JOHANNESBURG, South Africa, April 16 /CNW/ - CIC Energy Corp. ("CIC Energy") (TSX:ELC, BSE:CIC Energy) and Guma Group Investments ("Guma") today announced the entering into of a Warrant Agreement (the "Warrant Agreement"). Under the terms of the Warrant Agreement, upon the effectiveness thereof CIC Energy shall issue to Guma a total of 13,061,448 warrants ("Warrants"). Each Warrant entitles the holder to purchase one common share of CIC Energy at C$1.75. The Warrants will expire three years after the issue date.
The Warrants are to be issued in consideration for general assistance and advisory services to be performed by Guma for CIC Energy, mainly in relation to the Mmamabula Energy Project. The Warrants are subject to vesting based on the achievement of agreed milestones related primarily to the development of the Mmamabula Energy Project and the Coal Export Project. For additional details on these milestones, please see the Warrant Agreement filed on CIC Energy's profile on SEDAR at www.sedar.com.
"We have been working closely with Guma prior to formalizing this relationship," said Greg Kinross, President of CIC Energy. "This agreement cements this new relationship which brings a new resource to bear on the development of CIC Energy's Mmamabula Energy Project. Over the last 13 years, Robert Gumede and the Guma Group have built a successful multi-billion rand group, with clients spanning the public sector and state-owned enterprises, as well as the private sector in South Africa."
Robert Gumede, Chairman of Guma Group Investments said, "We are pleased to be working with CIC Energy as the Mmamabula Energy Project is an important initiative, and one which is aligned with South Africa's plan to include independent power producers as a key part of the country's electricity supply. In partnership with the governments of South Africa and Botswana, the Mmamabula Energy Project will strengthen the economic and social development of countries in the region."
Based on the number of common shares of CIC Energy currently outstanding, the Warrants, if fully vested and exercised, would result in an ownership by Guma of 19.9% of the outstanding common shares of CIC Energy.
The Warrant Agreement also provides that in the event that CIC Energy issues additional common shares within the next 12 months, then, subject to the approval of the Toronto Stock Exchange, CIC Energy will issue additional Warrants to Guma so as to entitle Guma to subscribe for 19.9% of the number of additional common shares so issued, subject to a maximum of two million additional Warrants in aggregate. The exercise price for the additional Warrants will be the same as the price at which the additional shares are issued.
In addition, Mr. Robert Gumede has been appointed to the board of directors of CIC Energy, as announced in a separate CIC Energy news release today.
About CIC Energy Corp.
CIC Energy Corp. is engaged in the advancement of the Mmamabula Energy Complex at the Mmamabula Coal Field in Botswana, Africa. This planned Complex consists of the Mmamabula Energy Project, the Mookane Domestic Power Project, the Export Coal Project and a potential Coal-to-Hydrocarbons Project.
CIC Energy has a treasury of approximately C$34 million and has 52,573,969 million shares outstanding and 57,441,469 shares fully diluted (prior to the pending issuance of the warrants discussed above). CIC Energy is listed on the Toronto Stock Exchange (TSX:ELC) and the Botswana Stock Exchange (BSE:CIC Energy).
About Guma Group Investments
The Guma Group of companies, founded by businessman, Robert Matana Gumede, is a black owned company with interests across a wide range of sectors including Information Technology, Smartcard manufacturing, energy, mining resources, real estate, tourism & hospitality, infrastructure development and construction.
The Guma Group of companies is mainly domiciled in Johannesburg, South Africa. It has established operations throughout the African continent, as well as in Canada and Australia (through GijimaAST), and the United Kingdom.
For additional information on Guma visit its website at www.guma.co.za.
This news release contains certain "forward-looking statements". All statements, other than statements of historical fact, that address activities, events or developments that CIC Energy believes, expects or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of CIC Energy based on information currently available to CIC Energy. Such forward-looking statements include, among other things, statements relating to: the issuance and vesting of the Warrants, Guma's potential ownership of CIC Energy's common shares, and the issuance of additional warrants to Guma. Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: the failure to achieve any or all of the vesting milestones.
Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, CIC Energy disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although CIC Energy believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE CIC Energy Corp.
For further information: For further information: on CIC Energy and its projects visit the Company's website at www.cicenergy.com or contact: Erica Belling, CFA, P.Eng., VP Investor Relations, Tau Capital Corp., Tel: (416) 361-9636 x 243, Email: firstname.lastname@example.org