CIC ENERGY ANNOUNCES SHAREHOLDERS' AGREEMENT FOR THE MOOKANE DOMESTIC POWER
PROJECT

TSX: ELC
BSE: CIC ENERGY

ROAD TOWN, Tortola, British Virgin Islands, Aug. 26 /CNW/ - CIC Energy Corp. ("CIC Energy" or the "Company") (TSX:ELC, BSE:CIC Energy) today announced the signing of a shareholders' agreement (the "Shareholders' Agreement") in relation to the Mookane Domestic Power Project ("MDPP"). The Shareholders' Agreement is between CIC International (Barbados) Corp. ("CIC International"), a wholly owned subsidiary of CIC Energy, and GCL (Botswana) Limited ("GCL Botswana"), a subsidiary of GCL Projects (Botswana) Limited ("GCL"). GCL is an indirect wholly owned subsidiary of Golden Concord Group Limited ("Golden Concord"). CATIDC Power Pty Ltd, a subsidiary of the China-Africa Trade & Industry Development Corporation ("CATIDC") is a minority shareholder of GCL Botswana.

Under this Shareholders' Agreement, CIC International will own 30% of a new holding company called GCL-CIC Mookane Power Holdings Corp. ("Holdings Corp."), which will hold the equity in the two Botswana project companies that will develop the MDPP.  GCL Botswana will own 70% of Holdings Corp.

Affiliates of GCL will build and operate the 300 MW (gross) MDPP power station and the associated coal mine and project infrastructure that will be located in Botswana, at the Mmamabula coalfield.  CIC Energy will be paid a development fee as well as being reimbursed for its historical costs related to the MDPP.  CIC Energy will transfer coal resources of approximately 200 million tonnes (run of mine) to the Botswana project company that will build the coal mine for the MDPP.

"This agreement with GCL and CATIDC on the Mookane Domestic Power Project is expected to herald the development of the first private, baseload independent power producer to break ground in Botswana," said Greg Kinross, President of CIC Energy.  "The project will be fast tracked to deliver electricity in the middle of 2013, all going well."

A tremendous amount of work has been completed since the Memorandum of Understanding was signed on the MDPP with GCL Projects Limited in March 2010. This includes substantial completion of the following key items:

  • Technical solution for the MDPP power plant, including completion of the basic engineering design and integration into the Botswana Power Corporation transmission grid
  • The mine plan for the MDPP coal mine, which has been planned to initially produce 1.3 million tonnes per annum, including technical solution for a coal beneficiation process to ensure compliance with international environmental emissions standards
  • Project costing and financial models
  • Agreement on a lump sum, fixed price for the Engineering, Procurement and Construction ("EPC") contract for the power station, mine and associated infrastructure with affiliates of GCL
  • Commencement of term sheet negotiations with lending banks for project debt financing

The next steps in the development of the MDPP planned by the end of the third calendar quarter of 2010 include:

  • The submission of a 30 year tariff offer to Botswana Power Corporation along with a proposed Power Purchase Agreement
  • Commencement of negotiation of agreements with the Government of Botswana regarding various aspects of the project including investment protection and stabilization, taxation, human resources, land rights, and management of environmental impacts
  • The submission to the Government of Botswana of applications for mining and power generation licences

Key milestones for the MDPP planned by the end of the fourth calendar quarter of 2010 include:

  • The submission to the Government of Botswana of environmental impact assessments as well as construction permits
  • Conclusion of negotiations and signing of the EPC contract
  • Signing of a Power Purchase Agreement with Botswana Power Corporation
  • Signing of the agreements mentioned above with the Government of Botswana

Key milestones for the MDPP planned by the end of the first calendar quarter of 2011 include:

  • Receipt of mining and power generation licenses, construction permits, and approval of environmental impact assessments
  • Commencement of equipment procurement, site access and preparation and provision of construction utilities

Key milestones for the MDPP planned by the end of the second calendar quarter of 2011 include:

  • Financial close and commencement of full construction

Project cost financing and construction schedule
The estimated cost of capital equipment and infrastructure for the 300 MW MDPP is 5.5 billion RMB (approximately US$800 million).

