Woodbois : Mozambique Agreement & Operations recommencement

RNS Number : 7049G

Woodbois Limited

19 March 2020

19 March 2020

The informa on contained within this announcement is deemed by the Company to cons tute inside informa on as

• pulated under the Market Abuse Regula ons (EU) No. 596/2014 ("MAR"). With the publica on of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Woodbois Limited

("Woodbois", the "Group" or the "Company")

(AIM: WBI)

• Recommencement of operations in Mozambique
• Three year management agreement with no cash requirement from Woodbois

Woodbois, the African focused forestry and mber trading company, is pleased to announce the signing of a management agreement (the "Agreement") with Future Earth II LLC ("Future Earth"), a US company with substan al concessions in Mozambique, crea ng a rela onship under which Future Earth will fund, manage and operate Woodbois' Mozambique concessions, employees and equipment, in order to produce sawn lumber and veneers to be sold by Future Earth on a profit share basis.

The Woodbois concessions have been on a care and maintenance basis for over two years, partly due to an industry export ban in 2018 and due to the quantum of investment required to restart and to enlarge the opera ons to be able to earn an acceptable return on capital comparable to the Group's other business segments. Management have been seeking the op mum way to recommence opera ons and believe the agreement with Future Earth provides material benefits to both par es, not least from the economies of scale arising from Woodbois' approximately 300,000 hectares and Future Earth's approximately 620,000 hectares of concessions.

Since 2006, Future Earth has built sustainable industry programmes in Mozambique. EAFP, its local subsidiary, processes mber into lumber and finished products through its sawmill and veneer manufacturing facili es in Mozambique. By opera ng these facili es in-country rather than shipping semi-finished mbers, the business captures a greater por on of the value chain locally, crea ng more employment and reducing the carbon footprint of finished goods. The business has mul ple mes received the Presiden al Award for "Best Exporter of Value-added Timber Products" as well as the award for "Best Rural Industrialization Project in Mozambique".

The Agreement is for 3 years, with op onal breaks a er 12 and 24 months at Future Earth's discre on. All costs during the term of the Agreement will be funded by Future Earth with a 50:50 post-cost profit share from products sold from Woodbois' concessions. Should Future Earth proceed with years 2 and 3 they will pre-pay Woodbois $1 million each year, to be deducted from the Woodbois share of profits for each respec ve year. Profits will be distributed quarterly.

Woodbois CEO Paul Dolan said: "Woodbois and Future Earth share strong sustainability values and I'm delighted to announce this agreement which I believe will prove beneficial to both par es. The agreement will allow Woodbois to start realising value from our substan al assets in Mozambique without dilu ng management focus or financial resources, which can now be fully concentrated on bringing our opera ons in Gabon to op mal capacity and on our interna onal mber trading business. I hope that this signals the start of a long and frui ul rela onship between our respective companies as well as our hardworking and dedicated teams on the ground in Mozambique."

Lenny Shibley, industry veteran and Chief Opera ng Officer of Future Earth, said: "In 30 years in the industry, I have seen no be er opportunity to deliver economic value, coupled with step-change social upli for local communi es, than through the environmentally responsible use of Mozambique's mber resource. We very much look forward to further developing our rela onship with Woodbois as we add the management of their mber resource to our operations."

Enquiries:

Woodbois Limited Paul Dolan - CEOwww.woodbois.com[phone]

Arden Partners Plc (Nominated adviser and broker)

Richard Johnson [phone]

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