Mr. Trevor Pruden reports

CONIFEX PROVIDES AN OPERATIONAL UPDATE

Conifex Timber Inc. will temporarily curtail operations at its Mackenzie, B.C., sawmill for a planned four-week period commencing Dec. 15, 2025.

The curtailment is being implemented in response to, among other things, continued weakness in North American lumber markets. Benchmark western SPF prices have declined sharply over the past several months due to a slowdown in new residential construction, soft repair-and-remodel activity, elevated interest rates, and the impact of recently increased countervailing and anti-dumping duties on Canadian softwood lumber shipped to the United States. The duty and tariff increases have significantly compressed cash margins across the sector and resulted in operating losses for many producers.

Against this backdrop, Conifex believes that temporarily reducing production is the best course of action to minimize operating losses. The curtailment, as planned, is expected to reduce Conifex's production by approximately 13 million board feet.

While near-term market conditions remain challenging, Conifex continues to believe the fundamentals for SPF lumber are positive over the medium and long term. Structural housing undersupply in the United States, an aging housing stock and improving affordability conditions as interest rates normalize are expected to support a gradual recovery in demand beginning in the second half of 2026. Curtailments across the industry have already driven North American lumber production to its lowest level in a decade, which is expected to help rebalance inventories and support a return to more sustainable pricing.

Conifex acknowledges recent federal government announcements on measures intended to support softwood lumber producers affected by elevated duties and tariffs. It has advanced applications under both the large enterprise tariff loan program and the Business Development Bank of Canada loan guarantee program, and it appreciates the federal government's continuing engagement on these files. It remains optimistic that meaningful progress is forthcoming, and encourages timely implementation of these programs to help stabilize operations, protect employment and sustain critical manufacturing capacity in rural communities.

Its power generation operations and competitive log cost structure at Mackenzie continue to provide important support to its business during this difficult period. Conifex remains committed to the Mackenzie region, its employees and its customers, and will continue to monitor market conditions closely.

"While the decision to reduce our year-end operating schedules was difficult, and we regret the impact this will have on our employees, their families and the community, we are encouraged by the fact that the Mackenzie TSA has the highest sawlog surplus of any TSA in the Interior region of B.C. The recent federal announcement expanding the BDC softwood lumber guarantee program and providing additional support through the large enterprise tariff loan facility is an important step, and swift implementation will be critical to capturing the benefits of these programs. We do not anticipate any challenges securing sawlogs to maintain capacity operations in the future once market conditions permit a return to full operations," said Andrew McLellan, president and chief operating officer of Conifex.

About Conifex Timber Inc.

Conifex and its subsidiaries operate forestry, sawmilling and biomass power generation facilities in Mackenzie, B.C. Its primary business is the manufacture and sale of high-quality SPF lumber and the generation of renewable energy.

We seek Safe Harbor.