CanFibre Finalized Equity Terms for Planned Riverside MDF Facility.

TORONTO--(BUSINESS WIRE)--April 9, 1997--The CanFibre Group (Canadian Dealing Network CFGL.) (The CanFibre Group Ltd., Canadian Dealing Network, symbol: CFGL) The CanFibre Group Ltd. ("CanFibre") in cooperation with The Kafus Capital Corporation ("Kafus"), CanFibre's major shareholder, has executed a letter of intent governing the terms of an offer from a major multinational energy group for the placement of US$10 million in sub-debt required to complete financing for CanFibre's planned MDF facility in Riverside, California. The placement is subject to final due diligence, documentation, and Board of Director's approval.

Additionally, CanFibre has accepted an offer from Kafus for a private placement of between US$5 and US$10 million to be used by CanFibre to supplement the equity requirements of the Riverside MDF facility as well as provide general working capital, as required, for its planned New York State MDF project.

Kafus will receive Series V Convertible Redeemable Preference shares of CanFibre at US$100,000.00 per share. The holder(s) of Series V Convertible Redeemable Preference shares of CanFibre are entitled to a fixed, accumulative, preferential cash dividend at a rate of 10 percent per annum and are entitled to convert such shares into Common shares of CanFibre at CDN$1.05 per share. The closing of the private placement is scheduled to take place on or before June 1, 1997, subject to Board of Directors and regulatory approval, as well as Kafus' successful completion of a planned US$15 to US$20 million private placement.

Both the US$10 million of sub-debt and the Kafus purchase of CanFibre Preference shares is subject to the successful placement of the tax exempt bonds required by CanFibre to finance the debt on its proposed Riverside MDF plant.

CanFibre is also pleased to report that, with the assistance of Kafus, it has recently retained a new major Wall Street firm as bond underwriters with the capability of offering CanFibre a range of expanded corporate finance services beyond debt placement.

CanFibre is now in receipt of an amended financing schedule from the new bond underwriter, which if met, will permit CanFibre to complete finance and commence construction of the Riverside facility by mid-May 1997. In order to meet the schedule, CanFibre has requested a short extension on the bond allocation which is currently due to expire on April 28, 1997.

CanFibre engages in the North American development of manufacturing plants to produce high quality wood panel products such as medium density fibreboard (MDF) from 100 percent recycled dry waste. CanFibre MDF is North America's first "Green" panel board. It is produced from materials normally dumped in landfills without the use of conventional Urea Formaldehyde resins, a growing environmental concern for current MDF producers worldwide.

Shares outstanding: 7,284,479 -0-

The Canadian Dealing Network neither approves nor disapproves the contents of this News Release.

CONTACT: The CanFibre Group Ltd.

Investor Relations Department, 604/ 685-2430

604/ 685-2426 (FAX)

1-800-661-0288 Toll Free

E-mail: [e-mail]