Miramichi Lumber Commences Legal Action Against Province of New Brunswick

Company Received Less than Half its Permanent Saw Log Allocation

MIRAMICHI, NB, Aug. 1, 2014 /CNW/ - Miramichi Lumber regrets to announce that it has commenced an action against the Province of New Brunswick for damages suffered  as a result of the Province's failure to  honour its agreement allocating saw logs to the Company from crown forests. The Statement of Claim was served on the Province July 10, 2014.

Miramichi Lumber was not successful in its attempt to resolve the dispute, and avoid legal action, through discussions with the Minister of Natural Resources and senior officials in the Department of Natural Resources.

Miramichi Lumber was incorporated in 2009 by a group of private investors, majority with backgrounds rooted in Miramichi. These shareholders have invested more than $5 million, relying on the sawlog allocation agreement with the Province. The Department of Economic Development also relied upon the allocation agreement when it provided loan financing and a  loan guarantee.

The Company was limited to saw log deliveries for year ended March 31, 2014 of 49,000 cubic metres (1200 truckloads), despite the initial agreement of the Province of a permanent allocation of 126,500 cubic metres of sawlogs and a later agreement  for an additional 39,500 cubic metres.

"Miramichi Lumber received less than half its permanent allocation from the Province in 2013," said Daniel Anderson, CEO. "It is unfortunate that Miramichi Lumber has been forced to take legal action against the Province of New Brunswick to preserve our rights. However, we are determined to preserve both the employment and the significant investment in our operations. We will vigorously pursue legal remedy to this situation."

The Miramichi Lumber sawmill employs 60 people. It was only able to operate  for seventeen weeks in 2013  because of the crown saw log shortfall. The Company's planer/kiln facility in Boiestown, which employs an additional fifteen workers, also operated  on a limited schedule in 2013.

The Company continues to improve its efficiency and had planned to open a drying/dressing facility in Blackville in 2013, creating twenty jobs in Blackville. As a result of the Province's action that opening has been postponed.

 

SOURCE Miramichi Lumber Products Inc.

For further information: W. Daniel Anderson, CEO, president, danderson@mlpi.ca, T 506-622-3155, M 506-625-9724; Hal Raper, FCA, CFO, VP Woodlands, hraper@mlpi.ca, T 506-622-3155, M 506-627-9971