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Lignol Energy Corporation Announces Completion of a $5 Million Credit Facility

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VANCOUVER, Feb. 27, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or the "Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, is pleased to announce that further to its previous announcement, the Company has entered into a secured credit facility for up to $5 million with Difference Capital Funding Inc. ("DCF"), a major shareholder of LEC.  Amounts drawn under this facility will bear interest at 8% per annum and the facility will mature on the earlier of February 27, 2014 or upon the completion of an equity financing raising gross proceeds of at least $5 million. These funds will initially be secured by a general security agreement providing for a security interest in all of LEC's present and future personal property until such time as DCF has a perfected security interest in all of the shares of Australian Renewable Fuels Limited ("ARW") owned by LEC pursuant to a share pledge agreement. Once DCF's security interest in the ARW shares has been perfected, the general security agreement will be terminated.

"This credit facility from DCF provides the flexibility in our financial planning to take advantage of strategic opportunities, such as participating in the recently announced private placement and rights offering of Australian Renewable Fuels, which is expected to result in LEC becoming one of ARW's largest shareholders", said Ross MacLachlan, President & CEO. "The support from DCF as one of our major shareholders is very encouraging and reinforces LEC's commitment to its strategy of taking significant equity stakes in companies such as ARW which have the potential of generating near term cash flow."

About Lignol Energy Corporation ("LEC")

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("LIL") and is one of the largest shareholders of 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-LTM lignin. 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 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.

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 proposed transactions to raise a combined A$12.3 million in cash through a placement and an entitlement offer. 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  the entering into the share pledge and the subsequent termination of the general security agreement, our ability to complete the acquisition of additional shares of ARW, the ability of ARW to generate near term cash flow and to pay dividends to shareholders, the transaction entered into by ARW and the resulting change to the LEC equity interest in ARW and 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 Australian Renewable Fuels Limited ("ARW"), 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, 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 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

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