OREANDA-NEWS. August 25, 2011. RusForest Magistralny has been granted priority investment project status by the Russian Minister of Industry and Trade, Victor Khristenko. As a result, RusForest Magistralny is now included on the List of priority investment projects within the forestry industry in Russia (the "List") in accordance with Russian Government Order №419, and has received an additional forest lease with an annual allowable cut ("AAC") of 398,700 cubic metres, as the company said in a press release received by Lesprom Network.

Order No. 419 was passed in 2007 to stimulate investments into forestry development and forestry value-adding industries in Russia. As of June 2011, there were 91 projects on the List including large pulp-mill construction projects. Projects on the List are granted access to needed forest leases without the usual auction procedure conducted in Russia, and pay 50% lower lease rates within the payback period of the project.

As a result of its new priority status, RusForest Magistralny has been allocated an additional forest lease in the Irkutsk region with reduced lease rates. The forest lease awarded has an AAC of 398,700 cubic metres and covers an area of 355,104 hectares. Additionally, the forest lease acquired by RusForest Magistralny in December 2010 will have its lease rates lowered.

Following the allocation of the additional forest lease, RusForest's total AAC in the Magistralny region amounts to approximately 960,000 cubic metres. On a consolidated basis, RusForest's AAC amounts to approximately 3.6 million cubic metres.

RusForest is forestry and sawmilling company operating in Eastern Siberia and the Arkhangelsk region of Russia. The Company controls long term forest leases with an annual allowable cut of approximately 3.6 million cubic metres, and utilizes these resources to produce a wide range of sawnwood products. Eastern Siberia is renowned for its Pine and Larch of exceptional quality, while the Arkhangelsk Region in northwest Russia has high quality spruce and pine forests similar to those found in northern Sweden.