Cathay Forest Products Corp.
TSX VENTURE : CFZ

Cathay Forest Products Corp.

September 18, 2009 16:30 ET

Cathay Forest Receives First Instalment Payment From DalEuroLes

TORONTO, ONTARIO--(Marketwire - Sept. 18, 2009) - Cathay Forest Products Corp., ("Cathay Forest" or the "Company") (TSX VENTURE:CFZ) is pleased to announce it has received as the first installment against loans made to its majority-owned Russian Joint Venture, DalEuroLes L.L.C. ("DalEuroLes").

A total of US $18,115,000 was advanced to DalEuroLes since December 2007. The funds have been used to develop the infrastructure of the forest property and to acquire the necessary forestry equipment. The infrastructure includes road building and rail landing facilities. DalEuroLes has been successfully harvesting timber since October 2008 and completed the development of the log shipping yard in March 2009. Since then, wood sales have steadily increased to markets in China and Japan.

Under terms of the loan agreements, the first payment was due to be made in September 2009 and has been received by Cathay Forest. Regular additional loan payments of approximately USD$1,000,000 will continue to be made by DalEuroLes on a quarterly basis for the next 5 years allowing the funds to be redeployed by Cathay Forest to satisfy other operational needs, if required.

About Cathay Forest

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.

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. Except as required under applicable securities laws, 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.

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