18th Jul 2014 11:38
LONDON (Alliance News) - Active Energy Group PLC Friday said it has entered into a new joint venture agreement with indigenous groups and entrepreneur Grand Chief Ronald Derrickson, to commercialise forestry in Alberta, Canada.
The AIM-listed supplier of industrial wood chip, timber products and forestry management services said the deal is for in excess of 100,000 hectares of mature forestry assets which are expected to yield more than 20 million metres cubed of commercial standing timber.
The company said the forests are owned by three indigenous aboriginal groups: the Alberta Métis Settlements of Peavine, Paddle Prairie and East Prairie.
Active Energy said the partners in the new venture include the three Métis Settlements which will has 45% stake, Grand Chief Ronald Derrickson of British Columbia who will have 10% interest, and Active Energy Group will hold the remaining 45% stake.
In exchange for equity interest in the joint venture company, the Métis Settlements will grant exclusive rights over the assets and AEG will commit to commercialise the area.
The company said the forests are primarily composed of prime mature standing hardwood and softwood species.
AEG said the deal includes an obligation to provide employment for Métis citizens, and a commitment to contribute to corporate social responsibility programmes which benefit Métis communities.
The company said that Grand Chief Derrickson will be appointed Chairman of the new company, and will be joined on the board by three representatives from Active Energy Group and one representative from each of the three Métis Settlements.
"This exciting new venture is the result of many years of working closely with Grand Chief Derrickson and the Métis leadership to structure an equitable arrangement that works for all parties, commercialises the forestry assets in a sustainable and environmentally-sensitive manner, and allows the Métis communities to actively participate in and benefit from the proper development of their lands and resources," Chief Executive Richard Spinks said in a statement.
Ron Derrickson served six terms as chief of the Westbank First Nation near Kelowna before becoming a land developer and international entrepreneur. Derrickson works with current First Nation chiefs to build investment friendly economies and lease out reserve land.
"I know that it will set the standards and terms for further agreements with other Métis, First Nations and aboriginal groups across Canada to enable them to develop and commercialise their assets in an equitable and sustainable manner to bring long-term economic growth, employment and stability to their communities and their peoples," Ronald Derrickson said in a statement.
Active Energy shares were up 16%, putting it in the top three AIM All-Share risers on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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