having the international market surveyed by Austrade. Hazel Hill will have an increasing amount of truffles to sell into the world markets. Over the next 2 or 3 years as this product begins to enter the world markets Hazel Hill will discover many of the issues regarding the international market for Truffles. The Manager will observe and analyse these issues and then develop strategies to enter the market with the objective of optimising the price received by 2008 Growers.

There is more than enough evidence to be satisfied that the fresh truffle market can and will absorb much more truffle than Oak Valley and Hazel Hill can produce. The truffles are produced 6 months out of season to the northern hemisphere production. There are currently no commercial quantities of truffles being currently produced in the southern hemisphere for export markets.

Truffle Projects Pty Ltd will also explore the market for processed truffle and for truffle products to determine the most profitable way to develop these markets on behalf of the 2008 Growers. Again Hazel Hill is doing preliminary work on both of these product groups and the Manager will access their research and then develop a marketing and sales strategy.
 

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