Cathay Forest reaches agreement to acquire additional standing timber concession in Russia



    Cathay Forest signs wood distribution agreement with Japan's Marubeni
    Corp.

    TSX Venture Exchange symbol: CFZ

    TORONTO, June 23 /CNW/ -

    Russia

    Cathay Forest Products Corp., ("Cathay") is pleased to announce that its
Russian Joint Venture, DalEuroles L.L.C. has received approval from the
government of the Russian Federation for a 49 year land lease of an additional
400,000 hectares from the government of Khabarovsk Province. This concession
is adjacent to DelEuroles' current 271,000-hectare concession acquired in
2007. The proposed lease is subject to final agreement with the government of
Khabarovsk, which Cathay expects to complete next week when two ministers are
visiting Toronto.
    As previously announced in a press release dated May 9th, 2008, the
Ministry of Industry and Power Engineering of the Russian Federation has
included the DalEuroles L.L.C. as a company included in the list of Priority
Investment Projects.
    In announcing this agreement, Anthony Ng, CEO of Cathay Forest Products
commented that "The acquisition of this additional concession solidifies
Cathay Forest Products' commitment to the Russian forest industry and
demonstrates our ability to work closely with the Russian government with
regards to the expansion of the forestry industry in the Khabarovsk Region.
With this agreement Cathay will continue to aggressively pursue its strategy
to export forestry products to China and Japan."

    Japan

    In addition to the acquisition of forestry rights in Russia, Cathay is
also pleased to announce that it has signed a Distribution Agreement with
Marubeni Corporation ("Marubeni"). Under terms of the agreement Marubeni will
act as a distribution agent for Cathay to sell, market, and distribute
roundwood and other wood products in Japan.
    "This is an important agreement for Cathay as it allows us to establish a
foothold in the Japanese wood products market by leveraging the established
sales and distribution infrastructure of Marubeni, which should provide Cathay
with a more favourable profit margin for its products" commented Anthony Ng,
CEO of Cathay Forest Products Corp.
    Terms regarding the logistics of transporting Cathay's wood products from
its properties to Marubeni are being finalized.

    About Cathay Forest Products

    Cathay Forest is a forest products company, that with the newly acquired
Russian lease will manage approximately 700,000 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.

    About Marubeni Corporation

    Marubeni is one of the largest trading conglomerates and importers of
wood products in Japan. Its Forest Products division engages in all operations
relating to paper and pulp, through the established value chain from the
upstream to the downstream sectors, ranging from forestation, production of
wood chips and pulp, supplier of wood building materials, collection of used
paper to the manufacture and marketing of paper and hardboard products.
Marubeni has the largest market share of the wood chips import business and of
the paper and pulp trading business in Japan.

    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.




For further information:

For further information: Ermo Ou, Vice President, Corporate Planning,
Cathay Forest Products Corp., (416) 226-7269, ermo.ou@cathayforest.com

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Cathay Forest Products Corp.

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