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