Exhibit 10.3.1





Exhibit 10.3.1




PORTIONS OF THIS EXHIBIT DENOTED WITH THREE ASTERISKS (***) HAVE BEEN

OMITTED AND WILL BE SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT

WITH THE SECURITIES AND EXCHANGE COMMISSION.




[LETTERHEAD OF NORSKECANADA]




August 23, 2005




Riverside Forest Products Limited

c/o Tolko Industries Ltd.

3203 — 30th Avenue

Vernon, British Columbia

V1T 2C6




	 	 	 
	Attention:

	 	Mr. Steven M. King
	 

	 	Fibre and Corporate Purchasing Manager






Chip Supply Agreement (S.I.W.P Division)




We confirm our agreement regarding changes to the wood chip supply arrangements under the chip
supply agreement (“Chip Agreement”) originally between Riverside Forest Products Ltd. and Crown
Forest Industries Limited dated November 19, 1992 (now between Riverside Forest Products Limited
and Norske Skog Canada Limited as managing partner of NorskeCanada) that were discussed at our
meeting on June 14.



Norske confirms its agreement to amendments to the Chip Agreement on the following basis:




	1.	 	Annual Volume. Under the Chip Agreement, a Chip volume is excluded from the Chip volume to
be purchased by Norske based on a percentage of overall Chip production or a volume referred
to as the Total Excluded Volume Cap (initially (***) BDUs) that varies with the chip recovery
factor among other things. This calculation was originally put in place to permit Riverside
to continue to supply chips under the three Weyerhaeuser and/or Fibreco contracts. Rather
than the volumes under those contracts automatically becoming Norske volumes when they expire
however, those volumes become subject to the 1992 Fibre Products Rights Agreement per Section
2.4 of that agreement.






We understand that the average chip recovery factor for 2002-2004 was (***). That change
from a chip recovery factor of (***) would result in the Total Excluded Volume Cap changing
from (***) BDUs to (***) BDUs ((***) BDUs). We also understand that the
Weyerhaeuser/Fibreco swing contract ((***) BDUs) has expired. As a result Riverside has
(***) BDUs available from the excluded volume after deducting the volume under the remaining
Weyerhaeuser and Fibreco contracts (***).




As indicated above the (***) BDU volume is subject to the 1992 Fibre Products Rights
Agreement. We confirm our mutual agreement that this volume will after July 1, 2005 be
included in the volume to be purchased by Norske under the terms and conditions of the
Chip Agreement through changing the Total Excluded Volume Cap under the Chip Agreement to
(***) BDUs effective July 1, 2005.


 


 









 






	2.	 	Allocation. (***) BDUs of the (***) BDU excluded Chip volume will be allocated to the White
Valley (Lumby) operation. The remaining volume of SPF Chips (approximately (***) BDUs)
available from that operation will be allocated to Norske while there is a Weyerhaeuser/Norske
chip trade agreement in effect which covers this volume but that volume will otherwise be part
of the (***) BDU excluded Chip volume.






	3.	 	Fibreco Volume. The volume to be delivered to Norske does not need to increase to take into
account the over shipment to Fibreco in the first two quarters of 2005. The volume to be
delivered to Fibreco during the last two quarters of 2005 should still be (***) BDUs (subject
to any increases that Riverside may implement with excess chips it has available because of
Norske curtailments during those two quarters).





We confirm our agreement to have planned quarterly meetings to review the Chip volumes delivered in
the quarter and anticipated Chip volumes for the next quarter. It is the intention that following
this review, Norske and Riverside would sign a written acknowledgment of the updated Riverside Chip
commitments under the Agreement.



We confirm that the operations of Tolko Industries Ltd. existing prior to the amalgamation of Tolko
Industries Ltd. and Riverside Forest Products Ltd. will not be considered to be New Businesses for
the purposes of making adjustments to the Total Excluded Volume Cap under Schedule D of the Chip
Agreement and to the Excluded Chip Percentage under Schedule E of the Chip Agreement nor will those
operations be subject to the 1992 Fibre Products Rights Agreement. Our preference would be to
maintain the 1992 Fibre Products Rights Agreement in its present form with respect to operations
acquired after the amalgamation but suggest we have further discussions regarding that subject.



If the above is acceptable to you, please confirm your agreement by signing and returning the
enclosed copy of this letter.



Yours very truly,




NORSKECANADA by its managing partner

NORSKE SKOG CANADA LIMITED



	 	 	 	 	 	 	 
	Per:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Confirmed and agreed this                      day of August, 2005	 	 
	 
	 	 	 	 	 	 
	RIVERSIDE FOREST PRODUCTS LIMITED	 	 
	 
	 	 	 	 	 	 
	Per:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 







 


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