Maple Leaf Reforestation Inc. - Yellowhorn tree bio diesel and cooking oil project with Xinjiang Government



    (TSX-V: MPE)
    Shares Issued: 53,461,980
    Last Close: 10-12-2007 $1.30

    CALGARY, Oct. 16 /CNW/ - Maple Leaf Reforestation Inc. ("Maple Leaf") is
excited to announce that it has entered into a Memorandum of Understanding
("M.O.U.") with Jilin Saar County of Xinjiang autonomous region of China
("Jilin") to establish a Bio Diesel Production Chain (the "project") for
Shiny-Leaved Yellowhorn trees ("Yellowhorn"). The M.O.U. requires the approval
of Maple Leaf's board of directors to become effective, and can be altered or
revoked by either party until the formal agreement is signed. While
negotiations continue toward a formal agreement for the project, Maple Leaf
currently has a team in China evaluating the project.

    
    Under the terms of the M.O.U., both sides agree to do the following:

    Jilin will:

    -  provide 400,000 mu (or 68,000 acres) of land to Maple Leaf free of
       charge for 70 years to grow the Yellowhorn trees (mu is a Chinese unit
       of area = 0.17 of an acre);
    -  assist Maple in obtaining all the necessary governmental approvals and
       permits to utilize the land, and will provide the required labour
       force, free of charge, to plant the seedlings;
    -  assist Maple Leaf in obtaining 300 mu of land for building a cooking
       oil and bio diesel processing plant in the county, with the cost below
       $5,000RMB per mu (or CDN$3000 per acre; CAN$1 = 7.7160
       Chinese Renminbi (yuan) ("RMB") as of October 15, 2007);
    -  guarantee Maple Leaf a monopoly to operate the processing plant in the
       county (with the exception of growing the Yellowhorn);
    -  allow Maple Leaf to dig enough irrigation wells to water the
       Yellowhorn (the norm is one well per 1,500 mu of land), and Jilin will
       also assist Maple Leaf in installing the necessary infrastructure for
       the plant and farm; and
    -  provide Maple Leaf with subsidies and special tax treatment, and
       assist Maple Leaf in applying for subsidies and grants from the
       central government of China with respect to developing bio diesel
       production.

    Maple Leaf will:

    -  develop this project under the guidance and supervision of Jilin and
       according to the laws and regulations of China;
    -  provide the necessary capital for developing the tree farm and the
       processing plant with 100,000 tonnes capacity, and it will guarantee
       the quality of the Yellowhorn trees and operation of the processing
       plant;
    -  implement new research and development ideas to improve the quality of
       the bio diesel production chain: from growing Yellowhorn to processing
       bio-diesel; and
    -  put up a building fund deposit with a bank for the purpose of
       developing this project, such amount to be determined at a later time
       by both parties. These funds will only be released with signatures
       from both Maple Leaf and Jilin; however, if for any reason Maple Leaf
       is unable proceed with the project according to the plan, upon
       returning all permits to Jilin, Maple Leaf can dispose of the funds on
       its own accord.
    

    During the development of this project, both parties will be able to
obtain technical support and advice from several research centers in China
regarding bio diesel development.
    The project is expected to start generating revenue after two years and,
upon execution, will operate for 70 years. During the initial six years of the
project Maple Leaf will primarily purchase Yellowhorn fruit from local farmers
at market prices in order to produce and sell bio diesel and cooking oil; as
the bio diesel market matures during the course of the six year period Maple
Leaf will shift its fruit production and processing plant toward bio diesel
production. Maple Leaf will be undertaking financings to provide the necessary
capital for the tree farm and the processing plant. The detail of future
investments by Maple Leaf will be disclosed later after more analytical work
is done.
    Yellowhorn's scientific name is Xanthoceras Sorbifolia Bunge. The
Yellowhorn is a local species in China that is well known for its endurance to
desert weather. Its root can go very deep and grabs on the surrounding soil,
so it is also good for stopping desertification. The Yellowhorn's fruit has
high oil content which can be used for bio diesel, cooking oil (very low
cholesterol content), and various medical applications. It usually takes three
years for a Yellowhorn to reach maturity and five years to harvest the fruit.
The technology for extracting oil from the fruit of Yellowhorn is quite mature
and reliable and is not as complicated as other types of oil and bio diesel
plants.
    Raymond Lai, President and Chief Executive Officer of Maple Leaf, is very
excited about this new Xinjiang project as it is the milestone of a new course
for Maple Leaf's future development. It will also complement Maple Leaf's
seedling operation and represent a big step forward toward achieving Maple
Leaf's mission.
    Maple Leaf's primary mission is to provide top quality, value added
nursery seedlings and modern Canadian tree growing technology to assist China
in solving its desertification problems. Maple Leaf currently has over
6,000,000 various types of seedlings under cultivation in its 110,000 square
foot greenhouse.

    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 therefrom. 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.




For further information:

For further information: regarding Maple Leaf Reforestation Inc., visit
www.mlreforestation.com or contact Raymond Lai, President & CEO, Office (403)
668-7560, Fax: (403) 250-2534, E-mail rlai@mlreforestation.com

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MAPLE LEAF REFORESTATION INC.

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