Cathay Forest Products Corp. - ss. 83.1(1)

Headnote

Subsection 83.1(1) -- issuer deemed to be a reporting issuer in Ontario -- issuer already a reporting issuer in British Columbia and Alberta -- issuer's securities listed for trading on the TSX Venture Exchange -- continuous disclosure requirements in British Columbia and Alberta substantially the same as those in Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 83.1(1).

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

CATHAY FOREST PRODUCTS CORP.

ORDER

(Section 83.1(1))

UPON the application of Cathay Forest Products Corp. (the Company) to the Ontario Securities Commission (the "Commission") for an order pursuant to section 83.1(1) of the Act deeming the Company to be a reporting issuer for the purposes of Ontario securities law;

AND UPON considering the application and the recommendation of staff of the Commission;

AND UPON the Company having represented to the Commission as follows:

1. The Company was incorporated in British Columbia on March 11, 1987. On September 23, 2004, the Company continued under the laws of the Canada Business Corporations Act, in anticipation of completing an exempt takeover bid of Cathay Forest Products Inc. and 1609060 Ontario Inc.

2. The Company was authorized to issue 500,000,000 common shares; however, pursuant to a share consolidation on a 1:5 basis, approved by the Company's shareholders on September 15, 2004, the Company is now authorized to issue 100,000,000 common shares. As of September 15, 2004, the Company's pre-consolidation issued and outstanding shares were 5,303,524.

3. The Company is a reporting issuer in British Columbia (since November 17, 1987) and Alberta (since November 26, 1999).

4. The Company is not in default of any requirement of the Securities Act (Alberta) or the Securities Act (British Columbia).

5. The Company believes it has a significant connection to Ontario for the following reasons:

a) the head office of the Company is located at 5650 Yonge Street, Suite 1500, Toronto, Ontario;

b) the registered office of the Company is located at 347 Bay Street, Suite 603, Toronto, Ontario;

c) three of the five directors of the Company are Ontario residents; and

d) approximately 76% of the subscribers to the concurrent private placement in 1609060 Ontario Inc. are Ontario residents, which upon the completion of the exempt takeover bid would represent approximately 30% of the total number of registered shareholders.

6. The continuous disclosure requirements of the Securities Act (British Columbia) and the Securities Act (Alberta) are substantially the same as the requirements under the Act.

7. The continuous disclosure materials filed by the Company are available on the System for Electronic Document Analysis and Retrieval.

8. There have been no penalties or sanctions imposed against the Company by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority, and the Company has not entered into any settlement agreement with any Canadian securities regulatory authority.

9. Neither the Company nor any of its directors and officers nor, to the knowledge of the Company and directors and officers, any of its controlling shareholders, has:

a) been the subject of any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority,

b) entered into a settlement agreement with a Canadian securities regulatory authority, or

c) been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.

10. Neither the Company nor its directors and officers nor, to the knowledge of the Company and directors and officers, any of its controlling shareholders, is or has been subject to:

a) any known ongoing or concluded investigations by:

i) a Canadian securities regulatory authority, or

ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or

b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

11. Neither the Company nor its directors and officers nor, to the knowledge of the Company and directors and officers, any of its controlling shareholders, is or has been, at the time of such event, a director or officer of another issuer which is or has been subject to:

a) any cease trade or similar orders, or orders that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the preceding 10 years; or

b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

AND UPON the Commission being satisfied that it would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to section 83.1(1) of the Act that the Company is deemed to be a reporting issuer for the purposes of Ontario securities law.

October 4, 2004.

"Iva Vranic"