SOURCE: Vega Biofuels, Inc.

February 04, 2011 13:53 ET

Vega Biofuels Updates Shareholders on Georgia Manufacturing Plant

NORCROSS, GA--(Marketwire - February 4, 2011) - VEGA BIOFUELS, INC. (PINKSHEETS: VGPR) provides the following update to its shareholders.

It's been a very busy few months. Since the reorganization of the Company last year, our focus has been on moving forward with the projects we have started before entertaining any new business. 

Our South Georgia project has been our primary focus during this time. We previously announced our plans to build a manufacturing plant in Tifton, Georgia that would manufacture bio-coal from timber waste. After extensive research and meeting with various entities associated with the project, we made the decision to move the project to another location also in South Georgia. We have located an existing 40,000 sq. ft. building that will serve our needs much better than the Tifton location and we are currently in negotiations to purchase the building. The building sits on 14 acres, has rail access with a rail spur on the property that will accommodate 5 train cars. Once the plant is completed, product will be loaded onto train cars and sent by rail to the Savannah, GA port where it will be shipped to customers around the world.

We are also working with the local government concerning the potential for free land adjacent to the existing building, tax abatements, job credits, and port job tax credits for using the Savannah Port. The proposed site is also located in a Free Port Trade Zone with exemptions on material and inventory destined for shipment out of state from sales, inventory, and advalorem taxes. 

According to a recent Forbes Magazine article entitled "America's Best Places For Alternative Energy," the abundance of biomass in Georgia's Bioenergy Corridor ranks third in the nation as a potential source of renewable energy. The article referenced the amount of privately owned forests in Georgia, more than any other state in the country, as a reason for the state's ranking.

When completed, the manufacturing plant will use special torrefaction technology to produce bio-coal briquettes from timber waste that will then be sold to power companies throughout the world.

Shipping is a large component of our business and significantly affects the price we can charge. Bio-coal will be much cheaper to ship to our clients than other forms of alternative energy such as fuel pellets. Target markets for our products are power plants around the world that face mandates to increase biomass usage in their coal burning plants. Firing bio-coal in existing coal plants will not require any retrofitting of existing power plants.

Bio-coal is made from a process called "torrefaction." Torrefaction is a partial carbonization process that takes place at temperatures between 475 - 575º in a low temperature environment which makes the physical and energetic properties of the biomass much more comparable to traditional coal. The biomass is then compressed into briquettes to be sold to the end user. Torrefaction has the added benefit of reducing or eliminating undesirable volatiles, such as nitrous oxides and sulfur dioxides and is considered carbon neutral to the environment.

By accounting for the positive environmental impact of not allowing biomass to decay and providing a positive impact through renewable energy under an approved methodology from the Clean Development Mechanism under the United Nations Framework Convention on Climate Change, the production and sale of carbon credits from the burning of biomass for CO2 production will provide additional income to Vega.

This is a very busy time in the life of the Company and we ask for your continued patience as we move forward. We will have additional details concerning the plant as we move forward.

Thanks again for your interest in Vega Biofuels and for your continued support. 

Michael K. Molen

Certain statements in this release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "plan," "project," "intend," "expect," "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (finance or operating) or achievements to differ from future results, performance (financing and operating) or achievements expressed or implied by such forward-looking statements.

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