1. SAKÂW ASKIY MANAGEMENT INC.
Presentation New FMP 29 April 2013
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2. Change
“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. For the initiator has the enmity of all who would profit by the preservation of the old institutions and merely lukewarm defenders in those who would gain by the new ones.” Machiavelli – The Prince ( 1469 – 1527)
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3. Sakâw Askiy Management Inc.
Chronology
October 5, 2005 – Weyerhaeuser announces closure of PA Pulpmill
Mid April 2006 – Big River and Wapawekka sawmills closed.
2007 – collapse of housing market
November 26, 2009 – Government announces allocation of wood from the PA FMA to industry, first nations and communities.
December 2009 – Sakâw Askiy Management Inc. is formed to take on the assignment of the FMA from Weyerhaeuser / Domtar
FMA assigned to Sakâw effective November 1, 2010
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4. Forest Management in Saskatchewan
The Forest Industry is sustainable and green.
The Prince Albert FMA has been sustainably managed for over 50 years.
The Forest Sector is highly regulated
Regulatory oversight ( Saskatchewan Environment.)
Complex and detailed forest management planning process
200 year even flow
Ecosystem based management
Community engagement
Rigorous and inclusive 5 year planning process
Saskatchewan Professional Foresters Govern the conduct of foresters 4

5. Sakâw Askiy Management Inc. Is the harvest sustainable?
Total Area of FMA) million ha
Total Harvesting Landbase 2.0 million Ha (60% of total)
AAC ( Swd Saw, Pulp; Hwd ) 2.9 million m3
Area logged per year ( at full Capacity) 20,000 hectares ( 1% of the harvestable land base)
CONCLUSION
Harvest levels very conservatively calculated 5

6. Common Challenges
Increasingly challenging working and business climate.
Market pressures evidenced by closure and curtailment of mills,
Industry more cost focused than ever before
Reduction in full time equivalents,
Shortage of skilled trades – including forest practitioners and contractors
Information management and business process complexities
Results based initiative,
new Tenure, Licensee and FMA manager,
new legislation, regulations and policy,
Forestry Build out commitments
New best practices
Landbase pressures
Public expectations
Can these changes / challenges be met by a “business as usual” focus?
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7. Economic Context
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8. Industrial Woodlands Staffing Saskatchewan – 2005 vs 2013
Woodlands Efficiency
2013
Weyerhaeuser PA 52
1:60,000
Out of business
Weyerhaeuser PP 21 10
1:80,000
Mistik 24
1:50,000
1:120,000
MLOSB 5
1:200,000 8
Edgewood 3
1:150,000
Carrier 1
Sakâw
Overhead
Total
103
1:64,000 35
1:190,000
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9. Result Based Commitment
Results-based regulation, or RBR, is a modern regulatory system that puts the focus on desired environmental and resource management outcomes rather than prescriptive regulation and processes, allowing environmental protection to proceed as a normal business process.  RBR is about encouraging innovation and efficiency, while holding proponents accountable for achieving clearly defined environmental results.
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10. Wood Supplies In Major License Areas
Services all of the major forest product facilities in Saskatchewan (except Weyco Hudson Bay) .
Sakâw ( PA FMA)
New paradigm - multidirectional fiber flows centered on the PA FMA . Multiple, geographically dispersed, industrial clusters centered in Meadow Lake, Big River, Prince Albert, Carrot River, Hudson Bay and anchoring further co-product investments.
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11. Sakâw Governance 8 partners:
6 facility shareholders: Carrier, Meadow Lake OSB, Norsask, Meadow Lake Mechanical Pulp, L&M, and Edgewood
2 First Nation shareholders: AC Forestry, Montreal Lake Business Ventures
Province provides timber allocations to all 8 parties
Aboriginal interests granted 44% of total allocation (AC Forestry, MLBV, Norsask, L&M)
Sakâw Shareholders Agreement has
Standard business provisions.
Operating Zone process
Leadership on business issues by individual shareholders an integral part of design.
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12. Regulatory Governance
Forest Resource Management Act
Associated Regulations, codes, standards, guidelines
Prince Albert FMA
PA FMA FMP
Memorandum of Understanding ( Side Agreement).
Assignment and Assumption Agreement
Unanimous Shareholders Agreement ( internal).
Operating Zone Agreement ( internal)
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13. Sakâw Askiy Management Inc.
Shareholders include 6 Industry and 2 First Nations
Shareholder
Sawlog Allocation
Hardwood Allocation
Allocation Percentage
AC Forestry
200,000
19.7%
Edgewood
75,000
3.7%
Carrier
375,000
18.4%
L & M
MLMP
95,000
4.7%
MLOSB
600,000
29.5%
Montreal Lk
40,000
11.8%
NorSask
175,000
8.6%
Total
1,100,000
935,000
Current AAC
1,269,000
947,000
661,000 m3 of softwood pulp allocated to Paper Excellence as a third party TSL.
Schedule F of PA FMA also provides for Third Party Allocations (162,000 m3 /yr.), and a Softwood Pulpwood Allocation (661,000 m3 / yr.). The Softwood Pulpwood has been allocated to Paper Excellence.
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14. Tenure Models in Saskatchewan

