BioExx Completes Major Canola Oil Distribution Contracts

Monday, 12 January 2009 11:15 AM

TORONTO, ONTARIO -- Bio-Extraction Inc. (TSX VENTURE: BXI) ("BioExx" or "the Company") is pleased to announce that it has concluded agreements with Calgary-based Sunora Foods Ltd., and Vancouver-based Shafer Commodities Inc. ("the Distributors") to collectively distribute 100% of the canola oil produced by BioExx at its Saskatoon facility.

Under the terms of the Agreements, the two Distributors will purchase oil from BioExx under normal commercial terms and re-sell the oil to their customer networks, with a preference towards higher value specialty markets. Going forward, the Distributors, who have complementary market sector strengths across a broad spectrum of end users, will also have the opportunity to work with BioExx to determine the optimal product mix for the market on a longer-term basis, allowing for the development of customized and customer-specific production arrangements.

"We are excited to have the opportunity to work with two high quality and experienced companies whose vision and mission aligns so well with ours, and who together can help BioExx penetrate multiple target markets around the globe," said Chris Carl, Chief Executive Officer of BioExx. "Since our first facility is relatively small compared to conventional producers, we believe this arrangement will allow us to sell selectively into markets not typically served by the much larger conventional producers, which will help us to both maximize our margins and the value offered to end customers, without being disruptive to conventional canola markets."

As is the case with all BioExx product agreements, pricing is based on market prices at the time of sale and then adjusted upward, where possible, based on the specialty features of its products. This ensures that selling prices track feedstock costs to create a natural hedge against timing risk and therefore supports the maintenance of margins consistent with industry crush margin trends. Canola crush margins have remained strong despite the recent decline in global commodity prices. In addition to its product sales agreements, BioExx has also signed a 10-year agreement (including renewals) for the supply of its canola feedstock to the Saskatoon facility.

"With these oil contracts, we have chosen a path that emphasizes our niche product strengths, such as our ability to produce non-genetically modified oil, while still providing BioExx access to some commodity-based markets to ensure that we can move our full production volume at all times," said Mr. Carl. "We have now completed commercial sales arrangements and agreements for all of the products to be produced at our Saskatoon facility, including canola oil, meal, and protein. At current market prices, planned sales of all products from the facility could generate approximately $300 million in revenue over the 10-year life of the agreements, including renewals. Of course, our planned migration to high value human food proteins could add significantly to that."

BioExx expects to begin production and sales at the plant within the next 30 days.

About Sunora Foods Ltd.

Sunora Foods, based in Calgary, Alberta, is internationally recognized for its canola oil and related canola products and is a major Canadian exporter of food oil. Operating through a base of more than 10 warehouse outlets, Sunora is a significant distributor of both expeller grade and organic food oils. Its introduction of canola oil into new specialty markets has elicited the support of both health practitioners and nutritionists. Sunora has spent around 20 years developing and servicing the specialty oil needs of a global base of customers in the retail, food service and food processing industries.

About Shafer Commodities Inc.

Shafer Commodities is a subsidiary of Shafer-Haggart Ltd., which was founded in 1934 in Vancouver, BC. With an early focus on the abundant supply of canned west coast salmon, the company expanded over the next four decades to include multiple agriculture and aquaculture based products that were distributed throughout the world. Shafer continues to service the agriculture industry through a large variety of ingredients used in many rations in addition to handling many of the grains and oils used in the bio-fuel industries. Shafer has many years of experience in products for human consumption in North American markets, including custom designing private label and foodservice programs for major retailer and food service accounts.

About Bio-Extraction Inc.

Headquartered in Toronto, Canada, BioExx is a leading technology company focused on the extraction of oil and high-value proteins from oilseeds for the global food market. BioExx' patented technology allows for the use of significantly lower temperatures than conventional methods in extracting the active ingredients and oils from oilseeds, resulting in higher yields and higher-quality meal, oils and proteins. BioExx' low energy requirements, environmentally sound process, and high-yield production have the potential to make a valuable contribution in alleviating food scarcity.

BioExx is currently completing construction of its first commercial scale, specialty extraction facility for processing canola to produce protein concentrates for the aquaculture and specialty animal feed markets, as well as canola oil and meal. The facility, located in Saskatoon, Saskatchewan, is expected to begin commercial operation in early 2009. To find out more about Bio-Extraction Inc. (TSX VENTURE: BXI), please visit www.bioexx.com.

The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, the demand for BioExx' products, the availability of funding, and the anticipated costs of BioExx' plant construction and operation. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from BioExx' expectations and projections.

The TSX Venture Exchange has not reviewed this press release and neither approved nor disapproved the information contained in this press release.

Contacts:

Bio-Extraction Inc.

Chris Schnarr

Chief Financial Officer

(416) 588-4442 x111

Email: [email protected]

Website: www.bioexx.com

Investor Relations:

The Equicom Group Inc.

Glen Williams

Account Executive