Cathay Forest Products Corp.

Cathay Forest Products Corp.

July 16, 2007 09:15 ET

Cathay Forest Announces Russian Strategy

TORONTO, ONTARIO--(Marketwire - July 16, 2007) - Cathay Forest Products Corp. (TSX VENTURE:CFZ), today announced its plans to further expand its forestry business into Russia. The Company is negotiating to form a joint venture with potential Russian partners to acquire more than 200,000 hectares of mature standing timber in Russia.

Cathay has been conducting commercial timber trading for approximately two years with Russian timber suppliers. To date, the Company's Russian forestry activity has been importing railcars of roundwood fir into China for sale to local wood markets.

"Russia contains vast tracts of dense forests which the government is motivated to commercialize with large-scale sustainable operators. Cathay is in a unique position because of our long-standing relationship with respected Russian timber operators as well as our knowledge and access to China's lucrative wood markets," said Anthony Ng, President and CEO of Cathay Forest. "To gain a foothold in Russia with meaningful forest assets will allow us to reach our goal of becoming a world-class forestry company ahead of previous timelines."

Cathay Forest is conducting intense due diligence on Russian timber properties and potential partners. This strategic activity follows a recent corporate announcement regarding trading timber from Russia via barge to increase the existing activity, which utilizes rail lines. By acquiring standing timber assets for sale to China's wood markets, Cathay will enjoy greater profit margins than the trading business and build its forestry asset base on a larger scale than economically possible in China.

Cathay Forest's strategy includes developing 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 while pursuing commercial timber opportunities in Russian.

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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