marketwired.com – Conifex Timber Inc. (“Conifex” or the “Company”) (TSX:CFF) announced today that it has completed the purchase (the “Purchase”) of 100% of the outstanding shares and shareholder loans of a private Delaware company (“AcquisitionCo”). The consideration consisted of 100,000 common shares of the Company at a deemed price of CAD$6.75, as well as the reimbursement of certain costs previously incurred by the vendor.
AcquisitionCo had the exclusive rights to acquire a sawmill and related facilities and equipment, including approximately 186 acres of land, located near El Dorado, Arkansas, United States (the “El Dorado Mill”). Concurrent with the closing of the Purchase, AcquisitionCo exercised its right to acquire the El Dorado Mill for total consideration of US$21 million, comprised of US$12.36 million in cash and an US$8.64 million vendor mortgage.
Ken Shields, Chief Executive Officer of Conifex commented: “It’s important to Conifex to secure this ideal site and high quality infrastructure in one of the most advantaged softwood supply regions in North America.” Mr. Shields further added, “The uncertainties flowing from the expiry and renegotiation of the Softwood Lumber Agreement could potentially impact the timing of the modernization and upgrade of our Canadian sawmills, while we expect the SLA will have less impact on capital expenditure decisions for mills located in the US.”
The El Dorado Mill is situated in an area well regarded for its availability of high quality sawlogs within cost effective proximity and a skilled labor pool. The Company is currently completing its review to evaluate the optimal capital upgrade for the El Dorado site, following which management expects to determine the priority in which to rebuild its currently idled Mackenzie Site I mill or the El Dorado Mill. Over the longer term, the Company expects to undertake capital upgrades to rebuild both of these mills.
The common shares issued pursuant to the Purchase Agreement will be subject to a hold period expiring four months and one day following closing.
About Conifex Timber Inc.
Conifex and its subsidiaries’ primary business currently includes timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips, and value added lumber finishing and distribution. Conifex’s lumber products are sold in the United States, Chinese, Canadian and Japanese markets. Conifex has expanded its operations to include bioenergy production following the commencement of commercial operations of its power generation facility at Mackenzie, British Columbia.