15. 16/01/2019

16. Legacy ( Weyerhaeuser) PRINCE ALBERT FMA WOOD FLOWS
WEST
CENTRAL & EAST
BIG
SAWLOGS
Oversize to Hudson Bay Plywood as “peelers” otherwise to Pulp
MIXED
SAWLOGS
SMALL
SAWLOGS
PULPWOOD
PULPWOOD
PURCHASED
SAWLOGS
PULP
WOOD
132 km
BIG RIVER
LUMBER
CHIPS
PRINCE ALBERT
PULP MILL
CHIPS
WAPAWEKKA
LUMBER
HOG
HOG
BIG RIVER
Large Log Line max 22”
Small Log Line min 4”
max 11”
Average Log 9.45”
90% treelength, tops chipped.
10% cut-to-length in bush, tops
longer than 8’ with 4” top to Pulp.
Oversize to Hudson Bay Plywood
as “peelers” otherwise to Pulp
EXTERNAL
CHIPS
PURCHASED
PULPWOOD
WAPAWEKKA
Small Log Line min 4”
max 11”
Average Log 7.87”
50% cut-to-length in bush, tops longer than 8’ with 4” top to Pulp.
50% cut to length in yard, trim longer than 5’ with 4” top to Pulp.
Moving to 100% cut-to-length in bush.
Cut-to-length for 10, 12, 14 and 16’
PULP MILL
Pulpwood minimum 3” top

18. Operating Zones = Coordinated Management
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19. Factors affecting future wood supply calculations
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

20. Factors
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Generally - as the land base increases the HVS increases even more
Age distribution of forest is the primary influencing factor
Lack of stands that are less than 60 years old is a limiting factor (fire suppression)
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

21. Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

22. Factors
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Species, height, crown closure are the main criteria for delineating forest stands
As seen on B&W 1:15,000 air-photo graphs
Age and site conditions are “average” for the forest stand
Softwood understory is generally not seen & therefore not mapped.
In Alberta many companies invest in colour leaf-off photography to map swd understory
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

23. Factors Source data (TSP) network and integrity of sample design.
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Source data (TSP) network and integrity of sample design.
Strata vary from one inventory to another.
Old WSGT may be split into several development types.
Use of site productivity indices vs. assuming average site
Inclusion of tL in yield curve data – is tL used by mills
Utilization standards
Net merch. vs. gros merch.
Statistical variability of data
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

24. Factors Company defined VOITS as required by FMP standard Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Company defined VOITS as required by FMP standard
Present and future mill requirements
Optimized utilization and wood flow
Opportunities for expansion
Certification (ISO, CSA, FSC)
Understand risks associated with management strategies
Carbon credits may be a future consideration
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

25. Factors Government defined VOITS
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Government defined VOITS
Minimize risk of unsustainable harvest
Balance economic, social and environmental benefits
Protect/promote other values from the forest
Emerging issues
Climate change
Biomass
Carbon credits
Cumulative effects
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

26. Factors Harvest systems Land base Winter cut vs. all season cut
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Harvest systems
tree length vs. cut to length
Winter cut vs. all season cut
access
Marginal stands
Small wood harvest systems
Environmentally sensitive areas
Steep slope
Riparian zones
Visual quality constraints
Insect & disease
jP mistletoe
MPB
spruce budworm
Road network
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

27. Factors Government baseline is defined in the regeneration standard.
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Government baseline is defined in the regeneration standard.
Extensive vs. intensive renewal programs
Assumptions for regeneration delay
Use of improved planting stock
Abundance of mature and over-mature standing timber is required to take an allowable cut effect benefit.
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

28. Factors Implementation vs. planned silviculture practices Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Implementation vs. planned silviculture practices
jP – plant vs. scarify
wS – cleaning/thinning
Results of surveys
FTG Surveys
Establishment surveys
Company survival surveys
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

29. Factors Traditionally based on literature research and expert opinion
Land base
New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
Traditionally based on literature research and expert opinion
Very little empirical data to support assumptions
Potential for use of stand level growth models (MGM)
Requires a SK calibration
Need to understand how to relate survey results to managed stand yield predictions
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

30. Factors One example is: Fire reserve factor Land base New Inventories
New yield curves
Management objectives
Company
Government
Company operational constraints
Renewal intensity
Renewal effectiveness
Managed stand yields
Reduction factors
One example is:
Fire reserve factor
Understand risks associated with assumptions about annual loss of timber due to fire
Set thresholds for re-planning or use of reduction factors
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

31. In Summary
It’s relatively easy to insert a new inventory and new yield curves into an existing approved HVS analysis to estimate what a future HVS might be.
The question is:
Are the management strategies and associated modeling assumptions in an approved FMP still relevant today?
The answer is :
They may not be in all cases and therefore pressures on wood supply could result.
Presentation to Major Licence Holders December 10, 2008
Ministry of Environment & Ministry of Energy and Resources

32. How to contact us Visit our website at www.sakaw.ca
Contact Sakâw at
Contact any one of our shareholders.
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