Cathay Forest Products Corp.

Cathay Forest Products Corp.

September 18, 2007 10:03 ET

Cathay Forest Releases a Revised Forestry Valuation Report by Indufor Oy

TORONTO, ONTARIO--(Marketwire - Sept. 18, 2007) - Cathay Forest Products Corp. (TSX VENTURE:CFZ) ("Cathay" or the "Company") released today, a revised forestry valuation report (the "Revised Report") to the initial forestry valuation report (the "Original Report") prepared by Indufor Oy ("Indufor"). The Original Report was released on June 13, 2007 and was commissioned by Cathay to provide third party indicative valuation of the Company's forest plantation assets in Central and Eastern China as of April 2007. The Revised Report reflects changes to the Discounted Cash Flow Based Value of Forest Assets and more specifically, the discounted values for the period between 2012- 2017 (the "Second Rotation") and 2017 until the end of the lease period (the "Third Rotation").

In the Original Report, Indufor presented Discounted Cash Flow Based Values for each rotation period that valued the forest assets at the beginning of each rotation rather than as of the date of the Original Report. This has resulted in the changes to the net present value ("NPV") of the Second and Third Rotation. The Second Rotation NPV has been revised to 318.1 million RMB from 465.9 million RMB and the Third Rotation NPV revised to 311.4 million RMB from 734.1 million RMB. The First Rotation period from 2007 - 2011 of 529.0 million RMB remains unchanged.

It is important to note that the Original and Revised Report on Cathay's forest assets have not been updated to reflect:

- 51% ownership of 6,667 ha of standing timber assets in Guizhou Province;

- 51% interest in a 271,100 hectares standing timber asset in Khaborosk, Russia; and

- Recent increase in wood prices in China.

The Revised Report is based on the Company's 13 forest plantations across six provinces in China. The report covers 13,259 hectares of fast growth poplar plantations and 5,173 hectares of standing timber.

Revised Indufor Valuation Report coverage:

Location Asset Coverage
Shangdong, China FGP INCLUDED
Jiangsu, China FGP INCLUDED
Jiangxi, China FGP INCLUDED
Hunan, China ST INCLUDED
Jiangxi, China ST INCLUDED
Guizhou, China ST NOT INCLUDED
Khabarovsk, Russia ST NOT INCLUDED

FGP equals fast growth poplar
ST equals standing timber

The revised forestry valuation report will be available on SEDAR at

About Indufor Oy

Indufor is an independent Finnish consulting company established in 1980. Indufor provides worldwide consulting and advisory services in areas of forest resource management, nature conservation, and environmental management. Support services to institutional and public sector clients are provided, in the realms of project planning, implementation and evaluation. Indufor's focus is on sustainable development - economic, social and environmental.

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. 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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