VANCOUVER, Sept. 5, 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 will
provide funding of A$4,070,000 to acquire a 40% equity stake in Neutral
Fuels Parent Company (“Neutral Fuels”) and a 51% interest in Neutral
Fuels’ Australia and New Zealand biodiesel operation, Neutral Fuels
(Melbourne) Pty Ltd. (“NFANZ”). This funding is for the deployment of
the next phase of a planned rollout of closed loop biorefineries
throughout the Asia Pacific/Middle East/Africa region (“APMEA”) in an
agreement with the McDonald’s Restaurants used cooking oil biodiesel
program. Under the agreement with McDonald’s, Neutral Fuels currently
operates two closed loop biorefineries located in Dubai, United Arab
Emirates and Melbourne, Australia.

Neutral Fuels’ closed loop business model, which was developed
specifically for McDonald’s, takes used cooking oil from its local
restaurants and in return provides B100 biodiesel to fuel its
suppliers’ delivery fleets. The company has been featured in print and
television media including;

CNN: : http://tinyurl.com/Neutral-Fuels-CNN

BBC : http://tinyurl.com/Neutral-Fuels-BBC

“Neutral Fuels has developed world-class biorefineries employing
state-of-the-art processing technology which has established them as an
emerging leader in the niche of small scale biofuel operators”, said
Ross MacLachlan, CEO and Chairman of LEC. “We are excited to be
involved in this commercial venture. Their novel business model and
collaboration with McDonald’s is an attractive and sustainable model
both in terms of the environment and in commercial terms.”

“Partnering with LEC is the logical next step for Neutral Fuels. Our
current technology is able to efficiently convert used cooking oil to
biodiesel today, and LEC’s next generation technology provides us with
some exciting options for the future.” said Karl W. Feilder, CEO and
Chairman of The Neutral Group.

The terms of the agreement between LEC and Neutral Fuels provide for two
tranches of funding for a total of A$4,070,000. Each tranche will be
comprised of a shareholder loan which will rank pari passu with the
existing shareholder loans currently in place, which are for a five
year term, interest free and unsecured. The first tranche will be
funded on or before 15 October, 2013 with a A$2,000,000 loan. On the
funding of the first tranche, LEC will be issued a 20% equity stake in
Neutral Fuels and a 51% stake in NFANZ. On the funding of the second
tranche of A$2,070,000 on 15 January 2014, LEC will be issued an
additional 20% equity stake in Neutral Fuels; resulting in a
A$4,070,000 loan owing to LEC and an equity interest of 40% ownership
of Neutral Fuels as well as a 51% equity stake in NFANZ. As part of
this agreement LEC has advanced an interest free A$500,000 loan secured
against the assets of NFANZ which will be retired and then applied to
the first tranche of A$2,000,000 on or before 15 October, 2013.
Neutral Fuels current management team will continue to manage all of
the operations with support as required from LEC.

The closing of this transaction is conditional upon regulatory approval.
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.

About Neutral Fuels

Neutral Fuels owns and manages biorefineries that convert used cooking
oil into biodiesel, the modern, sustainable replacement for fossil
diesel. On a lifecycle basis, biodiesel accounts for over 80% reduction
in carbon dioxide and equivalents, the major contributors to climate
change. Neutral Fuels pioneered the closed loop business model which
was developed specifically for McDonald’s, where used cooking oil is
collected from McDonald’s restaurants by the same vehicles that deliver
the fresh oil. The used oil is then backhauled to the co-located
Neutral Fuels biorefinery where it is converted, litre for litre, into
biodiesel, which is then pumped back into the delivery fleet in an
ongoing recycling process.

In Dubai, used cooking oil is collected from more than 100 McDonald’s
UAE restaurants each month and their fleet of supply trucks in the UAE
has to date driven more than 2 million kilometres on Neutral Fuels B100
biodiesel. In Victoria, Australia the Neutral Fuels biorefinery
currently services the used cooking oil from more than 140 McDonald’s
restaurants.

