Pinnacle 0 What it looked like before 1 Pinnacle 3 decades of - PowerPoint PPT Presentation

Pinnacle 0

What it looked like before 1

Pinnacle – 3 decades of growth Period Activity Late 1980’s Swaan brothers commence feed pellet operations in Quesnel Early 1990’s Developed wood pellets for home heating Built 2 nd mill in Williams Lake for bulk product 2004 2005 Commenced bulk shipments to European Power sector Built 3 rd mill in Houston, partnering with Canfor and Morristown Indian Band 2006 Bought 4 th mill in Armstrong for local bag market 2007 Built 5 th mill in Meadowbank 2008 First Bulk shipment to Japan 2011 Acquired by ONCAP (Onex Corp) Built 6 th mill in Burns Lake 2013 Built Panamax capable dedicated export terminal in Prince Rupert Building 7 th mill in Lavington, partnering with Tolko 2015 2

Lowest Risk Wood Pellet Supplier in the World Operate 7 pellet plants, producing 1.5 million tonnes of wood pellets Situated in BC, one of the worlds most sustainable and plentiful fibre baskets Pioneer in the diversification of feedstock (bark, sawdust, shavings, chips, logs) Leveraging 25 years of production experience, proprietary equipment & technical expertise Dual port, rail linked and panamax capable export logistics Strongly positioned for growth with ONCAP as an equity partner 3

Pinnacle’s Products  Bulk Industrial Pellets  Dedicated and co-fired large scale combustion & generating systems  CHP systems  Institutional heating systems  Bagged Pellets  Heating fuel  Animal bedding  Sorbent 4

Residential Heating 40 lb bags, Retail: • Premium Fuel (Douglas Fir) • Residential Fuel (SPF) • Animal bedding (Pet Comfort) • Sorbent & Other 5

Institutional Heating Bulk truck deliveries into hoppers • Education facilities, community centres, recreation facilities, prisons, hospitals, police, military and coast guard detachments, greenhouses. • Remote facilities often heated with oil or diesel if no gas installed 6

Industrial / CHP Bulk ship or rail deliveries into silo • Carbon neutral alternative to fossil fuels • Often seasonal demand • Sensitive to logistics costs 7

Renewable Energy Generation Full shiploads into storage facilities • Co-fired up to 15% with coal • Dedicated firing with maybe 10% coal 8

Pinnacle and Low Carbon Energy Sunlight and heat Primary Photosynthesis Lumber And Growth Carbon Sawmilling sequestration in wood products Waste Renewable CO ₂ Bioenergy Pellet Manufacturing Sawdust, shavings & bark Generator Fuel Wood Pellets 9

Pinnacle’s Fibre Supply Advantages Long term relationships with senior BC sawmilling companies Re-purposed sawmill residuals has directly resulted in the closure of more than 14 beehive burners Multiple pellet sites provides suppliers comfort that residuals can be utilized at different locations Optimal utilization of harvest residual Diverse mill network minimizes transport costs from forest to mill and mill to mill Proximity of mills allows for stockpiling and fibre transfers between mills in the event of supply shortages

Diversified Mill Locations in Substantial Fibre Basket Legend Sawmills / Forest Products Pinnacle Plants Ports PLANT CAPACITY 2015 Houston 220,000t Houston Mill Burns Lake 440,000t Burns Lake Mill Meadowbank Mill Meadowbank 220,000t Quesnel 90,000t Quesnel Mill Williams Lake 200,000t Williams Lake Mill Armstrong 60,000t Lavington 270,000t Armstrong Mill Lavington Mill TOTAL 1,500,000t 11

Houston Pellet Limited Partnership Constructed in 2006 Situated adjacent to Canfor Lumber operation at Houston, BC Partnership with Canfor and the Moricetown Indian Band Annual production capacity of 220,000 metric tonne 100% Industrial bulk pellet production Exported to Europe and Japan. MANa mx 12

Burns Lake Facility Completed in 2011 Located in Burns Lake, BC Incorporates best practices from existing mills Now on 12 pelletizers Industrial bulk pellets shipped mainly to UK. Annual production capacity of 440,000 metric tonne 13

Meadowbank Facility Constructed in 2008 Located at Strathnaver, BC - adjacent to the Dunkley Lumber Mill First plant to utilize sawdust, shavings, bark and harvest residuals Industrial bulk pellets Equidistant to Prince Rupert or Vancouver Annual production capacity of 220,000 metric tonne 14

Quesnel Facility Constructed in 1988, expanded in 1999 Located in Kersely, BC Produces full range of bagged pellets Some industrial bulk pellets Annual production capacity of 90,000 metric tonne 15

Williams Lake Facility Constructed in 2004, expanded in 2007 Located at Williams Lake, BC Produces industrial bulk pellets Exported through Vancouver Annual production capacity of 200,000 metric tonne 16

Armstrong Facility Acquired in 2007, older plant Located in Armstrong, BC Produces bulk and bagged pellets Annual production capacity of 60,000 metric tonne 17

Lavington Facility Approved in late 2014, under construction for Sept 2015 start Partnership with Tolko Industries Ltd Located in Lavington, BC Will produces bulk pellets Annual production capacity of 270,000 metric tonne 18

Pinnacle’s Logistics Advantage Wood pellets are the most efficient form of woody biomass for transportation • Super-B delivery to light-industrial, institutional and greenhouse customers • Over 500 covered hopper railcars in the fleet • Full handimax vessels from 2 ports in BC • Road or rail palletized bag logistics options • 19

Port of Vancouver (Fibreco Export Inc.) 20

Port of Prince Rupert (Pinnacle Westview Terminal) Pinnacle owned and operated Construction completed December 2013 Initial capacity 50,000t silo stored First dedicated wood pellet terminal in the world capable of handling small Handysize up to Panamax vessels. Instantaneous load rate of 2,000 tonnes per hour. Built-in automatic sampling. Dust free, low noise installation Westview Terminal Westview ship-loading in operation 21

Westview expansion plan Canada’s first shipping terminal designed specifically to handle wood pellets Design Features 1 • Four corrugated metal wood pellet storage silos: 45 m tall, 27 m diameter; 50,000 tonnes 3 total capacity 1 1 2 2 2 • Three possible additional storage silos up to 34,500 1 1 2 tonnes total additional capacity 4 • 5 3 Enclosed belt conveyors and bucket elevators 5 6 4 • Ship loader • 5 • Berthing dolphins to secure ships 6 • Berth capable of handling Panamax-class vessels up to 75,000 DWT 22

Pellet Production at a Glance PHASE IV Pinnacle Pellet complete manufacturing process Hog/Trees Grinding PHASE II Hammering PHASE III Sawdust Drying Green Hammering Shavings PHASE I Dry Conventional pellet manufacturing Screening Cooling Pelletizing Shipping 23

Hammering and Grinding 24

Drying 25

Pelletizing 26

Cooling 27

Screening 28

Storage & Loading 29

Pinnacle’s Customer Mix 30

Conclusion Strong Company Positioning:  Secure Feedstock in a Sustainable Fibre Basket  Multi-site, Best in Class Technology & Manufacturing  Efficient, Flexible, Multi-port Logistics  Strong Owners with Financial Muscle  Committed to Growth  Blue Chip Customers  Lowest Supply Risk in the World for Wood Pellet Fuel 31