Lignol Suspends Colorado Project Due to Market Uncertainty

Feb 09, 2009, 07:30 ET from Lignol Energy Corporation

VANCOUVER, Feb. 9 /PRNewswire-FirstCall/ - Lignol Energy Corporation (TSX-V: LEC) ("Lignol" or "the Company"), a leading technology company in the cellulosic ethanol and biorefining sector, today announced that Suncor Energy Products Inc. and Suncor Energy (U.S.A.) Inc. (collectively, "Suncor"), both wholly owned subsidiaries of Suncor Energy Inc. (TSX, NYSE: SU), and Lignol have determined it prudent not to enter into a joint venture to pursue the development of a cellulosic ethanol commercial demonstration plant in Grand Junction, Colorado given the instability of energy prices, the uncertainty in the capital markets and the general market malaise.

Lignol has worked closely with Suncor for the past three years, and announced on October 23, 2008 an agreement to negotiate entering into a joint venture, which would have included the construction of a proposed US$80 million cellulosic ethanol plant in Grand Junction, Colorado. The plant in Colorado was previously announced in 2008 in connection with a grant of US$30 million from the U.S. Department of Energy ("DOE"). Current economic conditions have led the parties to halt this process and end negotiations.

"Suncor will continue to monitor the progress of Lignol's technology and while it is disappointing for Lignol to be suspending the Grand Junction project, this is a practical decision based on the current realities that many companies are facing today. We are fortunate that this decision was reached at an early stage in the development of the project and as such Lignol and Suncor have not incurred significant costs," said Ross MacLachlan, President and Chief Executive Officer of Lignol. "We are currently exploring various alternatives for the US$30 million grant from the DOE including the re-examination of project time-lines, site locations and the participation of other industrial partners. We will report on the outcomes of these discussions as they unfold."

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 HP-L(TM) Lignin. Lignol is executing on its development plan through strategic partnerships to further develop and integrate the 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

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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. 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 finance the development of the commercial demonstration plant, our ability to develop our products, our ability to obtain requisite regulatory approvals 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, the complexity of the development of the commercial demonstration plant, market conditions which will effect our ability to finance our operations, risks relating to the protection of Lignol's core technology from infringement and 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