Conifex Creates Over 100 New Jobs By Acquiring A Dormant Sawmill In Mackenzie

Conifex Timber Inc.

2012-In June of 2010, Conifex Timber Inc. invested in two dormant sawmills, including their associated planer mills, a paper mill, and a steam/power plant in Mackenzie, BC. These mills have a combined annual production capacity of 445 million board feet of lumber on a two-shift basis. Through Conifex's investment in Mackenzie, the company also acquired a forest license with an annual allowable cut of approximately 932,500 cubic meters.

Forestry is the leading industry in Mackenzie, so the closing of these mills in 2008 was devastating for 700 employees who lost their jobs in the community. Many residents of Mackenzie were forced to relocate in an effort to obtain employment elsewhere and many others started making weekly commutes to Fort St. James or Prince George for work. When Conifex commenced operations in November of 2010, hope was restored for residents of Mackenzie and the greater region's forest-based economy.

With an economic stimulus loan from the Government of Canada's Community Adjustment Fund (that was provided in central and northern British Columbia by Northern Development Initiative Trust), Conifex was able to invest in upgrades including the purchase and installation of a new de-barker system. The availability of economic stimulus financing for these projects greatly increased the speed at which Conifex was able to move forward with their acquisition and capital investment plans in Mackenzie.

"The development of bioenergy at our Mackenzie facilities in conjunction with our traditional operations will diversify existing revenue sources, counteract some of the volatility inherent in the commodity lumber sector, and provide additional stable employment opportunities within the community of Mackenzie."

Ken Shields, Chief Executive Officer, Conifex Timber Inc.

"We expect employment opportunities to be expanded not only from the creation of jobs directly related to the project but also because this removes one of the impediments to the 2012 restart of our Site I Mackenzie mill."

Ken Shields, Chief Executive Officer, Conifex Timber Inc.

Positive Economic Impacts in Mackenzie

The re-opening of the Site II sawmill was significant to the community in that the mill is an essential economic driver for Mackenzie and the region's forest-based economy. By bringing Mackenzie's Site II sawmill back online, the company initially created over sixty new manufacturing jobs, and quickly increased that number to one hundred and ten new employees in the community with the start-up of the second shift. This project is an important part of Mackenzie's revitalization, as it is driving new investment in the community's primary industry sector and generating significant industrial tax revenues for the municipality, while also bringing back skilled workers to the community who have gained the confidence to once again live and work in Mackenzie.

Most recently, Conifex has announced plans to develop a new bioenergy business in Mackenzie and has entered into an agreement with BC Hydro to sell clean renewable biomass produced electricity into British Columbia's energy grid. A portion of the residuals produced by the sawmill will be used to generate clean, renewable power that will be purchased by BC Hydro.

Conifex envisions that the bioenergy project, with a thirty six megawatt steam turbine, will be able to produce 230 gigawatt hours of energy each year and generate revenues of $25 million annually. The construction of the Bioenergy facility will create eighty jobs during the eighteen month construction period and over twenty new permanent positions upon completion.

The addition of bioenergy revenue will further enhance Conifex's financial performance and diversification of its sources of revenue, helping to ensure long-term sustainability of the local wood products manufacturing sector in Mackenzie.