It is expected that the MDPP will be project financed at a ratio of not less than 70% debt, with the balance contributed by the equity partners. GCL shall assist the project companies in the raising of the financing for the MDPP. Chinese financial institutions are expected to contribute the majority of the debt funding. The debt is anticipated to be non-recourse to CIC Energy. CIC Energy will fund its 30% equity stake in the MDPP mainly through a combination of reimbursement for historical costs and its development fee, supplemented by its corporate treasury.

The estimated time to complete construction of the MDPP is approximately 26 months from start of the full construction activities, preceded by a period of about four months of site preparation work. Thus it is anticipated that the MDPP will be generating electricity for commercial sale during the middle of 2013.

Future plans
"Golden Concord is an excellent partner that is technically very capable and has access to capital from Chinese banks and financial institutions," continued Mr. Kinross.  "Golden Concord intends to significantly grow their business internationally and beyond the MDPP, there is potential for future collaboration on CIC Energy's Export Coal Project and future power plant expansions.  We see Golden Concord as a strategic partner in our future growth."

Conference Call

CIC Energy will host a conference call with Warren Newfield, CEO and Chairman, and Greg Kinross, President to discuss this news release on August 27, 2010 at 9:00 a.m. Eastern Time (3:00 p.m. SAST).

To participate in the conference call, investors and media from the US and Canada should dial 1-888-231-8191 ten minutes prior to the scheduled start time. International callers should dial +1 (647) 427-7450. To hear a replay of the conference call dial 1-800-642-1687 (toll free in Canada and the US) and +1-416-849-0833 (International callers), conference ID 95618588. The replay will be available approximately two hours after the conference call ends.

CIC Energy will offer an archived webcast of the conference call, accessible from the Company's web site at www.cicenergy.com.

Figure 1 - Artistic representation of the future power station of the Mookane Domestic Power Project courtesy of GCL (Botswana) Limited 

Click here to view: cr="true" href="http://files.newswire.ca/495/CIC_Mookane.JPG">http://files.newswire.ca/495/CIC_Mookane.JPG

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$30 million and has 52,573,969 million shares outstanding and 70,320,417 shares fully diluted, assuming vesting of all options and warrants.  CIC Energy is listed on the Toronto Stock Exchange (TSX:ELC) and the Botswana Stock Exchange (BSE:CIC Energy).

About Golden Concord and GCL-Poly Energy Holdings Limited ("GCL-Poly")

Golden Concord is an enterprise with core businesses in green power generation, solar raw materials manufacturing, wind power equipment manufacturing and others such as renewable energy equipment manufacturing.  Adhering to the philosophy of "providing high-quality energy and services while improving our living environment", Golden Concord endeavors to become a leader in the international energy industry.

GCL-Poly, a company listed on the Stock Exchange of Hong Kong under the stock code 3800.HK, is a subsidiary of Golden Concord.  GCL-Poly is China's largest polysilicon producer and one of the world's leading wafer suppliers and also a top green energy enterprise in China.  Annual polysilicon production capacity reached 18,000 MT by the end of 2009 and is expected to reach 21,000 MT by the end of 2010.  GCL-Poly has also started constructing wafer production facilities and targets to achieve 2GW of capacity by end of October 2010.  In addition, GCL-Poly owns 18 cogeneration power plants, 1 incineration power plant, 1 wind power plant and a 20MW solar farm in Jiangsu province, which is currently the largest solar farm in China. It has acquired over 10MW solar rooftop projects in the California. Headquartered in Hong Kong, Golden Concord has branches in Singapore, Vietnam and Indonesia, and has established management centers in Shenzhen, Shanghai and Xuzhou and representative offices in Beijing and Nanjing respectively in the PRC.

