Fortress Paper Ltd. has announced that it has initiated the final stages of the conversion project at its Fortress Specialty Cellulose Mill. The mill has commenced its start-up phase with final process testing, which will include cold and hot water trials, together with the testing of safety systems scheduled to occur over the coming days. Production of dissolving pulp beginning with wood chips cooking is expected to commence shortly thereafter.

The minor delay in the scheduled completion of the conversion project has resulted from: (1) the previously announced unexpected walkout in October of construction employees of contractors engaged by the Company; (2) the extra time subsequently required upon the return of the workers to fully ramp-up construction activities at the site; (3) completion of identified improvements to infrastructure relating to buildings, supports and the chip tower inter-connection; and (4) implementation of enhancements to the mill’s safety and control systems.

Chad Wasilenkoff, Chairman and Chief Executive Officer of Fortress Paper, commented: “We look forward to the imminent production of dissolving pulp, which will signify an important milestone in the history of Fortress Paper. We believe that the implementation of supplemental process control testing will provide for a more efficient ramp-up to commercial production.”

The completion of the conversion project is currently materially on budget, with the exception of costs resulting from the unexpected walkout of construction workers which remain to be quantified. The cogeneration project at the Fortress Specialty Cellulose Mill is proceeding substantially on schedule, and is expected to be completed in the third quarter of 2012.