Maple Leaf progress report on Yellowhorn Tree and Alfalfa Projects



    (TSX-V: MPE)
    Last Close: July 21 2008 - $0.25
    Shares Issued: 56,482,327

    CALGARY, July 22 /CNW/ - Maple Leaf Reforestation Inc. (TSX-V: MPE)
("Maple Leaf" or the "Company") today updated on the progress and forecasted
revenues for both its Yellowhorn and Alfafa projects in China.

    Yellowhorn Tree Project (the "Project")
    ---------------------------------------
    Maple Leaf has established a partnership with the Forestry Departments of
Changji District of China to cultivate Yellowhorn trees on its behalf. Maple
Leaf will pay a yearly fee to local farmers to cultivate Yellowhorn trees for
the Company and will later buy the trees' fruit at a fixed price when it
becomes available.
    To date Maple Leaf has secured approximately 7,000 mu (approximately
1,150 acres) of land out of 30,000 mu (approximately 5,000 acres) of land that
are currently planting Yellowhorn trees in the Changji District of China. Of
this 7,000 mu of land, 2,000 mu (approximately 330 acres) has been set up as a
demonstration unit for the Company. Securing partnership contracts for the
remaining 23,000 mu (approximately 3,750 acres) will proceed over the next
three to four months.
    Out of the 2,000 mu of land, 230 mu (approximately 38 acres) will be
harvested for its Yellowhorn fruit next month and should provide approximately
13.8 tons of fruit. The Company will utilize this fruit in the following
manners:

    
    -   one-third to produce cooking oil (30% extraction rate); 1,449 kg,
        projected to generate revenue of $116,000 RMB (approximately
        $18,000 CDN), calculated using a value of $80 RMB (approximately
        $12.12 CDN) per kg for cooking oil;

    -   one-third will be used for cultivating Yellowhorn seedling (30%
        extraction rate, 700 pieces per kg, 90% germinating rate and 90%
        survival rate), projected to generate revenue of $3.52 million RMB
        (approximately $533,000 CDN), calculated using a value of $1.50 RMB
        (approximately $0.23 CDN) per seedling; and

    -   one-third will be sold as Yellowhorn seed, at $15 RMB (approximately
        $2.27 CDN) per kg, which the company expects to generate
        approximately $72,450 RMB ($11,000 CDN) in revenue.
    

    Total revenue forecasted from the approximately 13.8 tons harvest is
$3.71 million RMB (approximately $562,000 CDN). All revenue projections are
speculative and calculated using the current market prices for these products.
Actual revenues may vary due to market price fluctuations.
    In addition, Maple Leaf is in the process of negotiating a joint venture
agreement (the "JV Agreement") with the Qitai County of China which would see
the Company take over the operatorship of 1,000 mu (approximately 165 acres)
of land that is cultivating Yellowhorn trees. These tress are in the second
year of their growing cycle (meaning that they will be bearing fruit in the
following year). The JV Agreement would also see the Company take operational
control over approximately 200,000 Yellowhorn seedlings and 50,000 mu
(approximately 8,250 acres) of land which has been set aside for use in
connection with China's anti-desertification and wind barrier program. The
total investment from Maple Leaf in the joint venture is currently forecasted
at approximately $50,000 RMB or ($7,600 CDN) a year. The JV Agreement is not
yet finalized, however the Company is confident that the final terms will be
agreed upon in the near term.
    Going forward, Maple Leaf believes that it is well positioned to achieve
its target of securing 100,000 mu (approximately 16,500 acres) of land for
demonstration purpose of cultivating Yellowhorn trees.
    Maple Leaf also clarified the information that it provided in its January
2008 update on the Project. On January 10, 2008, the Company announced that
"the Project agreement had been executed under the previously announced
terms". This statement was not meant to be interpreted as meaning that the
Memorandum of Understanding in relation to the Project (the "MOU") had been
formally executed as a binding agreement on either party. At that time,
President and CEO Mr. Raymond Lai had visited China and met with the
representatives on the other side of the Project, they reviewed the contents
of the MOU together and decided to proceed based on the previously announced
terms. At this time the Company is not formally bound to the terms of the MOU,
however it continues to proceed as planned with the hope that the MOU will
become a formalized agreement in the near future with either the Jilin Saar
County or other counties, depending on which county gives the most favorable
terms to the Company. Meanwhile, the Company is also reviewing alternative
opportunities for advancing the Project and capitalizing upon the demand for
Yellowhorn fruit and the cooking oil extracted therefrom.

