Cathay Forest Products says it has signed an agreement which expands Cathay's interest in a Guizhou Province joint venture to more than 65,000 hectares of standing timber plantations.

Cathay Forest says its strategy is to develop sustainable, regenerative forest assets by developing poplar plantations and acquired standing timber properties in China. The company will continue expanding its China-based timber properties and is currently investigating opportunities to develop commercial timber activities in Russian border areas.

This new agreement provides for an additional phase of standing timber acquisition after the first two phases have been completed. The first phase calls for Cathay Forest, through a joint venture with Hanfang Forestry Group, to acquire 6,600 hectares of standing timber in Guizhou Province. The area covered by the agreement was planted in the mid 1990's, predominantly with fir trees, which mature for harvest in 12 to 15 years from planting.

"This is a unique opportunity for Cathay Forest and our joint venture partners," said Anthony Ng, president of Cathay Forest. "We are submitting a sustainable forestry harvesting program to the ministry of forestry. All of our existing standing timber properties in China have been governed by the provincial governments' Annual Allowable Cut policies. If accepted, our sustainable harvesting program will allow us to more economically and efficiently harvest our properties compared to AAC policies."

The joint venture has commissioned Savcor Indufor to prepare a sustainable forestry harvesting business plan for submission to the forestry bureau. The business plan is expected to be completed in September.

Cathay Forest has advanced an initial deposit of CDN$1.5 million to Guizhou Hanfang Cathay Forestry Company Limited, the joint venture company, for the first phase and is awaiting receipt of forestry certificates to complete the acquisition of the first phase.