An anonymous director reports

GREENFIRST UPDATES STRATEGIC CAPITAL EXPENDITURE PLAN FOLLOWING KAP PAPER SPIN-OUT AND LAUNCH OF RIGHTS OFFERING

Greenfirst Forest Products Inc. has provided 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-per-cent production increase and up to a 10-per-cent 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, hereby allowing for quicker ramp-up of production as the lumber market improves. Depending on the amount of capital raised in the company's 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 per cent, enhancing recovery rates and reducing processing costs by about 5 per cent. 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 spinout 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 the company's 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 Forest Products Inc.

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 (Forest Stewardship Council) 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.

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