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$1.00 PLUS 7¢ GST
($1.10 plus 8¢ GST
outside of the Terrace area)

By JEFF NAGEL

MAJOR « challe nges await the Terrace Lumber
Company once the firm completes its purchase of
the former Skeena Cellulose sawmill here.

Chief among them are finding timber to cut and
a home for the pulp chips.that will be produced as a
byproduct. z

“The most difficult parts of this are the fibre sup-
ply and the disposal of chips and hog fucl,” Terrace

Lumber spokesman John Ryan said. “Those are ‘the

components that are very difficult.”

Even if all goes well, he predicted it- will be
months before the sawmill is up and running,

“It won’t be less than three months,” Ryan said.

» “But it should be less than six.”

The first step is completing the deal, which must

| be approved by B.C. Supreme Court Justice Donald

The pfanned completion date is March 31.

Then work shifts to the search. for employees,
logs and customers.

Although the sawmill is no longer connected to
its own wood supply, much timber should be avail-
able on the open market.

Newly created timber holders include aboriginal

groups like the Kitsumkalum band and others, which

have been granted forest licences by Victoria with
wood taken away from major licensees.

Ron Bartlett, president of Kalum Ventures Ltd.,
expects the Kitsumkalum-band owned company will
become onc of several wood suppliers to the Terrace
Lumber sawmill. “

“We've been approached as a supplier of fibro,”

Bartlett said, adding he welcomes the community
initiative to buy the mill.

llenges face new mill owners.

got really reat people i in the ors ganizing side.”
Bartlett said timber owners, including Socal ab-

original bands, will all applaud the local purchase of |
‘the: mill because it means increased local | competi-

tion for logs.

The Terrace Lumber mill will consume 360,000
cubic metres of sawlogs per year on just a one-shif t
basis. .

“It's going to, take about 70 loads of logs every
day.” Bartlett said.

Because around half of the logs cut in the region’

are only pulp quality, that means more than 700,000
cubic metres will have to be logged every. year‘to
achieve the minimum number of sawlogs to feed the

mill. Double that number would be required to run a °

preferred two-shilt operation, Ryan noted.
Bartlett said the Kitsumkalum band will be able

ednesday, March. 2, 2005 :

needed from its new licence, which avas reall cated
by the province under its 20 per cent timber take-:
back.

Another 430,000 cubic metres is available f rom
Tree Farm Licence #1, which is being purchased by’. -
Coast Tsimshian Resources, a company set up by the
Lax Kw’alaams band near Prince Rupert.

Band officials there congratulated the new own-
ers in Terrace and pledged to work with them.

“Lax Kwa’alaams stepped up to the plate to try to
save the forest operations, and now the group from
Terrace has done the same — like us — for the good of
our communities and the people. in the north,” said
Coast Tsimshian Resources CEO Wayne Drury. |

He said the band wants to, hire Terrace contrac-
tors to get logging underway quickly to supply the
Terrace mille * .

Cont'd Page A2-

Brenner at a yet-to-be-determined court date.

“There’s a lot of momentum,” he said. “They've

to provide about 100,000 cubic metres of what’s

Skeena Cellulose/New Skeena Forest Products site to hear speeches and applaud the mill's purchase by local investors and by the city.

MAYOR JACK Talstra addresses the crowd Feb. 23 at the welcoming party for the new Terrace Lumber Company, ‘More than 1, 000 people showed | up at the former

JEFF NAGEL PHOTO

Mill deal closed at t last minute

. By SARAH A. ZIMMERMAN
TERRACE businessmen John Ryan and Mo_

- Takhar never planned to buy a sawmill.

But when negotiations between the re-
ceiver hired to dispose of the closed New
Skeena Forest Products mill and one group
broke down, threatening to put the operation
under the auctioneer’s gavel to satisfy credi-

“tors, that’s exactly what they did.

“It’s fair ‘to say Mo's been the driving

force,” Ryan said last week. “He said, “John,

ons

I think we should buy a sawmill.
Ryan first went to Vancouver Feb. [4 to

‘back the efforts a group of former Repap

executives to buy the mill. Repap owned the
mill until the company went under in [997.
“We had heard they were short $1.2 mil-
lion so. we made sure that we could cover
that,” Ryan said of himself, Takhar and a
group of as- of-yet- unnamed investors. —
“This group's objective has always been
to make sure the mill doesn’t leave Terrace,”

_ Ryan said.

By late in the week it became apparent
the Repap group was not going to make the
purchase and the local group shifted gears,
Starting negotiations of their own because

of the looming handover of the-mill to the

May nard’s auction house.
“This.thing was coming to a crunching
halt,” Ryan recalled.

