Cathay Forest's Timber Assets Escape Significant Winter Storm Damage

Toronto, Ontario, Canada, 22 February 2008 -– Cathay Forest Products Corp. today issued an update on the state of its forestry plantations after surveying the properties affected by the winter storms that hit China in recent weeks.

Following the end of the Chinese New Year holiday, field staff returned to Cathay’s plantations and conducted surveys to assess the effects of the winter storms. The surveys revealed no unusual or widespread damage to Cathay’s forest assets.

Across Cathay’s poplar plantations, the hardest hit area suffered only 3% damage. This occurred at the Poyang Lake plantation where the poplar trees are youngest and more susceptible to harsh winter conditions. Cathay’s other poplar plantations, which have more mature trees, were negligibly affected.

The area of greatest concern to the company had been Jiangxi Province, one of the hardest hit areas in the country. Inspection revealed that only 10% of young bamboo had been damaged, representing an insignificant amount of the plantations overall asset value. The Chinese fir in the same area were not significantly damaged, as the species is much hardier than bamboo.

“We are relieved that our plantations did not suffer significant damages,” said Anthony Ng, president and CEO of Cathay Forest Corp. “Given the extent of the damage to forests across the country, we are fortunate that our assets escaped relatively unscathed. We will be continuing with our planting and harvesting activities as usual.”

Cathay Forest is a forest products company managing standing timber properties and developing 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 harvesting customers serving a variety of wood product industries.