CONFIDENTIAL

Stafford Timberland

Stafford Timberland is the timberland division of Stafford Capital Partners Limited, company no: 4752750 registered office: 24 Old Bond Street, London, W1S 4AW

Stafford Timberland – Phaunos Investor Presentation

30 June 2015

CONFIDENTIAL 2

Stafford Timberland, a division of Stafford Capital Partners Limited ("Stafford"), is distributing this shareholder update in its capacity as manager of Phaunos Timber Fund

Limited (the "Company"). The Company is a Guernsey domiciled Authorised Closed-ended investment scheme pursuant to section 8 of the Protection of Investors (Bailiwick of

Guernsey) Law 1987, as amended and rule 6.02 of the Authorised Closed-ended Investment Schemes Rules 2008. The Ordinary Shares of the Company are admitted to the

Official List of the UK Listing Authority and to trading on the London Stock Exchange’s main market.

In distributing this update Stafford and is relying on the fact that all recipients of it are qualified investors' within the meaning of section 86(7).of FSMA who are also (i)

investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (''FPO"); or (ii) high net worth

companies within the meaning of Article 49 of the FPO; or.(iii) members of the Company within the meaning of Article 43(2) of the FPO; or (iv) certified high net worth

individuals within the meaning of Article 48 of the FPO; or (v) certain sophisticated investors within the meaning of Article 50(1) of the FPO (each a "relevant person"). Persons

who do not fall within any of these definitions should not rely on this document nor take any action upon it. The document is only exempt if it is distributed to the exempt

categories of recipients. This document has not been approved as a financial promotion or otherwise by a person who is authorised under FSMA for the purposes of section

21 of FSMA and rules made under such legislation or any other applicable securities laws of any other territory. Approval will be required unless the recipient of this promotion

is a relevant person. This presentation has not been, and will not be, reviewed or approved by the Financial Conduct Authority ("FCA") or any other authority or regulatory

body.

Stafford is issuing this shareholder update, which includes a presentation by David Nunes, the Chief Executive Officer of Rayonier Canterbury LLC (“Rayonier”), a Delaware

company through which the Company holds an interest in the Matariki forest assets (the “Rayonier Presentation”) exclusively as manager of the Company and will not be

responsible to anyone other than the Company for providing regulatory and legal protections afforded to customers (as defined in the rules of the Financial Conduct Authority)

nor for providing advice in relation to the contents of this document on any matter, transaction or arrangement referred to in it. None of Stafford, the Company, Rayonier (in

respect of the Rayonier Presentation), nor any of their respective directors, officers or employees makes any representation or warranty, express or implied, as to the accuracy

or completeness of the information or opinions contained in this shareholder update...

Stafford is authorised and regulated by the FCA but has not authorised the contents of all, or any part of, this document. To the fullest extent permitted by law. none of Stafford,

the Company and Rayonier (in respect of the Rayonier Presentation), nor any of their respective members, directors, officers, employees, agents or representatives nor any

other person accepts any liability whatsoever for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred

howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with the subject matter of this document. The contents of this

shareholder update are not to be construed as legal, financial or tax advice. This document should not be distributed in whole or in part to other parties.

This shareholder update is being supplied to shareholders solely for their information and does not constitute or contain any invitation or offer to any person to subscribe for,

otherwise acquire, or dispose of any Ordinary Shares in the Company or advise persons to do so in any jurisdiction. This shareholder update does not constitute a

recommendation regarding the Ordinary Shares of the Company.

Some statements contained in this update are or may be forward-looking statements, including without limitation any forecasts or projections. Actual results may differ from

those expressed in such statements, depending on a variety of factors. Any forward-looking information contained in this shareholder update has been prepared on the basis of

a number of assumptions, only some of which are set out in the update,. which may prove to be incorrect, and accordingly, actual results may vary.

For the avoidance of doubt, nothing in this shareholder update is intended to constitute a profit forecast.

The value of any investments may fall over time and you may receive less back than what you invested on the back of any investment

Disclaimer

CONFIDENTIAL

1. Introduction

2. Progress over the past year

3. Current and future performance

Introduction – Sir Henry Studholme

3

CONFIDENTIAL

1. Introduction – Sir Henry Studholme, Phaunos Chairman

2. Main points – Stephen Addicott, Stafford Capital Partners

3. Phaunos update – Net Asset Value and operations

4. Management plan update

5. Updated 2015 financial guidance

6. Portfolio construction

7. Presentation on Matariki - David Nunes, CEO Rayonier

8. Looking ahead – management focus and shareholder presentation

9. Stafford’s view

Agenda

4

CONFIDENTIAL 5

Main points

CONFIDENTIAL

1. 2014 Dec NAV of USD 321m Stafford considers is a realistic estimate of the value overall

