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Jemi Fibre to acquire L&M Wood Products

Located in Glaslyn, Saskatchewan, L&M Wood Products is a fully integrated wood products company focused on producing and developing value added wood products for diversified markets. The L&M facility is situated on 430 acres of land and includes:

– Saskatchewan’s largest timber producing sawmill, upgraded in 2008, with an oversize head rig (optimized) saw and standard size log line;

– Post and wood treatment plant operating as Saskatchewan’s largest producer of treated wood products servicing the agricultural market;

– Dowler producing high quality, value added rails;

– Firewood processor with production capacity of up to 6,000 cords per year; and

– Re-manufacturing plant with an incisor, planer, multi-rip saw, band resaw and bundle cutter, all focused on custom, on-demand products such as specialty grooved dunnage and lathe.

In connection with the Transaction, Jemi Fibre Corp. will also be acquiring:

– L&M’s Forest Management Agreements with the Province of Saskatchewan, allowing an annual harvest of 205,000 cubic metres of hardwood and softwood;

– P&E Logging, a stump-to-dump logging company with approximately $8 million of equipment and capacity to harvest and haul up to 200,000 cubic metres timber annually; and

– 60% of L&M Wood Residues which sells bark, peelings, shavings and sawdust for use in agricultural, industrial and oilfield applications and has a capacity to transport 40,000 green tonnes of wood residue material per year.

The purchase price for the Transaction, subject to adjustments for debt balances at closing, is $16 million consisting of $5.3 million in cash, $3 million in Jemi Fibre common shares and the assumption of $7.7 million in debt. The Company has commenced its due diligence under the letter of intent and anticipates further announcements as the process continues.

Jemi Fibre is a B.C.-based forestry company that owns private timberland, harvesting, and specialty wood product production assets as part of its expanding operation. In 2014, the company acquired 50,000 hectares of forest in southern B.C. from Tembec, while also acquiring three other regional forestry assets.

Mike Jenks, Chairman & CEO, commented “This acquisition is a natural extension of our vertical integration strategy and an opportunity to add scale to our growing wood treatment division. Similar toprevious acquisitions, we anticipate applying our industry experience and harvesting capabilities to improve capacity, profitability and provide an attractive return on investment.”

Completion of the Transaction is subject to conditions in the ordinary course of transactions of this nature, including acceptance by the TSX Venture Exchange. There can be no assurances that the Transaction will be completed.

The company also announces that the TSX Venture Exchange has approved an exchange of $281,984.86 of debt into 469,975 of common shares of the Company at a price of $0.60 per share, previously announced on April 13, 2015.