Cathay Forest Products Corp.
TSX VENTURE : CFZ

Cathay Forest Products Corp.

December 21, 2006 08:37 ET

Cathay Forest Announces Initial Closing of Private Placement Financing

TORONTO, ONTARIO--(CCNMatthews - Dec. 21, 2006) - Cathay Forest Products Corp. (TSX VENTURE:CFZ)("Cathay Forest" or the "Company") is pleased to announce that it has closed the initial tranche of the private placement financing announced on November 22, 2006. A total of 6,030,000 common shares were issued at a price of $0.52 per share. Jennings Capital Inc. (the "Agent") was paid a cash commission and issued broker warrants entitling the Agent to purchase 422,100 common shares at $0.52 per share.

The net proceeds of the Offering will be used to finance the acquisition of additional standing timber plantations, to further advance the Jiangsu Riverbank Program, to initiate the Heilongjiang North Eastern Project and for working capital and general corporate purposes.

The Common Shares are subject to a hold period of four months plus one day from the date of issuance in accordance with the policies of the TSX Venture Exchange and applicable securities laws.

Forward-Looking Statements

Certain information regarding the Company contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

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.

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

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