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Tribal Council to acquire mill project (6/03)

By IAN ROSS A proposed birchwood fibre mill slated for Lake Huron’s North Shore will likely proceed under Aboriginal ownership.


A proposed birchwood fibre mill slated for Lake Huron’s North Shore will likely proceed under Aboriginal ownership.

Northern Ontario Business has learned, through an unidentified source, that the North Shore Tribal Council will be the new operators of Algoma Mill Works, a multi-million dollar birch plywood project

“It’s going forward,” says Graeme Lowry, the outgoing president of Algoma Mill Works. “The acquirers are serious and it’s the best thing. We did our role, we did the spadework and now someone else can do the bricks and mortar and take it from here.”

Lowry says some loose ends need to be tidied up before the transaction is finalized.

“From my perspective, it is a done deal.”

The North Shore Tribal Council is comprised of the seven First Nations on the north shore of Lake Huron. They have offices in Blind River and Cutler. Several levels of federal and provincial agencies are involved in the transaction.

Norma Diamond, North Shore Tribal Council chief executive officer, and Earl Commanda, chief of the Serpent River First Nation did not return phone calls to Northern Ontario Business prior to press time.

Last summer, Lowry was in discussions with two major North American forest products in an attempt to strike a partnership deal and secure a lead equity investor to move the proposed $105-million birch plywood project forward.

“Just at the time that we had one of the major players in the forestry industry buy all of the output, which would have made the financing more feasible,” says Lowry, “but someone else made an offer for the whole company.”

He refused to confirm the Tribal Council was the new buyer on conditions of confidentiality.

It is not known if any forestry companies in the region will continue to be involved in the project.

“It made the most sense for the project.” says Lowry. “It was its greatest chance of success. The acquirers had the financing or at least a good chance to get it, better than we did.”

Lowry says the suitors approached him and made him an offer he could not refuse.

“Our objective from the beginning was to get this thing built on the shore for the (North) Shore, and this was the optimal way to try and make that happen,” says Lowry. Lowry would not provide details on identity of new buyer, what the terms of sale are and where the funding is coming from.

Lowry and business partner Phil Stanghetta, the company’s director of business development, will no longer be affiliated with the project in any form.

Lowry currently works for a heavy truck accessory company in Norwich, Ont., while Stanghetta is now a justice of the peace for Blind River and the surrounding North Shore communities.“Phil and I have been at it for 12 years, at one point we got paid for all of four months of those 12 years.”

No site has been chosen for the mill, but it will be located somewhere along the North Shore.

The original proposal called for harvesting low- to medium-grade trees. The mill would create nearly 300 jobs.

The wood supply granted by the Ministry of Natural Resources has been extended. In 2001, the Ministry awarded wood allocations to several wood operations in North including Algoma Mill Works.

The proponents had until March 31 to demonstrate the project was moving forward.

“The acquirers to best of my knowledge negotiated an extension that was a condition of them proceeding with the transaction,” says Lowry.