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Katahdin Paper Company Confirms Shutdown of Millinocket Paper Machine

Katahdin Paper Company LLC (the "Company") confirmed today that operations ceased at its 180,000 ton per year supercalendered paper machine located in Millinocket, Maine, on September 2, 2008. Orderly shutdown procedures are being completed to ensure that an efficient re-start can be achieved. Employees are also completing the necessary steps to protect the manufacturing assets and related support systems through the winter period.

The Company reports continuing progress on the potential to replace oil with biomass as the source for generating the steam energy required for the paper manufacturing process. Further information related to this project will be released when it becomes available.

Katahdin Paper Company is a leading North American producer of high value directory and SC-A groundwood papers. The Company has operations in Millinocket and East Millinocket, Maine.

Note: This press release may contain forward-looking information and other "forward-looking statements" within the meaning of certain securities laws in Canada and the United States. The words "can", "continue", "potential", "will", "become" and other expressions which may be predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements. Although the Company believes that the anticipated actions expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors which may cause the actual outcome to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Factors that could cause actual results of the shutdown and energy project to differ materially from those contemplated or implied by forward-looking statements include: unforeseen mechanical or staffing issues; availability of equipment with optimum technology; and business or financing negotiations. We caution that the foregoing list of important factors that may affect future results is not exhaustive. The Company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.