Elandsberg Nature Reserve Game Farming operations
1. Background
Elandsberg Nature Reserve was formed in 2006 when seven game farm owners agreed
(whilst each retaining full title to their land) to remove fences, share traverse rights, and to
manage the reserve as one ecological unit over an area of 12 000ha. Elandsberg has all the
naturally occurring plains game of the Limpopo Province including sable, roan, East African
buffalo, white rhino, brown hyena and leopard.
2. Management and ownership of Elandsberg’s game farming operation
The game on Elandsberg is owned by Elandsberg Nature Reserve (Pty) Ltd. The landowners
on Elandsberg own the game via a shareholding in the above company. Elandsberg Nature
Reserve (Pty) Ltd is managed by its board of directors (landowners), who delegate day to day
operational responsibilities to its on site manager, Louis Nienaber.
The Elandsberg board meets annually, and a sub-committee of the board meets on a more
regular basis with Louis to oversee farming progress and make decisions. Elandsberg pays an
annual grazing fee (rental) equal to 10% of gross cash revenue from game to the Elandsberg
landowners. Only Elandsberg landowners may own shares in Elandsberg.
The East African buffalo and rhino herds roam freely on the Welgedacht plains of
Elandsberg.
3. Game farming strategy
The high cost of quality breeding rare game stock has become a significant barrier to new
entry in the game industry. The Elandsberg landowners participate in the game farming
industry on a cooperative knowledge and cost sharing basis. This is achieved via the pooling
of capital thereby lowering the capital cost barrier to entry for individual landowners.
We plan to generate revenue in the medium term from the sale of the following categories
of game:
Buffalo
Roan
Sable
Njala
Bushbuck
General plains game
41%
11%
25%
3%
2%
19%
100%
4. Valuation of game on Elandsberg
Elandsberg’s game is valued annually using the average auction prices achieved in South
Africa, and adjusted for downwards where auction prices are either distorted because of the
mix of superior breeding animals to average animals, or not reflective of likely future
realistic market prices. The schedule in Annexure A reflects game to the value of R21.1m at
31 December 2013.
Elandsberg Nature Reserve (Pty) Ltd
The split between plains game and rare species is as follows:
Rare species
Plains game
59%
41%
100%
5. Financial forecasts
The financial projections below assume the following future selling/valuation prices for rare
species (assuming a 50%:50% male/female sex birth ratio):
Species
Buffalo
Roan
Sable
Conservative forecast
future selling price
Rand
280 000
80 000
110 000
Elandsberg’s herds of rare game are still growing to optimal size, and as such will only start
to produce meaningful cash profits from 2017. As a consequence, dividends are only
forecast from 2017. A summary of the key financial forecasts using the conservative future
selling prices above are set out below:
2014
R'000
2015
R'000
2016
R'000
2017
R'000
2018
R'000
Total
R'000
Cash revenue from game sales
508
481
1895
2311
3222
8417
Increase in rare game numbers
3463
3154
3315
2136
2543
14612
51
48
189
231
322
842
Attributable profit after tax
2103
1809
3144
2627
3678
13361
Dividends to shareholders
0
0
0
399
1683
2082
Grazing fees paid to landowners
6. Valuation of Elandsberg shares
New Elandsberg landowners are encouraged to acquire shares in Elandsberg in order to
participate in the fruits of the land over and above the earning of grazing fees. This can be
achieved by either purchasing shares from existing shareholders, or subscribing for new
shares, subject to negotiation. Elandsberg currently has game valued at R21.1m, and net
asset value (after providing for deferred taxes on increases in game stock) of R18.2m.
Elandsberg has 1 139 665 shares in issue, valuing the shares at R16.00 per share.
Elandsberg game numbers
Species
IMPALA
KUDU
BLUE WILDEBEEST
BURCHILL'S ZEBRA
WATERBUCK
BUSHBUCK
ELAND
MOUNTAIN REEDBUCK
BLESBUCK
OSTRICH
KLIPSPRINGER
COMMON DUIKER
STEENBOK
WARTHOG
GIRAFFE
NJALA
RED HARTEBEEST
GEMSBOK
RHINO
SABLE
ROAN
BUFFALO (our 45% share of herd of 36)
No estimate
Dec-13
898
636
307
227
57
17
86
185
10
7
20
20
20
303
51
21
20
32
8
13
15
36
2013
auction prices
RAND
1283
3000
2941
4975
3846
9878
7079
4556
1347
2031
3500
3831
6565
456
14846
10706
4663
6172
APP A
Game value
Dec-13
RAND
1,151,842
1,908,735
901,593
1,130,619
218,030
163,382
605,255
843,224
13,470
14,745
70,000
76,620
131,300
138,122
757,146
221,828
9,326
196,146
2,480,000
2,440,000
2,040,000
5,528,320
21,103,419