Feb 14 2014
Lignol Energy Corporation ("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.
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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.
Source: http://www.lignol.ca