Conifex Provides an Operational Update

Executive Summary

• Conifex Timber Inc. will temporarily curtail operations at its Mackenzie, BC sawmill for four weeks starting December 15, 2025, reducing production by approximately 13 million board feet.
• The curtailment responds to sustained weakness in North American softwood lumber markets, including sharply lower Western SPF prices and recent U.S. countervailing/anti‑dumping duties.
• Management remains optimistic about medium‑term fundamentals, citing housing undersupply in the U.S. and anticipated government support programs (Large Enterprise Tariff Loan Program and BDC Loan Guarantee).

Key Details

• Curtailment period: Four weeks, commencing December 15, 2025.
• Production impact: Approximate reduction of 13 million board feet of SPF lumber output during the curtailment.
• Market drivers:
• Declining Western SPF benchmark prices over recent months.
• Slowdown in new residential construction and repair‑and‑remodel activity.
• Elevated interest rates.
• Recent increases in U.S. countervailing and anti‑dumping duties on Canadian softwood lumber, compressing cash margins and causing operating losses for many producers.
• Strategic rationale: Temporary reduction deemed the best course to minimize operating losses while preserving long‑term capacity.
• Future outlook: Management expects a gradual demand recovery beginning in H2 2026, supported by U.S. housing undersupply, aging stock, and easing interest rates.
• Government support: Conifex has advanced applications under:
• Large Enterprise Tariff Loan Program – seeking loan facilities to offset duty impacts.
• BDC Loan Guarantee Program – pursuing guaranteed financing for softwood lumber producers.
• Operational resilience: Power generation assets and competitive log cost structure at Mackenzie continue to support the business during the curtailment.
• Leadership comment: “While the decision to reduce our year‑end operating schedules was difficult…the recent federal announcement expanding the BDC Softwood Lumber Guarantee Program and providing additional support through the Large Enterprise Tariff Loan facility is an important step, and swift implementation will be critical to capturing the benefits of these programs.” – Andrew McLellan, President & COO.

Notable Quotes

• Andrew McLellan, President & COO: “While the decision to reduce our year‑end operating schedules was difficult, and we regret the impact this will have on our employees, their families, and the community…we are encouraged by the fact that the Mackenzie TSA has the highest sawlog surplus of any TSA in the Interior region of B.C.”

All boilerplate sections (About Conifex, Forward‑Looking Statements, contact information) have been omitted for brevity.