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Last updated on April 21, 2014 at 7:52 EDT

LEC increases its ownership in Territory Biofuels Limited, owners of the largest biodiesel plant in Australia

August 19, 2013

VANCOUVER, Aug. 19, 2013 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or the “Company”), a leading technology company in the advanced
biofuels and renewable chemicals sectors, is pleased to announce that
it will invest up to a further A$1,000,000 in Territory Biofuels
Limited (“TBF”), the owner of the largest biodiesel plant in
Australia.  Upon completion, LEC will increase its majority holding to
up to approximately 66% of the issued and outstanding shares of TBF and
up to approximately 68% on a fully diluted basis.

“We are excited to be increasing our ownership in such a large scale
biofuels project. This investment represents the opportunity for our
company to have a substantial majority equity interest in potentially a
very profitable business”, said Ross MacLachlan, CEO and Chairman of
LEC.  “Our goal remains to work with TBF with a view to restarting the
plant in late 2013 with an appropriate project funding package in
place. Once operational, we plan to incorporate plant upgrades to
process lower cost feedstocks that should further enhance margins in
2014.”

LEC has agreed to provide TBF with equity funding of up to A$1,000,000
over the course of the next several months. The first tranche of
A$500,000 is payable in two instalments: the first instalment of
A$200,000 has now been made and the second instalment of A$300,000 is
due on or before September 15, 2013.  The opportunity to subscribe for
the remaining A$500,000 worth of shares of TBF will be offered to
existing shareholders of TBF (other than LEC) who may subscribe on the
basis of their proportionate entitlement and LEC has agreed to fund any
amounts not subscribed by those existing shareholders and to close this
round of financing no later than October 31, 2013. The closing of this
entire transaction is subject to regulatory approval.

This investment will be funded by LEC through accessing funds available
to the Company from the recently secured revolving credit facility (the
“Note”) of up to $12,500,000 with Difference Capital Financial Inc.
(“DCF”), which was announced on August 14, 2013.

About Territory Biofuels Limited (“TBF”)

TBF owns a large scale biorefining facility located in Darwin, Northern
Territory which includes a Lurgi-designed biodiesel plant and the
largest glycerine refinery in Australia. The facility was commissioned
in 2008 at a cost of A$80 million, along with 38 million litres of
related tankage, now leased by TBF. The biodiesel plant is the largest
in Australia with a rated capacity of 140 million litres per year. The
plant was originally built to run on palm oil and food-grade vegetable
oil, however the plant was shut down in 2009 due to economic and market
conditions.  To take advantage of current market opportunities, TBF is
in the process of raising funds to restart the existing facility
utilizing a specific grade of palm oil; environmentally certified,
Refined Bleached & Deodorized (RBD) palm oil.   In 2014, TBF plans to
integrate new feedstock pre-treatment technologies and catalysts to
process a broader range of feedstocks such as lower quality tallow,
used cooking oil and palm sludge oil; a waste product from palm oil
mill extraction.

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) is an emerging producer of biofuels, biochemicals and
renewable materials from waste biomass. LEC owns 100% of the issued and
voting shares of Lignol Innovations Ltd. (“LIL”); a Canadian
biorefining company with an integrated pilot plant demonstrating its
technology for the production of cellulosic ethanol, high value
cellulose and high performance lignin. LEC owns approximately a 55%
controlling interest in TBF prior to the transaction described above. 
LEC also owns approximately 21% of Australian Renewable Fuels Limited
(ASX: ARW); currently the largest biodiesel producer in Australia with
three plants having a combined 150 million litres per annum capacity.
LEC also intends to invest in, or otherwise obtain, equity interests in
energy related projects which have synergies with the Company and have
the potential to generate near term cash flow.

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 LEC’s ability to complete
the funding of TBF in the above timeframes, the Company’s ability to
draw down additional funds in the future from DCF, DCF’s ability to
provide funding to LEC as provided in the Note signed between the two
companies, the ability of existing TBF shareholders to participate in
the above financing, TBF’s ability to finance, restart and profitably
operate its 140 million liter per year biodiesel plant and glycerine
refinery, TBF’s ability to successfully operate the Darwin facility and
to generate revenues and cash flow, TBF’s ability to obtain US EPA
approval, TBF’s ability to work with strong commercial partnerships and
to become a major regional player in the biodiesel market in the
Pacific Rim, TBF’s ability to integrate new pretreatment technologies
and catalysts to facilitate the processing of a broad range of lower
cost feedstocks, the successful outcome of projects undertaken under
the Technology Collaboration Agreement between LEC and TBF, LEC’s
ability to continue as a going concern and to raise additional
financing to fund the operations of LEC and LIL and to support the
financing requirements of TBF, LEC’s ability to invest in, or otherwise
obtain, equity interests in energy related projects which have
technical and commercial synergies with the Company and which have the
potential to generate future dividends and near term cash flow, 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, to meet current obligations, 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, LIL’s
ability to obtain requisite regulatory approvals and its ability to
enter into agreements with strategic partners on terms acceptable to
us, LEC’s ability to influence the strategy, operations and financial
performance of TBF or of ARW respectively, 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 and the inability to
divest the TBF ordinary shares, the cost of any future ARW capital
investment, the fluctuation of biodiesel and feedstock prices on ARW
and TBF, the effect on ARW and TBF of changes in government policy
relating to the environment, and incentives for renewable fuels, the
ability of ARW and TBF to generate cash flow and pay dividends, and the
ability of ARW and TBF to market their products overseas and to meet
relevant regulatory requirements. 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


Source: PR Newswire