    Alfalfa Project
    ---------------
    Maple Leaf has now taken control of Funong Alfalfa Feedstock Supply Ltd.
("Funong") and will be shipping out 1,000 tons of Alfalfa cakes to three of
Funong's existing customers, namely Shanxi Yangling Keyuan Clone Biology Co.,
Ltd., Sichuan New Hope Group and Hebei Kaite Feedstuff Group Co., Ltd.
(collectively, the "Existing Customers") in August and September 2008. Despite
having taken control of Funong's operations, Maple Leaf will be withholding
$700,000 RMB (approx. $106,000 CDN) of the purchase price until it is able to
confirm that the Existing Customers will still honor the contracts that they
have entered given the sale of Funong. Combined, the Existing Customers have
ordered 3,000 tons of Alfalfa cakes however Funong is currently only capable
of supplying a third of this. Alfalfa cake is currently in short supply in
China. The price of Alfalfa cake has escalated from $1,200 RMB (approximately
$180 CDN) to between $1,800 and $2,000 (approximately $272 to $303 CDN) a ton.
The Company believes that these sales will generate revenue of $2 million RMB
(approximately $303,000 CDN) and gross profit of approximately $1 million RMB
($152,000 CDN). The balance of the 2,000 tons is expected to be shipped out
before the end of 2008.
    The Company is planning to increase its capital investment in Funong and
to re-invest the profit from Funong's operations to acquire more automated
equipment, thus increasing the production capacity in the coming year.

    About Maple Leaf Reforestation Inc.

    Maple Leaf is a Canadian company operating a large-scale forest nursery
whose primary focus is growing value-added tree seedlings and alfalfa
feedstock alongside landscaping and nursery products in China. In addition,
the multi-faceted Xinjiang Yellowhorn tree project will provide for the
manufacture of biodiesel fuel. Reforestation has been identified as a critical
strategy to help manage China's troubling environmental issues, namely
pollution and desertification. Maple Leaf currently has over 6 million
varieties of seedlings under cultivation at its nursery facility that includes
a 110,000-square foot greenhouse located in Liang Cheng, Inner Mongolia,
China.
    Maple Leaf is a wholly-owned foreign enterprise ("WOFE"), which allows
Maple Leaf to control 100% of the direction and operations of the company in
China while permitting the cash generated from operations in China to flow
back to Canada.

    
       Should you wish to receive Company news via email, please email
     catarina@chfir.com and specify "Maple Leaf Reforestation Inc." in
              the subject line or contact the Company directly.

       The TSX Venture Exchange does not accept responsibility for the
                    adequacy or accuracy of this release.
    

    Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "intend",
"will", "believe", "should", "project", "forecast", "plan" and similar
expressions, including the negatives thereof, (ii) statements that are based
on current expectations and estimates about the markets in which Maple Leaf
operates and (iii) statements of belief, intentions and expectations about
developments, results and events that will or may occur in the future,
constitute "forward-looking statements" and are based on certain assumptions
and analysis made by Maple Leaf. Forward-looking statements in this news
release include, but are not limited to, statements with respect to future
capital expenditures, including the amount, nature and timing thereof; other
development trends within the China's seedling industry; business strategy;
expansion and growth of Maple Leaf's business and operations and other such
matters. Such forward-looking statements are subject to important risks and
uncertainties, which are difficult to predict and that may affect Maple Leaf's
operations, including, but are not limited to: the impact of general economic
conditions; industry conditions; government and regulatory developments;
seedling product supply and demand; competition; and Maple Leaf's ability to
attract and retain qualified personnel. Maple Leaf's actual results,
performance or achievements could differ materially from those expressed in,
or implied by, these forward-looking statements and, accordingly, no assurance
can be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do transpire or occur,
what benefits Maple Leaf will derive there from. Subject to applicable law,
Maple Leaf disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
    All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in other disclosure
documents of Maple Leaf which have been filed with Canadian provincial
securities commissions and are available on www.sedar.com.

    %SEDAR: 00022303E




For further information:

For further information: regarding Maple Leaf Reforestation Inc., visit
www.mlreforestation.com or contact: Maple Leaf Reforestation Inc., Raymond
Lai, Chairman, President & CEO, Tel: (403) 668-7560, Fax: (403) 250-2534,
Email: rlai@mlreforestation.com; CHF Investor Relations - Toronto, Catarina
Cerqueira, Associate Account Manager, Tel: (416) 868-1079 ext. 251, Email:
catarina@chfir.com; Christopher Haldane, Account Manager, Tel: (416) 868-1079
ext. 237, Email: chris@chfir.com; CHF Investor Relations - Shanghai, Tel: +86
(0)21 28909034

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MAPLE LEAF REFORESTATION INC.

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