GreenFirst Updates Strategic Capital Expenditure Plan Following Kap Paper Spin-out and Launch of Rights Offering

TORONTO, ON / ACCESSWIRE / November 11, 2024 / GreenFirst Forest Products Inc. (TSX:GFP) ("GreenFirst" or the "Company") announced an update to its strategic capital expenditure plan to accelerate growth in the lumber sector and advance its goal of becoming Ontario's largest and most profitable lumber producer.

Since acquiring sawmills from Rayonier Advanced Materials in August 2021, GreenFirst has invested modestly in various capital projects, such as a new infeed and kiln at Chapleau and additional kiln capacity at Cochrane and Hearst. These upgrades have addressed key production bottlenecks and positioned the Company for future growth and high-return investments.

Over the coming years, GreenFirst plans to establish itself as a top-quartile lumber producer in North America. The Company has opportunities to invest approximately $50 million during the current "off-cycle" in lumber pricing, which could yield up to a 20% production increase and up to a 10% reduction in production costs, which all translates to returns well above the cost of capital. The anticipated payback period for these projects is roughly 2.8 years or better. Off-cycle investments allow GreenFirst to maximize the value of each capital dollar spent and optimize installation timing, at hereby allowing for quicker ramp-up of production as the lumber market improves. Depending on the amount of capital raised in our announced financing, these projects could be completed within the next two years.

Following this initial phase, GreenFirst has identified an additional $70 million in capital expenditure opportunities focused on further increasing production capacity by over 15%, enhancing recovery rates, and reducing processing costs by about 5%. These initiatives would further solidify GreenFirst's position as a low-cost lumber producer.

The combination of anticipated improvements in lumber prices, cost reductions, funds raised through the recent Rights Offering, along with the completion of the spin-out of Kap Paper and other asset monetization, enables GreenFirst to pursue a measured and strategic capital expenditure program. This approach is designed to optimize GreenFirst's existing assets and transform GreenFirst into a first-quartile producer within the industry.

Each proposed investment is undergoing a thorough evaluation to ensure alignment with our overall business strategy and to ensure substantial returns. The Company continues to work with its Board of Directors to obtain approval for these initiatives.

GreenFirst will discuss its updated capital expenditure plan in greater detail during its third-quarter earnings call.

About GreenFirst

GreenFirst Forest Products is a forest-first business focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets, proudly operating over 6.1 million hectares of FSC®-certified public Ontario forestlands (FSC®-C167905). GreenFirst believes that responsible forest practices, coupled with the long-term green advantages of lumber, provide the Company with significant cyclical and secular advantages in building products.

Forward Looking Information

Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "potential", "believe", "intend", "estimate" or the negative of these terms and similar expressions. Forward-looking statements are based on certain assumptions and, while GreenFirst considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. In addition, forward-looking statements necessarily involve known and unknown risks, including those set out in GreenFirst public disclosure record filed under its profile on www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. GreenFirst disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

For more information, please visit: www.greenfirst.ca or contact Investor Relations at (416) 775-2821.

Investor Relations at (416) 775 2821

SOURCE: GreenFirst Forest Products Inc.