Lignol Announces Acquisition of further equity stake in Australian Renewable Fuels Limited

VANCOUVER, Oct. 15, 2012 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, today announced the execution of share purchase agreements to acquire an additional 88,000,000 ordinary shares of Australian Renewable Fuels Limited (ASX: ARW) for an aggregate purchase price of CAD$1,100,000 (the "Share Acquisition").

"We are pleased to announce this investment in ARW on terms more favourable to LEC than our first transaction", said Ross MacLachlan, President and CEO of LEC. "Upon closing, LEC will have a total equity stake of 14.9% in Australia's largest biodiesel producer."

Consideration for the Share Acquisition will be comprised of CAD$225,000 in cash and 7,000,000 in LEC common shares issued at CAD$0.125 per share.  The LEC common shares issued will be subject to a four-month hold period under applicable securities laws.  On the closing of the Share Acquisition, LEC's ownership in ARW is expected to increase from 11.2% to 14.9% of the issued and outstanding ordinary shares of ARW.

The Share Acquisition is expected to close on or about November 6, 2012. This transaction is subject to the receipt of all necessary regulatory approvals and in respect of LEC, that no material adverse change in its business, assets, liabilities or results of operations have occurred prior to the closing date and in respect of ARW, that each of the respective vendors do not possess or are not aware of any information which could reasonably be expected to have a material adverse effect on the price of or value of the ARW ordinary shares that has not been disclosed to the Australian Stock Exchange or is not otherwise generally available prior to the closing date.

About Lignol Energy Corporation ("LEC")

LEC (TSXV: LEC) currently owns an 11.2% stake in Australian Renewable Fuels Ltd (ASX: ARW) and owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("LIL"). LEC also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology.

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. More information on ARW can be found at their website; www.arfuels.com.au.

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 nonfood cellulosic biomass feedstocks. LIL's modified solvent based pretreatment 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 lignins. 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 byproducts 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 LEC's website at www.lignol.ca.

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 closing of the Share Acquisition, our ability 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 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

Lignol Energy Corporation
David Turner
Chief Financial Officer
Tel: [phone]
Email: [email protected]