For additional information on GCL contact:

Mr. Richard Li  Tel: (852) 2526 8368     Email: href="mailto:stephanielau@gclsolarenergy.com">richardli@gcl-power.com.hk

About China-Africa Trade & Industry Development Corporation

China Africa Trade & Industry Development Corporation was incorporated in 2006 for the purpose of promoting the development of trade and industry between China and Africa. The company has developed extensive and in-depth relationships with many African countries for the purpose of developing and promoting all kinds of projects in many industries between China and Africa.  In Botswana, CATIDC is the sponsor and a shareholder in Botswana Fengyue Glass Co., Ltd, which will take advantage of the abundant, high quality raw materials that are available in Botswana and the float glass technology and equipment that has been developed in China in order to establish and develop a glass industry in Botswana for supply to the Southern Africa market.

CATIDC Power Pty Ltd is a subsidiary of CATIDC and specializes in developing power projects mainly on the African continent, and also in other regions.

For additional information on CATIDC contact:

Mr. Rex Xu  Tel: +86 21 5125 5634      Email: rex.xu1206@gmail.com

Forward-Looking Statements

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 development of the MDPP to supply electricity to Botswana, including the proposed structure of, and potential participants involved in, such development; the anticipated equity interest of the Company in the MDPP; the construction and operation of the MDPP power station; the Company's transfer of coal for the MDPP; timing of initial generation of electricity at the MDPP for commercial use; anticipated milestones relating to the MDPP, including: the submission of a commercial offer to Botswana Power Corporation ("BPC") and the Government of Botswana, the commencement of certain negotiations with the Government of Botswana, applications for mining and power generation licences, submission of environmental impact assessments and construction permits to the Government of Botswana, conclusion of negotiations regarding the EPC contract for the MDPP, execution of certain requisite agreements relating to the MDPP (including the EPC contract, a power purchase agreement with BPC and other agreements with the Government of Botswana), receipt of mining and power generation licences and construction permits, approval of environmental impact assessments and the achievement of financial close; the project costs and construction schedule for the MDPP; and the financing strategy for the MDPP.  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: delays or failure in entering into requisite agreements for the development, operation and financing of the MDPP, including power purchase agreements, transmission agreements, and EPC contracts on favourable terms or at all; the failure of the counterparties to such agreements to comply in all material respects with the terms and conditions of such agreements; the inability to raise the required debt or equity financing to reach financial close and/or implementation of the MDPP on favourable terms or at all; capital equipment, infrastructure and operating costs varying significantly from estimates; delays in the development of the MDPP caused by events of force majeure, the unavailability of equipment, labour or supplies, climatic conditions or otherwise; the failure to obtain acceptable tariffs and/or concessions, including tax concessions, from the Government of Botswana; inability to adapt certain of the work that was done in preparation of the Mmamabula Energy Project for the purposes of the MDPP; inability to obtain requisite credit support from the Government of Botswana in relation to MDPP; delays or failures in obtaining regulatory permits and/or licences (and renewals thereof) and authorizations respecting mining, power generation and/or power transmission lines and other transportation and industrial activities; the existence of undetected or unregistered interests or claims, whether in contract or tort, over the properties of the Company and its subsidiaries; volatility of and sensitivity to market prices for coal and prices (market or otherwise) for electricity; changes in anticipated demand for power in southern Africa; changes in equity markets; environmental and safety risks, including increased regulatory burdens; insufficient or sub-optimal transportation and transmission capacity; geological and mechanical conditions; availability of water and sorbent; amendments to the laws of Botswana that may be prejudicial to the development of the MDPP; political risks arising from operating in Africa; the grade, quality and recovery of coal which is mined varying from estimates; or other factors (including the additional factors described under the heading "Cautionary Statement Regarding Forward-Looking Statements" in the Company's Management's Discussion and Analysis dated July 12, 2010, which is available under the Company's profile on SEDAR at www.sedar.com).

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: ebelling@taucapital.com

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