Lignol Completes Private Placement for Gross Proceeds of $14,375,000

    VANCOUVER, Aug. 2 /CNW/ - Lignol Energy Corporation (TSX-V: LEC) (the
"Company" or "Lignol") today announced that it has closed a brokered private
placement of 11,500,000 common shares of the Company at a price of $1.25 per
share for aggregate gross proceeds to the Company of $14,375,000.
    Haywood Securities Inc. acted as agent for the offering and received a
commission equal to six percent of the gross proceeds of the offering (a
portion of which, being 38,960 shares, Haywood elected to receive in common
shares of the Company at a deemed price of $1.25 per share). Haywood was also
paid a work fee of 180,000 common shares of the Company and agent's options to
acquire an aggregate of 805,000 common shares of the Company at an exercise
price of $1.25 per share for a period of 12 months following the closing of
the offering.
    The net proceeds of the offering will be used by Lignol for developing an
industrial scale commercial demonstration facility and general corporate
    Pursuant to applicable Canadian securities laws, the securities offered
are subject to a four month hold period. The securities offered hereby have
not and will not be registered under the United States Securities Act of 1933
(the "1933 Act") and may not be offered or sold in the United States or to
U.S. persons (as defined in Regulation S under the 1933 Act) unless the
securities have been registered under the 1933 Act, or are otherwise exempt
from such registration.

    About Lignol

    Lignol is a Canadian company undertaking the development of biorefineries
for the production of fuel-grade ethanol and other biochemical co-products
from cellulosic biomass feedstocks. Lignol's modified solvent based
pre-treatment technology, originally developed by a former affiliate of
General Electric (GE), and then further developed and commercialized for
wood-pulp applications by a subsidiary of Repap Enterprises Inc., facilitates
the rapid, high-yield conversion of cellulose to ethanol and the production of
value-added biochemical co-products, including High Purity Lignin. Lignol is
executing on its development plan with several major Canadian companies in a
strategic partnership to further develop and integrate the core technologies
on a commercial scale. Lignol also intends to invest in, or otherwise obtain,
equity interests in energy related projects which have synergies with its
biorefining technology. For more information about Lignol, please visit our
website at

    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

    Caution concerning forward-looking statements:

    Certain statements contained in this document may constitute
"forward-looking statements". When used in this document, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect", "investigate", "looking at" as they relate to Lignol or
its management, are intended to identify forward-looking statements or
information. Such statements or information reflect Lignol's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Many factors could
cause Lignol'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, those risk factors which are discussed elsewhere
in documents that Lignol 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. 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

    %SEDAR: 00004360E

For further information:

For further information: Lignol Energy Corporation, Ross MacLachlan,
President and CEO, Tel: (604) 222-9800 ext. 107, Email:; The
Equicom Group, Bruce Wigle, Investor Relations, Tel: (416) 815-0700 ext. 228,

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