The financial information contained herein has been prepared in accordance with International Financial Reporting Standards.

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2 This presentation contains certain forwardlooking information that reflects the Company s current views and/or expectations with respect to: expectations relating to the markets the Company operates in; the impact of currency exchange rates and other market factors on the results of the Company s mills; and expectations relating to capital expenditure spending. Persons reading this presentation are cautioned that statements comprising forwardlooking information are only predictions, and that the Company's actual future results or performance are subject to certain risks and uncertainties including, without limitation: those relating to potential disruptions to production and delivery, including as a result of equipment failures, labour issues, the complex integration of processes and equipment and other factors; fluctuations in the market price for products sold; trade restrictions or import duties imposed by foreign governments; labour relations; failure to meet regulatory requirements; changes in the market; potential downturns in economic conditions; fluctuations in the price and supply of required materials; foreign exchange fluctuations; availability of financing (as necessary); and other risk factors detailed in our Annual Information Form dated March 30, 2016 available on SEDAR at and other filings with the Canadian securities regulatory authorities. In particular, financial forecasts and expectations are not indicators of future financial performance and there is no assurance that the Company s assumptions' in support of such forecasts or expectations are correct, accurate or complete. These risks, as well as others, could cause actual results and events to vary significantly. The Company does not undertake any obligation to update any forwardlooking information, except as required by applicable securities law. Unless otherwise noted, are references in this presentation to $ are to Canadian dollars. The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with, the Company s audited consolidated financial statements for the year ended December 31, 2016 and the related notes thereto and Management s Discussion & Analysis, which are available on SEDAR. Where we disclose production costs, such costs are calculated based on a variety of factors and inputs which may result in such costs not being comparable to similar types of costs disclosed by other issuers. This presentation contains reference to Operating EBITDA, adjusted net loss and adjusted net loss per share, which are non GAAP financial measures. For disclosure of the manner in which these measures are calculated and a reconciliation to net loss, please refer to the MD&A for the year ended December 31, 2016, available on SEDAR. The financial information contained herein has been prepared in accordance with International Financial Reporting Standards. 2

3 Millions $ 15 5 (5) () (15) Quarterly EBITDA Operating EBITDA was $6.4 million compared to operating EBITDA of $7.6 million in the third quarter of The Dissolving Pulp Segment generated operating EBITDA of $6.7 million. The Security Paper Products Segment generated operating EBITDA of $1.6 million. Corporate costs contributed operating EBITDA loss of $1.9 million. Adjusted net loss was $7.0 million, or a diluted adjusted net loss per share of $0.49. EBITDA Manufacturing and distribution costs were $63.3 million or 78.2% of sales compared to $ 62.3 million or 75.8% of sales in the third quarter of

4 Millions $ Yearly EBITDA EBITDA was $21.3 million, an increase of $.9 million compared to EBITDA of $.4 million for the 2015 year. () (20) (30) (40) The Security Paper Products segment generated EBITDA of $6.3 million. The Dissolving Pulp Segment generated EBITDA of $23.0 million. Corporate costs contributed EBITDA loss of $8.0 million to EBITDA. EBITDA Adjusted net loss of $29.9 million, or diluted adjusted net loss per shares of $2.05 for the year. Millions $ 30 () Yearly EBITDA by Segment Manufacturing and distribution costs were $261.4 million or 79.0% of sales for the year compared to $251.4 million or 81.7% of sales for the year (30) (50) Corporate Security Paper Products Segment Dissolving Pulp Segment Total EBITDA 4

5 Millions $ 15 5 (5) () (15) (20) Quarterly EBITDA Dissolving Pulp Segment Operating EBITDA for the Dissolving Pulp Segment for the quarter was $6.7 million, compared to $11.9 million in the third quarter of The results of the fourth quarter were impacted by the planned annual maintenance shutdown and subsequent ramp up. EBITDA Sales totaled $41.2 million for the quarter compared to $48.9 million for the third quarter of Millions $ Sales by Quarter Dissolving Pulp Segment The cogeneration facility generated $4.2 million in sales revenue from the generation of power in the fourth quarter of 2016 compared to $5.6 million in the third quarter of Q415 Q116 Q216 Q316 Q416 Sales 5

6 ADMT Quarterly Shipments Dissolving Pulp Segment Q415 Q116 Q216 Q316 Q416 Dissolving Pulp The Company sold 30,962 air dried metric tonnes ( ADMT ) of dissolving pulp in the fourth quarter. The FSC mill held 2,622 ADMT of dissolving pulp inventory at December 31, 2016 compared to 988 ADMT as at September 30,

