Xylitol Canada Inc.
TSX VENTURE : XYL

September 02, 2010 08:30 ET

Xylitol Canada Strategic Partnership Now Includes Mascoma Corporation

Company Provides Corporate Update on Recent Sale of SunOpta BioProcess Inc. to Mascoma Corporation

TORONTO, ONTARIO--(Marketwire - Sept. 2, 2010) - Xylitol Canada Inc. ("Xylitol Canada", or the "Company") (TSX VENTURE:XYL) is pleased to provide the following update on the recently announced sale of SunOpta BioProcess Inc. ("SBI"), Xylitol Canada's joint venture partner, to Mascoma Corporation of Lebanon, New Hampshire ("Mascoma"). 

Background

In 2008, Xylitol Canada and SBI collaborated on a research and development program pursuant to a joint venture agreement focusing on the design, construction and optimization of biomass conversion equipment, processes and facilities for the cost effective production of xylitol from xylose-enriched raw materials. This initial agreement was later complemented by a series of agreements providing Xylitol Canada with relevant technology and sufficient xylose feedstock to validate scale-up to commercial production of xylitol in North America. SBI also became a major shareholder of Xylitol Canada pursuant to these agreements. 

The Sale of SBI

By way of press release dated September 2, 2010, SunOpta Inc. (TSX:SOY)(NASDAQ:STKL), announced the sale of SBI to Mascoma. SunOpta noted that the combination brings together SBI's fiber preparation and pretreatment technology with Mascoma's consolidated bioprocessing technology, to create a company with comprehensive capabilities for converting non-food cellulose (wood chips, energy crops and organic solid waste) into ethanol and high value co-products such as xylitol. Following the transaction, the resulting company will be approximately 73% owned by existing Mascoma shareholders, approximately 18% by SunOpta, and the balance by other SBI shareholders. SBI will operate as Mascoma Canada, a wholly-owned Canadian subsidiary of Mascoma.

"We congratulate both SunOpta and Mascoma on completing this important transaction and we believe that the resulting combination represents a benefit to Xylitol Canada's shareholders as we now execute our business plan with Mascoma Canada," stated Andrew Reid, Xylitol Canada's President and CEO. "We are excited to work with the expanded Mascoma/SBI team to move our project ahead and to explore opportunities to reduce the time and expense of implementing xylitol production at demonstration and commercial scales."

Mascoma, through its affiliate Frontier Renewable Resources LLC, is currently developing a commercial scale production facility in Kinross, Michigan. The facility is based on technologies developed in Mascoma's laboratories in Lebanon, New Hampshire and operating in its 57,000 square foot demonstration facility in Rome, New York. The facility will also incorporate technologies developed by SBI from its pilot operations in both Waterdown and Brampton, Ontario.

About Xylitol Canada Inc.

Xylitol Canada markets xylitol and xylitol based-products and is focused on becoming the major low-cost manufacturer of xylitol and related products, serving the global market from operations in North America. The Company's business strategy is to leverage novel proprietary technology and processes to become North America's premier manufacturer of low cost, high quality xylitol from readily available environmentally-sustainable biomass. Xylitol is an all-natural sweetener which is marketed globally including Canada and the United States and is accepted by the American Food and Drug Administration, the World Health Organization and the American Dental Association. Xylitol contains 75% less carbohydrates and 40% less calories than sugar, has a myriad of oral health benefits including the prevention of tooth decay and is safe for diabetics. To date, wider spread use of xylitol has been limited by the lack of a reliable, low cost, high quality supplier.

About Mascoma Corporation

Mascoma Corporation is an innovative biofuels company committed to developing environmentally sustainable, low cost, low carbon biofuels from cellulosic biomass. The company's Consolidated Bioprocessing method converts non-food biomass feedstocks into cellulosic ethanol through the use of a proprietary process that eliminates the need for costly enzymes and additives. The company's corporate office and R&D laboratories are based in Lebanon, New Hampshire. Mascoma is producing cellulosic ethanol on a demonstration scale at its facility in Rome, New York. Its affiliate, Frontier Renewable Resources LLC is developing a commercial scale production facility in Kinross, Michigan. For more information, visit www.mascoma.com.

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on natural, organic and specialty foods and natural health products. The Company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically significant vertically integrated business models The Company's core natural and organic food operations focus on value added grains, fiber and fruit based product offerings, supported by a global infrastructure. The Company has two non-core holdings, a 66.4% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of environmentally friendly industrial materials; and an 18% ownership position in Mascoma Corporation, an innovative biofuels company.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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