Maintained Excellent Safety Performance
Company continued record safety results and strong safety culture in Q1, maintaining industry-leading safety metrics (no impairments related to safety reported).
Improved Liquidity via Government Financing
Secured $30.0 million federal loan (BDC) and ~ $2.4 million provincial CHIP support in Q1; cash balance rose to $6.5 million from $3.5 million at prior quarter-end, and financing activities provided $38.6 million during the quarter to support liquidity.
Chapleau Capital Projects — Saw Line Ramp and Capacity Gains
New Chapleau saw line completed performance testing and ramped up production by 60% from January to March; currently operating at ~90% of target capacity. Planer mill and cogeneration refurbishment completed and ramp-up finalized. Company reports improved lumber quality, better recovery and grade, and project delivered under budget.
Quarter-over-Quarter Margin and Expense Improvements
EBITDA loss improved to negative $15.1 million vs negative $21.7 million in Q4 2025 (improvement of $6.6 million, ~30% improvement). Gross margin loss improved to $2.0 million vs a $9.0 million loss in Q4 2025. NRV (net realizable value) expense reduced to $1.8 million from $10.2 million in Q4 2025; freight costs down to $8.0 million from $9.8 million QoQ.
Recovering Lumber Prices and Positive Demand Signals
Western benchmark lumber prices increased from $422 to $487 during the quarter (+15.4%). March housing starts were +12% year-over-year and +11% month-over-month, and repair & remodeling activity was 6% above forecast over the last six months, indicating early demand improvement.