Mr. Robert McCurdy reports

PINNACLE RENEWABLE HOLDINGS ENTERS SOUTHEAST U.S. - ANNOUNCES AGREEMENT TO ACQUIRE 70% STAKE IN INDUSTRIAL WOOD PELLET PRODUCTION FACILITY IN ALABAMA

Pinnacle Renewable Holdings Inc. has entered into a definitive agreement to acquire a 70-per-cent interest in an operating industrial wood pellet production facility located in Aliceville, Ala., from The Westervelt Company, a diversified land resources company. Westervelt will retain a 30-per-cent interest in the Aliceville facility.

The Aliceville facility has an annual production capacity of approximately 270,000 metric tonnes of industrial wood pellets. Approximately 210,000 metric tonnes per annum are committed under a long-term off-take contract to a major European utility. The remaining production volume from the Aliceville facility will be sold through Pinnacle's contracted backlog of long-term, take-or-pay off-take contracts. Run-rate EBITDA (consolidated net income (loss) before depreciation and amortization, finance expense, and provision for income taxes) per metric tonne is expected to be in line with Pinnacle's other production facilities and the capital cost of the Aliceville facility will be within Pinnacle's target range of 4.0 times to 5.5 times run-rate EBITDA.

Westervelt is currently ramping up production at the Aliceville facility. Pinnacle is partnering with Westervelt to optimize asset configuration, distribution logistics and fibre supply.

"Our acquisition of a majority stake in this facility will increase our production capacity and establishes a platform for Pinnacle's future growth in the U.S. Southeast, one of North America's key fibre baskets. Geographic diversification of our asset base provides us with enhanced flexibility to cost-effectively allocate supply to our customers in Europe and Asia," said Robert McCurdy, chief executive officer. "Through this transaction, we are also pleased to form a partnership with Westervelt, a leading forestry and land resource company in the region. We look forward to working with Westervelt to optimize the production capacity and operating efficiencies at the Aliceville facility, and to jointly explore other potential future growth opportunities in Alabama and Mississippi."

"Our mutual dedication to safety, environmental responsibility, quality and our people provides a strong foundation for our partnership," said Brian Luoma, president and CEO of The Westervelt Company. "Where Pinnacle brings decades of pellet industry experience, we bring generations of land stewardship and management, our core business competencies. This was a natural partnership because of our shared values, and because this joint venture takes advantage of synergies between the two companies."

As part of the transaction, and consistent with Pinnacle's operating strategy, the Aliceville facility has now entered into long-term wood fibre supply contracts for residuals with several large local sawmills. Westervelt's sawmill, located in Moundville, Ala., will remain an anchor supplier, ensuring strong alignment between Pinnacle and Westervelt.

Pinnacle expects to finance the purchase of its 70-per-cent stake in the Aliceville facility through a draw on its credit facility and cash on hand. The purchase will provide accretive free cash flow per share on an annualized basis. Pinnacle's debt to EBITDA ratio for the next fiscal quarters will reflect this acquisition investment and Pinnacle's new production facility additions, but will be in line with Pinnacle's target of under 3.3 times as commissioning progresses and production is ramped up at the new facilities. The transaction, which is subject to customary closing conditions, is expected to close in early October, 2018.

Conference call

Mr. McCurdy, Leroy Reitsma, president and chief operating officer, and Andrea Johnston, chief financial officer, will host a conference call for investors and analysts to discuss the Aliceville facility acquisition on Friday, Sept. 7, 2018, at 1 p.m. ET.

The dial-in numbers for the conference call are 416-764-8609 or 1-888-390-0605. A live webcast of the call will be accessible via Pinnacle's website.

The webcast will be archived following conclusion of the call.

To access a replay of the conference call dial 416-764-8677 or 1-888-390-0541, passcode 445022 (pound sign). The replay will be available until Sept. 7, 2018, 11:59 p.m.

About Pinnacle Renewable Holdings Inc.

Pinnacle is a rapidly growing industrial wood pellet manufacturer and distributor and the third-largest producer in the world. The company produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets. This fuel is used by large-scale thermal power generators as a greener alternative to produce reliable baseload renewable power. Pinnacle is a trusted supplier to its customers, which require reliable, high-quality fuel supply to maximize utilization of their facilities.

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