111 Robert-Bourassa Blvd.

, Suite 5000
Montreal, Quebec, H3C 2M1 Canada
T 514-394-2124
E yves.laflamme@resolutefp.com

March 18, 2019

Mayor June Caul

Town of Fort Frances
320 Portage Avenue
Fort Frances, ON P9A 3P9

Dear Mayor Caul:

I am writing to provide you and the Town Council with an update on Resolute’s efforts to find a
credible alternative for our Fort Frances mill site. In January, Resolute signed a backstop
agreement to transfer the site to a community redeveloper. Recognizing recent interest from
certain market participants, we also ran a parallel process whereby we allowed interested
parties to prepare offers for the assets by March 15, 2019. Several entities participated in the
process; ultimately, all declined to submit a bid with the exception of Repap. The Repap bid fell
short on multiple fronts.

Over the past two months, Resolute made a number of accommodations to support Repap’s
requests. For example, we provided a specific carve-out for conversations with the provincial
Ministry of Natural Resources and Forestry, and even allowed the submission of a non-binding
vs. binding offer. In spite of our best efforts, Repap did not produce an offer providing us the
level of certainty required to move forward with them. They failed to provide the required
financial deposit, did not mark up the asset purchase agreement, did not address our key
requirement to perform environmental remediation, and did not produce sufficient, committed
financing to move forward. In addition, their refusal to agree to treat Resolute’s information on a
confidential basis prevented them from accessing sufficient information to inform their bid and
put forward a responsive offer. Resolute has basic conditions, applied equally to this project and
all other transactions.

After four years, and upwards of $35 million invested in the site and the latest process, we must
conclude, again, that a return to manufacturing operations is most unlikely. We are now
squarely focused on the community development project, which will reposition the Fort Frances
site. Having said that, Resolute proceeding with the redeveloper does not preclude Repap from
entering into their own discussions with the redeveloper. Our guiding principles remain:
environmental stewardship and community benefit.

The redeveloper is a restorative development company, specializing in the integrated

revitalization of distressed industrial properties. By leveraging public and private funding, they
invest in large-scale industrial projects in North America. The redevelopment company has
experience leading decommissioning, site recovery and restorative site development, achieving
important long-term gains for regional municipalities, public and private investors, and various
partners.
In the next several weeks, we anticipate the community development company and its potential
partners will make a public announcement. It is our understanding that in the interim, they will
be reaching out to you, various government ministries and interested partners.

In order to respect our commitment to environmental stewardship and community benefit,

Resolute must ensure that the Fort Frances site is passed on to a successor that has sufficient
financial resources, and is experienced with such an undertaking and capable of delivering on
its commitments. We want the regional economy to prosper, and we must ensure that the Fort
Frances site is handled in accordance with all applicable laws, including environmental, and at
all levels, including municipal.

Over the past few years, Resolute built on our commitment to the Northwestern Ontario region,
investing over $250 million. Almost 1,000 Resolute employees call Northwestern Ontario home,
and many thousands more are linked to our operations. It is, therefore, important to us to build
on our relationships, not see them deteriorate in the public discourse.

Mayor Caul, I hope we can work together in a constructive and collaborative way over the
coming months in the best interests of the region.

Regards,

Yves Laflamme
President and Chief Executive Officer

cc: Minister John Yakabuski, Minister Greg Rickford, Mayor Dennis Brown, Mayor Donald
Cunningham, Mayor Greg Wilson, Mayor Dan Reynard and Chief Administrative Officer Doug
Brown