NEWS RELEASE

Tolko files bid variation and identifies important issues for shareholders

Vernon, BC – Tolko Industries Ltd. (Tolko) announced today that it has formally varied the terms of its offer to purchase all of the outstanding common shares of Riverside Forest Products Limited (Riverside). Tolko has reduced the Minimum Tender Condition currently contained in the offer from 75% to 51%.

Trevor Jähnig, Tolko’s Vice-President of Finance & CFO said: “In the Notice of Variation, we also responded to important issues contained in Riverside’s Directors’ Circular and press release of September 14, 2004. We believe it is vital that all shareholders are fully informed and have access to balanced information. Issues raised by Riverside in previous documentation have been evaluated and are reflected in our offer.”

Some of the issues addressed include the following:

1. Comparison with recent transactions (West Fraser/Weldwood & Canfor/Slocan)

Weldwood is significantly larger and has broader, more diverse product offerings and is not a comparable company to Riverside. Also, the comparison of Enterprise Value to EBITDA multiples using a trailing 12 month EBITDA number do not reflect the highly cyclical nature of the forest sector where transactions have occurred at different points in the cycle. Using a more appropriate method such as the multiple of Enterprise Value to Trend EBITDA shows that Tolko’s offer is consistent with the multiple paid on the Slocan transaction. Furthermore, we believe both Weldwood and Slocan have been consistently stronger performers than Riverside.

2. Riverside’s business or growth prospects.

Riverside’s recent financial results are not sustainable as they are being driven by peak of cycle commodity prices for both lumber and plywood. Looking back across various commodity price cycles, Riverside has generated a net loss in four of its last 10 fiscal years.

3. Riverside’s substantial cash on hand.

The Riverside Directors’ Circular fails to point out that Riverside has non-investment grade debt outstanding of $197.0 million which is in excess of Riverside’s current cash balance.

4. Softwood Duty Refunds

The amount and timing of duty refunds, if any, is highly speculative.

5. Timber tenure take-back compensation

Riverside estimates that it will receive after-tax compensation of $28 million ($65/m3 or $100/m3 pre-tax) for timber tenure take-back from the BC government. The BC government recently announced they had reached agreement with Weyerhaeuser to pay $27/m3 (pre-tax) in compensation. Riverside’s estimate assumes it will receive compensation that is approximately four times higher than the most recent compensation paid.

6. Access to Riverside’s Data Room

Tolko’s initial request for access to Riverside’s Data Room was refused. Subsequent to that refusal, access was offered under terms and conditions Tolko finds unacceptable especially in light of the fact that we believe we are the most strategic buyer.

Further details of Tolko’s responses are available in the Notice of Variation which is filed on SEDAR.

For more information:

Tolko Industries Ltd.
Trevor Jahnig
Vice-President Finance & CFO

Phone: (250) 545-4411
E-mail

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