Conifex announces closing of senior secured financing; promissory notes in aggregate principal amount of C$12M will expire on Dec. 31, 2012
VANCOUVER, British Columbia
December 1, 2011
– Conifex Timber Inc. ("Conifex" or the "Company") (TSX VENTURE:CFF) announced today that it has completed its previously announced senior secured financing pursuant to which it issued promissory notes in the aggregate principal amount of $12 million.
The promissory notes will expire on December 31, 2012, subject to early redemption by the Company as provided in the notes, and bear interest rates of 10% for the first six months and 12% for the remaining term of the loan. As additional consideration for the loan, the Company issued share purchase warrants entitling the holders to purchase up to an aggregate of 325,000 common shares of the unissued capital stock of the Company at a price of $9.50 per share until December 31, 2014. The warrants (and the underlying common shares) are subject to a hold period of four months and a day from the date of issue of the warrants.
About Conifex Timber Inc.
Conifex and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips, and value added lumber finishing. Conifex's lumber products are sold in the United States, Chinese, Canadian and Japanese markets. Upon completion of its bioenergy facility at Mackenzie, British Columbia, Conifex's business sectors will be expanded to include bioenergy.
Conifex's sawmill complex situated in Fort St. James, British Columbia was purchased in August 2008 and commenced operations on a one-shift basis in March 2009. Conifex's two-mill complex situated in Mackenzie, British Columbia was purchased in June 2010. One mill at Mackenzie started up on a one-shift basis in November 2010. Conifex added a second shift at Fort St. James and Mackenzie in late March 2011 and expects to operate at approximately 70% of capacity once the production ramp up phase from the second shifts is completed. On a combined basis, Conifex now owns sawmills having an annual lumber production capacity of approximately 745 million board feet on a two-shift basis. The sawmill complexes are supported by renewable forestry licences with an allowable annual cut of approximately 1.6 million cubic metres.