Catalyst completes acquisition of Snowflake newsprint mill and Subscription Receipts...

Catalyst completes acquisition of Snowflake newsprint mill and Subscription
Receipts exchanged for Common Shares

RICHMOND, BC, April 10 /PRNewswire-FirstCall/ - Catalyst Paper Corporation
(TSX:CTL) has completed its US$161 million acquisition of the recycled
newsprint mill in Snowflake, Arizona. A definitive agreement to acquire this
operation from an AbitibiBowater subsidiary was announced in February, and its
finalization represents the first extension of Catalyst's manufacturing base
beyond Canada.
The Snowflake mill, located about 290 km (180 miles) from Phoenix,
Arizona, is one of the lowest-cost newsprint mills in North America. Its
annual production capacity is 375,000 tonnes of 100 per cent recycled
newsprint. This brings Catalyst's total newsprint production capacity to
approximately 980,000 tonnes, complementing its mechanical specialty paper
capacity of some 1.1 million tonnes.
"Increasing our recycled newsprint capacity strengthens our ability to
meet demand for this grade in large urban regions," said Richard Garneau,
President and Chief Executive Officer. "The Snowflake mill is well-located to
serve growing population centres in western North American and is the
freight-logical supplier to a number of key markets."
The acquisition is expected to provide annual synergies of US$10 million
through cost-savings in purchasing and related services, as well as
optimization of product distribution networks. It also provides Catalyst with
fibre and currency diversification.
Snowflake has a record of performance and profitability, reflecting
positive labour relations and modern equipment. It is an energy
self-sufficient mill with the potential to sell some excess electricity to the
power grid. Snowflake's production will be marketed under Catalyst's Marathon
newsprint brand.
The acquisition was financed, in part, through a C$125 million rights
offering resulting in the issue of approximately 167.1 million Subscription
Receipts. With the completion of the Snowflake Acquisition, each of the
Subscription Receipts was deemed exercised for one fully paid common share of
Catalyst. Share certificates representing the common shares will be
distributed to holders of the Subscription Receipts shortly. The balance of
the purchase price for the acquisition was funded by drawings under Catalyst's
secured revolving operating facility.
About Catalyst Paper
Catalyst is a leading producer of mechanical printing papers,
headquartered in Richmond, British Columbia, Canada. The company also produces
market kraft pulp and owns Western Canada's largest paper recycling facility.
With six mills strategically located within western North America, Catalyst
has a combined annual capacity of 2.8 million tonnes of product. Catalyst's
common shares trade on the Toronto Stock Exchange under the symbol CTL.
Forward-Looking Statements
Certain of the matters set forth in this news release including statements
with respect to production capacity, the achievement of synergies, cost
reductions and business efficiencies which may result from the acquisition of
the Snowflake mill are forward-looking statements. These forward-looking
statements reflect management's current views and are based on certain
assumptions including assumptions as to future economic conditions and courses
of action, as well as other factors management believes are appropriate. Such
forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially from those contained in these
statements including those risks and uncertainties identified under the
heading "Risk Factors" in the management's discussion and analysis contained
in Catalyst's most recent Annual Report available at www.sedar.com or at
www.sec.gov.
CONTACT: Investors: David Smales, Vice-President, Finance & CFO, (604)
247-4013; Media: Lyn Brown, Vice-President, Corporate Relations, (604)
247-4713
SOURCE Catalyst Paper Corporation

Investors: David Smales, Vice-President, Finance & CFO, (604) 247-4013; Media:
Lyn Brown, Vice-President, Corporate Relations, (604) 247-4713