Cathay Forest Products Corp.

Cathay Forest Products Corp.

November 29, 2007 09:17 ET

Cathay Forest Announces Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2007) - Cathay Forest Products Corp. (TSX VENTURE:CFZ) today reported its financial results for the three months ended September 30, 2007. The Company reported revenues of $5.0 million, compared to $0.5 million in the three months ended September 30, 2006. Revenues were primarily derived from the harvesting of standing timber in southern China and from trading of timber in Russia and northern China. The Company reported a net loss of $0.3 million or $0.01 per share for quarter.

General and administrative costs for the three months were $0.4 million versus $0.3 million a year earlier. Selling and marketing expenses were $0.2 million for the three months ended 2007 versus $0.07 million a year earlier. The Company's cash and equivalents and short term investments totalled $7.8 million as at September 30, 2007.

Operating Highlights

During the quarter, Cathay entered into a joint venture agreement, whereby Cathay purchased a 51% interest in DalEuroLes Co. Ltd., a Russian Company, which owns a 271,100 hectare concession of standing timber in Khabarovsk, Russia. The purchase was made through a combination of US $2.7 million cash, 800,000 common shares of Cathay, as well as a commitment for a loan to the joint venture.

Subsequent Events

Subsequent to the third quarter, ending September 30, 2007, Cathay Forest announced the closing of a private placement for gross proceeds of $45 million. The net proceeds of the Offering are being used to fund a capital expenditure loan in connection with the Company's previously announced acquisition of a 51% interest in a 271,100 hectare standing timber concession in Russia. The capital expenditure loan is for equipment, road, and general construction. Proceeds will also be used for the acquisition of the first phase of a standing timber joint venture in Guizhou Province, China, as well as for general corporate purposes.

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 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 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. We caution readers not to place undue reliance on these statements as a number of important factors could cause actual results and future events to differ materially from the plans, objectives, expectations and intentions expressed in such forward-looking statements. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

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