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Precious Woods considers investment in large forestry group in Democratic Republic of the Congo - Disclosure announcement transmitted by euro adhoc.

25.05.2005

Precious Woods announced today at the Annual General Meeting that it has entered into a memorandum of understanding with the Lichtenstein based Holding company of the Nordsudtimber (NST) Group. Subsidiaries of this Group include wood trading companies in Europe as well as four forestry companies (Soforma, Sodefor, Forabola and CFT) in the Democratic Republic of the Congo, the oldest of which was founded in 1955.

These companies are running 15 forestry operations, 7 saw mills, 5 plywood plants and 2 hospitals and dispose of more than 5 million hectares of forest concessions. For comparison: following this year’s purchases of land, Precious Woods will own 500’000 hectares of forest in Brazil.

Initially Precious Woods will acquire a 10% stake in NST combined with the option to become majority shareholder within the next 7 years. The definitive exchange of contracts is planned for August 2005 and depends on the positive conclusion of due diligence and contract negotiations which are currently underway.

As a company involved in the extraction of raw materials (timber), securing these raw materials well into the future is a priority for Precious Woods. Precious Woods expects the investment in NST to yield long term access to forests of high quality and value, which shall be managed according to the strict criteria of FSC in a environmentally sustainable and socially responsible manner.

If this cooperation progresses as planned, Precious Woods will contribute its vast experience with FSC certification and move towards attaining FSC certification of the first forestry operation as soon as possible. Following this, the other forestry operations are to be certified on a step by step basis.

The creation of workplaces in Africa’s poorest country, fair cooperation with the local population and the protection of the plants and wildlife are just as important matters to Precious Woods as achieving sustainable profits.

Precious Woods (SWX: PRWN) is active in the reforestation and sustainable management of tropical forests, downstream wood processing and trading of FSC certified timber and non- timber forest products. The shares of Precious Woods have been listed on the SWX Swiss Exchange since March 2002. More information about the company and its activities may be found on the web site www.preciouswoods.com.

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