Jemi Fibre Corp. Announces $13 Million Bought Deal Equity Financing and Operations Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 3, 2015) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Jemi Fibre Corp. (TSX VENTURE:JFI) ("Jemi Fibre" or the "Company") announced today that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. and including CIBC World Markets Inc., Mackie Research Capital Corporation and Dundee Securities Ltd. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal private placement basis, 21,670,000 units (the "Units") of the Company, at a price of $0.60 per Unit (the "Offering Price") for aggregate gross proceeds to Jemi Fibre of $13,002,000 (the "Offering").

The Company has also agreed to grant the Underwriters an over-allotment option to purchase up to an additional 3,250,500 Units at the Offering Price, exercisable in whole or in part, up to 48 hours prior to the Closing Date. If this option is exercised in full, an additional $1,950,300 will be raised pursuant to the Offering and the aggregate gross proceeds of the Offering will be $14,952,300.

The Offering is expected to close on or about March 24, 2015 (the "Closing Date") and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange (the "Exchange").

Each Unit of the Offering is comprised of one common share of the Company and one half of one common share purchase warrant (each a "Warrant" and together, the "Warrants"). Each Warrant shall be exercisable for a period of 36 months following the Closing Date at an exercise price of $0.90 per share. The warrants shall provide that if, during the 36 month period following the Closing Date, the Company's volume weighted-average share price for 20 consecutive trading days equals or exceeds $1.15, the Company may give notice to holders of Warrants that the Warrants will expire 30 days from the date of notice, during such 30 day period, holders may exercise their Warrants in accordance with their terms.

The net proceeds from the Offering are expected to be used for debt reduction, future acquisitions, working capital and general corporate purposes, including the retirement of the approximate $10 million Facility A credit facility previously announced on August 27, 2014, which is secured against the Company's sawmill in British Columbia. Retirement of this debt is expected to increase pre-tax cash flow by approximately $300,000 per month.

In connection with the Offering, Mike Jenks, Chairman & CEO of Jemi Fibre, has agreed to exercise 8,333,333 common share purchase warrants, representing all of his $0.32 warrants set to expire in June 2015 (the "Warrant Exercise"). The Company will use the proceeds of the Warrant Exercise to further reduce indebtedness. Following completion of the Offering and Warrant Exercise, Mr. Jenks will own 42% of the 78.3 million common shares outstanding and 37% of the 28.6 million warrants outstanding.

The Company has agreed to use commercially reasonable efforts to cause certain directors, officers and insiders (including, but not limited to, Mike Jenks, Georgina Martin and Brent Lokash) to deliver a lock-up in favour of the Underwriters pursuant to which they agree to not sell any common shares of the Company for a period of twelve months following the Closing Date.

Mr. Jenks commented, "The Offering and Warrant Exercise are the first steps in reducing leverage and right-sizing the Company's capital structure for the long term. We expect that in the coming quarters we will be in a position to announce additional recapitalization measures to further reduce leverage, establish long-term institutional funding at a lower cost of debt, and further reduce the number of in-the-money warrants outstanding." Mr. Jenks added, "Jemi Fibre is well-positioned as an emerging, integrated forestry company, and continues to look to grow organically or through acquisitions to drive profitability, add scale and capitalize on the positive macro-economic sector tailwinds."

The Shares will be sold in all of the provinces and territories of Canada on a private placement basis pursuant to "accredited investor" exemptions under National Instrument 45-106 and certain other available and agreed upon exemptions. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

The Company is also pleased to report EBITDA for January 2015 of approximately $1.84 million and combined EBITDA of $5.1 million for its third quarter ended January 2015. The Company anticipates releasing its full financial results for the third quarter by March 20, 2014.

The Company further announces that it has acquired Forest License A16832 (the "License") located in the Kispiox Forest District in the vicinity of Hazelton, British Columbia, through an equal joint venture partnership with a British Columbia based, forestry company. The replaceable License has an annual allowable cut of 55,414 cubic meters plus a current undercut of 180,663 cubic metres. The total acquisition cost is $776,796 which is subject to adjustments in the normal course. The acquisition is also subject to approval by the Ministry of Forests, Lands and Natural Resource Operations, and the Exchange.

"The renewable license acquisition represents an opportunity for the Company to diversify and expand its forestry asset base and generate increased revenue through the sale of logs into both the domestic and international log markets," noted Mr. Jenks.

About Jemi Fibre

Jemi Fibre is a British Columbia based forest products company which trades on the TSX Venture Exchange under the symbol JFI. Jemi Fibre's operations consist of a full service contract logging division, with operations in Mackenzie and Cranbrook, a sawmill located in Edgewater producing high value lumber products, a manufacturing facility in Cranbrook producing pressure treated posts, rails and lumber for agricultural and industrial use, and private timberlands located in the Kootenay region.

Forward Looking Statements

Certain statements included herein constitute forward-looking statements. The words "expect", "intend", "anticipate", "propose" and "may" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, such risks, uncertainties and other factors set forth under "Risk Factors" in the Company's current MD&A filed with the British Columbia Securities Commission. Forward-looking statements are necessarily based upon a number of estimates and assumptions. While such estimates and assumptions are considered reasonable by the management teams of Jemi, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks and accordingly may not occur as described herein or at all. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.

The financial information included in this release also contains certain data that are not measures of performance under IFRS. For example, "EBITDA" and "EBITDA excluding specific items" are measures used by management to assess the operating and financial performance of the Company. We believe that EBITDA is a measure often used by investors to assess a company's operating performance. EBITDA has limitations and you should not consider this item in isolation, or as a substitute for an analysis of our results as reported under IFRS. Because of these limitations, EBITDA should not be used as a substitute for net loss or cash flows from operating activities as determined in accordance with IFRS, nor is it necessarily indicative of whether or not cash flow will be sufficient to fund our cash requirements. In addition, our definitions of EBITDA may differ from those of other companies. Additional information relating to the Company is available on SEDAR at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.