Cathay Forest Products Corp. (TSX VENTURE: CFZ) ("Cathay Forest" or the "Company") today announced an agreement with Jiangxi Forestry Development Co. Ltd. to jointly develop a fast-growth poplar plantation along the lakeshore of PoYang Lake in Jiangxi Province. Cathay Forest will own 70% of the joint venture, with Jiangxi Forest Development Co. controlling the remaining 30%. Jiangxi Forestry Development Co. is responsible for developing forestry in Jiangxi Province including the area around PoYang Lake, one of the largest lakes in China. It is estimated that there are more than 100,000 hectares of land available for developing poplar plantations in the area surrounding PoYang Lake. The poplar is intended to be used as feedstock for one of the largest paper companies in China, which has a pulp mill within 100 kilometres of PoYang Lake.
"The signing of the joint venture agreement with Jiangxi is part of the Company's overall strategy to build Cathay into a world-class timber company," said Anthony Ng, Cathay Forest's President and CEO.
Cathay Forest has built significant relationships throughout the forestry industry in Jiangxi Province over the past few years. The Company has been involved with the development and research of fast growing poplar species with the Jiangxi Government and local forestry schools. In addition, the Company has recently acquired the rights to sustainably manage approximately 5,000 hectares of existing forest plantations in Jiangxi Province.
Cathy Forest also announced that it has acquired 650 hectares of standing timber in Hunan Province, adjacent to the timber property acquired in the Company's November 22, 2006 announcement.
This is the third tranche of standing timber acquired by Cathay in this location. The standing timber property is located in the southern China province of Hunan. This latest property contains mature fir, pine and poplar, which will be part of Cathay's harvesting program for the region that begins early in 2007. As part of the agreement to purchase the standing timber, Cathay Forest has 35 years of land use rights on the property. Land cannot be acquired permanently in China and as such specific land uses and rights are provided over extended periods of time.
About Cathay Forest Products
Cathay Forest is a forest products company managing standing timber properties and developing fast-growth, high-yield poplar plantations in the Peoples Republic of China. Cathay Forest is building a world class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and harvesting customers serving a variety of wood product industries.
Forward-Looking Statements
All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of the Company. Actual results and future events could differ materially from those anticipated in such statements. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this release.
Contacts: Cathay Forest Products Corp. Jay Hussey Investor Relations (416) 482-1411 Email: [email protected] Cathay Forest Products Corp. Anthony Ng Chief Executive Officer (416) 226-7269 Email: [email protected] Website: www.cathayforest.com
SOURCE: Cathay Forest Products Corp