Lignol Receives Australian Foreign Investment Review Board Approval to increase its investment in Australian Renewable Fuels Ltd

VANCOUVER, Jan. 23, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading technology development company in the advanced biofuels and renewable chemicals sector, today announced that it is currently evaluating various opportunities to increase the value of its investment in Australian Renewable Fuels Ltd. (ASX: ARW) ("ARW") and identify areas for collaboration between the two organizations. As a part of its evaluation process, which is based on publicly available information, LEC has applied for and been granted approval by the Australian Foreign Investment Review Board ("FIRB") to increase its ownership in ARW beyond the threshold for foreign ownership of 15 percent.

FIRB is responsible for examining proposals by foreign persons to invest in Australia and makes recommendations to the Treasurer on those subject to the Foreign Acquisitions and Takeovers Act 1975 and Australia's foreign investment policy. As a general rule, ownership of certain Australian publicly listed companies by a foreign corporation is restricted to less than 15 percent in the absence of FIRB approval.

Notwithstanding that LEC has received FIRB approval, the Company has not yet decided to take any action in relation to ARW (including increasing its stake).

"Our investment in ARW is an important component of our strategy of investing in complementary businesses in the renewable fuels industry", said Ross MacLachlan, President and CEO. "Being able to add value to such investments is an important component of that strategy and so our ongoing evaluation may lead either to an increase in the size of the investment, further complementary investments or business transactions or, under certain conditions, liquidating our investment. Receipt of FIRB approval gets us to another key stage of our evaluation and discussion process", he added.

On November 9, 2012, the Company announced that it had completed the acquisition of an additional 88,000,000 ordinary shares of ARW, increasing its ownership in ARW from 11.2% to 14.9% of the issued and outstanding ordinary shares of ARW. ARW has subsequently announced that it plans to enter into a business transaction to raise AUD $14 million in cash, which if successful will result in the dilution of LEC's equity stake in ARW to approximately 10%.

About Lignol Energy Corporation ("LEC")

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("LIL") and currently owns a 14.9% stake in Australian Renewable Fuels Ltd (ASX: ARW). LEC also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology.

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 nonfood cellulosic biomass feedstocks. LIL's modified solvent based pretreatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including high purity HP-LTM lignins.  HP-LTM 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 byproducts 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.

ARW is the largest biodiesel producer in Australia owning three plants with a total nameplate capacity of 150 million litres per annum.  ARW's three plants were built at an aggregate cost of approximately A$150 million. ARW has made significant changes in recent years to become a cost effective producer of high quality biodiesel to address growing biofuel demand in the Australian market. More information on ARW can be found at their website; www.arfuels.com.au

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 FIRB approval and the Company's plans with respect to its investment in ARW, the proposed transaction recently announced by ARW and the potential resulting change to LEC's equity interest in ARW, the Company'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 LIL'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, our ability to obtain requisite regulatory approvals and our ability to enter into agreements with strategic partners on terms acceptable to us, the inability to influence the strategy, operations and financial performance of ARW, the reliance on publicly 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. 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 Lignol'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 Lignol'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



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