Agreement signed to launch Gitxsan Bioenergy project

June 16, 2014, Prince George, B.C. – Many years
of co-operative efforts between the provincial government, First Nations,
researchers and bio-energy producers led to an important announcement involving
the creation of a new era of green energy projects and the potential creation
of tens of thousands of jobs in British Columbia and elsewhere.

At the 6th Annual International Bio-Energy
Conference and Exhibition 2014 held in Prince George, Gitxsan Bio-Energy Ltd.
announced its intention to construct a bioenergy facility to produce white and
torrefied black pellets.

Gitxsan Bio-Energy is structured to be owned
jointly by a group of First Nations and Korean investors and will be the first
large scale commercial deployment of torrefied black pellets in BC destined for
export markets.

After more than three years of consultation and
negotiations with the Suskwa and Gitsegukla First Nations, agreements have been
reached for the construction and operation of the region’s first bioenergy
facility capable of producing 200,000 tonnes of both white and torrefied black
pellets for the Korean market from regional fibre sources. The pellets will be
used primarily to reduce emissions from coal-fired power plants. Construction
is expected to start this summer and will take about nine months to complete.
Engineering and related tasks are currently underway with business details are
being finalized.

Planned to be located on First Nations property
in Carnaby, adjacent to the CN Rail line 216 km east of Prince Rupert, the $26
million facility will create 40 local full-time jobs at the plant and an
additional 30 in forest operations.

The Suskwa and Gitsegukla First Nations will
operate the Morning Glory Sawmill and provide the necessary fibre for pellet
production. Carnaby was chosen in part because it is near the centre of the
Gitsegukla and Gitxsan fibre sources. Sufficient fibre has been committed to
allow the company to produce the 200,000 tonnes of pellets annually with signed
offtake agreements in place with large Korean customers in excess of expected
productions rates for this initial project.

The First Nations are expected to own 50% of the
project through their Tricorp development company and other First Nations
investors, joining a Korean consortium made up of Samsung,

Jack Sebastian, spokesperson for the Suskwa First
Nations commented: “The Suskwa Chiefs and the Black Bear Nation fully support
the bioenergy plant and Morning Glory Sawmill on the basis that it will not
only boost employment in the Hazeltons, but it will also boost economic
development throughout the Gitxsan Nation. The Chiefs and their members are
quietly excited about this long- awaited project, thanks to Mr. Haksung Lee.”

Cliff Sampare, Chief Councillor Spokesperson for
the Gitsegukla First Nations commented: “Gitsegukla Band Council, along with
their Hereditary Chiefs has been involved in negotiating, following technical
consultation, to identify actual outcomes of the proposed project once
implemented.

Their findings conclude: the project is viable,
sustainable, economical; it opens doors for all interested Gitxsan Stewardship
holders in providing fibre required on the project through partnerships; it
will create much needed employment for all, plus enable private sector
employment development within the area; its product may be available for local
use at much lesser and affordable reach; and It is in high demand.

Gitsegukla First Nation fully supports the
project and total involvement insuring that it meets all environmental
assessment requirements. Also the proponent is committed to developing
partnership agreements within other sectorial needs of Gitsegukla First
Nation.”

Global Bio-Coal Energy (GBCE) of Vancouver was
chosen to supply their Wyssmont, licensed/patented technology and construction
management for the plant construction for the facility.

GBCE CEO John Bennett explained the company has
been working for the past five years to find the best available technology to
torrefy densified wood fibre and to design a plant that was both scalable and
functional at all stages of production.

It has now chosen CWA Engineers Inc., a
Vancouver-based multi-disciplinary engineering and project management company
to complete the design of the project. GBCE will be joined by KECC- Korea
Engineering Consultants Co. (part of the Hanjin Group), and UtilTech, an EPC
company specialized in biomass logistics to complete the project.

Mr. Bennett noted that the federal government’s
recent signing of a free trade agreement with Korea has had a positive effect
on both countries. “I feel the agreement has encouraged more Korean investment
in the country and it certainly helped our Korean partners make up their minds
to proceed with the Gitxsan project and very likely others across the country.”

Haksung Lee, CEO of Gitxsan Bio-Energy Ltd.
agreed the recent free trade agreement between Canada and Korea has already
generated positive interest in creating new Korean ventures in the country,
especially those that will help reduce greenhouse gas emissions around the
world. He concluded that Canada offers many similar opportunities comparable to
the Gitxsan Project across the country. A number of future sites have already
been identified as having sufficient fibre available.

Gitxsan Bio-Energy Ltd., meanwhile, will provide
the general management of the facility and seek out other similar opportunities
in the region. A Gitxsan official explained BC was chosen for sustainable
biofuel projects because of an abundant, reliable supply of biomass, stable
politics, an experienced labour force and a welcoming atmosphere. This
investment follows a number of years’ technical evaluation by Korean and
Canadian investors and supporting stakeholders.

An important factor in BC’s favour is the role
the University of British Columbia (UBC) Chemical and Biological Engineering
Department has played in research and development of biofuel and biofuel
technologies.

The BC Bioenergy Network has also been credited
with playing a pivotal role in attracting the Korean investment to the
province, financial support and advice on equipment selection. Michael Weedon,
Executive Director of the BC Bioenergy Network stated: “This is an exciting project
and represents the second torrefied black pellet plant this year in BC, the
start of what is expected to be the dawn of a brand new energy industry which
will ultimately complement and strengthen the forest industry.

This is just the beginning of many bio-energy
projects and bio-refineries to be built in BC which will support exports; lower
the cost of fuels for local use, including the generation of tens of thousands
of jobs.”