Canadian company Syntec Biofuel (Symbol - SYBF) has signed (28th September) a definitive purchase agreement with Montilla Capital Inc. to acquire certain ownership rights to the Syntec Intellectual Property, in respect to the catalyst technology being developed for converting biomass/syngas into ethanol, butanol, methanol and propanol, including all the research and development assets used at their laboratory.

Development and research of these catalysts commenced in 2001 in laboratories at the University of British Columbia, and since 2005 have been further developed in house. Development has been funded through private equity as well as the Canadian government agencies, National Research Council of Canada and Natural Resources Canada. Syntec is now in Phase 2 development, refining its Catalysts using non-precious metals for long term stability tests under industrial conditions and expects to be ready to file a second patent application within the next 6 months. Syntec has undertaken to raise up US$3 million dollars to ramp up technical staff, purchase equipment and provide working capital for development , testing and quantifying the life of the catalysts prior to commercialization.

Michael Jackson, President of Syntec Biofuel Inc, says, “ The industry recognizes that production of corn to ethanol has a negative impact on consumer food prices and farm land while cellulosic conversion of waste products are going to spawn the next generation of growth in the Ethanol industry. Vinod Khosla, a world known venture capitalist and proponent of cellulosic ethanol production, is heavily invested in proving commercialization of this technology. With oil prices now exceeding $70 a barrel the use of ethanol as a fuel additive is the only option available to reduce our reliance on imported oil."

Syntec's revenue model will be based on Joint Venture projects, licensing fee for use of the Syntec technology and a royalty of approximately 7.5 cents per gallon of alcohol produced plus a commission on the sale of catalysts to licensees.

The company has agreed to issue 11,000,000 shares in exchange for the Syntec Assets and will assume liabilities not exceeding $350,000. The purchase of the Assets has been approved by the board of directors of Syntec Biofuel Inc. Syntec’s current business is in the animal food and supplement sector, which the company proposes to phase out in due course.

This acquisition is subject to Syntec raising a minimum of $500,000 by December, 31st 2007 failing which the purchase agreement will terminate.