2. Forecast 2015 cash position updated from a USD 7m deficit to a USD 2m* surplus

3. Cash held increased from USD 15m (Dec 2014) to USD 21m (29 June 2015)

4. Improved cash position due to cost reductions and a 1-year harvesting contract for Mata Mineira (USD 7m

net)

5. Forward focus on further cost reductions and achieving sustainable revenues

6. Ongoing target of selling non-core assets and opportunistic sales of non-yielding assets

Main points

6

* After one-off costs of USD (2)m for the closure of Phaunos Boston and the final capital call from Greenwood Tree Farm Fund

CONFIDENTIAL 7

Phaunos update – Net Asset Value and operations

CONFIDENTIAL

Phaunos investments and % of Net Asset Value

USA

Uruguay

Brazil

New Zealand

China

Tanzania

Mozambique

Matariki 41%

Mata Mineira 15%

Eucateca 11%

Uganda

Green Resources

GTFF

Aurora 10%

Pradera Roja 7%

Green ChinaNTP

Phaunos update

Non Core = 12% combined NAV

* The December 2014 NAV of USD 321m comprises 84% core assets, 12% non-core assets and 4% parent company assets

8

CONFIDENTIAL

1. NAV reduced USD 98m from USD 419m (Dec 2013)

to USD 321m (Dec 2014)

2. The USD 98m included:

USD 63m reduction in independent valuations

USD 26m reductions recommended by Stafford

USD 18m unrealised foreign exchange losses

Offset by new equity raised

3. Relative to the 2013 values, the low & medium risk

asset values reduced by 11% and the higher risk

asset values by 54%, reflecting greater end market

uncertainty

4. Stafford considers the 31 Dec 2014 NAV of USD

321m to be realistic

Phaunos update – Net Asset Value changes

9

Comparison of the Dec 2013 & Dec 2014 NAVs

5. Updated NAV, adjusted for cash movements and foreign exchange, as at 23 June 2015, was approximately

USD 290m due mostly to a strengthening US Dollar

Low & medium risk assets Higher risk assets

CONFIDENTIAL

1. Matariki, USD 1.3m Q1 2015 dividend, but flat Chinese demand expected to limit additional dividends

in 2015

2. USD 1.5m Aurora Forestal dividend based on solid US lumber demand. Steady growth in US Housing

starts and a strong US dollar indicate a similar dividend for 2016

Phaunos update - operations

10

Chinese softwood log inventories at ocean ports US Housing starts & lumber prices

Source: International Wood Markets Group, China Bulletin June 2015Source: National Association of Home Builders/US Housing Starts March 2015;

Source: Random Lengths lumber and panel composites

CONFIDENTIAL

0

50000

100000

150000

200000

250000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Hecta

res p

lante

d

3. For Mata Mineira, the charcoal markets are oversupplied but a 529,000 m3 pulpwood contract in 2015 is

expected to net USD 7m. Discussions for a subsequent contract are still to take place but we are planning

for the 2015 contract to be a one-off event.

4. Pradera Roja/Eucateca replacement of property managers & negotiation of partial property sales

5. Active involvement on non-core assets, Green China, Green Resources, Greenwood Tree Farm and NTP

Phaunos update - operations

11

0

5

10

15

20

25

30

35

40

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Million m

3 o

f ro

und w

ood logs

Integrated steel Merchant pig iron Alloys Others Fiber

Wood consumption for charcoal, MG Brazil Wood consumption for charcoal, MG Brazil

Source: Silvicultural Association of Minas Gerais, Annual Report 2013 Source: Silvicultural Association of Minas Gerais, Annual Report 2013

CONFIDENTIAL

Phaunos update - operations

12

Mata Mineira harvesting operations Aurora Forestal thinning operations

Eucateca pruned teak logs Eucateca eucalypt harvesting operations

CONFIDENTIAL 13

Management plan update

CONFIDENTIAL

Management plan update

14

2014 – Phase I 2015 – Phase II 2016 – Phase III

Costs:Identification of cost control

measuresImplementation

Maintenance of low cost

operations

Revenues: Identify key markets Increase market accessRegular harvesting in line with

increasing volumes

Asset sales:Focus on existing interested

partiesTarget buyers Target buyers

NAV:

Provision against higher risk

assets & focus on appraisal

assumptions

NAV Consolidation Base NAV annual growth

Management: Review structures & controls Implement change Maintain & adapt as required

Primary focus: Cost reductionCost reduction and revenue

generationSustainable yields

Costs:

Revenues:

Asset sales:

NAV:

Management:

Primary focus:

Implementation

Increase market access

Target buyers

NAV Consolidation

Implement change

Cost reduction and revenue

generation

CONFIDENTIAL

Management plan update

15

2015 – Phase II 2016 – Phase III

Costs:

Revenues:

Asset sales:

NAV:

Management:

Primary focus:

2015 – Phase II

Implementation

Increase market access

Target buyers

NAV Consolidation

Implement change

Cost reduction and revenue

generation

Key changes

USD 3.0m cost reduction, annual running costs USD 15m (2014) reduced

to USD 12m (2015f)

USD 7m net increase in revenues from Mata Mineira contract; harvesting

started at Eucateca eucalypts and an unexpected Matariki dividend

No sales to report to date, but negotiations well advanced on parts of

Pradera Roja and Eucateca Teak estates

NAV considered by Stafford to be realistic

Change of property managers for Pradera Roja & Eucateca

An ongoing priority

CONFIDENTIAL 16

Updated 2015 financial guidance

CONFIDENTIAL 17

Financial guidance – cash position

2015 Financial Guidance

USD millionsDec 2014

Estimate

Dec 2014

Actual

Previous

Guidance on

2015

*Updated

Guidance on

2015

*Guidance on

2015 half year

NAV 330-360 321 ~290

NAV per share (USD/share) 0.58-0.63 0.57 0.51

Cash inflows 9 10 8 16 13

Cash outflows (16) (15) (12) (12) (6)

One-off / restructuring costs - - (3) (2) (1)

Other cash adjustments - - -

Net cash outflows (7) (5) (7) 2 6

Sale of non current assets - - - - -

Equity placement 12 12

Cash held at start of FY 8 8 13 15 15

Cash held at end of FY 13 15 6 17 21

Cash inflows and outflows are from operations & investment activities.* Indicative estimates subject to variation, NAV adjusted for FX and cash movements only

CONFIDENTIAL 18

Portfolio construction

CONFIDENTIAL

– Higher risk non-core assets include Green China, Green Resources and Greenwood Tree Farm Fund

– The core assets are dominated by lower & medium risk assets and assets with immediate harvesting potential

– We are in advanced discussions for the partial sale of Pradera Roja & Eucateca teak assets (between USD 3 to

10m in total). Once completed these sales will help to reduce the overall risk rating and lower the percentage of

non-yielding growth assets within the portfolio

Portfolio construction

19

Portfolio risk (based on 31 Dec 2014 NAV) Portfolio harvesting maturity profile

Potential sale of non-yielding

growth assets

Partial sale

of Pradera &

Eucateca

Teak assets

CONFIDENTIAL 20

Presentation on Matariki – David Nunes, CEO Rayonier

CONFIDENTIAL 21

Looking ahead

CONFIDENTIAL

Looking ahead – management focus

22

Continued focus on cost reductions and revenue generation including:

1. Matariki debt reduction

2. Market development of Eucateca eucalypts

3. Aurora Forestal sawmill augmentation to capitalise on increasing woodflows

4. Asset sales of higher risk assets supplemented by opportunistic sales of non-yielding growth assets

5. Ongoing corporate cost reductions and sale of high cost assets such as Green China

6. Development of Phaunos 5 year cashflow models and strategic plan 2016-2021

CONFIDENTIAL

Looking ahead – Shareholder communication

23

Shareholder communication over the course of the next 12 months will involve

1. August 2015 - Release of 2015 half year results

2. December 2015 - Meetings with shareholders to discuss strategic plan 2016-2021

3. March 2016 - Shareholder presentation detailing 2015 FY results and final strategic plan 2016-2021

4. April 2016 - Release of 2015 full year results

5. June 2016 - AGM and Phaunos continuation vote

CONFIDENTIAL 24

Stafford’s view

CONFIDENTIAL

1. The Dec 2014 NAV of USD 321m is a realistic overall value

2. The turnaround from a cash deficit of USD 7m to a forecast cash surplus of USD 2m in 2015 is a real

positive…. But more work is needed to achieve sustainable net revenues

3. A key to sustainable revenues is debt reduction for Matariki, along with market development for the

Brazilian eucalypt assets

4. The higher risk assets have been difficult to sell but the cashflow position does not require these assets to

be sold immediately

5. We will continue to work diligently to improve the performance of the fund

6. The Phaunos portfolio has a solid core of good quality assets that has the potential to provide sustainable

yields – we plan to prove this through its performance and through the presentation of the 2016-2021

strategic plan

Stafford’s view

25

CONFIDENTIAL

Stafford Timberland

Stafford Timberland is the timberland division of Stafford Capital Partners Limited, company no: 4752750 registered office: 24 Old Bond Street, London, W1S 4AW

Stafford Timberland – Phaunos Investor Presentation

30 June 2015