Neutral Fuels, headquartered in Dubai, UAE, is a member of The Neutral
Group, the international cleantech organisation founded in 2006 to
build sustainability strategies for the logistics, energy and
hospitality industries and to execute significant reductions in energy
spend and CO₂ emissions. CEO and founder, Karl W Feilder, won the Asian
Sustainability Leadership Award in September 2012 and was awarded
Innovator of the Year 2011 by LOG Magazine for his work in carbon
savings in the Middle East. For more information please visit www.biodiesel.ae

About Lignol Energy Corporation (“LEC”)

Lignol Energy Corporation is an emerging producer of biofuels,
biochemicals and renewable materials from waste biomass. LEC is
actively involved in the management of its wholly owned subsidiary
Lignol Innovations Ltd. and in the management of Territory Biofuels
Limited, in which it has a controlling interest, but has no influence
over the activities of Australian Renewable Fuels Limited. The Company
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.

Lignol Innovations Ltd. (“LIL”)

The Company’s wholly owned subsidiary, 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.

Territory Biofuels Limited (“TBF”)

The Company presently owns a controlling 56% equity stake in TBF (and is
in the process of increasing that stake to up to 66% pursuant to the
August 19, 2013 news release), a company which owns a large scale
biorefining facility located in Darwin, Northern Territory which
includes a Lurgi-designed biodiesel plant and the largest 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
rated capacity of 140 million litres per year. The plant was originally
built to run on palm oil and food-grade vegetable oil, however the
plant was shut down in 2009 due to challenging technical and economic
conditions. To take advantage of current market opportunities, TBF is
in the process of raising funds to restart the existing facility
utilizing a specific grade of palm oil; environmentally certified,
Refined Bleached & Deodorized (RBD) palm oil. In 2014, TBF plans to
integrate new feedstock pre-treatment technologies and catalysts to
process a broader range of feedstocks such as lower quality tallow,
used cooking oil and palm sludge oil; a waste product from palm oil
mill extraction. LEC has appointed a majority of the Board of TBF which
includes two executives and directors of LEC, one of whom is Chairman
of the Board. Since obtaining a controlling interest on April 15, 2013,
LEC has been actively engaged in the operations of TBF and in
supporting TBF to obtain access to additional finance to restart the
Darwin plant and to enable the company to commence commercial
operations.

Australian Renewable Fuels (“ARW”)

The Company currently owns a 21% investment in ARW, a company listed on
the Australian Stock Exchange (ASX: ARW), which 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 over A$100 million. ARW has made
significant changes in recent years to become a more cost effective
producer of high quality biodiesel to address growing biofuel demand in
the Australian market. In March 2013, ARW completed an equity financing
of A$12.3 million, which was partially funded by LEC, for the purpose
of repaying existing debt and to provide additional working capital.
Further information about ARW can be found at www.arfuels.com.au

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 complete
the provision of funding of A$4,070,000 to Neutral Fuels within the
agreed timeframes, LEC’s ability to invest in, or otherwise obtain,
equity interests in energy related projects which have potential
synergies with the Company and which have the potential to generate
near term cash flow, LEC’s ability to increase its stake in TBF in the
future, the ability of The Neutral Fuels Group to complete the
transfer of all of its liquid fuels business to Neutral Fuels before
the completion of the funding of the transaction, the ability of
Neutral Fuels to complete the rollout of closed loop biorefineries in
accordance with its agreed timetable, TBF’s ability to finance and
restart its 140 million litre per year biodiesel plant and glycerine
refinery and to commence commercial operations, and TBF’s ability to
integrate new pretreatment technologies and catalysts to facilitate the
processing of a broad range of lower cost feedstocks.

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, LEC’s ability to raise
additional capital to fund operations and to support the capital
requirements of its affiliates, the requirements of the potential
effect of changes in government policy relating to the environment, and
incentives for renewable fuels, the potential impact of changes in the
prices of feedstock and the market price of liquid fuels including
biodiesel, ethanol and renewable chemicals, the ability of LEC’s
subsidiary, associate and investee company to generate future profits
and to pay dividends, and to meet increasing regulatory requirements,
LEC’s ability to divest the ARW ordinary shares due to modest trading
volumes,

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, financial market conditions which will impact LEC’s ability to
finance its operations and to meet future capital and investment
requirements, the demand for the market price of liquid fuels including
gasoline, biodiesel, ethanol, the market price and demand for renewable
chemicals, risks relating to the protection of technology from
infringement and those risk factors which are discussed elsewhere in
documents that LEC files from time to time with securities and other
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