Bio-Extraction Inc.

Bio-Extraction Inc.

January 07, 2008 08:07 ET

BioExx Update on 2007 Achievements and 2008 Plan

TORONTO, ONTARIO--(Marketwire - Jan. 7, 2008) - For the benefit of its shareholders and other interested parties, Bio-Extraction Inc. (TSX VENTURE:BXI) ("BioExx") is pleased to issue an update of its milestone achievements during 2007 and its plan for 2008. This update is not intended to be comprehensive, but rather simply to touch upon selected items which management believes are most reflective of progress in 2007, its strong late year momentum, and its path going forward, so that all stakeholders might have a better understanding of the company's activities to date and plans for the future.

The Year in Review

Public Listing: In May 2007, BioExx completed its CPC Qualifying Transaction through the acquisition of Bio-Extraction Ltd. This transaction provided much needed working capital to BioExx; a public listing of its common shares, which have been trading on the TSX Venture Exchange under the symbol BXI since May 22, 2007; and a platform from which to raise additional capital for continued growth through the construction and operation of multiple production facilities on a global basis.

Technology Development: BioExx continued and accelerated its on-going development activities at its Intermediate Sized Plant ("ISP"), with a view to expediting its entry into major oilseed extraction markets. Across all key metrics of oil extraction and soluble protein retention, as measured by time, cost, and quality, BioExx technology performed very well. This again confirmed management's expectations of the presence of significant competitive advantage and material economic benefits in the oilseeds market. It also signalled full commercial readiness. As part of this progress, BioExx filed for its fourth patent on September 11, based on its unique continuous counter-flow process design, to augment its portfolio of patents on its key extraction solvents.

Commercial Scale Plant Construction: On the heels of completion of key development and testing milestones, BioExx announced on September 28 its plans to construct its first full commercial scale extraction facility, with a rated capacity of 40,000 metric tonnes of canola oilseeds per year. At full capacity, the facility should be able to produce more than 17.5 million litres of canola oil (for further refinement into edible oil or biodiesel) and 13 million kg of canola meal annually. BioExx believes this facility will be unique because, in addition to the oil and meal, it will also be capable of producing up to 11 million kg per year of valuable protein concentrate, at a standard purity level of 65%. Protein concentrate typically sells for as much as five times the price of meal on a weight basis.

Additional Plant Development Milestones: On October 4, BioExx announced the engagement of its key engineering contract partner for design, procurement and construction on the facility, Mentra Life Sciences. As a skilled and respected engineering firm familiar with the BioExx technology from its work on the BioExx ISP, Mentra is an ideal partner. On October 17, BioExx announced that it had concluded an Offer to Purchase certain industrial lands on the north end of Saskatoon, as the site for its plant. In addition, BioExx announced on November 15 that it signed a Memorandum of Understanding with Viterra, Canada's largest grain and oilseed handler, to secure the supply of feedstock required for the plant, on commercially competitive terms, for five years with two renewal options of two years each.

Market Readiness of Products: As commodity products, the oil and meal to be produced at the plant are expected to be readily saleable through established commercial channels consistent with conventional oilseed processing facilities.

What makes BioExx unique among typical commercial processors of canola is that its technology lends itself very well to the ancillary low-cost production of protein concentrates. These proteins will be targeted initially and primarily at the aquaculture market. According to the Food and Agriculture Organization of the United Nations, the global aquaculture market is estimated to be in excess of $60 billion annually, accounting for almost one-third of the world's fish supply, and it is anticipated that by 2010 aquaculture production could exceed beef production. With feed comprising an estimated 40% of aquaculture production costs, the quest for high quality and reasonably priced protein feeds has become a significant focus of the industry, which currently consumes an estimated 7-8 million tonnes of protein annually. The need for new high protein feed sources as an alternative to the traditional fish meals is driven by depleted wild fish stocks and the cycling of toxic heavy metals through the feed chain. With a protein efficiency ratio (amount of weight gain per unit of protein consumed) twice that of soy, and nearly on par with beef and milk proteins, canola proteins can be an ideal fit for this market need. The primary growth constraint in this respect to date has been a lack of economical commercial quality supply of canola concentrates, an issue which BioExx believes it can address from its planned Saskatoon production facility.

