Conifex Announces Note Financing and Provides Corporate Update

VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 12/10/14 — Conifex Timber Inc. („Conifex“ or the „Company“) (TSX: CFF) today provides the following corporate update.

Proposed Private Placement of Convertible Subordinated Notes

Conifex announced today a proposed private placement of approximately $12 million aggregate principal amount of unsecured subordinated convertible notes due December 15, 2016 (the „Notes“). The Company primarily intends to use the net proceeds of the private placement to repay its existing convertible notes totalling approximately $9.7 million which mature on December 15, 2014, and expects to use the balance of the net proceeds for working capital and general corporate purposes.

The Notes will bear interest at 7% per annum from the date of issue, such interest to be payable in cash twice a year on June 15th and December 15th. The principal amount of the Notes, plus all accrued and unpaid interest, are convertible, at the option of the holder, prior to the maturity date. The conversion price for the Notes will be based on a premium to the market price of the Conifex common shares prior to closing, subject to the rules and policies of the Toronto Stock Exchange („TSX“).

From December 15, 2015, the Company will have the right to redeem the Notes, in whole or in part, plus all accrued and unpaid interest, on at least 30 days– prior written notice. The Notes will be transferable, subject to hold periods required by applicable securities laws, but will be unlisted.

The offering of the Notes is expected to close on or about December 15, 2014.

All Notes issued in connection with the private placement will be subject to a statutory hold period of four months and a day from the date of issuance, in accordance with applicable securities laws. The completion of the private placement is subject to customary closing conditions, including the approval of the TSX.

Mackenzie Power Generation Project

Further to its news release on October 30, 2014, Conifex provides an update on its Mackenzie Power Generation Project. Equipment repairs at the Mackenzie Power Generation Project are proceeding as scheduled, and reinstallation, testing, and commissioning work is expected to commence in January 2015 once the repaired components are delivered to the project site. The Company has received confirmation from the underwriter that insurance coverage for physical damage and delay in start-up („DSU“) has been extended under its course of construction policy.

The Company previously estimated the Power Project construction budget would total approximately $100 million. The Company currently expects the net financial impact attributable to the delay of commercial operations to be approximately $3 million, comprising the deductible for insurance for physical equipment damage and the customary waiting period for the receipt of insurance proceeds under the DSU coverage. Conifex expects to be fully reimbursed for foregone income after the expiry of the waiting period, as provided for under the DSU coverage.

Conifex remains committed to the Power Project, which it believes will help improve the cost competitiveness and margins at the Company–s forestry, sawmilling and bioenergy site at Mackenzie.

Conifex Power LP is in discussions with the project lenders to amend its existing project finance credit facility to reflect the revised project schedule.

Appointment of Vice President, Power Generation Operations

Conifex is pleased to announce the appointment of Fred Stock as Vice President, Power Generation Operations of Conifex Power LP effective January 5, 2015. Mr. Stock holds a First Class Interprovincial Power Engineer Certificate and has extensive experience managing power plants and cogeneration facilities at a number of locations in western Canada. Mr. Stock was most recently the General Manager and Chief Power Engineer of an 18 MwH power plant in Westlock, Alberta which maintained a strong safety record and plant reliability during his tenure.

Seasonal Expansion to Credit Facility

The Company announced that it is completing a seasonal expansion of its existing $25 million senior secured revolving asset backed credit facility by $10 million with the existing lender until May 31, 2015. The temporary increase is intended to provide the Company with additional working capital flexibility in its lumber segment to accommodate seasonal log build up and potential inventory builds due to weather related shipment delays.

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, Chinese, Canadian and Japanese markets. Upon completion of its power generation facility at Mackenzie, British Columbia, Conifex–s business sectors will be expanded to include bioenergy.

Forward-Looking Statements

Certain statements in this news release may constitute „forward-looking statements“. Forward-looking statements are statements that address or discuss activities, events or developments that Conifex expects or anticipates may occur in the future. When used in this news release, words such as „estimates“, „expects“, „plans“, „anticipates“, „projects“, „will“, „believes“, „intends“ „should“, „could“, „may“ and other similar terminology are intended to identify such forward-looking statements. Forward-looking statements reflect the current expectations and beliefs of the Company–s management. Because forward-looking statements involve known and unknown risks, uncertainties and other factors, actual results, performance or achievements of the Company or industry may be materially different from those implied by such forward-looking statements. Examples of such forward-looking information that may be contained in this news release include statements regarding the use of proceeds of the private placement, the expected timing for the closing of the private placement growth and future prospects of our business, the anticipated benefits, cost, timing and completion dates for the power generation project at the Company–s Mackenzie facility. Assumptions underlying the Company–s expectations regarding forward-looking information contained in this news release include, among others: that the Company will receive TSX approval for the private placement; that the Company will be able to effectively market its products; that the U.S. housing market will continue to improve; that there will be no further delays and disruptions affecting the completion of the power generation project at the Company–s Mackenzie facility and that the Company will be able to complete repairs to the project in early 2015; that softwood lumber will experience improved and sustained demand in the marketplace at favourable prices; that the Company will be able to dynamically respond to shifts in demand among its major markets; the general stability of the economic, political and regulatory environments within the countries where the Company conducts operations; the ability of the Company to obtain financing (if necessary) on acceptable terms or at all; that interest and foreign exchange rates will not vary materially from current levels; that management will effectively execute the Company–s strategy to grow and add value to its business; and that our mills and equipment will operate at expected levels.

Forward-looking statements involve significant uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, without limitation: those relating to potential disruptions to production and delivery, including as a result of equipment failures, labour issues, the complex integration of processes and equipment and other factors; labour relations; further delays relating to acquiring parts, scheduling offsite resources or unfavourable weather conditions; failure to recover a material or any portion of the additional carrying costs and incremental costs associated with the delay in COD from insurance policies; failure to meet regulatory requirements; changes in the market; potential downturns in economic conditions; fluctuations in the price and supply of required materials, including log costs; fluctuations in the market price for products sold; foreign exchange fluctuations; trade restrictions or import duties imposed by foreign governments; availability of financing (as necessary); shipping or logging disruptions; and other risk factors described in the Company–s 2013 annual information form, available on SEDAR at . These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.

Conifex Timber Inc.
Yuri Lewis
Chief Financial Officer
(778) 331-8687

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