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GreenFirst Announces Plan to Spin-Out Kap Corporation

Press Release

TORONTO, ON, July 2, 2024 GreenFirst Forest Products Inc. (TSX: GFP) (“GreenFirst” or the “Company”) announces that it intends to complete a spin-out transaction (the “Spin-out”) of Kap Corporation (“Kap”), whereby the shares of Kap will be held directly by the shareholders of the Company (as of the completion of the Spin-out). The Spin-out is expected to be completed in Q4 2024.  GreenFirst will hold a shareholder meeting on September 12, 2024, (the “Meeting”) where shareholders will be able to vote on the Spin-out. The record date for shareholders entitled to vote at the Meeting will be August 8, 2024.

The Spin-out of Kap is part of the natural progression of the decentralization and deconsolidation of the newsprint mill that was originally disclosed by GreenFirst in the Fall of 2023.  The Spin-out will enable GreenFirst to focus on its core business of being a pure-play lumber producer, offering shareholders a stake in any future upside from the development of Kap.  Under the new structure, Kap will be able to explore numerous possibilities that were not feasible under the original GreenFirst ownership structure. As a separate company, Kap will consider independent financing alternatives and partnerships in the future.

Kap Paper Inc. (“Kap Paper”) is the only chip consuming facility in Northeastern Ontario and the Spin-out provides Kap Paper with the potential to pursue new opportunities to support the green economy as part of a broader Northern Ontario forest strategy.

“We have made notable strides this year by improving operational performance and lowering our manufacturing costs. With these changes, we can now focus on developing the next evolution of Kap Paper, which is to produce various forms of green energy by efficiently utilizing sawmill residuals and forest biomass” said Terry Skiffington, Kap Paper’s CEO.

“We are pleased to announce the Spin-out, marking the culmination of the initiatives launched last year.  This strategic move enables us to fully concentrate on our core business. Kap Paper remains crucial as a major consumer of our residuals,” said Joel Fournier, GreenFirst’s CEO.

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). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provides GreenFirst with significant cyclical and secular advantages in building products.

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

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