TSX symbol: BX
TORONTO, June 17, 2016 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), a renewable energy company that owns and operates biodiesel production facilities, today announced it has acquired a 50 million litre nameplate capacity biodiesel facility in Sombra, Ontario from Methes Energies Canada Inc. for US$4.5 million.
The Sombra facility is located on a 21-acre facility near Sarnia, Ontario with excellent logistics, including on site rail. Originally constructed in 2009, the facility has not achieved nameplate capacity due to working capital and market challenges, and is currently not in production. The Company will expend an additional C$5 million over the next 12 months on upgrades to the facility that will improve the facility's efficiency and enable the use of a broader range of feedstock, specifically lower carbon intensity feedstocks, such as animal fats and recycled cooking oils. The purchase price and capital upgrades will be funded through a combination of cash on hand and are in discussions for a C$1.8 million mortgage on the facility.
"The Sombra acquisition represents a 75% increase in our production capacity and fits our strategy to control and distribute more gallons, leveraging our existing Sales and Marketing capabilities. We believe the Ontario market will play an increasingly important role in our distribution network. The implementation of the Greener Diesel program in Ontario, with its increasing blend rates and move toward lower carbon intensity fuels in 2017, made Sombra an attractive asset," said Alan Rickard, Chief Executive Officer of BIOX.
The province of Ontario implemented the Greener Diesel program in April 2014 based on bio-fuel percentage and carbon intensity. The program escalates the bio-fuel percentage for all diesel sold in the province from three percent in calendar 2016 to four percent in calendar 2017 onward. The regulation requires the use of an estimated 240 million litres of bio-based diesel on an average greenhouse gas adjusted volume basis in 2017.
"We are already seeing with the increase in the Ontario mandate for 2016 that distribution of bio-diesel from our Hamilton facility is shifting quickly from dependence on the US market to fulfilling the demand in Ontario," continued Mr. Rickard. "We expect this shift in distribution away from the U.S market to continue as the Ontario Greener Diesel mandate increases for 2017."
BIOX currently supplies biodiesel fuel to Shell Canada Limited through an inter-terminal pipeline that feeds directly to the Shell distribution terminal in Hamilton located adjacent to BIOX's Hamilton facility.
The GHG reduction aspects of the Ontario Greener Diesel mandate are an important differentiator for BIOX. Bio-based diesel produced by BIOX has the lowest carbon intensity in the province, reducing GHG emissions by more than 100% when compared to petroleum diesel. The Sombra facility, once upgraded to handle lower carbon intensity feedstocks, will produce at a comparable GHG emission efficiency to the bio-diesel produced by BIOX at its Hamilton facility.
"With these low carbon intensity products, BIOX expects to be the best performing source of bio-diesel available to obligated parties in Ontario to meet the requirements under the Greener Diesel program," said Mr. Rickard.
About BIOX Corporation
BIOX is a renewable energy company that owns and operates two biodiesel facilities in Ontario with a combined nameplate capacity of 117 million litre per year. BIOX has an innovative, proprietary and patented production process that is capable of producing the highest quality, renewable, clean burning and biodegradable biodiesel fuel utilizing a variety of feedstocks - from pure seed oils to animal fats to recovered vegetable oils with no change to the production process. BIOX's high quality biodiesel fuel meets North American (ASTM D-6751) quality standards.
Certain statements in this press release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of BIOX, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. Such statements relate to, among other things, BIOX's long-term expectations for the biodiesel market in light of current market conditions, and the ability of BIOX to benefit from recent regulatory initiatives in the U.S. and Ontario. These statements reflect BIOX's current views regarding future events and operating performance, are based on information currently available to BIOX, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Those assumptions and risks include, but are not limited to, the fact that BIOX's results of operations and business outlook are highly dependent on a mix of legislation and producer payment programs and tax credits and upon commodity prices, which are subject to significant volatility and uncertainty. Many factors could cause the actual results, performance or achievements of BIOX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including factors described in this press release and those discussed in BIOX's publicly available disclosure documents, as filed by BIOX on SEDAR (www.sedar.com) except as updated herein. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, BIOX does not intend and does not assume any obligation to update these forward-looking statements. To the extent any forward-looking statements herein constitute financial outlook, they were approved by management as of the date hereof and have been included to provide an understanding with respect to BIOX's financial performance and are subject to the same risks and assumptions referred to herein. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur and readers are cautioned that any financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein.
SOURCE BIOX Corporation
For further information: Alan Rickard, CEO, BIOX Corporation, 905-521-8205 ext. 253, firstname.lastname@example.org