Last Close: February 18, 2011 - $0.125
Shares Issued: 80,104,090
CALGARY, Feb. 22 /CNW/ - Maple Leaf Reforestation Inc. ("Maple Leaf" or
the "Corporation") is pleased to announce that continued demand for its
seedlings in China has resulted in its current greenhouse capacity of
110,000 square feet and annual production of 16 million seedlings being
outgrown. As a result, Maple Leaf is undertaking a two year expansion
plan to access or acquire two additional greenhouse facilities of
similar size and scale to its current greenhouse. In addition, due to
the demand growth of Maple Leaf's seedlings, during this two year
expansion it anticipates gradually increasing the selling price of its
seedlings by approximately 30%. The operational expansion will also
offer numerous cost-cutting efficiencies and thus increase the margins
on Maple Leaf's seedlings.
As its first phase of executing on its expansion plans, Maple Leaf has
secured an 110,000 square foot greenhouse from the Liang Cheng County
government, including 17 acres of adjacent useable land, for 10 years.
This facility will allow Maple Leaf to produce an additional 16 million
seedlings annually. The cost of leasing this facility will initially
be a maximum of $45,000 Cdn (300,000 Rmb) annually, however the final
lease price is still being negotiated and will be finalized when
Raymond Lai, President & C.E.O. of Maple Leaf, visits Maple Leaf's
China operations in March and meets with the Liang Cheng County
As a result of doubling its greenhouse capacity, Maple Leaf has now been
able to accept a 5-year, 100 million seedling sales contract with the
Liang Cheng County Forestry Department. The annual shipment details,
including quantity and type of seedlings, and pricing of the seedlings,
will be negotiated and agreed upon by the parties at the beginning of
each calendar year. The parties have agreed that for 2011, Liang Cheng
will purchase 15 million Chinese and Scott Pine seedlings for a total
cost of approximately $1.425 million Cdn (9.5 million Rmb). Liang
Cheng will pay a 20% deposit to Maple Leaf, $285,000 Cdn (1.9 million
Rmb) before June 30, 2011, and an additional 40% will be paid, $570,000
Cdn (3.8 million Rmb) before December 1, 2011. The balance owed to
Maple Leaf for 2011 shipments will be due before May 1, 2012. Maple
Leaf will be required to ship the purchased seedlings as they become
available, with delivery of the 15 million seedlings to be completed
before November 1, 2011.
Acreage Leasing Plans
Maple Leaf would also like to announce that it has secured two parcels
of land from the Inner Mongolia government each comprised of
approximately 330 acres (2,000 mu) for 30 to 70 years, at Maple Leaf's
Parcel #1 will be used to create a 1 million tree plantation utilizing
Maple Leaf's own seedlings. It is anticipated that after 3 years of
cultivation these trees will reach an average height of 70 cm, which
presently sell in the China market for approximately $4.50 to $7.50 (30
to 50 Rmb) per tree, depending on the type tree, thus making the value
of the plantation at least $4.5 to $7.5 million Cdn (30 million to 50
million Rmb), assuming that the market prices for such trees stay at
Parcel #2 will be used to grow Yellowhorn seedlings and trees. Eight
acres (50 mu) will be used to grow approximately 500,000 Yellowhorn
seedlings per year and the other 322 acres (1,950 mu) will be used to
grow approximately 200,000 Yellowhorn trees. The Yellowhorn seedlings
will be used for re-sale to generate revenue. The market price for
Yellowhorn seedlings can vary dramatically depending on the current
supply situation in the market and whether they are being sold overseas
or locally in China. Also, within 3 to 5 years of initial planting the
Yellowhorn trees should produce approximately 400,000 kg of seeds.
These projects will require initial capital of approximately $2.2
million Cdn (14.7 million Rmb) and can be undertaken on a much larger
scale if greater financing becomes available. Maple Leaf will be
focusing its ongoing fundraising efforts on securing financing to move
forward with developing these parcels of land.
Issuance of Shares for Services
Maple Leaf would also like to announce that the disinterested directors
of the Corporation have approved it executing agreements for shares for
past services (the "Agreements") provided by Brad R. Docherty
Professional Corporation (wholly owned by Brad R. Docherty) and Nice
Accounting Service (wholly owned by Raymond Lai). The sole beneficial
owners of each of these entities are both directors and officers of the
Corporation and both individuals abstained from voting on the approval
of this matter by Maple Leaf's board.
Maple Leaf will issue an aggregate of 578,785 common shares in the
capital of the Corporation (the "Common Shares") having a deemed
issuance price of $0.10 per Common Share. Brad R. Docherty
Professional Corporation will be issued 316,285 Common Shares in
partial satisfaction of past services provided to the Corporation.
Nice Accounting Service will be issued 262,500 Common Shares in full
satisfaction of past services provided to the Corporation.
The transactions contemplated by the Agreements are subject to the
approval of the TSX Venture Exchange (the "TSXV"). The Common Shares
issued pursuant to the Agreements are subject to a four month hold
period from the date that approval of the transactions contemplated by
the Agreements is granted by the TSXV.
About Maple Leaf Reforestation Inc.
Maple Leaf is a Canadian company operating various projects in China.
Maple Leaf is a wholly-owned foreign enterprise which allows the
Company 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.
For further information regarding Maple Leaf Reforestation Inc., visit www.mlreforestation.com or contact:
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.
Maple Leaf maintains a forward-looking statement database which is
reviewed by management on a regular basis to ensure that no material
change has occurred with respect to such forecasts. The Company will
publicly disclose such material changes to its forward-looking
statements as soon as they are known to management.
SOURCE Maple Leaf Reforestation Inc.
For further information:
Maple Leaf Reforestation Inc.
Raymond Lai, Chairman, President & CEO
Tel: +1 (403) 668-7560
Fax: +1 (403) 250-2534