GNT to purchase, upgrade Scotia Atlantic Biomass facility

Great Northern Timber Group has signed a tentative agreement to purchase the Scotia Atlantic Biomass pellet plant, pending due diligence and court approval, said Thor Olesen, CEO of GNT.

The Scotia Atlantic Biomass facility is located near Musquodoboit in central Nova Scotia and has a production capacity of approximately 120,000 metric tons per year. The facility was previously owned and operated by Viridis Energy Inc.

In April 2016, Viridis Energy announced all of its assets were being put up for sale, including Okanagan Pellet Co., Scotia Atlantic Biomass Co., and Viridis Merchants Inc. As part of the announcement, Viridis informed investors that its lender, Royal Bank of Canada, had made a demand for payment in full of OPC’s outstanding debt, and that the company could not pay the $2.61 million by the date specified in the demand notice.  In October 2016, American Biomass Corporation Inc. purchased OPC from Viridis. Now, nearly one year later, GNT is expected to purchase the Scotia Atlantic facility.

Olesen said the transaction is expected to close before the end of September. Regarding his company’s interest in the acquiring the plant, Olesen noted “GNT is a vertically integrated forestry firm and the production and export of pellets is a [natural] fit to our existing activities.”

According to Olesen, GNT intends to restart pellet production at the plant late in the fourth quarter of this year. He also indicated GNT plans to make several repairs and upgrades to the mill to address productivity and output.

Olesen said the company plans to predominately use residual mill products for feedstock at the plant, and noted his company is very pleased with the level of support from local mills. “We are in the process of securing long-term agreements for both the feedstock and sales of the finished pellets,” he said.