It is estimated the plant would cost $250 million to construct. The letter is subject to the formal approval of three parties named.
However, Prince Albert Mayor Jim Scarrow said he had "every confidence" the project will come to fruition.
The mayor estimates between 200 and 250 people could be employed during the construction phase of the plant, while more than 100 people could be employed by the facility once it's operational.
The Prince Albert Pulp Mill was closed by Weyerhaeuser in 2006, putting 700 people out of work. Domtar formally acquired the plant in early 2007.
From the Western Investor, August 2009
