Lignol Energy Corporation Announces Completion of a $5 Million Credit Facility

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/

VANCOUVER, Feb. 27, 2013 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or the “Company”), a leading technology company in the advanced
biofuels and renewable chemicals sector, is pleased to announce that
further to its previous announcement, the Company has entered into a
secured credit facility for up to $5 million with Difference Capital
Funding Inc. (“DCF”), a major shareholder of LEC.  Amounts drawn under
this facility will bear interest at 8% per annum and the facility will
mature on the earlier of February 27, 2014 or upon the completion of an
equity financing raising gross proceeds of at least $5 million. These
funds will initially be secured by a general security agreement
providing for a security interest in all of LEC’s present and future
personal property until such time as DCF has a perfected security
interest in all of the shares of Australian Renewable Fuels Limited
(“ARW”) owned by LEC pursuant to a share pledge agreement. Once DCF’s
security interest in the ARW shares has been perfected, the general
security agreement will be terminated.

“This credit facility from DCF provides the flexibility in our financial
planning to take advantage of strategic opportunities, such as
participating in the recently announced private placement and rights
offering of Australian Renewable Fuels, which is expected to result in
LEC becoming one of ARW’s largest shareholders”, said Ross MacLachlan,
President & CEO. “The support from DCF as one of our major shareholders
is very encouraging and reinforces LEC’s commitment to its strategy of
taking significant equity stakes in companies such as ARW which have
the potential of generating near term cash flow.”

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol
Innovations Ltd. (“LIL”) and is one of the largest shareholders of
Australian Renewable Fuels Ltd (ASX: ARW). LEC also intends to invest
in, or otherwise obtain, equity interests in energy related projects
which have synergies with its biorefining technology.

LIL is a leading technology company in the advanced biofuels and
renewable chemicals sector undertaking the development of biorefining
technologies for the production of advanced biofuels, including
fuel-grade ethanol, and other renewable chemicals from non-food
cellulosic biomass feedstocks. LIL’s modified solvent based
pre-treatment technology facilitates the rapid, high-yield conversion
of cellulose to ethanol and the production of value-added biochemical
co-products, including high purity HP-L(TM) lignin. HP-L(TM) lignin represents a new class of high purity lignin extractives (and
their subsequent derivatives) which can be engineered to meet the
chemical properties and functional requirements of a range of
industrial applications that until now has not been possible with
traditional lignin by-products generated from other processes. LIL is
executing on its development plan through strategic partnerships to
further develop and integrate its core technologies on a commercial
scale. For more information please visit Lignol’s website at www.lignol.ca.

ARW is the largest biodiesel producer in Australia owning three plants
with a total nameplate capacity of 150 million litres per annum. ARW’s
three plants were built at an aggregate cost of approximately A$150
million. ARW has made significant changes in recent years to become a
cost effective producer of high quality biodiesel to address growing
biofuel demand in the Australian market. ARW has recently announced
proposed transactions to raise a combined A$12.3 million in cash
through a placement and an entitlement offer. More information on ARW
can be found at their website; www.arfuels.com.au.

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements:

Certain statements contained in this document may constitute
forward-looking information within the meaning of applicable securities
laws. Such forward-looking statements or information include, without
limitation, statements or information about  the entering into the
share pledge and the subsequent termination of the general security
agreement, our ability to complete the acquisition of additional shares
of ARW, the ability of ARW to generate near term cash flow and to pay
dividends to shareholders, the transaction entered into by ARW and the resulting change to the LEC
equity interest in ARW and to continue as a going concern and to raise
additional financing to fund the operations of LEC and LIL, the
development status of LIL’s fully integrated pilot scale biorefinery in
Burnaby, British Columbia, the planning and development of a commercial
plant, LIL’s ability to complete project deliverables which are funded
in part by government agencies, obtaining strategic partnership
investments and government funding for initial commercial projects.
Often, but not always, forward looking statements or information can be
identified by the use of words such as “plans”, “expects” or “does not
expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes” or variations of such words and phrases or words and phrases
that state or indicate that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved.

Such statements or information reflect LEC’s current views with respect
to future events and are subject to certain risks, uncertainties and
assumptions including, without limitation, our ability to establish the
validity of LIL’s technology at the fully integrated biorefinery pilot
plant scale, LIL’s ability to satisfy the conditions of existing
government grants and to obtain new additional grants, our ability to
continue to finance our operations and to finance and complete the
development of a commercial project, LIL’s ability to work with
Novozymes to produce cellulosic ethanol at production costs competitive
with gasoline and corn ethanol, LIL’s ability to develop products and
to obtain off-take agreements, our ability to obtain requisite
regulatory approvals and our ability to enter into agreements with
strategic partners on terms acceptable to us, the inability to
influence the strategy, operations and financial performance of
Australian Renewable Fuels Limited (“ARW”), the reliance on publically
available information of ARW in the Company’s evaluation of its
acquisition of shares in ARW, the potential inability to divest the ARW
ordinary shares due to modest trading volumes, the cost of future ARW
capital investment, the fluctuation of biodiesel and feedstock prices
on ARW, the effect on ARW of changes in government policy relating to
the environment, and incentives for renewable fuels. Many factors could
cause LEC’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements or information, including among other things, the
technological challenges that remain to be surpassed in obtaining the
necessary operating data from LIL’s fully integrated biorefinery pilot
plant that is required prior to completing the next scale-up of the
technology, financial market conditions which will impact our ability
to finance our operations and to finance the construction and operation
of a commercial plant, the price of gasoline and demand for ethanol,
the market pricing and demand for renewable chemicals, risks relating
to the protection of LIL’s core technology from infringement and those
risk factors which are discussed elsewhere in documents that LEC files
from time to time with securities regulatory authorities. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements or information prove
incorrect, actual results may vary materially from those described
herein as intended planned, anticipated, believed, estimated or
expected. Except as required by law, the Company expressly disclaims
any intention or obligation to update or revise any forward looking
statements and information whether as a result of new information,
future events or otherwise. All written and oral forward-looking
statements and information attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the foregoing
cautionary statements.

SOURCE Lignol Energy Corporation