Outlook Resources to acquire 75% of biomass densification company Prairie Bio Energy

Canada's Outlook Resources Inc. announces that it has reached an agreement to acquire 75% of the outstanding common shares of Prairie Bio Energy Inc., of La Broquerie, Manitoba. Prairie Bio Energy has developed a proprietary densification process for the production of biomass 'fuel cubes', a renewable fuel alternative to traditional coal, propane and natural gas for heating and power generation.

Bioeconomy Park
Outlook's current projects seek to introduce normally uncorrelated business initiatives or "tenants" into a single cluster or 'Bio-Economy Park' location. Prairie Bio Energy's biomass densification process is seen as fitting well within this structure. The 'Park' concept allows ecological relationships to be developed between individual business units allowing them to operate symbiotically through the sharing and exchange of resources within the Park. These ecological relationships are meant to create an opportunity for higher overall efficiencies between the Bio-Economy Park tenants because of their increased capacity to exploit a resource sharing opportunity.

Additionally the by-products and waste streams of renewable biofuels and bioenergy production can be mostly, if not completely, eliminated amongst the Bio-Economy Park's group of tenants as the waste from one component becomes input energy, nutrients or a source of feedstock for another. This integrated approach thus forms the key to experimenting with 'cascading' and 'circular' resource strategies.

Biomass in Canada
Biomass energy, or bioenergy, is the energy stored in non-fossil organic materials such as wood, straw, vegetable oils and wastes from the forestry, agricultural and industrial sectors. Like the energy in fossil fuels, bioenergy is derived from solar energy that has been stored in plants through the process of photosynthesis. The principal difference is that fossil fuels require thousands of years to be converted into usable forms, while properly managed biomass energy can be used in an ongoing, renewable fashion. Municipal solid waste and sewage sludge can also be considered as biomass.

In Canada, biomass energy accounts for 540 PJ (petajoules) of energy use. It already provides more of Canada's energy supply than coal (for nonelectrical generation applications) and nuclear power, accounting for 5% of secondary energy use by the residential sector and 17% of energy use in the industrial sector, mainly in the forest industries. Including lumber and pulp and paper, forestry accounts for 35% of Canada's total energy consumption; the forest industries meet more than one-half of this demand themselves with self-generated biomass wastes. The forest industries have been increasing their use of wood wastes that otherwise would be burned, buried or landfilled. Principal uses include firing boilers in pulp and paper mills for process heat and providing energy for lumber drying.

Prairie Bio Energy's approach to utilizing biomass is focused on the design of novel densification techniques. Its briquetting technology results in a 7/8inch fuel cube that utilises the lignin in the biomass as a binder. The primary components of the fuel cubes include a mixture of wood by-products and flax shives. The energy content is approximately 7900 BTU (British Thermal Unit) per pound, making the fuel is equivalent in energy to lignite coal. The fuel cubes have an average density of 33 pounds per cubic foot and a moisture content of 5-6%:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: densification :: briquetting :: co-firing :: bioeconomy :: Canada ::


Acquisition
With the acquisition of Prairie Bio Energy, Outlook Resources plans to produce a renewable fuel product from biomass more commonly known as Biomass-fuel or Refuse-Derived-Fuel. Management believes this approach will result in Outlook being particularly well positioned to process a variety of industrial and agricultural processing wastes or by-products in a manner that allows for the production of higher value products to be used as a source of renewable, carbon neutral fuels.

Outlook intends to grow the company through the construction and operation of both RDF/Biomass-fuel densification plants in addition to the development of environmentally conscientious, land based aquaculture facilities built and operated in an environmentally sustainable manner.

The transaction includes an exchange of Outlook Resources shares for Prairie Bio Energy shares and a combination of cash and notes payable. The transaction is subject to the completion of due diligence, TSX Venture Exchange approval and to Outlook raising a minimum of $2 million dollars.

Prairie Bio Energy was founded in 2004 by Stephane Gauthier and Eugene Gala, P. Eng. The business employed 5 people and culminated in the establishment of a 100 ton per day biomass fuel cubing line that was operated from Prairie Bio Energy's 20,000 square foot research and development facility located on an 80 acre agricultural property, one hour east of Winnipeg. Patent applications have been filed in Canada and the U.S. for the Prairie Bio Energy densification process.

Stephane Gauthier, President and Eugene Gala, Executive Vice President & COO will continue to lead Prairie Bio Energy as the company moves forward with Outlook Resources on the development of a commercial scale, 400 ton per day biomass cubing production facility. All of the current employees will be retained and the operations will be expanded over the next six months to facilitate additional business currently being finalized. Outlook is currently negotiating a long term lease on suitable premises for the proposed production facility.

Outlook will acquire 75% of the voting equity of Prairie Bio Energy in consideration for the issuance of 4,067,702 common shares of Outlook priced at $0.06 per share, the payment of $744,000 of debts owed to shareholders of Prairie Bio Energy and the assumption of the liabilities of Prairie Bio Energy. The founding shareholder group, including Stephane Gauthier and Eugene Gala, will retain a 25% interest in Prairie Bio Energy. The share consideration will be subject to a voluntary escrow until December 31, 2008 subject to earlier release upon Prairie Bio Energy meeting certain milestones.

References:
Outlook Resources: Outlook to Acquire 75% Ownership of Prairie Bio Energy - January 28, 2008.