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Salt Lake-based Biomass International Inc. has completed a private sale of 1.2 million shares of its authorized but unissued common stock to Taconic Plastics Ltd. to finance a demonstration module of a municipal waste system.

At 60 cents per share, Biomass will raise $750,000 toward the project. In addition, Plastonics Inc., an affiliate of Taconic Plastics, received warrants to purchase 2,257,000 shares of common stock at 62 cents per share.Biomass will construct a 1/10th scale module at the Weber County landfill to demonstrate the commercial viability of a new process that transforms municipal solid waste into recycled industrial products.

Processing 56 tons of waste in eight hours, the Biomass project is designed to dispose of Weber County's entire municipal waste to fulfill a 25-year contract signed last September between the county and the company, officials said. Some of the equipment already is on site and the company expects to complete work of the demonstration module in 120 days.

According to a company newsletter, Biomass expects to receive an independent consulting engineer's report later this year reporting on the commercial feasibility of the system.

If the report is favorable, officials said, PaineWebber Inc. will provide the $30 million in financing for the disposal project. The company is targeting completion and start-up of the Weber County Biomass refinery for July 1, 1991.

Company officials said the biomass process uses the chemical reduction of all organic materials such as paper products, cardboard and yard waste to produce usable industrial products. The inorganic recyclables such as metals, glass, plastics, sand, gravel and dirt are recovered from the remaining materials.

Company officials said the principal commercial product from their refinery is fuel ethanol, which is used to raise octane ratings in unleaded gasoline and can lower pollutants from automobiles.