VANCOUVER, May 27, 2013 /CNW/ – Lignol Energy Corporation (TSXV: LEC)
(“LEC” or “the Company”), a leading technology company in the advanced
biofuels and renewable chemicals sectors, today announced that it has
agreed to acquire an additional 2.67 million shares of Territory
Biofuels Limited (“TBF”) for A$1 million under a TBF private placement
offering transaction, which also provides for the further issuance of
approximately 0.25 million shares of TBF to other shareholders of TBF.
Upon completion, LEC will become the majority shareholder with
approximately 56% of the issued shares of TBF and 60% on a fully
diluted basis.

“We are excited to be working with the TBF team and adding our support
as the majority shareholder in planning the re-start of the Darwin
refinery”, said Ross MacLachlan, CEO and Chairman of LEC. “Our goal is
to have the refinery come back on line in Q4 2013, and incorporate
upgrades to process lower cost feedstocks that will enhance
profitability in 2014. This is an important milestone for our company
and represents the potential for us to accelerate our transition to
commercial operations with a majority equity stake in a world scale
biofuels project.”

At full capacity the Darwin refinery will be capable of producing up to
150 million litres of biodiesel per year. The facility also includes
the only glycerine refinery in Australia. Crude glycerine is a
bi-product waste stream of most biodiesel plants which can be upgraded
to a refined form of glycerine with attractive margins and financial
returns.

As a result of LEC’s achievement in becoming the majority shareholder,
Difference Capital Funding Inc. (“DCF”) has agreed to assist LEC in the
funding this investment by increasing the existing line of credit
established earlier this year by $1 million to $6 million under similar
terms to the existing facility.

About Territory Biofuels Limited (“TBF”)

TBF owns a large scale biorefining facility located in Darwin, Northern
Territory, Australia, which includes a Lurgi designed biodiesel plant
and the only 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 maximum rated capacity of 150 million
litres per year. Originally built to run on food-grade vegetable oil,
the plant was shut down in 2009 due to feedstock constraints. TBF is
in the process of raising funds to restart the existing facility
utilizing feedstocks such as tallow and used cooking oil and then plans
to integrate new feedstock pre-treatment technologies and catalysts to
process a broader range of feedstocks such as lower quality tallow and
palm sludge oil; a waste product from palm oil mill extraction. TBF has
established trading relationships with its shipping, off-take and
feedstock partners which it expects will allow it to profitably start
up and operate the facility. Two LEC executive officers and directors,
Mr. Ross MacLachlan and Mr. Stephen Morris have been appointed
directors of TBF with Mr. MacLachlan also having assumed the role of
Chairman of TBF.

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol
Innovations Ltd. (“LIL”). LEC is the majority shareholder of TBF and
also owns 21.4% of the largest producer of biodiesel in Australia,
Australian Renewable Fuels Ltd. (ASX: ARW) (“ARW”). LEC also intends
to invest in, or otherwise obtain, equity interests in energy related
projects which have synergies with the Company and have the potential
to generate near term cash flow.

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 lignin. 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 by-products 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.

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 fund the
investment in additional shares of TBF, TBF’s ability to repay the loan
of A$500,000 the Company had previously provided to TBF, TBF’s ability
to finance, restart and profitably operate its 150 million litre per
year biodiesel plant and glycerine refinery, TBF’s ability to
successfully operate the Darwin facility and to generate revenues and
cash flow, TBF’s ability to obtain US EPA approval, TBF’s ability to
work with strong commercial partnerships and to become a major regional
player in the biodiesel market in the Pacific Rim, TBF’s ability to
integrate new pretreatment technologies and catalysts to facilitate the
processing of a broad range of lower cost feedstocks, the successful
outcome of projects undertaken under the Technology Collaboration
Agreement between LEC and TBF, LEC’s ability to continue as a going
concern and to raise additional financing to fund the operations of LEC
and LIL and to support the financing requirements of TBF, DCF’s ability
to provide an additional $1 million in funding under the increased line
of credit, LEC’s ability to invest in, or otherwise obtain, equity
interests in energy related projects which have technical and
commercial synergies with the Company and which have the potential to
generate future dividends and near term cash flow, 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, LIL’s ability to obtain requisite
regulatory approvals and its ability to enter into agreements with
strategic partners on terms acceptable to us, LEC’s ability to
influence the strategy, operations and financial performance of TBF or
of ARW respectively the reliance on publically 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 and the inability to divest the TBF ordinary shares,
the cost of any future ARW capital investment, the fluctuation of
biodiesel and feedstock prices on ARW and TBF, the effect on ARW and
TBF of changes in government policy relating to the environment, and
incentives for renewable fuels, the ability of ARW and TBF to generate
cash flow and pay dividends, and the ability of ARW and TBF to market
their products overseas and to meet relevant 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, the technological challenges that remain to be surpassed in
obtaining the necessary operating data from LIL’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 LIL’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