7 The viscose staple fibre ( VSF ) and rayon filament markets (key drivers in dissolving pulp demand) have experienced an improved supply and demand balance and improved prices since bottoming in At March 2017 rayon filament prices have increased by 9% and VSF prices are up 29% year over year. Dissolving pulp and VSF prices have increased by US$128 and US$747 per tonne, respectively, year over year. In the fourth quarter of 2016, the FSC mill's production costs, including amortization of some of the shutdown costs and the positive impact of the cogeneration facility, averaged $926 per ADMT (excluding $77 per ADMT impact of the shutdown) of dissolving pulp produced, which was above trend. Production costs are expected to be lower in the first quarter of 2017, relative to the prior year comparative period, due, in part, to significant progress in resolving issues related to digester productivity encountered during previous winters. Focus continues to be on cost reductions, production improvement and power generation to improve margins at the FSC mill. 7

8 Quarterly EBITDA Security Paper Products Segment Millions $ (1) (2) Operating EBITDA for the Security Paper Products Segment for the quarter was $1.6 million compared to operating EBITDA loss of $1.8 million in the third quarter of EBITDA Results in the fourth quarter of 2016 were unfavorably impacted by production of a new product for a major customer that resulted in some additional startup costs. Millions $ Sales by Quarter Security Paper Products Segment t 3,000 2,000 Sales were $39.7 million for the quarter compared to $33.3 million for the third quarter of The Landqart mill sold 2,474 tonnes of security paper in the fourth quarter, compared to 2,431 tonnes in the third quarter of ,000 Q315 Q415 Q116 Q216 Q316 Q416 Sales Shipments 8

9 The Landqart mill continues to build on a strong order book for 2017 and is filling the 2018 order book. On March 16, 2017 Fortress announced an agreement with a new Durasafe customer. This order is anticipated to begin shipping in Production of Durasafe for the substrate of the ninth series of the Swiss franc for the Swiss National Bank ( SNB ) began in 2014 and will continue for all series expected through to In April 2016, the SNB issued the new 50 franc bank note printed on Durasafe, the first of six notes in the SNB ninth series. In March 2016, the National Bank of Kazakhstan s 20,000 Tenge banknote produced with Fortress Paper's Durasafe banknote substrate was the recipient of the Regional Banknote of the Year Award at the High Security Printing European conference. 9

10 Millions $ Sales by Quarter Sales Total sales were $80.9 million for the fourth quarter compared to $82.1 million for the third quarter of Cash on hand excluding restricted cash at December 31, 2016 was $22.1 million compared to $78.1 million at September 30, The Company had $15.0 million in restricted cash at December 31, 2016 compared to $17.3 million at September 30, Millions $ Quarterly Cash Balance Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 During the fourth quarter of 2016, the Company repurchased $36.2 million face value of convertible debentures due in 2016 and spent approximately $7.1 million on capital expenditures (including maintenance and projects). During the third quarter of 2016, the Company received $58.4 million in net proceeds from the sale and leaseback of land and buildings at the Landqart mill. Cash and cash equivalents

11 14 Normalized Consolidated SG&A by Nature 14 Normalized Consolidated SG&A by Segment Millions $ 12 8 Millions $ Q415* Q116 Q216 Q316 Q416 Q415* Q116 Q216 Q3 16 Q4 16 General & administrative Commission, sales & marketing Security Pulp Corporate *See EBITDA reconciliations in December 31, 2016 MD&A 11

12 $ (Millions) Q Q Q Q Q Cash Restricted Cash Total Cash Working Capital* Convertible Debentures Other Debt Total Debt** *Total current assets less total current liabilities, which in Q includes net assets held for sale. **Total debt is net of unamortized borrowing costs (Q4 2016: $5.4 million) and includes both long term and current portion of debt. 12

13 On January 4, 2016, the Company announced that the Toronto Stock Exchange accepted the Company s notice of intention to make a normal course issuer bid for its debentures due in 2016 and To date the company has purchased the % allowed under the normal course issuer bid and cancelled $4.0 million principal amount of the 2016 and $6.9 million of the 2019 debentures. On July 27, 2016, the Company assigned and transferred a $7.0 million note to a lender as early repayment of principal amounts due in The lender agreed to defer an aggregate of $6.3 million of quarterly principal payments otherwise payable September 30, 2017, December 31, 2017, and March 31, 2018, without penalty or interest accruing on such amounts for one year. Repayments of principal for debt outstanding as at December 31, 2016 are required as follows: Year Convertible Debt Q $ millions Other Debt Total Thereafter Total

14 Credit Agreement In January 2017, the Company entered into a credit agreement with a new lender for a $40.0 million loan secured by cogeneration assets. The loan is repayable over 14 years and accrues interest at a rate of 6.0% per annum plus an account maintenance fee of 0.5% per annum. An existing lender agreed to subordinate its security rights on the cogeneration assets. In consideration for the subordination, the Company agreed to increase the interest rate payable on $40.0 million principal amount of the loan owing to the existing lender to 6% per annum. All principal payments to the current lender will be applied firstly to the higher interest bearing principal amount outstanding. Early Repayment of Debenture On February 3, 2017, the Company announced the early repayment in full, without penalty, of an unsecured convertible debenture in the aggregate principal amount of $25.0 million. 14