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Fortress Paper

Vancouver, British Columbia, Canada, 20 January 2011 -- (Marketwire) -- Fortress Paper Ltd. (TSX:FTP) today announced that it has entered into an agreement with a syndicate of underwriters, pursuant to which the underwriters have agreed to purchase from Fortress Paper and sell to the public an aggregate of 967,000 common shares of the company priced at CAD 51.75 per share (the offering price). The underwriters are led by Raymond James Ltd. and including Dundee Securities Corporation, RBC Capital Markets, Cormark Securities Inc., TD Securities and Acumen Capital Finance Partners.

The company also granted the underwriters an option to purchase up to an additional 145,050 common shares of the company at the offering price, exercisable in whole or in part for a period up to closing of the offering, to cover over-allotments and for market stabilization purposes, if necessary.

The offering will result in gross proceeds of approximately CAD 50 million, assuming that the over-allotment option is not exercised, and approximately CAD 57.5 million if the over-allotment option is fully exercised. Closing is expected to occur on or about 10 February 2011, and is subject to customary conditions and regulatory approvals, including the approval of the Toronto Stock Exchange. The offering will be conducted by way of a short form prospectus to be filed by Fortress Paper in each of the provinces of Canada, and in the United States, under applicable private placement exemptions.

Fortress Paper intends to use the net proceeds of the offering to finance certain capital expenditures and for working capital and general corporate purposes.

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress operates three mills, the Landqart mill located in Switzerland, the Dresden mill in Germany, and the Fortress specialty cellulose mill in Quebec, Canada. Fortress Paper's security papers include banknote, passport, and visa papers and its specialty papers include nonwoven wallpaper base products. Fortress Paper's pulp business includes northern bleached hardwood kraft pulp produced at the Fortress specialty cellulose mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass-based cogeneration plant.


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