Toronto, Ontario, Canada, USA, 23 November 2009 – Cathay Forest Products Corp. (TSX Venture: CFZ) has entered into an agreement with Dundee Securities Corporation and Canaccord Capital Corporation, to include a syndicate of underwriters, to be determined, pursuant to which the underwriters have agreed to purchase 25,000,000 common shares of the company on a bought deal basis, at a price of CAD 0.61 per share for aggregate gross proceeds of approximately CAD 15.25 million. The underwriters have been granted an over-allotment option, exercisable until 30 days after the closing of the offering, enabling them to purchase up to an additional 15% of the number of shares sold pursuant to the offering at the issue price.
The net proceeds of the offering will be used primarily to fund the expansion of the company’s Russian activities, including the harvesting of a second plantation and to develop downstream processing operations in a manner that would allow the company to become exempt from Russian export tax. The remainder will be used for general corporate purposes.
The offering is scheduled to close on or about 15 December 2009, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.
These materials are not an offer for sale of securities in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be sold in the United States absent registration or an exemption from registration under the Securities Act. The corporation does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States
Cathay Forest is a forest products company that manages approximately 1,000,000 hectares of standing timber properties and fast-growth, high-yield poplar plantations in 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 other wood products customers in the Japanese market