Infinity Bio-Energy Ltd. ("Infinity") Announcement of Acquisition and Joint Venture Agreement

SAO PAULO, Brazil, July 24 /PRNewswire-FirstCall/ -- Infinity Bio-Energy Ltd. (AIM: IBI) is pleased to announce that it has entered into a share puchase agreement with BER Brasil Energia Renovavel Participacoes Ltda. ("BER") to acquire 100% of the shares of a sugarcane-based ethanol production facility in Brazil called Destilaria Guaricanga SA ("Guaricanga"). The closing of this acquisition is scheduled to occur by September 2008 and is conditional on certain conditions present including satisfactory completion of due diligence, which is now being initiated.

Guaricanga would add an immediate installed current crushing capacity of 1.2 million tons of sugarcane to Infinity's current crushing capacity of approximately 9.5 million tons, representing an increase of more than 12%. The additional investment required for Guaricanga to reach a crushing capacity of 1.5 million tons, expected for the 2009/2010 harvest, will be deducted from the acquisition consideration.

Guaricanga is located in the state of Sao Paulo, which concentrates 60% of the total Brazilian ethanol production and represents 59% of the ethanol market. Guaricanga is geographically situated in the center of the state, with exceptional access to three logistic modals (road, railroad and river). Guaricanga will facilitate our logistics in the Mato Grosso do Sul cluster. It is in one of the few regions of Sao Paulo state where Infinity would consider investing because of lower land and therefore lease prices, allowing expansion at lower costs.

The value of Guaricanga's gross assets as of December 31, 2007 was approximately US$205 million and the net loss for the period ended December 31, 2007 under its existing operating and ownership structure was approximately US$3.5 million.

The agreement also includes agricultural equipment used for the planting, maintenance and harvesting of cane for Guaricanga, as well as approximately 750,000 tons of sugarcane plantations, which currently supply and will continue to supply Guaricanga with feedstock. The total consideration to be paid for the acquisition of the Guaricanga mill and certain other related assets is approximately US$100 million, including debt to be assumed, of which the equity component will be paid in full by way of Infinity's ordinary shares at US$5 per share. There will be no cash consideration. The industrial final acquisition cost per ton will be approximately US$60.

Sergio S. Thompson-Flores, Infinity's CEO, declared: "I believe this acquisition is important from three points of view. First, it increases by more than 15% both the Company's current crushing and the Company's installed capacity. Furthermore, it increases Infinity's offering of ethanol and sugar in Sao Paulo State, which we already serve from our Paraiso mill, and is doing so in a region of the state where lower production costs are in line with the Company's stated strategy. Finally, in doing an all share transaction with Infinity shares as consideration, the current shareholders of the mill, which have been in the sector for decades and are third generation mill owners, are providing an important endorsement not only to shareholder value, but also to its strategy and its ability to generate future growth in that value."