Daily News: September 26, 2012

USA Synthetic Fuel Receives Financing From Third Eye Capital

USA Synthetic Fuel Corporation (USASF) announced that it has received $35 million in debt financing from Third Eye Capital, a special situations investor based in Toronto, Canada with established expertise in resource lending and other complex assets. In addition, Global Energy, Inc. having launched USASF in 2010, purchased 1.1 million shares of common stock of the company for $11 million.

The company used some of the proceeds of the equity and debt investments to purchase a BOE (barrel of oil equivalent) energy asset consisting of approximately 50 million tons of Illinois Basin coal located in Indiana. Consideration for the transaction was $50 million, consisting of $25 million in cash and $25 million in common stock of the Company (2.5 million shares). The purchased energy asset has an estimated energy equivalent of 200 million barrels of oil, according to the Company, and represents a 50 year fuel supply for USASF’s subsidiary, Lima Energy Company, which is developing and constructing an Ultra Clean Btu Converter in Lima, Ohio. This facility will be designed to enable solid hydrocarbon resources, such as coal, petroleum coke, and renewables, to be transformed into lower cost synthetic fuel products, such as ultra clean synthetic crude, diesel, jet, gasoline, and synthetic natural gas. The balance of the proceeds from the equity and debt investments will be used to purchase land for the Lima Energy project, continue site work, and for working capital and general corporate purposes.

USASF’s goal is to develop and construct Ultra Clean Btu Converters in several U.S. locations within the next ten years, utilizing solid hydrocarbon resources such as those acquired from Global Energy. The Company believes that its Lima Energy project is one of the most fully developed gasification projects in the United States.

Arif N. Bhalwani, managing director of Third Eye Capital, reiterated his firm’s support of the company: “USA Synthetic Fuel Corporation has the critical assets and technical know-how necessary to develop low-cost clean energy products that can be commercially viable. Our innovative investment allows the Company the time and resources to raise adequate public and private finance for its current Lima Energy project, one of the most advanced projects of its kind.”

USA Synthetic Fuel is an environmental energy technology company focused on building ultra clean btu converters designed to enable America’s solid hydrocarbon resources to be transformed into low cost synthetic fuel products.