Montreal-based forest manufacturer Tembec (TSX:TMB) has closed the sale of approximately 17,700 hectares of forestland in the East Kootenays to Vancouver and Nanaimo-based Jemi Fibre Corp. (TSX-V:JFI).
The sale, originally announced April 24, totaled $15 million and is the first of a planned two-phase sale. The second phase, which is expected to close in September 2014, will sell Jemi approximately 31,800 hectares for a price of $20 million.
The purchased timberland is in multiple titles, all near Fernie.
This second phase remains subject to Jemi obtaining adequate financing.
Tembec has set an objective of realizing up to $70 million in British Columbia land sales by December 2014. To date, it has realized a total of $38.6 million and still has 7,400 hectares it is trying to sell.
“There can be no assurance that the Company will attain the stated objective or that it will do so within the specified time period,” Tembec cautions.
In a statement, Jemi Fibre CEO and president Michael Ainsworth said Jemi has secured $16 million in financing as it pursues the second phase purchase.
The purchase from Tembec is part of an aggressive Kootenay expansion for Jemi. This year, the forest company acquired three wood manufacturing companies in the region, namely the WoodEx Industries sawmill in Edgewater; Kootenay Wood Preservatives in Cranbrook, and Prairie Holdings, a contract logging operation.
Tembec is an international manufacturer of forest products - lumber, pulp, paper and specialty cellulose. Principal operations are in Canada and France. Tembec has some 3,500 employees and annual sales of approximately $1.6 billion.
