Lignol announces Investment and Technology Collaboration with Territory Biofuels Limited

VANCOUVER, March 11, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, today announced that it has subscribed for convertible notes with a principal value of A$1.18 million ("Notes") issued by Territory Biofuels Limited ("TBF") and signed a Technology Collaboration Agreement that includes a package of technical and further assistance to aid in the restart of TBF's 150 million litre per year biodiesel plant and glycerine refinery located in Darwin, Australia.

The terms of the Notes provide for conversion into an equity position for LEC of between 20% to 40% in TBF, depending on a range of criteria related to the development of the Darwin facility. This investment will be funded, in part, from Lignol's recently announced line of credit with its major shareholder, Difference Capital Funding Ltd. The terms of the Technology Collaboration Agreement provide for technical assistance from Lignol and its partners with respect to both the restart of the facility and the potential integration of new pretreatment technologies and catalysts to facilitate the processing of a broad range of low cost feedstocks.

"We are proud to be working with TBF on this important, large scale project", said Ross MacLachlan, Chairman and CEO of LEC. "The Darwin plant is an impressive industrial facility and the TBF team has developed a compelling business model with strong commercial partnerships with which to become a major regional player in the biodiesel market in the Pacific Rim. This transaction reinforces the commitment to our strategy of selective investments in energy related projects which have synergies with our Company and have the potential to generate near term cash flow."

"Lignol's financial investment and support from its partners is an important step in the restart of our world class facility", said Chris Hart, Chairman of TBF. "Having toured the Lignol facilities and met with their scientists, engineers and partners, I am also confident that our new technology collaboration will assist in an efficient recommissioning of our project and lead to the implementation of advanced technologies that maximize plant performance."

About Territory Biofuels Limited ("TBF")

TBF owns a large scale biorefining facility located in Darwin, Northern Territory, Australia, which includes a Lurgi designed biodiesel plant and the only 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 maximum capacity of 150 million litres per year. Originally built to run on food-grade vegetable oil, the plant was shut down in 2009 due to feedstock constraints. TBF intends to restart the existing facility utilizing feedstocks such as tallow and used cooking oil and then plans to integrate new feedstock pre-treatment technologies and catalysts to process a broader range of feedstocks such as lower quality tallow and palm sludge oil (PSO); a waste product from palm oil mill extraction. TBF has established trading relationships with its shipping, off-take and feedstock partners which will allow it to profitably start up and operate the facility.

About Lignol Energy Corporation ("LEC")

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("LIL") and has interests in both Australian Renewable Fuels Ltd. (ASX: ARW) ("ARW") and Territory Biofuels Ltd. ("TBF"). 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.

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 non-food cellulosic biomass feedstocks. LIL's modified solvent based pre-treatment 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 lignin. 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 by-products 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 Lignol'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 outcome of factors influencing the future conversion of LEC's Notes into an equity position for LEC of between 20% to 40% in TBF depending on a range of criteria related to the Darwin facility, TBF's ability to restart and profitably operate its 150 million litre per year biodiesel plant and glycerine refinery, 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 low cost feedstocks, the successful outcome of projects undertaken under the Technology Collaboration between LEC and TBF, the success of the recently proposed transaction announced by ARW to raise A$12.3 million and the resulting change to the LEC equity interest in ARW, LEC's ability to complete the acquisition of additional shares of ARW, LEC's ability to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with the Company and which have the potential to generate near term cash flow and to pay dividends, LEC's 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 Lignol'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, LIL's ability to obtain requisite regulatory approvals and its ability to enter into agreements with strategic partners on terms acceptable to us, the inability of LEC to influence the strategy, operations and financial performance of 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 prices on ARW, the effect on ARW of changes in government policy relating to the environment, and incentives for renewable fuels, and the ability of ARW to generate short term cash flow and pay dividends. 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]