Lignol Energy Corporation announces first commercial supply agreement for HP-L lignin in the thermoplastics sector

VANCOUVER, Jan. 31, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, today announced that its wholly owned subsidiary, Lignol Innovations Ltd. ("LIL") has secured a commercial supply agreement with a market leader in the sustainable thermoplastics industry.

The agreement provides for the supply of LIL's proprietary HP-L^TM lignin to a European company, a global leader in sustainable thermoplastics, as an ingredient in its commercial products.  Previously Lignol had delivered trial samples which were used for formulation development, customer evaluation and product trials. LIL will supply tonnage quantities of HP-L lignin for this supply agreement and anticipates working with this customer on other product applications, building upon this initial business success.

"Our ability to attract commercial business for HP-L lignin with a global leader in the sustainable thermoplastics sector is a major step towards commercial deployment of our technology", said President and Chief Executive Officer, Ross MacLachlan. "This order in the thermoplastics field complements our own development efforts with the use of HP-L lignin in proprietary polymer applications."

LIL is engaged in a wide range of application development projects with the products derived from its biorefinery technology at values that are expected to provide attractive returns for commercial projects. Most companies in the cellulosic biorefining sector realize only the thermal value for lignin in the range of 5 cents per pound since they burn the lignin fraction (about 25% of the biomass) to provide energy for their process. Conversely, LIL's proprietary HP-L lignin can be sold for significantly higher values when incorporated into many core products of the chemical industry, such as coatings, resins, binders and thermoplastics.

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 non-food cellulosic biomass feedstocks. LIL'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. HP-L^TM 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. ARW has recently announced a proposed transaction to raise A$14 million in cash, which if successful will dilute LEC's interest to approximately 10 percent. More information on ARW can be found at their website; www.arfuels.com.au.

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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 LIL's ability to meet the terms and conditions of the thermoplastics industry related supply agreement, to enter into additional commercial supply agreements for HP-L lignin, 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