LEC announces feedstock supply and biodiesel marketing joint venture with oil trader Milio International for TBF’s Darwin plant

February 13, 2014

VANCOUVER, Feb. 13, 2014 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or the “Company”) today announced the signing of a formal
Memorandum of Understanding (“MOU”) between Milio International
(“Milio”) and LEC’s subsidiary, Territory Biofuels Limited (“TBF”), for
the development of a joint venture (“JV”). Under the terms of the
planned JV, it is anticipated that Milio will fund up to 120,000 tons
of feedstock per year as well as facilitate the marketing and sales of
the production from TBF’s 140 million litre per year biodiesel plant
located in Darwin, Australia. At full production capacity this funding
is expected to provide working capital funding of approximately US$25

“This joint venture will provide a creative and important funding
mechanism for the working capital necessary to make the Darwin project
robust and sustainable in the years to come”, said Ross MacLachlan,
Chairman and CEO of Lignol Energy Corporation. “Milio has agreed to
provide us with support at a critical juncture as we bring the Darwin
plant back online. Having a partner as creative and motivated as Milio
is already proving to be a tremendous asset, and we look forward to
working together in seeking ways to optimize the profitability of our
world-scale plant.”

At full production Milio will provide funding for up to 120,000 tons of
feedstock per year and will receive 25% of the net profits earned on
the sale of related production. In addition, Milio has agreed to assist
in the restart of the Darwin plant with the funding of 1,500 tons of
feedstock for an initial startup campaign and up to 10,000 tons for an
initial commercial campaign. As additional consideration for this
support, Milio will receive funds sufficient to recover Milio’s costs
and also the provision of $600,000 in shares of LEC or cash by mutual

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 Milio International (“Milio”)

Milio International is a Commodity Trading and Investment Company,
specialising in upstream, midstream and downstream fuel operations and
infrastructure. Milio’s upstream capability encompasses the technical
assessment, licensing, exploration, development, management and
commercialisation of assets across the E&P sector, including those in
Milio’s own portfolio. The company maintains strong, established
relationships with all the major oil producers, suppliers and refiners.
The company has a proven track record of directly purchasing crude at
the wellhead, valuing and marketing new crudes into the market and
structuring volume crude-product swaps. Milio sources and purchases
commercial and defence grade fuels from across the world and on variety
of Incoterms. Milio also offers complete commercial support services
through risk management, structured finance, insurance and investment
expertise. Further information is available at www.milio.com.

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 challenging
technical and economic conditions. TBF is in the process of raising
funds to restart the existing facility in the latter part of 2014
utilizing environmentally certified, Refined Bleached & Deodorized
(RBD) palm oil. In 2015, 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”)

Lignol Energy Corporation is an emerging producer of biofuels,
biochemicals and renewable materials from waste. LEC owns 100% of
Lignol Innovations Ltd. (“LIL”), 100% of Territory Biofuels Limited
(“TBF”), 21% of Australian Renewable Fuels Limited (“ARW”), 51% of
Neutral Fuels (Melbourne) Pty Ltd (“Neutral Fuels Melbourne”) and 20%
of Neutral Fuels Parent Company Ltd (“Neutral Fuels”). The Company
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. Further information is
available on the Company’s website at www.lignol.ca.

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 and TBF’s ability to
finance, restart and profitably operate its 140 million litre per year
biodiesel plant and glycerine refinery. 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, TBF and Milio’s ability to
conclude and to enter into definitive agreements with respect to the
formation and operation of a joint venture, TBF and Milio’s ability to
secure the supply of suitable feedstock to be funded by Milio, TBF’s
ability to process such feedstock and for Milio to facilitate the
marketing and sales of the production from the Darwin plant, LEC’s
ability to raise additional capital to fund operations and to support
the capital requirements of its affiliates, TBF may in the future issue
shares in connection with the raising of capital or the repayment of
debt or other obligations, which could result in LEC owning less than
100% of TBF, TBF’s ability to successfully operate the Darwin facility
commencing in the latter part of 2014 and to generate revenues and cash
flow, TBF’s ability to integrate new pretreatment technologies and
catalysts to facilitate the processing of a broad range of lower cost
feedstocks, LEC’s ability to continue as a going concern and to raise
additional finance to fund the operations of LEC and its affiliates and
LEC’s planned investment in Neutral Fuels, Neutral Fuels and Neutral
Fuels Melbourne’s ability to maintain a profitable working relationship
with McDonald’s restaurants, 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
requirements of the potential effect of changes in government policy
relating to the environment, and incentives for renewable fuels, the
potential impact of changes in the prices of feedstock and the market
price of liquid fuels including biodiesel, ethanol and renewable
chemicals, the ability of LEC and its affiliates to generate future
profits and to pay dividends, and to meet increasing regulatory
requirements, LIL’s ability to finance and complete the development of
a commercial project, LIL’s ability to develop products and to obtain
off-take agreements, LEC’s reliance on publically available information
of ARW in its evaluation of its acquisition of shares in ARW, the
potential inability to divest the ARW ordinary shares due to modest
trading volumes, the potential inability to divest the ordinary shares
LEC owns of TBF, the ability of ARW and Neutral Fuels to market their
products and to meet relevant regulatory requirements, the estimated
cost of any future TBF capital investment, the fluctuation of biodiesel
and feedstock prices, and the effect of changes in government policy
relating to the environment.

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, financial market conditions which will impact LEC’s ability to
finance its operations and to meet future capital and investment
requirements, the demand for the market price of liquid fuels including
gasoline, biodiesel, ethanol, the market price and demand for renewable
chemicals, risks relating to the protection of technology from
infringement and those risk factors which are discussed elsewhere in
documents that LEC files from time to time with securities and other
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, LEC 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

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