CFZ Cathay Forest Products Corp

Cathay Forest Products Corp. ("Cathay Forest" or the "Company") (TSX
VENTURE:CFZ) announces that it will not be in a position to file its
consolidated audited financial statements as at and for the year ended December
31, 2010, accompanying management's discussion and analysis, related CEO and CFO
certification and Annual Information Form for the year ended December 31, 2010
within the prescribed 120 day period as prescribed under National Instrument
51-102 and National Instrument 51-109, respectively (the "2010 Financial
Filings"). Cathay Forest cannot presently estimate when it will be in a position
to file the 2010 Annual Filings. The delay stems from the following:




--  Forestry certificates for the Shandong plantation 
--  Deposits related to properties in Guizhou and Jiangxi provinces 
--  Investment in Eco-Energy China Group Inc. 



Management has spent significant effort during the last several months reviewing
all aspects of the Company's affairs. The above items, in addition to those
identified by the Venture Exchange disclosed in our last press release, have
come to light and are the subject of ongoing investigation.


As previously publicly disclosed on March 31, 2011, the Company is also
continuing to prepare submissions to the TSX Venture Exchange Compliance &
Disclosure Group so that it can complete its review of several transactions
entered into by the Company during prior periods and of the Company's internal
disclosure procedures and corporate governance practices. 


Forestry Certificates for the Shandong Plantation

Cathay Forest, through its subsidiary, Shanghai Shengtai Forest Co. Ltd., was
provided with the rights to plant and harvest a total of 11,531 hectares of
poplar plantations under a Master Agreement in Shandong Province. The majority
of the forestry right certificates totaling 11,333 hectares which had been
issued to the Company have now expired. Cathay Forest understands that the local
government is willing to allow the Company to reacquire these certificates.
However, considering the current prices of poplar in the region, the economic
feasibility of reacquiring the plantations does not appear to be viable at this
time considering the amount of the deferred and accrued land lease payments for
such plantations over the years. 


If the Company decides not to proceed with the reacquisition of such plantations
a write down of plantation assets and related deferred and accrued land lease
payments liabilities will be required for an amount of approximately $79
million.


Deposits related to properties in Guizhou and Jiangxi provinces

The Company previously reported as at September 30, 2010, deposits amounting to
$4.8 million relating to potential property transactions in the Chinese
provinces of Guizhou and Jiangxi. The Company has recently uncovered information
suggesting that certain irregularities could have occurred with respect to the
payment of these deposits by Cathay Forest. The Company has engaged local legal
counsel to investigate this matter. At this time, the investigation is on-going
and no formal conclusion can be reached with regards to the status of the
deposit amounts in question.


Investment in Eco-Energy China Group Inc. ("EEC")

Cathay Forest has been advised by management of EEC that EEC is not able to
complete the preparation of audited financial statements for the year ended
December 31, 2010 due to financial constraints. Such financial statements are
required by Cathay Forest to complete its 2010 Financial Filings in relation to
the investment by Cathay Forest in EEC.


The Company is continuing to work with its auditors to resolve these matters and
complete the 2010 Financial Filings as expeditiously as possible.


About Cathay Forest Products

Cathay Forest is a forest products company that manages approximately 1,000,000
hectares of forest properties in Russia and China. Cathay Forest's customer base
includes the domestic Chinese pulp and paper industry and other wood products
customers in the Chinese and Japanese markets.


Forward-Looking Statements

All statements, other than statements of historical fact, in this news release
are forward-looking statements that involve various risks and uncertainties,
including, without limitation, statements regarding the future plans and
objectives of Cathay Forest. Actual results and future events could differ
materially from those anticipated in such statements. Except as required under
applicable securities laws, Cathay Forest assumes no obligation to update
forward-looking statements should circumstances or management's estimates or
opinions change.

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