BSE: CIC ENERGY
ROAD TOWN, TORTOLA, British Virgin Islands, Aug. 27 /CNW/ - CIC Energy
Corp. ("CIC Energy" or the "Company") (TSX:ELC, BSE: CIC Energy) is pleased to
announce that the Company, along with its partner, International Power plc
("IPR"), has entered into a preliminary agreement with Sumitomo Corporation
("Sumitomo") on the possible subscription of a 20% equity interest in Phase
One of the Mmamabula Energy Project (the "Project"). Currently CIC Energy and
IPR hold equal 50% interests in the Project.
Subject to a favorable outcome of its due diligence, Sumitomo has agreed
to enter into a good faith negotiation with CIC Energy and IPR on the possible
subscription of a 20% interest in Meepong Energy (Mauritius) Pty Ltd.
("Meepong Energy (Mauritius)"). CIC Energy and IPR would be expected to
equally sell down a portion of their respective equity stakes to facilitate
this. Meepong Energy (Mauritius) is the joint venture company which will hold
the power station assets of Phase One of the Project.
This agreement also provides the option for Sumitomo to take a 20%
interest in Meepong Resources (Mauritius) Pty Ltd. ("Meepong Resources
(Mauritius)"). Should this occur, the balance of this holding company is
expected to be held equally by CIC Energy and IPR. Meepong Resources
(Mauritius) is the joint venture company which will hold the assets related to
the coal mine for Phase One of the Project.
While this preliminary agreement does not commit Sumitomo to equity
participation in the Mmamabula Project, it is an important milestone
indicating Sumitomo's serious interest in the Project.
"We are extremely pleased to announce the potential addition of Sumitomo
to the Mmamabula Energy Project," stated Mr. Greg Kinross, President and CEO
of CIC Energy. "This development brings a possibility of another major and
highly credible partner to the project which, over and above their wealth of
experience, should also enhance our access to new sources of project finance."
The electricity generated by the Mmamabula Energy Project is expected to
be sold under long-term Power Purchase Agreements ("PPA") of approximately 40
years, predominantly to Eskom Holdings Limited ("Eskom"), South Africa's
national electrical utility, with the balance to Botswana Power Corporation,
Botswana's national electricity utility. The first phase is envisaged as a
2,100 to 2,500 megawatt coal-fired power station with commercial operations
planned for 2012.
Sumitomo is a leading Japanese company with operations in diverse sectors
including mineral resources and energy, machinery and electricity, metals,
transportation and construction systems, media, electronics and network,
chemicals, consumer goods and services, materials and real estate, and finance
and logistics. Sumitomo had annual net income of (Yen)211 billion
(C$1.8 billion) for the 12 month period ended March 2007 and is listed on the
Tokyo Stock Exchange.
About CIC Energy Corp.
CIC Energy is a TSX/BSE-listed company engaged in the advancement of the
Mmamabula Energy Project, a planned power station and integrated coal mine in
Botswana. This Project is in partnership with International Power plc
(LSE listed), a leading independent electricity generating company. The
Southern Africa region is projected to require significant new baseload power
generation capacity over the next several years. The Project includes the
Mmamabula East and Mmamabula South prospecting licenses, located in the
Mmamabula coal field of southeastern Botswana, 120 kilometres north of the
capital city of Gaborone and adjacent to South Africa's Waterberg Coal Field.
Phase One of the Project is planned as a 2,100 to 2,500 MW power plant with an
integrated 7.5 to 9.0 Mt per annum coal mine expected to be in commercial
operation in 2012.
CIC Energy has a treasury of approximately CDN$133 million and has
53,652,519 shares outstanding and 60,115,760 shares fully diluted. For
additional information on the Company and Mmamabula, please visit CIC Energy's
website at www.cicenergycorp.com.
This news release contains certain "forward-looking statements". All
statements, other than statements of historical fact that address activities,
events or developments that the Company 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 the
Company based on information currently available to the Company. Such
forward-looking statements include, among other things, statements relating to
the Mmamabula Energy Project with respect to estimates and/or assumptions in
respect of mineral resources, mineral resource qualities, targets, future
production, the selection of a preferred engineering, procurement and
construction firm, goals, objectives, plans and future economic, market and
other conditions. 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: failure
to complete a positive bankable feasibility study on the Project; the grade,
quality and recovery of coal which is mined varying from estimates; inflation;
changes in exchange rates; the ability to raise the required debt financing
for the Project; Rand liquidity and constraints under applicable South African
law and/or practice on the amount that a single lender is able to lend to a
single borrower; delays in the development of the Project caused by
unavailability of equipment, labour or supplies, limited capacity among
engineering, procurement and construction firms, climatic conditions or
otherwise; insufficient transportation and transmission capacity, geological
and mechanical conditions; delays or failures in obtaining regulatory permits
and/or licences respecting mining, power generation and/or power transmission
lines; the existence of undetected or unregistered interests or claims,
whether in contract or tort, over the properties of the Company; availability
of water and sorbent (at cost effective prices); inability to enter into power
purchase agreements and/or transmission agreements with Eskom Holdings Limited
and (to a lesser extent) Botswana Power Corporation or other requisite
agreements, including preliminary and/or definitive fixed price contracts with
reputable engineering, procurement and construction firm(s) and other
agreements required to facilitate the development, operation and financing of
the Project, including with International Power plc; failure to raise
additional funds on favourable terms to finance such development; inability to
obtain tax concessions from the Government of Botswana and requisite credit
support from the Government of South Africa and/or the Government of Botswana;
political risks arising from operating in Africa; lack of markets for coal
resources, if any, which may exceed the projected coal consumption of the
Phase One and Phase Two power plants of the Project; the termination of the
preliminary agreement with Sumitomo; the inability to enter into a definitive
agreement with Sumitomo regarding its possible subscription for a 20% interest
in Meepong Energy (Mauritius); 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,
the Company 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 the Company 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.
No assurances can be given that the levels of coal indicated by the
current mineral resource estimates for the Project will be produced. Such
estimates are expressions of judgment based on knowledge, mining experience,
analysis of drilling results and industry practices. Valid estimates made at a
given time may significantly change when new information becomes available.
While the Company believes that the current mineral resource estimates for the
Project are well established, by their nature resource estimates are imprecise
and depend, to a certain extent, upon statistical inferences which may
ultimately prove unreliable. If such estimates are inaccurate or are reduced
in the future, this could have a material adverse impact on the Company.
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. There is no certainty that mineral resources can be
upgraded to mineral reserves through continued exploration.
For further information:
For further information: Erica Belling, VP Investor Relations, Tau
Capital Corp., Tel: (416) 361-9636 ext. 243, Email: firstname.lastname@example.org