CIC Energy Provides Updates on Mmamabula Energy Project and Stock Option Plan


    ROAD TOWN, TORTOLA, British Virgin Islands, June 11 /CNW/ - CIC Energy
Corp. ("CIC Energy" or the "Company") (TSX:ELC, BSE: CIC Energy) is pleased to
provide an update on the Mmamabula Energy Project ("Mmamabula" or the
"Project") in Southern Africa as well as providing an update on events
subsequent to the annual meeting of shareholders related to the Company's
stock option plan.

    Updates on the Mmamabula Energy Project included in this news release

      -  Exploration
      -  Engineering, Procurement and Construction Contract
      -  Power Purchase Agreements
      -  Project Finance
      -  Appointment of Lenders' Counsel
      -  Environmental Impact Assessment

    Exploration Update

    In excess of 110,000 metres in over 1,150 diamond drill holes have been
completed on the Project and a total of seven diamond drill rigs are currently
active. Exploration drilling is now focused on the Serorome Block, while
in-fill drilling to determine the detail of the geological structure and
geophysical characteristics of the Mookane and Border Blocks is also in
    Beyond the power plant project, management of the Company is exploring
options to maximize the value of the coal resource at Mmamabula. The current
coal resource estimate in the measured and indicated categories (see the
technical report referred to at the end of this news release) exceeds
projected coal consumption for both Phase One and Phase Two power plants and
ongoing exploration may lead to a further increase in the mineral resource.
The general nature of the options being considered include other markets for
the coal as well as other potential upstream projects such as coal to liquids.

    Engineering, Procurement and Construction ("EPC") Contract

    The Company is advancing well in its discussions with a select group of
EPC contractors following the launch of a formal EPC tender late last year.
Due to substantial global demand for power plants, a robust construction
market and tight supply for engineering services, EPC contract prices for
power stations have increased significantly since the Project was initiated in
    As previously disclosed, the Company currently estimates the total cost
of development and construction of Phase One to be approximately US$6 billion
for the power plant plus US$0.3 billion for the mine infrastructure. A
definitive EPC contract is expected to be signed concurrent with the Power
Purchase Agreements, Implementation Agreement with the Government of Botswana
and Project financing agreements towards the end of 2007.

    Power Purchase Agreements ("PPAs")

    Discussions with Eskom Holdings Limited and Botswana Power Corporation,
the national utilities of South Africa and Botswana respectively, on the Power
Purchase Agreements are progressing well. The PPAs are expected to have a term
of approximately 40 years and the finalisation and signing of definitive
agreements is anticipated towards the end of 2007.

    Project Finance

    Discussions between the Company and its 50% partner International Power
plc ("IPR"), and South African and international lenders and leading Export
Credit Agencies, disclosed in the Company's news release of March 14, 2007,
are advancing well. Approximately 80% of the Project is expected to be
financed by limited recourse project debt with the remainder to be financed by
equity. CIC Energy and International Power are evaluating the option of
selling down a small portion of their respective equity stakes to a third
party in order to access low-cost debt finance.

    Appointment of Lenders' Counsel

    The Company is pleased to announce the appointment of Shearman & Sterling
LLP as the international lenders' counsel for the Mmamabula Energy Project.
Shearman & Sterling is a leading international law firm. For more information
on Shearman & Sterling please see the company's web site at
    The Company is further pleased to announce the appointment of Webber
Wentzel Bowens as the South African lenders' counsel for the Project. Webber
Wentzel Bowens is a leading South African law firm. For more information on
Webber Wentzel Bowens please see the company's web site at

    Environmental Impact Assessment

    The Project's final Environmental Impact Assessment was filed last week
with the Government of Botswana for the power station, mine and transmission
lines. The Environmental Impact Assessment will be subject to a final public
participation process in July 2007, with the target being to obtain formal
Records of Decision from the Government in terms of environmental compliance
in accordance with Botswana law and regulation during third quarter of this
year. The Project is also seeking Environmental and Social Impact Assessment
approval under applicable World Bank Guidelines in the form of International
Finance Corporation Performance Standards and Equator Principles. Such
approval is also expected during third quarter of 2007.

    Recent Annual Meeting

    At CIC Energy's annual meeting held on May 28, 2007 each matter
considered by shareholders was passed, including certain amendments to the
Company's stock option plan. Among other things, the amendments allowed for an
increase in the maximum number of options issuable under the stock option plan
from 10% to 12.5% of the number of common shares issued and outstanding from
time to time. However, the board of directors of the Company, based on a
recommendation from management, passed a resolution subsequent to the annual
meeting to keep the plan maximum at 10% of the number of common shares issued
and outstanding.
    Also at the annual meeting, shareholders elected Mr. E. Adrian Meyer as a
new member of the board. Mr. Meyer is a Principal and Director of Cidel Bank &
Trust Inc. in Barbados and brings a wealth of business and finance experience
to CIC Energy. The board thanked Mr. Frank Crothers for his contribution to
the board, as he did not stand for re-election.

    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/NYSE-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 fields of southeastern Botswana, 120 kilometres north of the
capital city of Gaborone and adjacent to South Africa's Waterberg Coal Fields.
    Additional information with respect to Mmamabula is contained in a
technical report of Snowden Mining Industry Consultants dated June 1, 2007 and
entitled "CIC Energy Corp.: Mmamabula Project, South-eastern Botswana, Project
No. J912, National Instrument 43-101 Technical Report", a copy of which has
been filed on SEDAR and may be accessed at
    CIC Energy has a treasury of approximately CDN$54 million and has
47,993,111 shares outstanding and 54,493,611 shares fully diluted.

    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 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, 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 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; 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.

    %SEDAR: 00023467E

For further information:

For further information: on the Company and Mmamabula, please visit CIC
Energy's website at or contact: Erica Belling, VP
Investor Relations, Tau Capital Corp., Tel: (416) 361-9636 ext. 243, Email:

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