(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 (equal sign) 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 (equal sign) 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.