CIC Mmamabula Energy Project Update


    ROAD TOWN, TORTOLA, British Virgin Islands, March 14 /CNW/ - CIC Energy
Corp. ("CIC" 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. This update includes:

    -   Power Purchase Agreement ("PPA") negotiations,
    -   Commencement of formal discussions with Engineering, Procurement and
        Construction ("EPC") contractors,
    -   Project finance update,
    -   Submission of Mining Licence Application,
    -   Appointment of Executive Vice President, Project Finance, and
    -   Exploration update.

    Power Purchase Agreement

    It is envisaged that the electrical output from Mmamabula will be sold
under approximately 40 year PPAs with Eskom Holdings Limited ("Eskom") and
Botswana Power Corporation ("BPC"), the national electrical utilities of South
Africa and Botswana, respectively. The majority of the power is expected to be
sold to Eskom. On May 16, 2006 and September 12, 2006, CIC previously
announced the signing of memoranda of understanding with Eskom and the
Government of Botswana, respectively, regarding the proposed development of
the Project.
    Formal PPA negotiations with Eskom commenced in August 2006 and with BPC
in November 2006; these negotiations continue to progress. The outcome of
these negotiations will be subject to review and due diligence by the legal
counsel appointed to represent the Project lenders, with the lenders counsel
anticipated to be appointed by the end of March 2007.

    Engineering, Procurement and Construction

    The Company has shortlisted a select group of multi-national EPC
contractors with experience in the design and manufacture of major coal-fired
power stations worldwide. A formal EPC tender process for the Phase One 2,100
to 2,460 megawatt ("MW") power station was launched in December 2006. Due to
recent increased global demand for the construction of power stations, there
is currently limited capacity in the EPC market for the production of long
lead time items. Although negotiations with prospective EPC contractors are
not yet concluded, the Company believes that commencement of construction of
the power generation units could be later than originally anticipated, as a
result of factory capacity constraints, and accordingly production from Phase
One may be pushed back by some six to twelve months.

    Project Finance

    The total costs of the development and construction of Phase One are
currently anticipated to be the equivalent of approximately US$5.5 billion,
plus US$0.3 billion for the construction of related mine infrastructure.
However, limited capacity within the EPC market is placing upward pressure on
prices, and it is possible that the final EPC price may increase the overall
Project costs. Of this amount, approximately 20% is expected to be contributed
by the equity investors and the remaining 80% will be provided in the form of
limited recourse project debt.
    The Company, in conjunction with planned development partner
International Power plc, has initiated discussions with South African and
international lenders and leading Export Credit Agencies, with significant
interest being shown in the Project. The engagement includes potential debt
financing, structured to optimize the overall economics of the Project.
    Mr. Greg Kinross, President and CEO of CIC, states "We are pleased to
confirm that the Project is on track to reach financial close as planned
before the end of the current year. Limited capacity in the EPC market, due to
current demand for new sources of power both within the region and globally,
is a reality for build-out of all new power stations. Current EPC market
conditions further support CIC's previous decision to increase the individual
unit size at Mmamabula from 600 MW to 800 MW, as the different sized units
have approximately equivalent build-out times. Although worldwide EPC costs
are on the increase, this will be taken into consideration as PPA negotiations
proceed and we do not expect this to have a material impact on Project
economics in relation to CIC".

    Mining Licence Application

    Through its wholly-owned Botswana subsidiary, Meepong Resources
(Proprietary) Limited, the Company submitted an application for a mining
licence with respect to Mmamabula to the Ministry of Minerals, Energy, and
Water in December, 2006. Evaluation of the application is expected to take up
to six months.

    Appointment of Executive Vice President, Project Finance

    The Company is pleased to announce the appointment of Jennifer Feinberg
as Executive Vice President, Project Finance. Jennifer holds a B.Sc. (Chemical
Engineering) from the University of Witwatersrand, a B.Comm. from the
University of South Africa and an MBA from the University of Witwatersrand
Business School. Prior to joining CIC, Jennifer held the position of Director
- Investment Banking with NM Rothschild and Sons. Her past experience includes
Head of Corporate Finance for the Industrial Development Corporation of South
Africa Limited and Head: Structured Finance with Corpcapital Bank Limited.
    Mr. Warren Newfield, Co-Chairman of CIC, states "With Jennifer's
appointment, we continue to enhance our management team. Jennifer brings to
the Company a wealth of experience in debt, project, and corporate finance, a
strong background in financial modeling and structuring, and familiarity with
equity and debt instrument negotiations for both green and brown field
projects in Africa. On behalf of CIC, I would like to take this oppourtunity
to welcome Jennifer to the Company."

    Exploration Update

    In excess of 98,800 metres in over 1,031 diamond drill holes has been
completed on the Project and a total of six diamond drill rigs are currently
active. Drilling is now focused on the Serorome and Border Blocks, in the
Mmamabula East prospecting license. Both of these blocks, as well as the
recently drilled Mmamabula South prospecting license, are located outside of
the currently defined resource areas at Mmamabula. An updated, independent
mineral resource estimate for the Project is expected to be received and
released by the Company within the next three weeks.

    About CIC Energy Corp.

    CIC is a TSX/BSE-listed company engaged in the advancement of Mmamabula,
which 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. The Southern Africa region is projected to require significant
new baseload power generation capacity over the next several years. To address
this shortfall, the Company is currently conducting a Bankable Feasibility
Study on an integrated coal mine and mine-mouth power station at Mmamabula.
    On October 18, 2006, the Company announced the selection of International
Power plc ("IPR") as development partner for a Phase One mine and power
station at Mmamabula. IPR is a FTSE100 company, listed on the London and New
York Stock Exchanges, with a market capitalization of approximately US$10.5
    Additional information with respect to Mmamabula is contained in a
technical report dated October 19, 2006 and entitled "CIC Energy Corp.:
Mmamabula Energy Project, Southeastern Botswana, Project No. J912: Fourth
Technical Report", a copy of which has been filed on SEDAR and may be accessed
    CIC has a treasury of approximately CDN$52.3M, and has 46,331,689 shares
outstanding and 54,082,361 shares fully diluted. For additional information on
CIC and Mmamabula, please visit the Company's website at
or contact:

    Forward-Looking Statements

    This press 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 Project with respect to assumptions in respect of mineral resources,
capital costs, 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; delays
and/or higher costs in constructing and developing the Project caused by,
among other things, unavailability of equipment, labour or supplies, limited
capacity among EPC firms, climatic conditions or otherwise; insufficient
transportation and transmission capacity; geological and mechanical
conditions; delays or failures in obtaining permits and/or licences respecting
mining, power generation and/or power transmission lines; availability of
water and sorbent (at cost effective prices); inability to enter into PPAs
and/or transmission agreements with Eskom and (to a lesser extent) BPC or
other requisite agreements, including fixed price contracts with reputable EPC
firms 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; 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.

For further information:

For further information: Fiona Childe, Ph.D., P.Geo., VP Corporate
Communications, Tau Capital Corp., Tel: (416) 361-9636 x 227, Email:

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