Cathay Forest Products Corp.
TSX VENTURE : CFZ

Cathay Forest Products Corp.

November 10, 2009 15:49 ET

Cathay Forest Clarifies Poyry Forestry Valuation Report

TORONTO, ONTARIO--(Marketwire - Nov. 10, 2009) - Cathay Forest Products Corp., ("Cathay Forest") (TSX VENTURE:CFZ) recently released a forest valuation report prepared by Poyry Forest Industry Consulting Ltd ("Poyry"), an international forestry consulting firm. The report was commissioned by Cathay Forest to provide an independent assessment of the entire managed forestry assets portfolio, which includes the minority interest of Cathay Forest's various business partners. Cathay Forest's interests in its forestry operating subsidiaries is described below.

Poyry's valuation composed of the following asset classes for the entire managed forestry assets portfolio:

Forest AssetPre-tax discount rateSingle Rotation Value Rate (US$ million)
China FGP and Standing Timber 11.5 % $119.98
Bamboo 11.5 % 3.52
Russian Standing Timber(1) 12.0% 52.00
Total $175.50

The following table provides a description of Cathay Forest's interest in each of its forestry operating subsidiaries:

EntityOwnership InterestSize of Plantation (ha)Operations and Locations
Shanghai Shengtai Forest Company Limited 97% 11,530 Fast Growth Plantations
Jiangsu Cathay Forest Company Limited 96.67%(2) 874 Fast Growth Plantation
Guizhou Hanfang Cathay Forestry Co., Ltd. 51% 6,996 Standing Timber Operations
Henan Xinya Cathay Forest Products Co. Ltd. 70% 221 Fast Growth Plantation
Jiangxi Cathay Forest Co. Ltd. 100% 1,361
5,173
Fast Growth Plantation
Standing Timber Operations
Bamboo
DalEuroLes LLC 51% 992,196 Standing Timber Operations

The complete Poyry valuation report is available on Cathay Forest's website (www.cathayforest.com) as well as SEDAR (www.sedar.com).

About Cathay Forest Products

Cathay Forest is a forest products company that manages approximately 1,000,000 hectares of standing timber properties and fast-growth, high-yield poplar plantations in China and Russia. Cathay Forest is building a world-class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and other wood products customers in the Japanese market.

About Poyry Forest Industry Consulting Ltd

Poyry is a global expert in consulting and engineering. Offering in-depth industry expertise, innovative solutions and lifecycle engagement. Poyry's knowledge extends across hydropower, oil and gas, power and heat, renewable energy, pulp and paper industry, chemical process industry, transportation, water and environment, and construction services. Poyry is recognized as one of the world's leading advisors to the global forestry industry.

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 Cathay Forest. Actual results and future events could differ materially from those anticipated in such statements. Cathay Forest assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.


(1) Held through DalEuroLes LLC

(2) Cathay Forest has the right to use 96.7% of the Jiangsu fast growth plantation under the relevant land lease agreements. In lieu of paying annual rent, Cathay Forest shares the harvest equally with the lessors. Accordingly, Cathay Forest's effective beneficial ownership interest is 48.5%.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this release.

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