The Repap group and one other interested
party were the only parties given standing by
the B.C. Supreme Court to bid on the mill
before it was handed over to Maynard’s on
Feb. 19. The local group had to wait to en-
sure those groups did not make any purchase
moves.

As soon as the mill officially went into
the hands of Maynard’s in preparation for
auction, Ryan got busy.

“It was really scary, actually, for me,”

-Ryan said, adding even though he made an

offer, Maynard’s had other interested par-
ties.

“So I took the position that when I fly out
of Vancouver today -P'm not coming back,”
Ryan said.

He gave Maynard's an hour to decide
if they would accept his offer or not. May-
nard’s officials huddled in a Vancouver of-

" fice before accepting the bid.

Ryan won’t disclose the amount, saying
people will have to wait until the official sale

Closing : date of March 31, but it’s believed to
be in the $3 million range.

Ryan put up a $200,000 deposit on the
spot. Without a cheque on hand, he i impro-
vised.

“I did it ona piece of paper -a foolscap,
‘regular piece of paper,’

* Ryan said. It was
witnessed by his lawyers and the lawyer rep-

" resenting Maynard’s.

Although the makeup of the Ryan-Takhar
investor group, now known as the Terrace

‘Lumber Company, remains unknown, the
City of Terrace has agreed to provide tax —

money and to front other groups to the total
of $950,000 toward the purchase price.
- That money will come from internal rev-

" enue sources, said mayor Jack Talstra, add-

ing it won't come from long-term borrow-

ing, which could have, forced a referendum

on the issue.
Talstra conceded some of that money

- may have to be pulled from other parts of the

city’s budget. but he said some of the money
will be repaid to the city, over time, by other
parties.

One such group is the IWA-Steelworkers
union which represents workers at the mill.

details. ;

They’ ve agreed to contribute a small portion

of their hourly wages to eventuaiiy repay the =

city more than $175,000.
Talstra said other parties are interested
in contributing but have yet to iron out the

‘

The sale of;the mill is subject to a deal

being reached between the city and the Ter-:

race Lumber Company over paying $2.654
million in back taxes which are tied to the
land upon which the mill sits.

Although the city doesn’t technically
own the land it does have a first charge on it
because of the back taxes.

The city and the company have agreed
to a 10-year repayment schedule for those

Mine ©

road —
plan |

starts

~ THE PROVINCIAL gov-
_ ernment. is putting together

a plan to build a road to’one
mine and to potentially oth- —
ers in a mineral-rich area
northeast of here.

Within weeks the trans-
portation ministry will draft
what’s needed for engi-
neering, environmental and
consultation for the Stew-
art-Omineca Resource Road
which would lead off of the
Cranberry Junction north of
Kitwanga on Hwy37, says

# . Skeena Liberal MLA Roger.”

Harris. .
“Part of this plan will be

. how they’re going to do it

and how. to pay for it,” he

| said last week.

Some of the .route has
already been constructed as

» rough road but would need

to be improved and new

road would need to be built

to the Kemess South cop- ° —

per-gold mine “belonging to
Northgate Resources.

While that property has
a limited life left, the com-
pany. wants to develop the
Kemess North property and
truck that processed ore out
on the road for shipment

overseas through the port at

Stewart via Hwy37.

It now takes Kemess
South processed ore by road
cast to Mackenzie where it is
placed on railcars for ship-

“ment to a smelter in eastern

Canada. Shipping the ore

taxes, That arrangement must be approved |

by receiver Larry Prentice. “I don’t see
any bumps in the road ahead: of that deal,”
Prentice said. “The Ryan group and the city
have worked out their deal with respect to
the treatment of back taxes. All of which is
perfectly fine with me.”

In addition to the repayment of back tax-
es, the lumber company will pay the city $1
for the land.

Cont’d Page A2

west to the port at Stewart
would be cheaper.

Harris said this road will
be more than a forestry road

-in anticipation of it being

used by many types of in-
dustrial and other traffic.

“} want to build the right
road first,” he said. “I want
a road that handles the full:
spectrum of traffic.”

Aside from the promise
of more mines, the area con-
tains forests which could be
logged and has the potential
for tourism development.

“What this does is send 4
message,” said.Harris of the _

‘road work plan.

A projected cost of $30
to $40 million is too -rich
for Northgate to shoulder by .
itself, leading to the call by -
northwest municipalities and
others for some type of gov-
ernment involvement based
on recouping costs through
a user-pay system. ,