This presentation contains certain forward-looking 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 forward-looking 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 31, 2017 available on SEDAR at www.sedar.com 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 forward-looking 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 unaudited condensed consolidated financial statements for the quarter ended March 31, 2017 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 quarter ended March 31, 2017, available on SEDAR. The financial information contained herein has been prepared in accordance with International Financial Reporting Standards.

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• Operating EBITDA was $7.5 million compared to operating EBITDA of $6.4 million in the fourth quarter of 2016.

• The Dissolving Pulp Segment generated operating EBITDA

of $8.3 million. The Security Paper Products Segment generated operating EBITDA of $1.5 million. Corporate costs contributed operating EBITDA loss of $2.3 million.

• Adjusted net loss was $3.0 million, or a diluted adjusted

net loss per share of $0.21. • Manufacturing and distribution costs were $72.2 million

or 78.1% of sales compared to $63.3 million or 78.2% of sales in the fourth quarter of 2016.

3

(15)

(10)

(5)

-

5

10

15

Mill

ions

$

Quarterly EBITDA

EBITDA

• Operating EBITDA for the Dissolving Pulp Segment for the quarter was $8.3 million, compared to $6.7 million in the fourth quarter of 2016.

• The results of the first quarter were impacted by improvements in production rates and quality.

• Sales totaled $48.7 million for the quarter compared to

$41.2 million for the fourth quarter of 2016. • The cogeneration facility generated $5.1 million in sales

revenue from the generation of power in the first quarter of 2017 compared to $4.2 million in the fourth quarter of 2016.

4

(20) (15) (10)

(5) - 5

10 15

Mill

ions

$

Quarterly EBITDA Dissolving Pulp Segment

EBITDA

-

10

20

30

40

50

Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Mill

ions

$

Sales by Quarter Dissolving Pulp Segment

Sales

5

• The Company sold 37,833 air dried metric tonnes

(“ADMT”) of dissolving pulp in the first quarter.

• The FSC mill held 1,891 ADMT of dissolving pulp inventory at March 31, 2017 compared to 2,622 ADMT as at December 31, 2016.

ADMT

-

10

20

30

40

50

Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Thou

sand

s

Quarterly Shipments Dissolving Pulp Segment

Dissolving Pulp

• 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 2015. In 2016 viscose experienced one of its better years in recent history.

• At May 2017 rayon filament prices have increased by 7% and VSF prices are up 18% year over year. • Dissolving pulp and VSF prices have increased by US$20 and US$334 per tonne, respectively, year over year.

• In the first quarter of 2017, the FSC mill's production costs, including amortization of some of the shutdown

costs and the positive impact of the cogeneration facility, averaged $945 per ADMT of dissolving pulp produced.

• Ongoing initiatives to reduce operational costs are focused primarily in the following areas: productivity

improvement, reducing fuel consumption, increasing power generation, and chemical cost optimization. Separately, the fifth digester project is scheduled to be completed in the first quarter of 2018.

6

• Operating EBITDA for the Security Paper Products Segment for the quarter was $1.5 million compared to operating EBITDA of $1.6 million in the fourth quarter of 2016.

• Due to the sale and leaseback transaction of the land and buildings, rent of $0.9 million has been incurred quarterly since the third quarter of 2016. Adjusting for rent, the first quarter of 2017 compares favourably to the prior year comparative period.

• Results in the first quarter of 2017 were impacted primarily by product mix.

• Sales were $43.8 million for the quarter compared to $39.7 million for the fourth quarter of 2016.

• The Landqart mill sold 2,836 tonnes of security paper in the first quarter, compared to 2,474 tonnes in the fourth quarter of 2016.

7

t

(2) (1) - 1 2 3 4 5

Mill

ions

$

Quarterly EBITDA Security Paper Products Segment

EBITDA

-

1,000

2,000

3,000

10

20

30

40

50

Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Mill

ions

$

Sales by Quarter Security Paper Products Segment

Sales Shipments

8

• The Landqart mill continues to build on a strong order book for 2017 and 2018.

• On March 16, 2017 Fortress announced an agreement with a new Durasafe® customer. This order is anticipated to begin shipping in 2017.

• 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 2019. 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. In April 2017, the Swiss 50 Franc was the recipient of the International Bank Note Society 2016 bank note of the year award. Based on multiple Durasafe® trials being conducted at various stages, management continues to anticipate additional orders in the near, medium and long term.

9

• Total sales were $92.5 million for the first quarter compared to $80.9 million for the fourth quarter of 2016.

• Cash on hand excluding restricted cash at March 31,

2017 was $40.5 million compared to $22.1 million at December 31, 2016.

• The Company had $17.4 million in restricted cash at

March 31, 2017 compared to $15.0 million at December 31, 2016.

• During the first quarter of 2017, the Company spent

approximately $6.9 million on capital expenditures (including maintenance and projects).

-

20

40

60

80

100

Mill

ions

$

Sales by Quarter

Sales

-

20

40

60

80

100

120

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Mill

ions

$

Quarterly Cash Balance

Cash and cash equivalents Restricted cash

10

-

2

4

6

8

10

12

14

Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Mill

ions

$

Consolidated SG&A by Nature

General & administrative Commission, sales & marketing

-

2

4

6

8

10

12

14

Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Mill

ions

$

Consolidated SG&A by Segment

Security Pulp Corporate

$ (Millions) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Cash 31.6 26.3 78.1 22.1 40.5

Restricted Cash 15.3 15.0 17.3 15.0 17.4

Total Cash 46.9 41.3 95.4 37.1 57.9

Working Capital* 26.1 43.5 60.9 53.6 93.4

Convertible Debentures 125.0 123.6 116.7 81.3 57.1

Other Debt 118.7 119.2 114.5 116.5 152.7

Total Debt** 243.7 242.8 231.2 197.8 209.8

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*Total current assets less total current liabilities, which in Q2 2016 includes net assets held for sale. **Total debt is net of unamortized borrowing costs (Q1 2017: $3.2 million) and includes both long term and current portion of debt.

Q1 2017 $ millions

Year Convertible Debt

Other Debt Total

2017 - 2,972 2,972

2018 - 13,093 13,093

2019 62,100 14,927 77,027

2020 - 14,889 14,889

2021 - 14,613 14,613

Thereafter - 84,067 84,067

Total 62,100 144,561 206,661

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Repayments of principal for debt outstanding as at March 31, 2017 are required as follows: • 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.

• 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.