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Jemi Fibre (JFI.v): Bobby Genovese’s latest scam upsets the locals

IKN’s coverage of the scumball stock pumper/dumper Bobby Genovese continues today with news of Jemi Fibre (JFI.v), his latest scam that’s based around the lumber industry. Yesterday JFI.v emitted this news release that has really got under the skin of locals where JFI is operating (or better said, trying to operate, see below for more) because the difference between the airbrushed spin in the NR and the cold hard reality of how this scam works was just too much for the law-abiding people that now have JFI hanging round and stinking up the neighbourhood. 
Which means, yes indeed, IKN has received a mail from an insider and you’re about to read it, so you too will be able to see the difference between JFI’s corporate BS and the nasty way in which it’s going about business. It goes without saying that the person’s identity will remain anonymous, as aside from the usual reasons JFI and its band of scumballs has already shown itself to be very quick on the SLAPP suits. We want you to read the real deal info, which means people’s names have to be kept out of it. 
So without further ado, here’s another episode in “avoid Bobby G stocks like the plague” starting with the excerpt in yesterday’s NR which so annoyed the people that really know how JFI operates.

“As of this week, our WoodEx sawmill is now operating on a full one-shift basis. Since this past August, our Kootenay Wood preserving operations has been operating near a 1.5 shift basis. In addition, harvesting operations from our private timberlands has been progressing since late July. As of this month, we are operating at a steady-state on these lands and have commenced silviculture operations with an order of 1.2 million new seedlings.”

And now the real juice on why that above is just a big crock. Our anonymous insider takes over from here and it’s very interesting stuff). Read on.
The Real Story, by A.N. Other
WoodEx is a very small sawmill, Kootenay Wood is a small
operation only set up to do fence poles or similar products. Both were close to bankruptcy when they were recently
acquired by JFI in exchange for JFI penny stock. Neither mill can handle the
production that JFI needs to accommodate the recent approximately $40 m purchase of private forest lands from Tembec. Also, word is they substantially
overpaid for the Tembec land and many locals are wondering how they can ever be
profitable after obtaining its capital via 100% financial debt at high interest
rates of up to 22%. The debt deals were with BG Capital (i.e. Bobby Genovese, who
also holds a significant equity investment in JFI).
We’ve done rough calculations and believe they need to clear
near to 24 hours a day and find an outlet to sell the logs and at a high
pace in order to make the business viable. One important thing to understand is
clearcutting, why it’s important and why JFI needs to use this technique. Why is clearcutting with no silviculture (re-planting of trees) so
desirable? Here is an excerpt from an article that explains.
“Logging private land is cheaper than
logging Crown Land that’s under the provincial Forest Practices Act. The act
requires a comprehensive logging plan – something that can take months and add
about $5 a cubic metre to the cost of wood harvested. There are restrictions on
how much of the land can be logged at one time. The size of an allowable cut
block varies from site to site. On private land, reforestation isn’t required.
Unless property is in the Forest Land Reserve, the logger doesn’t pay stumpage.
The cost of logging with plans, reforestation and stumpage would eat up half to
two-thirds of the $50 to $200 (JFI) is getting per tree”.
We understand that JFI has approached the three private
mills in the Kootenays that are close to recently acquired (ex-Tembec)
timberlands and made offers, but nobody wants to sell. These include Galloway
Lumber, J. H. Huscroft Lumber and WynnWood. They even tried a hostile takeover
of WynnWood using one of WynnWood’s minority shareholders, but none of the
other shareholders agreed and the deal fell through. So although it appears
none of these local mills are for sale the question is whether JFI will get
desperate (it needs a bigger mill, period) and offer a big price plus penny stock
to cause the owners to re-consider.
There are three more mills in the area owned by public
listed company Canfor (CFP.to). We don’t know if JFI has tried to purchase the
Canfor mills but we do know that JFI has been selling logs to Canfor. Canfor is
certified by the Forest Stewardship Council (FSC) which means it can’t buy logs
from an outfit that doesn’t practice sustainable silviculture (replanting of
trees) or they will place their FSC certification in jeopardy.
To sum up so far, in order to be profitable, JFI needs clear-cut
and not re-plant trees. Its lands purchased from Tembec are Managed Forest and
they’re not allowed to clear cut. Therefore to move forward it has the
following options
  • It
    must remove the government classification of Managed Forest (which
    requires replanting) on their lands. This they’ve reportedly tried to do with
    no success.
  • If
    they can’t do that, they can purchase mills that are not FSC certified and
    as you read above, they’ve had no luck so far.
  • If
    they can’t do that, they can have the mills they sell logs to remove their
    FSC certification. We strongly believe that Canfor will not remove its FSC
  • Galloway
    is not FSC certified. WynnWood and JHH have a similar certification called
    SFI (Sustainable Forestry Initiative) and would not remove their
    certification under their present ownership.
In other words, JFI is stuck. So instead of playing it
straight, they decided to play dirty. The Nature Conservancy of Canada met with
JFI to make sure they’d follow the rules and were told by JFI that they would
indeed follow the correct environmental practices of sustainability. So the NCC
was hopping mad when just a few days later they found out that JFI had already
cut down trees in a covenant area they weren’t supposed to touch. The NCC put
the word out and Canfor refused to buy any more logs until they get with the
program, which is why JFI announced yesterday the order of 1.2m seedlings. In
other words, it’s not that they are “nice guys” and voluntarily commenced
silviculture as suggested by the news release. Far from it; they were logging
illegally, they got caught, their buyer stopped buying and from now on they’re
going to be monitored very closely by the big national agency they annoyed; they really picked the wrong enemy there. So they had no choice but to start the
silviculture program, and that’s going to cost them way too much money for the
business model.
In JFIs official management discussions posted on Sedar,
their plans are to acquire sawmills, so we believe they will keep trying. The
local sawmills should be aware that some of the players of JFI have been
also known to use middle men to purchase land in the past so those mills should
do their due diligence if they decide to sell. Mike Jenks and 4064 Investments
use middle man to purchase 1/3 of Denman Island. So sawmills be aware. Every company Bobby Genovese has been involved with has
suffered a bad fate so if you care about your people, the jobs,
environment and your reputation you will not sell at any price.

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