CMQ Cathay Merchant Grp.

Cathay Merchant Group, Inc. Announces Plans to Develop a 160 Megawatt Wind Farm in China SHANGHAI, China, Nov. 3 /PRNewswire-FirstCall/ -- Cathay Merchant Group Inc. (AMEX:CMQ), an affiliate of MFC Bancorp Ltd. (Nasdaq: MXBIF; Frankfurt Stock Exchange: MFC GR), is pleased to announce today that it is developing its first wind energy project in China. The Twin Dragon Wind Farm ("Wind Project") has been planned as a 160 megawatt project in the Hebei Province of China.* Cathay Merchant Group, Inc. ("Cathay") chose the site for its world class wind resources in a large wind gap facing the Inner Mongolia Autonomous Region. This area is known for consistent high wind conditions. The first phase of the development will be 100 megawatts (between 50 to 70 wind turbines) and is expected to cost approximately US$125 million.* The projected yearly output from this phase is 400,000 MWh*, and Cathay expects that the Wind Project will also be eligible to sell emission credits for the yearly reduction of 300,000 tons of CO2.* Cathay will be developing the Wind Project, utilizing a wholly owned foreign enterprise. It is anticipated that financing will be arranged by domestic lenders and by way of a syndicate.* Cathay has signed an exclusive site reservation agreement with three Weichang counties in Hebei Province, which has reserved a total of 50 square kilometers of land with excellent development potential and wind conditions. Initial estimates are that the wind speed has a yearly average of 8m/s at a 10 meter elevation. Cathay is currently undertaking detailed wind measurements and has built two 70-meter wind measurement towers on the site. To ensure there is an accurate prediction of expected energy production, Cathay has also retained an internationally renowned firm to collect the measured data and to provide analysis. An interesting aspect of the Wind Project is that it is to be constructed on land that was once the summer resort and hunting spot in the ages of Kangxi and Qianlong emperors of the Qing Dynasty. The Wind Project enjoys support from the Governor of Hebei Province and from the people of Weichang county. A new highway is planned to pass close to the Wind Project and will make it only a three hour drive from Beijing.* The Wind Project is anticipated to be developed using a combination of expertise from Chinese design institutes and internationally recognized wind consultants, engineering companies and state of the art, megawatt class turbines.* The combination of its location, superior wind resources, and the planned use of world class megawatt wind turbines is expected to make this wind park a showcase project.* In light of these developments, Cathay's Board of Directors has determined that it is not necessary to proceed with the previously announced rights offering. China's goal is to meet 10% of its energy needs from renewable energy sources. They have set a goal of wind power generating capacity, to increasing to 10,000 megawatts by 2015, and 20,000 megawatts by 2020. Michael Smith, President of Cathay Merchant Group Inc., said, "The Twin Dragon Wind Farm will bring a significant new source of clean and renewable energy to the region. Our project manager has over 20 years in energy and project development experience in China. We believe our team is in a good position to capitalize on these types of opportunities in China." Statements in this news release which are not purely historical, are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this news release are marked by an asterisk (*). Management cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not necessarily limited to, the risks and uncertainties discussed in the Company's most recent annual report on Form 10-KSB and other documents filed by the Company with the Securities and Exchange Commission. For further information please contact: Michael Smith, Secretary of Cathay Merchant Group, Inc., +86-21-6353-0012. DATASOURCE: Cathay Merchant Group Inc. CONTACT: Michael Smith, Secretary of Cathay Merchant Group, Inc., +86-21-6353-0012

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