Cadiz Valley Water Conservation, Recovery & Storage Project

1. Cadiz Valley Water Conservation, Recovery & Storage Project July 2013

2. Cadiz Inc. • California company founded in 1983. • Land and water rights at 3 locations in San Bernardino County. • 20-year organic farming operation. • Developing water supply and groundwater storage projects. PIUTE CADIZ DANBY CRA

3. 1,300 sq. mile watershed -size of Rhode Island Approx. 20 million AF stored in the alluvial aquifers, comparable to Lake Mead Estimated average natural recharge 32,500 AF/year Cadiz-owned land at base of watershed. 66 Bristol Dry Lake Cadiz Dry 5 Miles Lake The Cadiz Valley New York Mountains Providence Mountains Fenner Valley Granite Mountains Orange Blossom Wash

4. Loss of Water at Dry Lakes Groundwater in the watershed currently flows to local dry lakes, where it is lost to evaporation. Dry Lake Crust Beneath Dry Lake Surface

5. Cadiz Valley Property • 34,000 acres with 9,600 acres zoned for permanent agricultural development. • 1,600 Acres developedfor ag:grapes, lemons and seasonal vegetables. • Network of 8 large-scale production wells and 10 monitoring wells. • 3,000 – 5,000 AF/year used for irrigation. • Site of Cadiz Valley Water Conservation Project.

6. Project Design • Intercept and conserve groundwater before it reaches dry lakes. • Put conserved water to beneficial use in So. California water system. • Without intervention, billions of gallons of water lost

7. Conservation & Recovery (CEQA Approved) Deliver average of 50,000 AF/year to water providers over 50-year project term, subject to management plan. Reliable supply for 100,000 families. Facilities – 20-32 wells and supporting wellfield manifold Natural gas power source and ancillary facilities 43-mile buried pipeline to Colorado River Aqueduct within Arizona & California Railroad right-of-way. Project Description – Phase 1

8. Project Participants • Six water providers with customers in LA, Orange, Riverside and San Bernardino Counties. • Santa Margarita Water District • Three Valleys Municipal Water District • Suburban Water Systems • Golden State Water Company • California Water Service Company • Jurupa Community Services District • Arizona & California Railroad will receive water and power for critical railroad purposes.

9. Environmental Analysis and Approvals • 2009 – 2011: Analysis of water and environmental resources conducted, CEQA review process led by SMWD. • July 31, 2012: SMWD Board unanimously certified the Final EIR. • October 1, 2012: San Bernardino County Supervisors approved Groundwater Management, Mitigation and Monitoring Plan and withdrawal of 50,000 AF/yr.

10. Groundwater Management Plan • Over 40 monitoring features including – • Measured water levels in private wells • Air quality monitoring installations • Subsidence monitoring devices • Plan includes action triggers designed to identify potential impacts in advance and authorizes strict corrective actions. • Regular monitoring reports prepared by technical experts will be reviewed and posted online. • Independent enforcementby San Bernardino County & Santa Margarita Water District.

11. Subject to further permitting, import water when available for storagein the aquifer system at Project area ; return to agencies when needed in dry years. Facilities: Convert existing buried 30” pipeline from Cadiz to Barstow to water conveyance Recharge basins on Cadiz Property to accept storage water, and Pump station. Total storage capacity = 1 million acre-feet. Phase 2 – Imported Water Storage

12. Map – So Cal Water System • Phase 1 & 2 would link Cadiz to main water transportation routes in California.

13. Capital Cost (approx.): Phase 1 Conservation and Recovery - $275 M. Phase 2 Imported Water Storage - $250 M. 18 months construction for Phase 1 could begin as early as next year. Economist John Husingestimated construction benefit for Phase 1 & 2: Total economic impact of approx. $878M over 4 yrs. Create and support average of 1,500 jobs/yr. Economic Impact

14. Economic impact will benefit many sectors including: Construction (heavy, industrial) Construction Materials & Supplies Planning & Engineering Transportation Construction–related jobs to be across various specialties: Construction Benefits

15. Local Support • Building Industry Association of Southern California • Inland Empire Economic Partnership • The Morongo Basin Regional Economic Development Consortium • Adelanto Chamber of Commerce • Needles Chamber of Commerce • 29 Palms Chamber of Commerce • Rancho Cucamonga Chamber of Commerce • Fontana Chamber of Commerce • Redlands Chamber of Commerce • South Orange County Regional Chamber of Commerce • Orange County Taxpayers Association • San Bernardino Railroad Historical Society

16. Timeline /Next Steps • 2013 • Resolve outstanding litigation, BLM. • Consider sales agreements with current option holders. • 2014 • Finalize agreements with Metropolitan Water District for CRA tie-in and exchange terms. • Begin additional permitting for Phase 2. • Project financing, final design and start construction of Phase 1 facilities.

17. For more information, visit www.cadizinc.comemail:ir@cadizinc.com