TORONTO, ONTARIO--(Marketwire - Nov. 16, 2012) - China Green Star Agricultural Corporation (TSX VENTURE:GRE) ("Green Star" or the "Company") announced today that it has signed new lease agreements for an aggregate of 3,500 Mu (or 576 acres) of agricultural land. Of the total acreage covered by the leases, approximately 1,500 Mu (or 247 acres) are orchards growing mandarin oranges, while the balance of 2,000 Mu (or 329 acres) is comprised of bamboo forests for the harvesting of bamboo shoots, both of which are to be sold as fresh produce in the local market. The acreage under the new leases increases Green Star's agricultural land base by 63.6%, from 5,500 Mu (906 acres) to 9,000 Mu (1,482 acres).
Historically, and based on the financial information for the year ended December 31, 2011, Green Star's leased mandarin orange orchards produced approximately 22.7 tons of mandarin oranges per acre annually, and contributed approximately Cdn$8,800 in revenue per acre, annually. The bamboo forests leased by Green Star produced 25.5 tons of fresh, spring bamboo shoots per acre annually, and contributed approximately Cdn$7,700 per acre, to annual revenues. In the summer of each year, the leased bamboo forests historically generated 1,627 units per acre of mature bamboo trees for sale, which also contributed annual revenues of approximately Cdn$3,900 per acre. As well, approximately Cdn$500 per acre of revenue was generated annually by contracting out to local farmers the harvesting of winter bamboo shoots, which was also a critical maintenance procedure for the leased bamboo forests as preparation of the earth for the following season's harvest.
The new leases are for 30 years commencing on January 1, 2013 and effective to December 31, 2042, with an option enabling Green Star to extend the leases for an additional term of 50 years after December 31, 2042. The cost of the new leases for the 30-year terms was RMB 55 million (Cdn$8.87 million) in aggregate, of which 40% (Cdn$3.55 Million) has already been paid by Green Star as a prepayment. The balance of the lease payments are to be paid in 2013.
"We expect that harvest from these new leases, and based on 2011 production parameters, will significantly increase Green Star's fresh and processed product revenues starting in the new year, without having to expand our current production facilities," commented Mr. Guan Lianyun, Green Star's CEO.
About Green Star
Green Star operates two main divisions, agricultural and food processing. The agricultural division is involved in the cultivation and harvesting of agricultural products such as fresh fruit and vegetables, for sale either directly as fresh fruit and vegetables or canned, and sold overseas and domestically. The food processing division is primarily involved in the processing of canned food which includes canned tomato paste, canned boiled bamboo shoots, canned oranges, canned peaches and various other types of fruits and vegetables.
The Company has been operating for over 18 years, and has focused on maintaining product and reputational excellence and a high standard of food quality, through the application of science and technology in production, quality control and assurance, business operations and management. Key assets include a well established management team, modern production facilities, and a close partnership with local farmers.
China Green Star Agricultural Corp. is listed on the TSX Venture Exchange under the symbol "GRE".
For more information on the Company, please visit our web site at www.cgsac.com.
Forward-Looking Information Statement
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits or operating expenses. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information in this press release includes, but is not limited to, statements or information concerning the Company's future production plans for the new leased lands, the payment schedule for the balance lease payments, and management's expectation on increased production and processing capacity. The forward-looking information reflects management's current expectations regarding future events and operating performance and is based on certain assumptions which are more particularly set out in this press release. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including business risks such as volatility of raw material and utility prices, weather conditions, risks on permits and business licenses, seasonality, dependence on management team, future financing requirements, environmental risks and hazards and dependence on key customers and suppliers, and risks associated with doing business in china, as well as those factors discussed in the section entitled "Risks and Uncertainties" of the Company's annual management discussion and analysis dated April 30, 2012. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Service provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy and accuracy of this release.