NEWS UPDATE July 2007

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NEWS UPDATE January 2007

In December 2006 KFPL secured new investment. CDC has been replaced as the majority shareholder by the Tropical Timber Fund. The Sydney based ‘New Forests Asset Management’ [NFAM] act as the asset manager on behalf of TTF.

A loan has been arranged with the European Investment Bank to help finance the replacement of the heavy machinery fleet, and overhaul of infrastructure. Funds have also been made available by the EU to support the equity holding of ICSI and support a major replanting programme.

Areas of activity will be expanded to include an active role in marketing of regional small holder timber and also to manage customary land under FSC principles following an invitation from local communities.

The log market is very buoyant and the only difficulty in exporting all our production is attributable to the scarcity of shipping.

Our small sawmill continues to offer sawn timber to enable potential buyers of our logs to gain familiarity with our plantation grown species. The Solomon Islands wood processing industry is in its infancy but it is possible that either KFPL or another business can increase the scale and availability of FSC sawn timber. KFPL does not yet have the resources or experience to operate a larger sawmill but we are hopeful of entering in to partner ship with an appropriate and experienced wood processing business.

January 31, 2007

New Forests Closes First Asia Pacific Investment for the Tropical Timber Fund

Majority Ownership in FSC-Certified Forestry Company in the Solomon Islands

SYDNEY – New Forests Pty Limited announces the completion of its first investment in the Asia-Pacific region, positioning the Tropical Timber Fund (TTF) as the majority shareholder in Kolombangara Forest Products Ltd (KFPL) in the Solomon Islands. KFPL is the largest plantation forestry business in the Solomon Islands, producing high-value hardwood logs for export markets. New Forests will manage the asset on behalf of TTF, which is managed by Sydney-based funds management firm Seiza Capital.

The 39,000-hectare KFPL estate comprises 12,000 hectares of hardwood plantations, including teak, eucalyptus, gmelina, mahogany and others species, and over 25,000 hectares of natural rainforest under conservation and natural forest management. KFPL’s operations achieved Forest Stewardship Council (FSC) certification in 1999, the first in the Asia-Pacific region. Certification was renewed in June 2006 for an additional five years, and the high social and environmental criteria required by this standard will remain a priority for New Forests.

“New Forests’ investment in KFPL, on behalf of TTF, brings the required capital for this promising business to meet its full potential,” says David Brand, Managing Director of New Forests. “KFPL’s future success will be based on the forestry management systems and solid infrastructure that it has developed over 17 years of operation, as well as its strategic location near growing Asia Pacific markets for timber.

“New Forests and TTF are also committed to sustainable forest management practices, and KFPL’s FSC certification was an important aspect of our investment decision.”

The transaction arrangements include a concessionary loan from the European Investment Bank to finance the purchase of new forestry machinery. The government of the Solomon Islands, through the Investment Corporation of the Solomon Islands (ICSI), also receives a STABEX grant provided by the European Union Sustainable Forestry and Conservation Project. The grant, which will finance plantation development, helps ICSI maintain its 40% ownership as the minority shareholder. This builds on its position in the original joint venture with the Commonwealth Development Corporation, the outgoing majority shareholder.

KFPL currently directly employs 230 people and provides work for up to a further 500 contractors. The company provides an alternative model for the future of the Solomon Island’s forestry sector, as logging of the country’s depleted native forests is expected to decline over the next five years. An estimated 240 additional jobs may be created in the longer term, making KFPL one of the largest employers in the country. Current production of 60,000 cubic meters per year is expected to increase to 180,000 cubic meters per year through improved silviculture regimes and enhanced efficiency of forestry operations, as plantations reach maturity and underperforming sites are re-established.

“KFPL’s ability to deliver quality timber products to the market should be enhanced through this new ownership and investment in the company,” says Simon LeGassicke, General Manager of KFPL. “All stakeholders on Kolombangara Island are looking forward to working with New Forests to ensure successful operations, sustained growth and a vibrant company.”

Logs from KFPL are exported directly from the two deep water ports on Kolombangara Island, and over 50% are sold to processors requiring FSC-certified wood. New Forests will be holding discussions with potential export partners seeking to service the growing global demand for the high-quality hardwood timber KFPL produces.

New Forests Pty Limited

New Forests Pty Limited is a forestry investment management and advisory services firm based in Sydney, Australia. The company’s investment thesis is unique in seeking assets that deliver traditional timber returns, as well as returns from emerging environmental markets and preferences, such as certified timber, carbon, biodiversity and water quality. In addition to world-leading forestry investment expertise in the areas of acquisitions, modeling, operations, silviculture and ecosystem services, New Forests is at the forefront of developing and commercializing environmental products and evaluating opportunities from emerging environmental markets. The company holds an Australian Financial Services License. For more information see www.newforests.com.au.

Tropical Timber Fund

The Tropical Timber Fund invests in a diversified portfolio of timberland assets in the Asia-Pacific region with a focus on tropical hardwoods managed in an environmentally sustainable manner. The fund is managed by Sydney, Australia-based Seiza Capital, and New Forests Pty Limited acts as the fund’s asset manager. Kolombangara Forest Products Ltd is the first investment for the Tropical Timber Fund.

Kolombangara Forest Products Ltd

Kolombangara Forest Product Ltd (KFPL) is the largest sustainable forestry plantation business in the Solomon Islands. The company maintains a 75-year lease for a 39,000-hectare estate comprising 12,000 hectares of high-value hardwood plantations and natural rainforests under conservation and natural forest management. Established as a joint venture in 1989 between the Government of the Solomon Islands (represented by the Investment Corporation of the Solomon Islands) and the United Kingdom’s Commonwealth Development Corporation, KFPL was the first company in the Asia Pacific region to achieve Forest Stewardship Council certification for its plantation forestry operations. For more information see www.kfpl.com.sb.

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NEWS UPDATE April 2006

Over the past thirty months the Solomon Islands economy has not blossomed but the gains emanating from the RAMSI influence have been consolidated. There is a national election scheduled for 5 April 2006.

Foreign investment is recommencing with the palm oil and gold mine operations on Guadalcanal being re-opened recently. This is good news for everyone including the business sector.

KFPL had its second five-year accreditation assessment from the Soil Association UK in May and our FSC Certification has been renewed for five more years.. This gives third party credibility to managements’ on going improvements in the standards of sustainability, environmental management and social policies.

Currently 75% of KFPL sales by volume are to FSC sensitive processors and may further increase next year. KFPL is replacing low yielding low value trees with improved planting material and is careful to match species with soil/site characteristics to enhance the overall quality of the plantation resource.

There are small areas of natural forest within our estate that we will proactively manage and thereby introduce small volumes of natural forest timbers in to our sales portfolio during 2006 when fully approved by our FSC certifiers. We may also manage customary land under FSC principles following an invitation from local communities and hopefully this will be capable of replication regionally.