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Management Side
Sino-Forest Expand Timber Rights in in Hunan Province, China
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Toronto, Ontario, Canada, 07 December 2006 -- /PRNewswire/ -- Sino-Forest Corporation (TSX:TRE and TRE.S), a leading commercial forestry plantation operator in China, is pleased to announce the signing of an agreement to acquire an additional 300,000 hectares of plantation trees in Hunan Province through Sino-Panel (Asia) Inc., a wholly-owned subsidiary.

Sino-Panel had previously agreed to acquire 100,000 hectares of plantation trees in that region, bringing the total to 400,000 hectares. The Master Agreement for Acquisition of Pine and Fir Forest is signed with Hongjiang City Forestry Technology Integrated Development Services Company, a state-owned enterprise in the People's Republic of China (PRC) appointed to act as the authorized agent for the original plantation rights holders.

Under the agreement, Sino-Panel will purchase an additional 300,000 hectares of plantation trees in Huaihua City, Shaoyang City, and its surrounding areas in Hunan Province with a fixed cost not to exceed RMB 260 per cubic meter (m3) or approximately USD 32.10 per m3 over a 14-year period. The plantations in Hunan contain mature species of pine and Chinese fir, with an estimated fiber yield of 100 m3 to 120 m3 per hectare, or aggregate 30 million m3 to 36 million m3 of wood fiber. The terms and conditions of this agreement are substantially the same as the first agreement signed in late September 2006.

Under the provisions of the agreement, Sino-Forest is given the right of first refusal to lease land for 50 years. The company intends to annually replant approximately the same hectares of trees harvested in the previous year over the 14-year period. The final terms of the lease are to be negotiated with Hongjiang City Forestry upon the authorization of the original plantation rights holders.

"We are very excited to have expanded our acquisition area beyond the county level of Honjiang to the city level of Huaihua and Shaoyang," said Allen Cahn, Sino-Forest chairman and CEO. "This underpins the level of confidence and support Sino-Forest received from the Hunan forestry bureau which fortifies our long-term working relationship."

About Sino-Forest Corporation

Sino-Forest is the leading, foreign-owned, commercial forestry plantation operator in China in terms of plantation area. The corporation cultivates trees for sale as standing timber and wood chips, and is involved in the trading and manufacturing of wood chips, logs, and engineered wood products for the pulp and paper, furniture, construction, and decoration industries. Sino-Forest is a Canadian corporation with executive offices in Hong Kong and operations in southern China. It operates mainly through three wholly-owned subsidiaries: Sino-Wood Partners Limited, Sino-Panel Holdings Limited, and Sino-Global Holdings Inc. The corporation's common shares trade on the Toronto Stock Exchange under the symbol TRE since 1995.

Note: All amounts in U.S. dollars are translated at a rate of RMB 7.92 to USD 1.00.

Source: Sino-Forest Corporation
 

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