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Last updated on April 18, 2014 at 17:24 EDT

LEC provides further details on the variation of terms of its investment in Territory Biofuels Limited, owners of the largest biodiesel plant in Australia

November 6, 2013

VANCOUVER, Nov. 6, 2013 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or the “Company”), a leading technology company in the advanced
biofuels and renewable chemicals sectors, further to its press release
dated September 30, 2013, would like to provide additional information
to its shareholders in connection with the transaction to vary the
terms and conditions of its existing loan to Territory Biofuels Limited
(“TBF”) in the amount of A$500,000 (the “Loan”) and LEC’s recently
announced investment (the “Investment”) in TBF of up to A$1,000,000.

The Company and TBF have agreed, pursuant to the entering into of a
“Secured Convertible Note Funding Term Sheet” dated September 27, 2013,
that the Loan and the Investment amounts will be applied to the
subscription for secured convertible notes (the “Notes”) of TBF, in the
aggregate amount of up to A$1,500,000. In accordance with its previous
Investment commitment, LEC has provided funding to TBF totaling
A$500,000 and has provided the opportunity to existing TBF investors to
subscribe for the remaining A$500,000 worth of Notes. Existing
investors of TBF could subscribe for these Notes on the basis of their
proportionate entitlement and LEC has agreed to fund any amounts not
subscribed by these existing shareholders. The proposed closing for
this transaction is still no later than November 15, 2013 and continues
to be subject to regulatory approval.

The Notes convert at 5 or 15 cents (Australian dollars) per ordinary
share depending on the outcome of several criteria related to the
Darwin facility, the outcome of which is expected to be known by June
30, 2014. Each of the Notes is convertible into ordinary shares of TBF
after June 30, 2014 and at any time up to November 15, 2018.

Upon completion of the Investment, and the conversion of all the Notes,
LEC is expected to increase its majority holding up to potentially
between 76% and 87% of the issued and outstanding shares of TBF, and up
to potentially between 75% and 86% on a fully diluted basis, assuming
no other existing investors participate in this investment opportunity.
LEC currently owns a 55% controlling interest in TBF.

LEC plans to utilize existing resources to complete the funding for this
investment.

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.

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 creation of the Notes
through the conversion of the Loan and the applicable amount of the
Investment, possible conversion of the Notes into equity of TBF, 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