Cathay Forest Products Corp.
TSX VENTURE : CFZ

Cathay Forest Products Corp.

June 13, 2007 08:00 ET

Cathay Forest Announces Results of Savcor Indufor Forestry Valuation Report

TORONTO, ONTARIO--(Marketwire - June 13, 2007) - Cathay Forest Products Corp. ("Cathay" or the "Company") (TSX VENTURE:CFZ) today released the results of a forestry assessment report prepared by Savcor Indufor. The report concluded that the net present value of Cathay Forest's China-based tree plantations, based on a discounted cash flow analysis for the five-year period 2007-2011, is approximately CDN $120 million.

The report was commissioned by Cathay Forest to provide third party analysis of its properties and to assist Cathay with its transition into commercialization of its forestry assets. For the period 2011 to 2017, Indufor indicated Cathay Forest's China-based tree plantations, based on a discounted cash flow analysis is approximately CDN $100 million. For the following period - 2017 until property leases expire, the trees have an indicated net present value of approximately $160 million.

The valuation is based on a poplar wood price assumption of RMB 650 per m3, roadside. Current poplar wood price is RMB 900 per m3 delivered. The report takes into account increased yield per hectare due to maturing trees, however it does assign an increase in wood prices even though wood prices have increased significantly due to increasing demand in recent years. The report covers all of Cathay Forest's 13 forest plantations across six provinces, covering an area of 18,488 hectares. The plantations consist predominantly of poplar fir and bamboo. Approximately 75% of Cathay's plantations consist of fast-growth poplars.

Cathay Forest's strategy is to develop sustainable, regenerative forest assets. To date, the company has developed poplar plantations and acquired standing timber properties in China. The Company will continue expanding its China-based timber properties and is currently investigating opportunities to develop commercial timber activities in Russian border areas.

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

Savcor Indufor provides leading services in forest industry know-how and forest management, nature conservation, and environmental management in Finland and worldwide. Savcor Indufor provides clients the range of expertise needed for sustainable forest management and forest conservation. Services include up-to-date advice and technological solutions on issues ranging from how to capture the benefits of the international forest-related conventions and agreements to the smallest details of the logistics in forest production.

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.

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