<B>Alliance Forest Planning for New Deinked Line</B>

Alliance Forest Products' board of directors approved a $113 million investment for the construction of a new recycled pulp plant, as a replacement for the existing deinking facilities. Daily production of recycled pulp will increase from 500 to 1500 air dried tons, next fall.

The expansion will eliminate the use of virgin fiber in the newsprint manufactured at Coosa Pines, while meeting customers' increasing demand for higher recycled content.

The paper manufacturing process will be simplified by eliminating the need for mechanical, thermomechanical, and kraft pulps currently used in the newsprint manufactured at Coosa Pines. Once the new plant is operational, the kraft pulp currently utilized to manufacture newsprint will be used for manufacturing fluff pulp, thereby rationalizing the market pulp sector.

Due to the shutdown of the current deinking, thermomechanical pulp and southern hardwood kraft pulp facilities, the Company will post an unusual, before-tax charge of C$62.8 million in the current quarter for the disposal of these assets in the fall of 2001. The combined effect of the commissioning of the new plant and the termination of the production of hardwood kraft pulp will translate into the elimination of approximately 200 positions at the Coosa Pines complex.