Prima triples forestry footprint in Colombia

Vancouver’s newest tropical hardwood company has just tripled its land position in Colombia.

On Tuesday, Prima Colombia Hardwood Inc. (TSX-V:PCI) increased its license agreement for tropical timber to 3,121,720 cubic metres from 1,050,000.

The agreement also allows Prima to access the timber for 25 years compared with the four years it originally announced in October.

“The increase in timber reserve is expected to have significant financial impact and greatly improves the company’s sustainable production base over the term of the timber agreement,” said CEO Donald Hayes.

“We are very pleased to deliver such a large increase in our timber reserve at this early stage of the company’s development,” added COO Harold Hayes.

Business in Vancouver first reported on Prima in October shortly after the company transformed from a shell corporation into a full-fledged forestry company. (See “Group of prominent B.C. businessmen aims to kick-start forest industry in Colombian jungle” – issue 1094; October 12 to 18.)

Even though Prima is still an infant among global forestry companies, its management team has decades of experience.

Hayes will lead the company with brother Harold, both of B.C.’s Hayes Group, which was once one of the province’s largest timber service providers.

Prima’s board includes such Vancouver business veterans as:

To top it off, Goldcorp Inc. (TSX:G) chairman Ian Telfer has been appointed a senior adviser, and Prima’s largest shareholder is billionaire mining mogul Frank Giustra.

The company said this latest agreement includes an annuable allowable cut of 208,114 cubic metres of timber, with the ability to carry forward prior years’ undercuts or volume shortfalls.

The deal also allows Prima to consider harvesting options different than the selective-harvesting method using helicopters it originally planned to use.

Prima did not say what other options it might have, but did say it had reached an agreement with the local community of Los Delfines to pay US$10 per cubic metre of timber harvested in the near term.

At press time, Prima’s shares were down $0.01 to $0.34.