Celgar power project ready to roll

Oct. 4,
2010, New York, NY – Mercer International has completed an
important milestone in the renewable energy project at its Celgar pulp mill near
Castlegar, British Columbia. The project is currently in the commissioning and
optimization phase, and Celgar has completed a 72-hour performance test for its
new turbine as required under its power purchase agreement with BC Hydro.

The
company has submitted the test results and other required documentation to BC
Hydro for approval of commercial operation status, pursuant to the terms of its
agreement. Following confirmation from BC Hydro that all necessary
documentation has been provided, it is expected that commercial operation
status under the electricity purchase agreement will be set retroactive to
September 27, and all power generation from that point will be recognized at
bioenergy rates.

“We are
pleased with the significant milestone achieved on this project, and I would
like to thank all of our employees, contributors, and suppliers for a job very
well done. I would also like to recognize the important contribution by the Canadian
Federal Government through Natural Resources Canada,” states Jimmy Lee,
president and chairman of Mercer International.