Conifex Timber Announces Sawmill Curtailment and Plan to Appeal BC Supreme Court Ruling on Cryptocurrency Ban

Conifex Timber Inc. (“Conifex”) announced that it will appeal the ruling of the BC Supreme Court (“BCSC”) upholding a government decision that prevented Conifex from diversifying its business operations and helping stabilize the interior BC forest sector.

Conifex, a forestry and independent power company operating in Mackenzie BC, had sought to develop High Performance Computing (“HPC”) data centers in northern BC. Those plans were put on hold late in 2022 when the Lieutenant Governor in Council (“LGIC”) directed the British Columbia Utilities Commission by Order-in-Council (“OIC”) to relieve BC Hydro of the obligation to supply electrical service for cryptocurrency projects for a period of 18 months. The cryptocurrency moratorium forced Conifex to halt development at two HPC sites BC Hydro had identified as promising locations with available power to support HPC data center operations.

In April 2023, Conifex filed a petition in the BCSC seeking judicial review of the OIC and an order quashing and setting aside the OIC as unauthorized or otherwise invalid. The BCSC dismissed the petition in February 2024. Although the judgment concluded that the LGIC could not impose a permanent ban on supplying power, imposing a temporary ban on cryptocurrency miners was determined to be valid.

“Conifex has not been provided any credible justification for allowing BC Hydro to deny service to our two HPC sites,” said Ken Shields, Chairman and CEO of Conifex.

Mr. Shields added: “With the large number of forest sector plant closures over the past few years, it is obvious that forestry companies need to diversify and strengthen their revenue streams to sustain operations. Successfully appealing the decision will provide us a clear path to resume work on initiatives that meet the social and economic expectations of our employees, contractors and shareholders, as well as residents of the communities where we operate.”

Conifex continues to believe that the provincial government and BC Hydro are missing out on several opportunities available to them to improve energy affordability, accelerate technological innovation, strengthen the reliability and resiliency of the power distribution grid in British Columbia, and achieve more inclusive economic growth. Conifex looks forward to an opportunity to hold discussions that will promote the principles of sustainable economic development and Indigenous reconciliation in the Province.

Conifex also announced today that it is curtailing its sawmill and planer for a period of two weeks commencing June 17, 2024. The curtailment is the result of ongoing weather-related transportation challenges that have delayed spring log deliveries and resulted in lower than planned log inventories. It is anticipated that the reduced operating schedule will impact sawmill production capacity by approximately 8,500 Mfbm. Conifex continues to deliver spring decked logs from the southern portion of the Mackenzie TSA, and has commenced summer logging activities in the northern portion of the TSA. While weather may continue to impact log deliveries, Conifex currently anticipates resuming full operations at the sawmill and planer on July 2, 2024.

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 and distribution. Conifex’s lumber products are sold in the United States, Canadian and Japanese markets. Conifex also produces bioenergy at its power generation facility at Mackenzie, BC.

Contact:

Trevor Pruden – Chief Financial Officer – (604) 216-2949

Source: Conifex Timber Inc.