Scully Royalty Ltd. — Director's Dealing 2004

Nov 9, 2004

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: CATHAY MERCHANT GROUP, INC. (IJX)
CIK: 0000352281
Period of Report: 2004-11-05

Reporting Person: MFC BANCORP LTD (10% Owner)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2004-08-24	common stock, par value $0.10 per share	C	3738044	$0.50	Acquired	3738044	Indirect
2004-11-05	common stock, par value $0.10 per share	P	680000	—	Acquired	680000	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2004-08-24	Convertible Debt (Note 2)	$0	P	0	Acquired	2009-03-31	common stock (0)	Indirect

Footnotes

F1: (C) On August 24, 2004, upon MFC Merchant Bank SA ("MFC Merchant Bank") exercising its conversion rights under the Credit
Facility Agreement (defined in Note 2) and converted $1,575,000 of the Commitment at a rate of exchange of $0.50 per share,
the Issuer issued to MFC Merchant Bank 3,150,000 shares in the common stock, representing approximately 18.4% of the
Issuer's common stock, and immediately, on the same day, MFC Merchant Bank transferred its 3,150,000 shares to Sutton Park
International Limited at the same price of $0.50 per share for a total price of $1,575,000. Both MFC Merchant Bank and
Sutton Park International Limited are direct, wholly-owned subsidiaries of the Reporting Person, MFC Bancorp Ltd.

F2: (1) On November 5, 2004, MFC Bancorp Ltd. acquired 200,000 shares at a price of $0.661 per share, 200,000 shares at a price
of $0.671 per share, and 280,000 shares at a price of $0.6525 per share.

F3: (2) Pursuant to a credit facility agreement (the "Credit Facility Agreement") dated for reference April 1, 2004 between MFC
Merchant Bank and the Issuer, MFC Merchant Bank will make available to the Issuer, subject to the terms and conditions of
the Credit Facility Agreement, until March 31, 2009, a revolving credit facility (the "Credit Facility") in the principal
amount of up to $20,000,000 (the "Commitment"). As part of MFC Merchant Bank's compensation for the services to be
performed by it under the Credit Facility Agreement, MFC Merchant Bank may at any time and from time to time during the term
of the Agreement convert the Commitment or any portion of the Credit Facility to shares of common stock of the Issuer. MFC
Merchant Bank is not entitled to exercise rights that will cause it to own or control greater than 19.99% of the voting
control of the Issuer until such time as the Issuer has received shareholder approval to do so. On August 24, 2004, upon
MFC Mer

F4: (3) The rate of exchange for purposes of calculating the number of shares in the common stock of the Issuer to be exchanged
for the Commitment or a portion should be as follows: (amount of Commitment to be converted) divided by (the ten day average
of the closing price of the stock of the Issuer).