Prima Colombia Hardwood, Pacific Lumber, enter agreement to work together on timber acquisition, anticipate additional harvesting rights of up to 31.5 million m3
VANCOUVER, British Columbia
May 6, 2011
– Prima Colombia Hardwood Inc. (TSX-V: PCT) ("Prima") is pleased to announce that pursuant to the LOI reported on March 4, 2011, it has entered into a formal agreement (the "Agreement") with Pacific Lumber S.AS. ("Pacific") to join forces in Colombia to further develop Prima as a major international tropical hardwood timber development, production and marketing company.
The Agreement with Pacific anticipates the potential addition of rights to harvest up to 31.5 million cubic meters pursuant to timber concessions to be obtained by Prima through the efforts of Pacific (or approximately 10 times Prima's current timber reserves).
Pacific is part of Blue Pacific Assets Corp. with extensive expertise in developing highly successful natural resource projects in Colombia.
"Concluding this agreement with Pacific is an important milestone for Prima in its goal to increase its timber reserves", says Donald P. Hayes, CEO.
Prima's timber reserve under its current license is 3,121,720 cubic meters from an area of 44,596 hectares. All Prima forestry concession are intended to be operated following the highest standards of sustainable forestry and environmental management. Prima brings over 30 years of forestry experience and dedication to best environmental operating practices and working with local communities and governmental agencies.
The Agreement provides that Pacific and Prima will work exclusively together on timber acquisition and to further the business interests of Prima in Colombia.
This will be achieved by:
1. Pacific obtaining timber concessions, licenses or other exclusive binding rights to harvest timber from communities or other third parties for Prima; and
2. Pacific working to further the business interests of Prima by providing operating, regulatory, community and other support.
In consideration of these efforts, Prima will issue up to a maximum of 60 million common shares in the capital of Prima, which currently would represent 17.83% of the issued and outstanding shares of Prima after their issuance.
The shares will be performance based and issued at a rate of 1.9 Prima Shares for each 1.0 cubic meter of timber that Prima acquires the exclusive right to harvest by entering into concessions as a result of the efforts of Pacific.
The Agreement remains subject to applicable regulatory approvals, including the approval of the TSX Venture Exchange.
About Prima Colombia
Prima Colombia Hardwood Inc. is a TSX Venture Exchange-listed Canadian based forest products company focused on international tropical hardwood timber development, production and marketing. Prima Colombia's initial operations are located near Bahia Solano, Department of Choco on the west coast of the Republic of Colombia. The harvesting will be carried out using sustainable, selective, low intensity, helicopter logging which is both highly regarded as having low environmental impact and involves no 'clear cutting'.