VANCOUVER, April 7, 2014 /CNW/ - Lignol Energy Corporation (TSXV: LEC)
("LEC" or the "Company") today announced the signing of a formal
Memorandum of Understanding ("MOU") between M Energy Co., Ltd. ("M
Energy") and LEC establishing the framework by which the two companies
will work together to restart LEC's 140 million litre per year
biodiesel plant and incorporate M Energy's proprietary pre-treatment
technology. The Parties have been in discussions regarding an
investment structure which, if successful, would provide sufficient
capital for the Darwin project and an opportunity for M Energy to
become an equity partner in the project.
The two companies have collaborated over the past several months to
develop a technology and commercial feasibility study on the
integration of M Energy's patented pre-treatment solution with the
Company's Lurgi designed, biodiesel plant located in Darwin Australia.
This has involved physical inspections of both the Darwin plant and of
M Energy's operating pre-treatment plant in Korea. Samples of
feedstocks for the Darwin plant have also been tested and verified to
work with the M Energy pre-treatment technology. The scope of the
collaboration also covers marketing rights to M Energy's technology in
Australia as well as commercial synergies in feedstock procurement,
offtakes and sales of biodiesel to export markets.
The Darwin project involves the completion of certain Lurgi upgrades to
ensure operability as well as routine replacement and refurbishment of
certain existing components, followed by implementation of M Energy's
proprietary pre-treatment package, which will allow the plant to
process a range of low-cost, sustainably certified high free fatty acid
waste feedstocks. Biodiesel produced from certified waste feedstocks
that meet quality specifications can be sold into certain markets
around the world at a premium price; especially those markets which
have established mandates for environmentally sustainable fuels.
About M Energy Co. Ltd. ("M Energy")
M Energy is a profitable biodiesel producer with three operating plants
in Korea. M Energy's production capacity is the second largest in
Korea, capable of producing 135 million liters per annum, soon to
become 185 million liters capacity once the Iksan plant is
re-commissioned this year. M Energy has developed a patented,
proprietary pre-treatment process for the processing of low cost, high
free fatty acid feedstocks from a range of waste materials. The
technology has been installed at one of M Energy's operating biodiesel
plants where it has been proven to work at commercial scale. High
quality biodiesel is produced by M Energy and it currently sells a
significant portion of its production to Europe under long term
agreements at the premium prices established for biodiesel produced
from sustainably certified waste feedstocks.
About Lignol Energy Corporation ("LEC")
LEC is an emerging producer of biofuels, biochemicals and renewable
materials. The Company is undergoing a transformation from a leading
technology developer in the biorefining sector, to that of an owner of
commercial biorefining assets. This strategy has leveraged LEC's
expertise gained through its experience with the development of its
proprietary biorefining technology. On April 2, 2014 LEC announced that
it is working with its financial advisors to establish the terms of a
financing which it needs to complete within the next month.
LEC owns 100% of Territory Biofuels Ltd ("TBF") which owns the largest
biodiesel plant and 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. LEC is currently
seeking ways to raise funds to restart the existing facility using
sustainably certified waste feedstocks. The Darwin plant has recently
received European ISCC certification and LEC has secured agreements
that will qualify the Darwin plant's production to receive premium
prices for exports to Europe. The Darwin plant requires a
pre-treatment technology package to process low cost, high free fatty
acid ("FFA") waste feedstocks and the company has selected M Energy as
its preferred technology partner.
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 LEC's ability to complete
discussions with investment advisors to establish the terms of a
financing and to complete such financing within the next month, LEC's
ability to complete its transition from a technology developer to an
owner and operator of commercial biorefining assets, LEC's ability to
restart the Darwin biodiesel plant and to subsequently integrate the
plant with M Energy's pretreatment facility so as to allow it to
process lower cost feedstocks, and to establish in collaboration with M
Energy commercial synergies in feedstock procurement, offtakes and
sales of biodiesel to export markets, TBF's ability to generate cash
flow from the operation of the Darwin plant, LEC's ability to invest
in, or otherwise obtain, equity interests in energy related projects
which have potential synergies and the potential to generate near term
cash flow, LEC's ability to continue as a going concern and to raise
additional financing to fund the restart of the Darwin plant and to
fund the operations of LEC and its affiliates, LEC's ability to repay
amounts owning to DCF under the revolving credit agreement, LIL's
ability to satisfy certain project deliverables and related funding
conditions from existing and potential future government grants,
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, LEC's ability to raise
additional capital to fund operations and to support the capital
requirements of its affiliates, 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, the effect of changes in government
policy relating to the environment, and incentives for renewable fuels,
the ability to meet relevant local and international 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, 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
