Fortress signs Hydro Québec energy agreement

May
11, 2010, Vancouver – Fortress Paper, through its wholly owned subsidiary
Fortress Specialty
Cellulose, has signed an energy supply agreement with Hydro Québec for the sale
of renewable electricity to be produced at the Thurso mill upon completion of a
biomass-based cogeneration facility. Under the agreement, the company will
construct a cogeneration facility to provide 18.8 MW of renewable power to
Hydro Québec over a 15-year term, with deliveries estimated to commence in the
fourth quarter of 2012.

Chadwick
Wasilenkoff, CEO of Fortress Paper, states, "The signing of the agreement
represents an important step in achieving our business plan at the Thurso mill,
which includes the building of a cogeneration plant that produces green
electricity that in turn will ultimately benefit Québec residents."

The
agreement is subject to final approval by the Régie de l'énergie in Quebec,
which is expected to be received in the third quarter of 2010.