Organizational Development: BioExx announced on October 10 the formation of its Science Advisory Board, comprising an extremely well-experienced, knowledgeable, and respected team of four members from various disciplines. This team brings tremendous market and technical knowledge in their respective fields including engineering and design for low temperature extraction technology, chemical innovations and diagnostic chemistry, large scale process and product development, health and nutrition, and aquaculture nutrition and feed development. The Board has already proved itself invaluable in terms of both technology and commercial plant development milestones that have been achieved.

Looking Ahead to 2008

With the momentum established in the last half of 2007, the BioExx technology, commercial presence, and management team are now firmly established and well positioned to address key 2008 business plan milestones.

Corporate Finance: Foremost among these milestones is completion of the previously announced private placement of $10 million to provide funds required for plant construction and start-up. Progress has been steady, and efforts are targeted towards completing this financing before the end of January, 2008.

Plant Construction: Facilitated by the financing, BioExx will continue to move forward with detailed engineering design and construction plans, to meet timing targets of groundbreaking at spring thaw and start-up of the plant in early Q4 2008. This state-of-the-art extraction facility, which is being designed on a low or zero-emissions basis, should begin producing revenue immediately upon start-up, with growth through ramp-up and into full operation in early 2009.

Personnel: As BioExx advances on the various fronts of its 2008 plan, it will also continue to augment the depth and breadth of its team by adding key individuals in key areas, most particularly those related to construction and operation of the planned Saskatoon facility.

Commercial Partnerships: During the construction period, BioExx intends to continue working on additional commercial relationships with key potential customers to secure forward sales of the various commodity products to be produced at the plant. In addition, BioExx will continue to actively advance partnering with companies requiring its proteins for use in aquaculture and specialty animal feeds, in order to ensure demand and supply are apportioned across multiple customers.

Second Facility: The Company currently has received third-party interest expressions for a soy facility in the United States, a rapeseed facility in Europe, and a second canola facility in Canada. All opportunities will be rigorously evaluated and filtered across a number of key metrics before final selection is made. During the second half of 2008, BioExx will actively commence efforts to site and negotiate key commercial contracts for its second, larger processing facility.

Research & Development: BioExx has already contracted with third parties to continue active and on-going research and development activities throughout 2008. Key initiatives will focus on completion of protein concentrate development for aquaculture, followed immediately (with some activities in parallel) by development of even higher value protein products suitable for human food markets. The team is targeting to complete initial product development of these human-grade products late in 2008, and to enter the regulatory approval process in 2009. It is expected that these higher value protein products, which typically sell for three to eight times the price of fish and animal feed concentrates, can represent a significant source of economic upside in the already very attractive BioExx model.


"During this past year we have successfully established strong foundations across the areas of technology, market, infrastructure, and personnel. From this solid base, 2008 will be our break-out year. We intend to move prudently, but aggressively, to take advantage of the tremendous opportunity before us", said Mr. Chris Carl, Chief Executive Officer of BioExx. "Our timing and our positioning in the agri-business industry are exceptional, leaving us well poised to move forward on our plans to construct multiple oilseed processing facilities, at increasing scales and on a global basis, with the goal of driving to become a world leader in the supply of protein derivatives from oilseed crops. We believe this is also the path to creation of tremendous value for our shareholders"

About Bio-Extraction Inc.

The global demand for ever higher food value from agriculture is growing at an unprecedented pace, driven by population growth and economic growth. At the same time, food supply constraints are increasing, due to urban development of arable land, alternate uses of crops for bio-fuel and other industrial purposes, and many crops having already maximized yields. The result is an alarming imbalance between over-demand and under-supply.

BioExx owns patented technology which allows for much lower temperatures to be used for the extraction of active ingredients and oils from biomass. This makes BioExx particularly well suited to process oilseed crops in a manner that allows for the production of much higher value additives to the food chain, in the form of higher yields of high value proteins which tend to be temperature sensitive. While forming just a small, but very valuable part of the solution to prominent global agricultural problems, BioExx has a mandate to rapidly grow the company through the construction and operation of extraction facilities around the world - and because of its much lower energy requirements, to do so in a very environmentally responsible manner.

To find out more about Bio-Extraction Inc. (TSX VENTURE:BXI), please visit our website at

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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