Lignol Announces Memorandum of Understanding with BAE Systems PLC

VANCOUVER, July 22 /PRNewswire-FirstCall/ - Lignol Energy Corporation (TSX-V: LEC) ("Lignol" or "the Company"), a leading technology company in the cellulosic ethanol and biorefining sector, and BAE Systems PLC (LSE: BAES.L) ("BAE Systems") announced today the signing of a memorandum of understanding to explore and develop commercial applications for biochemicals from the Lignol biorefinery process that have use or synergies within BAE Systems' business, as well as financing of cellulosic ethanol projects.

"Lignol is delighted to be collaborating with BAE Systems, a global company engaged in the development, delivery and support of advanced defence, security and aerospace systems," said Ross MacLachlan, President and CEO of Lignol. "Over the next few months we will be exploring a wide range of potential applications for our high purity lignins and other biochemicals which have synergies within BAE Systems business. The objective of both parties is to formalize a joint development agreement and subsequent work plan to incorporate Lignol's biochemicals within BAE Systems business," continued Mr. MacLachlan. "In addition to the focused collaboration on biochemical applications, Lignol will also work with BAE Systems and other third parties in evaluating the development and financing of commercial scale biorefineries utilizing Lignol's unique process technology."

"BAE Systems takes its ongoing commitments to all Canadian industry extremely seriously, " said John Rossall, Director, Industrial Participation of BAE Systems.

"We develop industrial programs that concentrate primarily on the defense sector and try and maximize the value of the direct participation of Canadian industry in the delivery of any of our products to the Canadian Armed Forces. Beyond our commitment to do that, we look to the high technology sectors across the whole of Canada for new innovations that have an application in the defense sector and, as important, a global commercial application. Our aim is to ensure we help to develop strong successful Canadian companies that first and foremost, own and retain their technology and survive the ups and downs of the defense equipment acquisition programs," Rossall added.

"Lignol fits this profile and we are proud to be investigating possible applications for their high purity lignins. Also, we will be working with Lignol, within an appropriate framework, to identify specific biorefinery projects in Canada and around the world."

About BAE Systems

BAE Systems is the premier global defence, security and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, security, information technology solutions and customer support services. With approximately 105,000 employees worldwide, BAE Systems' sales exceeded (pnds stlg)18.5 billion (US $34.4 billion) in 2008.

About Lignol

Lignol (TSX-V: LEC) is a Canadian company undertaking the development of biorefining technologies for the production of fuel-grade ethanol and other biochemical co-products from non-food cellulosic biomass feedstocks. Lignol'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) lignins. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology. For more information about Lignol, please visit our website at www.lignol.ca.

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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 our ability to exploit commercial opportunities and broaden our market opportunities for a range of cellulosic derivatives and environmentally sustainable biochemicals and our ability to pursue these opportunities with strategic partners including the potential for entering into a joint development agreement with BAE Systems and/or BAE's involvement in respect of the potential development and financing of commercial scale biorefineries. 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 Lignol's current views with respect to future events and are subject to certain risks, uncertainties and assumptions including, without limitation, our ability to develop our products and our ability to enter into agreements with strategic partners on terms acceptable to us. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Many factors could cause Lignol'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, those risk factors which are discussed elsewhere in documents that Lignol 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