AGM Minutes & Units for Sale
5 August 2004

To All Partners

We are pleased to report as follows:

Units for Sale
Two Partners wish to sell their units of Partnership capital. If you would like to make an offer, please do so through us. For some guidance as to value, see below and our 'Units for Sale' page.
There we list the sum per unit invested to date for all our partnerships and we give our 'recommended retail price'. For Six Hills these figures are currently $7,239 and $10,900.

Value of Units
The value of a partnership's units should reflect the value of the immature forests it has. But immature forests cannot be valued with a great deal of certainty, the more so the further from harvest they are.
From a market value stance, there are too few sales of immature forests and there is a very wide range of quality. Accordingly, there are not a lot of similar and recent transactions one can point at to arrive at a 'market' value.
From a financial analysis stance, there are three key variables. These are quantity, quality and net log price and one can at best only give educated estimates of what these might be. But the further away the harvest is, the more uncertain the quantity and quality variables are, so the less certain a valuation becomes. The 'market' is very fickle about uncertainty. When it lacks confidence, a large discount is made for it 'just in case'. When it is confident the discount may almost be dropped altogether. Forest valuation is really more an art than a science.

A Good Time to Buy or Sell?
Given the unusual factors outlined above surrounding the valuation of immature forests, a wide range of valuations can be defended at any particular time. In practice the valuations go up when there is a lot of confidence in the local industrial forestry companies and down when there is not.
We are in a period when confidence is low, so without a doubt it is a 'buyer's market' at the moment.

Kind regards,
Charles Etherington,
Manager
Warren Forestry Ltd

Warren Forestry Ltd, New Zealand forestry investment provider
Warren Forestry Ltd, New Zealand forestry investment providerWarren Forestry Ltd, New Zealand forestry investment providerWarren Forestry Ltd, New Zealand forestry investment provider