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Tonga Capital Corporation Announces Initial Financing for 20 Million Gallons Per Annum Biodiesel Plant

Posted on: Tuesday, 20 June 2006, 09:00 CDT

Tonga Capital Corporation (OTCBB:TGPC) is pleased to announce that it has arranged the initial bridge financing for Momentum Biofuels, Inc., ("Momentum Biofuels"), a Texas-based company that is developing a business in the production, marketing, and distribution of alternative fuels, with an current emphasis on biodiesel fuel. As previously announced, Tonga Capital has entered into a definitive agreement to acquire 100% of the outstanding stock of privately-held Momentum Biofuels. The initial bridge financing has allowed Momentum Biofuels to remain on track to complete its state of the art production plant to produce 20 million gallons plus of biodiesel fuel per year, by permitting Momentum to order the necessary equipment and start the delivery lead times running. The technology used by Momentum permits its plants to be constructed for a cost of less than $0.25 per gallon of annual production, which is about 1/4 of the industry average for such plants. This low CAPEX will permit the company to achieve rapid cost recovery and a higher than average return on investment. Momentum Biofuels anticipates EBITDA for the 4th quarter of calendar and fiscal 2006 near $2 million, subject to continued financing, petro diesel number two distillate prices near current levels, ample supply of feed stock at today's current prices and availability of equipment. Momentum is capitalizing on its current low CAPEX for the construction of its plants to build five strategically located plants around the United States with a total production of B-100 of over 100,000,000 gallons per annum. Momentum plans on its second plant coming online no later than the third quarter of 2007. After completion of the first plant, Momentum plans to construct additional plants from cash flow.

"We now have confirmed delivery dates on the key components for the plant and are confident that Momentum will be in production at the beginning of the 4th quarter of this year," stated Charles Phillips, president and CEO Momentum Biofuels. Mr. Phillips further said that, "We are currently considering an offtake agreement for 20,000,000 gallons of B-100 that would provide a profitable first year of production."

The recently announced execution of the Agreement and Plan of Reorganization between Tonga and Momentum will permit the Company to become a leader in the emerging Biodiesel business. Biodiesel is a clean burning, renewable fuel made from vegetable oils or animal fats. The triglycerides or fatty acids of vegetable oils or animal fats are converted in a relatively simple process into methyl esters, or biodiesel. This product is then generally blended with petroleum diesel to produce fuel for diesel engines that reduces polluting exhaust emissions. In fact, the biodiesel components of these blends:

-- Produces 80% less carbon dioxide than petroleum diesel

-- Produces 100% less sulfur dioxide than petroleum diesel

-- Produces up to 75% fewer particulate emissions (black smoke) than petroleum diesel

-- Has substantially higher lubricity than petroleum diesel

-- Is biodegradable and non-toxic

About Momentum Biofuels

Momentum Biofuels plans to produce and distribute biodiesel fuel through private fleets, federal and local government fleets, and the development of a network of wholesale outlets. The biodiesel industry is part of the broader alternative fuel industry. Alternative fuel is any fuel that can be substituted for traditional gasoline or diesel fuels. Compressed natural gas, methanol, ethanol, propane, electricity, biodiesel and hydrogen are all federally recognized alternative fuel sources. While there are vehicles that are currently designed to run on such alternative fuels, biodiesel has the advantage of working with unmodified diesel engines, eliminating modification costs that would ultimately be passed on to consumers. Momentum Biofuels will benefit from federal and local tax credits for producers of biodiesel fuel such as those outlined in the U.S. Energy Bill of 2005, Oklahoma House Bill No. 1398 and from other government subsidies for producers of biodiesel fuel. The Company is focused on capitalizing on the growing demand for alternative and renewable fuels in the domestic market. For more information go to the Company's website at www.momentumbiofuels.com. The Company's website is currently being updated and will finalize shortly. The company's public competitors include Earth Biofuels, Inc. (OTC BB: EBOF), Pacific Ethanol, Inc. (NASDAQ: PEIX), Xethanol Corporation (OTC BB: XTHN), Verasun Energy Corporation (NYSE: VSE), and Nova Oil Inc. (OTC BB: NVAO). Momentum Biofuels feels that due to its low construction costs of its manufacturing plants, extensive industry experience and focus on private fleets, federal and local government fleets, and the development of a network of wholesale outlets, the Company has a competitive advantage over the fore mentioned companies in the Biodiesel industry.

FORWARD-LOOKING STATEMENTS

This press release may contain "forward-looking statements" statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, commonly identified by such terms as "believes,""looking ahead,""anticipates,""estimates" and other terms with similar meaning. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company's projections and expectations are disclosed in the Company's filings with the Securities and Exchange Commission. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions.

Source: Business Wire

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