Jemi Fibre Corp. of Nanaimo, BC, has signed a letter of intent with WoodEx Industries Ltd. to acquire all of its issued and outstanding shares and a letter of intent with Kootenay Wood Preservers Ltd. and Prairie Holdings Inc. to acquire all of the issued and outstanding shares of KWP and Prairie.
WoodEx operates a sawmill located in Edgewater, BC. The sawmill is situated on about 50 acres of land and on a nominal board foot basis, has capacity to produce about 110 million BFM per annum. Its principal wood product is designed for the Japanese housing market.
KWP is a post peeling and treatment operation and plant, with its principal operations located in Cranbrook, BC, on about 70 acres of land. It produces treated timber products for agricultural, highway and telephone pole use.
Prairie is a contract logger operating in the Kootenay region of BC. It has a current run rate of approximately 250,000 cubic metres of logging per annum.
Completion of the transactions is subject to a number of conditions, including but not limited to, entering into definitive agreements with WoodEx, KWP and Prairie, TSX Venture Exchange acceptance, any other required regulatory and/or shareholder approval, and completion by Jemi Fibre of concurrent financing.
WoodEx, KWP and Prairie are not dealing at arm's length with Jemi Fibre in that Mike Jenks and Georgina Martin, directors and principal shareholders of Jemi Fibre, are directors of NMS Ventures Ltd., which owns 50% of WoodEx, and are directors of RGM Holdings Ltd., which owns 50% of each of KWP and Prairie. Accordingly, each of the transactions will constitute a ‘non-arm's length transaction’.