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Fortress Paper provides update on its specialty cellulose mill cogeneration facility

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Fortress Paper provides update on its specialty cellulose mill cogeneration facility

August 13, 2013 - 01:24
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VANCOUVER, BC, Aug. 13, 2013 (Market Wire) -Fortress Paper Ltd. (FTP.TO) ("Fortress Paper" or the "Company") reports that the high pressure water pump at its Fortress Specialty Cellulose Mill (the "FSC Mill") was re-installed on July 12, 2013 and the cogeneration facility operated for 20 days before being shut-down due to pump failure. The back-up high pressure water pump was then installed on August 5, 2013 and its operation was again unsustainable due to inadequate repairs. The Company has already placed an order with another supplier for a high pressure water pump which is expected to arrive in approximately four weeks for installation.

Despite these setbacks, the Company completed all major testing of equipment during the operating period. The facility successfully completed 18 and 24 MWH output testing. The Company anticipates completing the final 100 hour test as soon as the new pump is installed and tested. Fortress expects the cogeneration facility will be delivering power to the Hydro Quebec grid at the contractual rate within 24 hours of completing the test.

Chad Wasilenkoff, Chief Executive Officer of Fortress Paper commented, "Although the performance of the repair by the supplier of the pump has been disappointing, we are pleased that we were able to complete all major testing of equipment. The Company will proceed with an alternate pump supplier in order to complete the final 100 hour test before delivering power to the Hydro Quebec grid and ultimately reducing our production costs."

About Fortress Paper

Fortress Paper operates internationally in two distinct business segments: dissolving pulp and security paper products. The Corporation operates its dissolving pulp business at the Fortress Specialty Cellulose Mill located in Canada, which is also in the process of expanding into the renewable energy generation sector with the construction of a cogeneration facility. The Corporation is also seeking to expand its dissolving pulp capacity with the recent acquisition of Fortress Global Cellulose Mill located at Lebel-sur-Quévillon, Québec, which the Corporation is evaluating to convert into a dissolving pulp mill and re-start the cogeneration facility.

The Corporation operates its security paper products business at the Landqart Mill located in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers, and at its high security production and research facility located in Canada, where it manufactures optically variable thin film material.