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Road Town, Tortola, British Virgin Islands (August 8, 2007) – CIC Energy Corp. (“CIC Energy” or the “Company”) (TSX:ELC, BSE: CIC Energy) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Westwind Partners Inc. (the “Underwriters”) which have agreed to purchase, on a bought deal private placement basis, 3,100,000 common shares of the Company at a price of CDN$16.25 per share, for aggregate gross proceeds of CDN$50,375,000 (the “Offering”). The Underwriters will have the option to purchase up to an additional 1,500,000 common shares at a price of CDN$16.25 for a period of up to 48 hours prior to closing for additional gross proceeds of up to CDN$24,375,000.
The Offering is scheduled to close on or about August 23, 2007 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.
Furthermore, the Company announces the closing of a CDN$14,999,985 non-brokered private placement of 923,076 shares at CDN$16.25 per share with an arm’s length investor.
Proceeds from the financings will be used for the payments that will be required before Financial Close for engineering, procurement and construction (“EPC”) contracts and the development of the Mmamabula Energy Project.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
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 fields of southeastern Botswana, 120 kilometres north of the capital city of Gaborone and adjacent to South Africa’s Waterberg Coal Fields. Phase One of the Project is planned as a 2,100 to 2,460 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$48 million and has 48,224,359 shares outstanding and 54,363,609 shares fully diluted as of the date of this news release. Please note that these figures do not include the effect of the offerings discussed above. For additional information on the Company and Mmamabula, please visit CIC Energy’s website at www.cicenergycorp.com or contact:
Erica Belling
VP Investor Relations
Tau Capital Corp.
Tel: (416) 361-9636 ext. 243
Email: ebelling@taucapital.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 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.
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