Bio-Extraction Inc.
TSX VENTURE : BXI

Bio-Extraction Inc.

July 07, 2008 07:14 ET

BioExx Announces Long-Term Commercial Sales Agreement for Canola Meal at Premium Prices

TORONTO, ONTARIO--(Marketwire - July 7, 2008) - Bio-Extraction Inc. (TSX VENTURE:BXI) ("BioExx") is pleased to announce that it has executed a Purchase and Sale Agreement with Shafer Commodities Inc. based in Vancouver, B.C. to purchase and distribute all of the meal to be produced at the BioExx canola processing facility under construction in Saskatoon, SK. The Agreement covers a ten year period, comprised of a six year base term with two automatic two year renewals and, at current market prices without premium, would represent a value in excess of $30 million over the life of the Agreement.

The Agreement also stipulates that, provided BioExx Meal meets the specifications based on the samples analysed, the price paid to BioExx will be a premium to standard canola meal prices based on the indicated crude protein levels, high protein solubility, and other unique nutritional characteristics of BioExx Meal. BioExx Meal is derived from the canola meal produced from the BioExx process after the meal has first been used to produce BioExx Protein Concentrates. BioExx expects to produce approximately 12,500 metric tonnes of BioExx Meal annually.

"We are very pleased to have the opportunity to work together with such a strong and respected organization as Shafer Commodities. This is another significant milestone for BioExx, as it is the first time we have had the opportunity to demonstrate through commercial sales contracts, the special nature and higher value of our products," said Chris Carl, CEO of BioExx. "Our conservative economic modelling has always been based on a 15% to 25% discount to market value for our meal. To now solidify a long-term commercial sales contract at a substantial premium to market is a tremendous validation of the superior properties and economic value that can be derived from the BioExx cold temperature extraction technology. We believe that this represents just the beginning of a product demonstration process that will characterize itself through similar contracts for all of our products over the balance of this year," said Carl.

"We have a long and proud history at Shafer Commodities. We pride ourselves on our understanding of our markets and on meeting the needs of our customers, both domestic and international. In our view, the BioExx Meal is unique in its attributes, and will lend itself very well to higher value applications, and as such, should be the subject of strong demand in our markets", said Duart McLean of Shafer. "We look forward to a long and mutually beneficial relationship with the BioExx team."

The BioExx patented technology enables the extraction of active ingredients and oils from canola seeds using much lower temperatures than conventional extraction processes. The lower temperatures help to preserve high-value proteins and other nutritional elements which tend to be temperature sensitive. BioExx meal not only has higher protein content and a superior level of protein solubility than conventional canola meal, it also provides more of the essential amino acids lysine and cystine, as well as higher levels of essential sulphur containing the amino acid mathionine. Together, these attributes indicate that BioExx canola meal may fit well into higher-value products, such as starter diets for livestock, that require both high concentrations of amino acids to build proteins and high levels of protein solubility to aid the digestive process. The unique properties of BioExx canola meal have allowed the company to realize greater value for its product, while enabling Shafer to offer a premium canola meal to its downstream customers around the world.

In addition to specialty meal, BioExx facilities will also produce unique canola oil for use in the conventional and specialty canola oil industry; and BioExx protein concentrates, with widespread applications in aquaculture and specialty animal feeds. Like BioExx Meal, third-party testing has shown the company's oils and high-value protein concentrates to be superior to conventional canola oil and protein concentrate products across a number of key metrics. Among the desirable properties that emerged during the third-party testing are lower processing requirements for BioExx canola oil and high levels of solubility in BioExx protein concentrates. The company intends to secure long-term purchase agreements for BioExx canola oil as well as the BioExx protein concentrates that, in aggregate, will account for at least 90% of the expected output of the facility, before it reaches full operating capacity.

About Shafer Commodities Inc.

Shafer Commodities is a subsidiary of Shafer-Haggart Ltd., which was founded in 1934 in Vancouver, BC. With an early focus on the abundant supply of canned west coast salmon, the company expanded over the next four decades to include multiple agriculture and aquaculture based products that were distributed throughout the world.

In the mid 1970's the company ventured into agricultural commodity trading throughout North America and became a leader in distributing low cost feed formulations to the livestock industry. In 1996 Shafer-Haggart Ltd. joined forces with US based Perdue Farms to form a new joint venture company called Perdue Shafer which quickly established itself across Canada, the US, and Mexico.

In early 2004, Shafer-Haggart Ltd. and the traders from the original western Canadian offices purchased the Western Canadian Division of Perdue Shafer Inc. to become Shafer Commodities concentrating on the procurement and marketing of feed ingredients for dairy feed, beef feed, poultry feed, hog feed, aquaculture feed, pet food, and organic ingredients.

About Bio-Extraction Inc.

Headquartered in Toronto, Canada, BioExx is a leading technology company focused on the extraction of oil and high-value proteins from oilseeds for the global food market. BioExx' patented technology allows for the use of significantly lower temperatures than conventional methods in extracting the active ingredients and oils from oilseeds, resulting in higher yields and higher-quality meal, oils and proteins. BioExx' low energy requirements, environmentally sound process, and high-yield production have the potential to make a valuable contribution in alleviating food crop scarcity.

BioExx is currently constructing its first commercial specialty extraction facility for processing canola to produce protein concentrates for the aquaculture and specialty animal feed markets, as well as canola oil and meal. The facility, located in Saskatoon, Saskatchewan, is expected to begin commercial operation by January 2009. To find out more about Bio-Extraction Inc. (TSX VENTURE:BXI), please visit our website at www.bioexx.com.

Other News

BioExx Retains Equicom Group

BioExx is also pleased to announce that it has retained The Equicom Group Inc ("Equicom") to provide BioExx with strategic investor relations and communications services with an emphasis toward customer and product communications.

Equicom provides strategic communications services to approximately 100 public companies across a diverse range of industries. Under the terms of the agreement, BioExx will pay Equicom a monthly retainer fee of $5,000 for select strategic communications services. The initial contract term is 12 months and commences immediately.

Neither Equicom nor any of its principals have an ownership interest, directly or indirectly, in BioExx or its securities, and BioExx has not granted Equicom or its principals any right to acquire such an interest. Equicom is a wholly-owned subsidiary of TSX Group Inc.

Construction Update

Construction of the building continues on schedule with most site work complete, foundation piers having been poured and building footings about to be poured. A rendering of the completed building as well as a pictorial update can be found by selecting the "Project Update" on our website. Major long lead time orders have now begun to be placed with equipment due for arrival on site in November 2008. A detailed startup schedule is being prepared that will allow for start-up of the facility to commence in January 2009 and be completed in three phases by the end of the second quarter of 2009.

The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, the demand for BioExx' products, the availability of funding, and the anticipated costs of BioExx' plant construction and operation. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from the BioExx' expectations and projections.

The TSX Venture Exchange has not reviewed this press release and neither approved nor disapproved the information contained in this press release.

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