Lignol Energy signs formal "MOU" for development of joint venture
Published on February 13, 2014 at 8:03 AM
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.
Lignol Energy Corporation