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LEC announces feedstock supply and biodiesel marketing joint venture with oil trader Milio International for TBF's Darwin plant

VANCOUVER, Feb. 13, 2014 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or the "Company") today announced the signing of a formal Memorandum of Understanding ("MOU") between Milio International ("Milio") and LEC's subsidiary, Territory Biofuels Limited ("TBF"), for the development of a joint venture ("JV"). Under the terms of the planned JV, it is anticipated that Milio will fund up to 120,000 tons of feedstock per year as well as facilitate the marketing and sales of the production from TBF's 140 million litre per year biodiesel plant located in Darwin, Australia.  At full production capacity this funding is expected to provide working capital funding of approximately US$25 million.

"This joint venture will provide a creative and important funding mechanism for the working capital necessary to make the Darwin project robust and sustainable in the years to come", said Ross MacLachlan, Chairman and CEO of Lignol Energy Corporation. "Milio has agreed to provide us with support at a critical juncture as we bring the Darwin plant back online. Having a partner as creative and motivated as Milio is already proving to be a tremendous asset, and we look forward to working together in seeking ways to optimize the profitability of our world-scale plant."

At full production Milio will provide funding for up to 120,000 tons of feedstock per year and will receive 25% of the net profits earned on the sale of related production. In addition, Milio has agreed to assist in the restart of the Darwin plant with the funding of 1,500 tons of feedstock for an initial startup campaign and up to 10,000 tons for an initial commercial campaign. As additional consideration for this support, Milio will receive funds sufficient to recover Milio's costs and also the provision of $600,000 in shares of LEC or cash by mutual agreement.

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 Milio International ("Milio")

Milio International is a Commodity Trading and Investment Company, specialising in upstream, midstream and downstream fuel operations and infrastructure. Milio's upstream capability encompasses the technical assessment, licensing, exploration, development, management and commercialisation of assets across the E&P sector, including those in Milio's own portfolio. The company maintains strong, established relationships with all the major oil producers, suppliers and refiners. The company has a proven track record of directly purchasing crude at the wellhead, valuing and marketing new crudes into the market and structuring volume crude-product swaps. Milio sources and purchases commercial and defence grade fuels from across the world and on variety of Incoterms. Milio also offers complete commercial support services through risk management, structured finance, insurance and investment expertise. Further information is available at www.milio.com.

About Territory Biofuels Limited ("TBF")

TBF 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. TBF is in the process of raising funds to restart the existing facility in the latter part of 2014 utilizing environmentally certified, Refined Bleached & Deodorized (RBD) palm oil. In 2015, 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.

About Lignol Energy Corporation ("LEC")

Lignol Energy Corporation is an emerging producer of biofuels, biochemicals and renewable materials from waste. LEC owns 100% of Lignol Innovations Ltd. ("LIL"), 100% of Territory Biofuels Limited ("TBF"), 21% of Australian Renewable Fuels Limited ("ARW"), 51% of Neutral Fuels (Melbourne) Pty Ltd ("Neutral Fuels Melbourne") and 20% of Neutral Fuels Parent Company Ltd ("Neutral Fuels"). 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. Further information is available on the Company'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 and TBF's ability to finance, restart and profitably operate its 140 million litre per year biodiesel plant and glycerine refinery. 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, TBF and Milio's ability to conclude and to enter into definitive agreements with respect to the formation and operation of a joint venture, TBF and Milio's ability to secure the supply of suitable feedstock to be funded by Milio, TBF's ability to process such feedstock and for Milio to facilitate the marketing and sales of the production from the Darwin plant, LEC's ability to raise additional capital to fund operations and to support the capital requirements of its affiliates, TBF may in the future issue shares in connection with the raising of capital or the repayment of debt or other obligations, which could result in LEC owning less than 100% of TBF, TBF's ability to successfully operate the Darwin facility commencing in the latter part of 2014 and to generate revenues and cash flow, TBF's ability to integrate new pretreatment technologies and catalysts to facilitate the processing of a broad range of lower cost feedstocks, LEC's ability to continue as a going concern and to raise additional finance to fund the operations of LEC and its affiliates and LEC's planned investment in Neutral Fuels, Neutral Fuels and Neutral Fuels Melbourne's ability to maintain a profitable working relationship with McDonald's restaurants, 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 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 and its affiliates to generate future profits and to pay dividends, and to meet increasing regulatory requirements, LIL's ability to finance and complete the development of a commercial project, LIL's ability to develop products and to obtain off-take agreements, LEC's reliance on publically available information of ARW in its evaluation of its acquisition of shares in ARW, the potential inability to divest the ARW ordinary shares due to modest trading volumes, the potential inability to divest the ordinary shares LEC owns of TBF, the ability of ARW and Neutral Fuels to market their products and to meet relevant regulatory requirements, the estimated cost of any future TBF capital investment, the fluctuation of biodiesel and feedstock prices, and the effect of changes in government policy relating to the environment.

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, LEC 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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