LEC announces plans to partner with M Energy to restart 140 million litre biodiesel plant in Darwin Australia

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

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