Last Close: March 8, 2010 - $0.16
Shares Issued: 62,186,627
CALGARY, March 8 /CNW/ - Maple Leaf Reforestation Inc. ("Maple Leaf" or the "Company") is pleased to announce that it has signed a Memorandum of Understanding with Biodis Engineering Ireland Limited (the "MOU"), which is a partially owned subsidiary of Biodis Engineering Swiss, S.A. ("Biodis"). This MOU further pursues the relationship Maple Leaf has with Biodis for the securing of feedstock oils for the production of bio-diesel. Pursuant to the MOU, Maple Leaf and Biodis will undertake to enter three separate joint venture agreements regarding the following projects (the "Definitive Agreements"):
1. Installation of one Biodis made Bio-Diesel Plant with a minimum
capacity of 7,000 tons per annum in Zhanjiang City, China
("JV No. 1");
2. Construction of a facility for the collection and crushing of
feedstock plants and the gathering of Recycled Vegetable Oil with a
capacity of 10,000 tons per month in Zhanjiang City, China
("JV No. 2"); and
3. Acquisition of enough land in different regions of China to grow one
type or several types of feedstock plants in order to supply 100,000
to 150,000 tons of feedstock oil per year ("JV No.3").
The MOU has been filed on www.sedar.com as a "Material Document".
JV No. 1
The following terms will apply to JV No. 1:
(a) A joint venture company will be established in China to operate
JV No. 1 ("JV Company No. 1"). Maple Leaf and Biodis will each own
50% of JV Company No. 1;
(b) Maple Leaf will loan $250,000 USD to JV Company No. 1 (the "Maple
Leaf Loan"). The date that the Maple Leaf Loan will be provided to
JV Company No. 1 will be dependent on its ability to raise the funds
through debt or equity;
(c) Biodis will loan all necessary financing for JV No. 1 to
JV Company No. 1, excluding the amount of the Maple Leaf Loan (the
(d) Maple Leaf will secure an appropriate site location and will acquire
all necessary permitting for JV No. 1. The cost of acquiring such a
location and obtaining the permitting will be the responsibility of
JV Company No. 1; and
(e) Maple Leaf and Biodis will share 40% of the net profit generated from
JV No. 1 immediately upon realizing such profits, and 60% of the net
profit will be used to pay back the Maple Leaf Loan and the Biodis
Loan (collectively, the "JV No. 1 Loans"), in proportional amounts to
the total of the JV No. 1 Loans. Upon full repayment of the JV No. 1
Loans, Maple Leaf and Biodis will share net profits from
JV Company No. 1 50/50.
JV No. 2 and JV No. 3
The following terms will apply to JV No. 2 and JV No. 3
(a) A separate joint venture company will be established in China to
operate each of JV No. 2 and JV No. 3 ("JV Company No. 2" and
"JV Company No. 3). Maple Leaf will own a minimum of 25% of each of
JV Company No. 2 and JV Company No. 3, which will be an ownership
interest earned from its efforts to set-up JV No. 2 and JV No. 3;
(b) Biodis will provide all the necessary financing for JV No. 2 and
JV No. 3, which may be entirely an equity investment or a combination
of an equity investment and a loan to the applicable JV Company;
(c) Maple Leaf's ultimate ownership interest in JV Company No. 2 and
JV Company No. 3 will be greater than 25% depending on whether Biodis
provides the necessary financing through debt or equity and whether
Maple Leaf's efforts to set-up JV No. 2 and JV No. 3 warrant a
greater than 25% ownership interest; and
(d) Maple Leaf and Biodis will later agree upon the precise ownership
percentages and, if applicable, loan repayment schedules for
JV Company No. 2 and JV Company No. 3, which will be included in each
of the respective Definitive Agreements.
Maple Leaf will be the operator of all of the joint venture projects.
Based on preliminary estimates, Maple Leaf and Biodis anticipate that the three joint venture projects will require combined start-up financing of approximately $30 million USD. The revenue generated from JV No. 1 (Bio-diesel Plant) is estimated to be approximately $5.25 million USD in the first year of producing 7000 tons, based on current bio-diesel prices of approximately $750 USD per ton. The revenue generated from JV No. 2 (Collection and Crushing Facilities) is estimated to be approximately $55 million USD to $70 million USD per year, based on the 100,000 ton capacity and current feedstock oil prices of $550 USD to $700 USD per ton. Revenue generated from JV No. 3 (Plantation) will be dependent on the type of feedstock oil plants that are cultivated.
Raymond Lai, President & CEO of Maple Leaf comments, "We are very excited about this opportunity which has MPE back on track to participate in the Bio-diesel industry, which has been one of our goals for the past few years. If these joint ventures are finalized and implemented successfully they will result in Maple Leaf having a significant ownership interest in valuable Chinese assets, which will be earned, not obtained through monetary contribution. We are very much looking forward to working with Biodis on the previously announced Exclusive Supply Agreement and these joint ventures. Our Chinese connections, experience and resources should mesh well with Biodis' experience in the bio-fuel industry and its ability to finance large-scale projects."
For more information about Biodis, please see the Company's news release dated March 1, 2010.
About Maple Leaf Reforestation Inc.
Maple Leaf is a Canadian company operating five environmental related projects in China:
1. a large-scale forest nursery in Inner Mongolia which is focused on
growing value-added tree seedlings and nursery products;
2. an alfalfa feedstock operation that produced 10,000 tons in 2009 with
great expansion potential and opportunity to build an alfalfa crop
cake processing plant;
3. a multi-faceted Xinjiang Yellowhorn tree project which will provide
for the manufacture of bio-diesel fuel and cooking oil and complement
the fabrication of the ever demanding nutritious alfalfa feedstock;
4. an organic fertilizer plant in the Hunan Province which will produce
environmentally friendly bio-organic fertilizer; and
5. a Flexi-Pipe distribution network to serve the oil and gas industry
and other renewable energy industries.
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.
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: 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, E-mail: email@example.com