Update provided on the ongoing IRP2010 regulatory process in South Africa
ROAD TOWN, Tortola, British Virgin Islands, June 22 /CNW/ - CIC Energy Corp. ("CIC Energy") (TSX:ELC, BSE:CIC Energy) today is pleased to announce the extension of the Engineering, Procurement and Construction ("EPC") contract originally signed by Meepong Energy (Proprietary) Limited (a subsidiary of CIC Energy), with Shanghai Electric Group Co., Ltd. ("SEC") in March 2009. This EPC contract is for the Mmamabula Energy Project in Botswana, Africa.
This extension maintains the fixed price for this lump sum turnkey contract for the engineering, procurement, construction, testing and commissioning of the power station for the Mmamabula Energy Project. The contract now extends beyond the period expected to be required for approval of the second Integrated Resource Plan ("IRP2010") by the Department of Energy of South Africa.
"The extension of the EPC contract is a key accomplishment towards maintaining the Mmamabula Energy Project in a ready mode to be able to restart project development following the resolution of the regulatory matters in South Africa, regarding new power projects," said Mr. Greg Kinross, President of CIC Energy. "We remain cautiously optimistic that these regulatory matters will be resolved in the third or fourth quarter of this year, in conjunction with the gazetting of the IRP2010."
South Africa's IRP2010 is expected to be a 20 year country plan for how South Africa will bring on new electricity supply to meet the projected demand for power from 2013 onwards. IRP2010 is anticipated to include a combination of new government owned power stations and independent power producer ("IPP") projects, like the Mmamabula Energy Project.
The first public consultation period for input parameters to the IRP2010 was completed in June, and a first draft of the proposed IRP2010 approved by the cabinet of the Government of South Africa is expected to be released to the public in August. Based on this draft IRP2010, a second and final round of public consultation is then anticipated to take place. The Government of South Africa's target date to gazette the final IRP2010 is the end of September 2010.
CIC Energy intends to reassess the project development program for the Mmamabula Energy Project following the final approval of the IRP2010, including seeking a further extension of the EPC contract as necessary at such time.
The planned capacity of the Mmamabula Energy Project power station will be approximately 1,320 megawatts ("MW") (gross) or 1,200 MW (net), comprised of two supercritical 660 MW units (gross). The Mmamabula Energy Project is the most advanced IPP project that can meet the urgent demand for new baseload capacity in South Africa in the near future.
The Mmamabula Energy Project is being developed independently of the CIC Energy's smaller power station project, the 300 MW (gross) Mookane Domestic Power Project ("MDPP"), also to be located at the Mmamabula Coal Field. Electricity generated from the MDPP will be targeted to supply Botswana.
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$32 million and has 52,573,969 million shares outstanding and 70,810,417 shares fully diluted. CIC Energy is listed on the Toronto Stock Exchange (TSX:ELC) and the Botswana Stock Exchange (BSE:CIC Energy).
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 extension of the EPC contract with SEC, anticipated approval of the IRP2010 by the South African Department of Energy, maintenance of the Mmamabula Energy Project ("MEP") in a ready mode pending resolution of the regulatory matters in South Africa, and the intention of CIC Energy to reassess the project development program for the MEP following approval of the IRP2010. 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, CIC Energy.
Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: delays or failure in the preparation and completion of the IRP2010 or its implementation necessary to achieve Financial Close of the MEP; further delays or failures in entering into power purchase agreements and/or transmission agreements and other requisite agreements for the development, operation and financing of the MEP, on favourable terms or at all; the failure of the counterparties to such requisite agreements to comply in all material respects with the terms and conditions of such agreements; the failure to complete agreements with equity partners, including an arrangement with a independent power producer partner on favourable terms or at all; the inability to raise the required debt or equity financing for funding CIC Energy's development activities to reach Financial Close of the MEP and/or the implementation of the MEP on favourable terms or at all; capital equipment, infrastructure and operating costs varying significantly from estimates; delays in the development of the MEP caused by delays or failure in reaching or, following approval of the IRP2010, modifying (as necesary) applicable agreements with relevant counterparties, 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; the Minister of Energy in South Africa electing to procure new power generation capacity from other sources; inability to obtain requisite credit support from the Government of South Africa and/or the Government of Botswana in relation to the MEP; 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; changes in exchange rates; 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; amendments to the laws of South Africa or Botswana that may be prejudicial to the development of the MEP, or the failure to obtain amendments to any such laws that may be necessary to implement the MEP; political risks arising from operating in Africa; the grade, quality and recovery of coal which is mined varying from estimates; or other factors (including development and operating risks).
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: email@example.com