Conifex announces agreement with Dunkley
April 15, 2016 - Conifex Timber Inc. announced that it has completed a timber harvesting cooperation agreement with Dunkley Lumber Ltd. to conduct coordinated joint timber harvesting operations on certain portions of Conifex’s harvesting areas in the Mackenzie Timber Supply Area. Conifex believes that the coordinated harvesting operations will enhance fibre optimization between the two companies, improve supply chain efficiencies, and contribute to more stable harvest levels in the Mackenzie Timber Supply Area. Conifex also believes that this innovative arrangement with Dunkley can provide additional volumes of affordable feedstock to its power generation unit at Mackenzie through increased utilization of lower quality wood and harvest residuals.
By Andrew Macklin
Pursuant to the agreement, Dunkley paid Conifex $20 million to acquire half of the shares of a Conifex subsidiary which holds a forest licence having a 300,000 cubic metre annual harvest of timber.
Conifex intends to use the net proceeds from the transaction to repay indebtedness, augment working capital and fund high-return capital projects at its BC harvesting and manufacturing operations.