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RusForest Magistralny receives priority investment project status and a new forest lease

RusForest Magistralny has been granted priority investment project status by the Russian Minister of Industry and Trade, Mr. Victor Khristenko.

As a result, RusForest Magistralny is now included on the List of priority investment projects within the forestry industry in Russia (the "List") in accordance with Russian Government Order No. 419, and has received an additional forest lease with an annual allowable cut (AAC) of 398,700 m3, stated a company release.

Order No. 419 was passed in 2007 to stimulate investments into forestry development and forestry value-adding industries in Russia. As of June 2011, there were 91 projects on the List including large pulp-mill construction projects.

Projects on the List are granted access to needed forest leases without the usual auction procedure conducted in Russia, and pay 50 per cent lower lease rates within the payback period of the project.

As a result of its new priority status, RusForest Magistralny has been allocated an additional forest lease in the Irkutsk region with reduced lease rates. The forest lease awarded has an AAC of 398,700 m3 and covers an area of 355,104 hectares.

Additionally, the forest lease acquired by RusForest Magistralny in December 2010 will have its lease rates lowered, said the company.

Following the allocation of the additional forest lease; RusForest's total AAC in the Magistralny region amounts to approximately 960,000 m3. On a consolidated basis, RusForest's AAC amounts to approximately 3.6 million m3.

RusForest is forestry and sawmilling company operating in Eastern Siberia and the Arkhangelsk region of Russia. The Company controls long term forest leases with an annual allowable cut of approximately 3.6 million ml, and utilizes these resources to produce a wide range of sawnwood products.
 
Eastern Siberia is renowned for its Pine and Larch of exceptional quality, while the Arkhangelsk Region in northwest Russia has high quality spruce and pine forests similar to those found in northern Sweden.

RusForest's goal is to develop into a leading independent integrated forestry and sawmilling company in Russia, with an annual harvest of 2.7-2.9 million ml and an annual sawnwood production of 800,000-850,000 ml during the coming four to five years.

Last month, RusForest acquired ZAO ADAR and OOO LP LDK Kansky in the Krasnoyarsk region. The two companies hold forest leases with a combined Annual Allowable Cut (AAC) of 470,600 m3.

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