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Tortola, Road Town, British Virgin Islands (March 17, 2006) - Coal Investment Corp. ("CIC") and Consolidated Ophir Ventures Inc. ("Ophir") announced that they have completed their previously announced merger under the laws of the British Virgin Islands pursuant to a Plan of Consolidation (see press release of Ophir dated January 4, 2006). The new name of the merged company is CIC Energy Corp. (the "Company"). The Company has approximately Cdn. $ 65 million of cash.
The Toronto Stock Exchange has conditionally approved the listing of the Company's common shares. The number of outstanding common shares is approximately 39,351,517.
Business of the Company
The Company is engaged in the exploration, development and operation of two coal properties (Mmamabula East and Mmamabula South) located in the Mmamabula coalfields in south-eastern Botswana. The properties are held by the Company's wholly-owned Botswana subsidiary, Meepong Resources (Pty) Ltd.
Mmamabula East is comprised of a coal prospecting licence (PL NO. 11/2004) covering approximately 504 square kilometres, which expires in March 2007, subject to renewal. Mmamabula East contains coal resources which may be suitable as thermal coal for a coal-fired power generation plant. The Southern African region is expecting major peaking power shortages as early as 2007 and major baseload generation capacity shortages as early as 2011 according to, among others, ABSA Bank of South Africa Limited. In light of this, the regional utilities are promoting new projects and require additional power. Provided the project is supported by a positive bankable feasibility study, the Company is planning to develop Mmamabula East as a mine-mouth coal fired power station supplying the Southern African power grid with electricity commencing in 2011 (provided that the Company obtains all applicable regulatory permits and/or licences and enters into a power purchase agreement with Eskom Holdings Limited, South Africa’s state owned electricity utility, and secures the necessary funding for the project) or alternatively, as a supplier of coal to one or more power producers and/or industrial users.
Mmamabula South is comprised of a coal prospecting licence (PL NO. 75/2002) covering approximately 140 square kilometres, lying to the south west of Mmamabula East, which expires in June 2007 subject to renewal. Mmamabula South is a stand alone exploration prospect on that the Company plans to carry out a US$ 2 million exploration program by June 2007.
Mmamabula East
Mmamabula East is the subject of a technical report dated February 20, 2006 entitled “CIC Mmamabula Coal Project – Second Technical Report” (the “Report”) prepared by Snowden Mining Industry Consultants (“Snowden”), an independent mining consulting company, which has been filed with the Canadian Securities Administrators on the System for Electronic Document Analysis and Retrieval (SEDAR). This Report is an update of the technical report prepared by Snowden effective November 4, 2005, which was filed by Ophir on SEDAR.
The information set out in this section of the press release, “Mmamabula East,” is derived from the Report.
Mmamabula East is located 120 km to the north of Botswana’s capital city of Gaborone and lies between the Gaborone-Francistown main road, and the border between Botswana and South Africa in the east. The project area can be accessed via the main tar road linking Francistown in the north with Gaborone in the south. There are a number of dirt roads that can be used to access the project area to the east of the tar road. These roads may become impassable without the use of four wheel drive vehicles during periods of heavy rainfall.
The project area is very flat, with surface elevations varying between 800 m and 1,000 m above mean sea level. The area is semi-arid with no surface water and is covered by savannah grasslands, shrubs and trees. The Serorome River course runs through Mmamabula East. This river flows only during the rainy season and is dry for the rest of the year.
The coal mineralisation in Mmamabula East occurs within the Dibete Formation of the Upper Ecca Subgroup and Mmamabula Formations of the Middle Ecca Subgroup. The D1 seam of the Dibete Formation and M2 seam of the Mmamabula Formation have been identified from previous exploration undertaken by British Petroleum’s Coal Division ("BPCD") as having the most potential to be economically extracted. CIC identified the potential value of the D1 and M2 seams, and used BPCD’s information as a basis for funding and implementation of an infill drilling and sampling program.
The Mmamabula East licence area is divided into the Mookane area in the west and the Tuli area in the east by a zone of poor quality coal. CIC’s Phase 1 drilling was concentrated in the Mookane area. Snowden has reviewed the available information derived from previous and CIC's Phase 1 drilling activity within the Mookane area.
The Phase 2 drilling program, which is concentrated on the Tuli area, is currently in progress and is expected to delineate comparable resource figures to that identified in the Phase 1 drilling programme in the Mookane area.
Structural and quality modelling and resource estimation has been conducted over the Mookane area where Phase 1 drilling information was made available to Snowden. Only those holes that had been drilled, logged and sampled by CIC before December 13, 2005 were used in the modelling in addition to the BPC holes in this area for which digital down-hole log information had been captured. A total of 118 holes, (88 holes drilled by CIC and 30 holes drilled by BPC), were used for structural modelling purposes and resource estimation. Of the above holes, 51 holes for the D1 seam and 62 holes for the M2 seam have coal quality information available for quality modelling and resource estimation purposes.
Borehole logs and coal quality information provided to Snowden by CIC have been used by Snowden to construct three dimensional (3D) block models of the geology in the Mookane area. Snowden was able to demonstrate in the 3D model the spatial continuity of the D1 and M2 seams across the project area.
Snowden has estimated a total tonnes in situ ("TTIS") of measured and indicated resources of 591.6 million tonnes ("Mt") and an additional 156.3 Mt inferred resources (TTIS) in the Mookane area. The TTIS comprises the M2 seam and D1S horizon of the D1 seam in the Mookane area. The D1S horizon of the D1 seam excludes poor quality floor coal in the D1 seam. Snowden has estimated the total mineable in situ tonnes ("MTIS") of measured and indicated resources for the Mookane area to be 522.0 Mt and comprise the D1M horizon and the full M2 Seam. Snowden has estimated the total inferred resources (MTIS) for the Mookane area to be 140.8 Mt. The D1M horizon is a select cut within the D1S horizon whereby at least 1.0 m of coal is left in the roof of the D1S horizon to ensure geotechnical stability and to further optimise coal qualities by excluding poor quality roof coal.
Resource Estimate
|
D1 SEAM HORIZON RESOURCES (air dryed basis) |
|
RESOURCE
CLASSIFICATION |
AREA
(ha) |
D1S(1)
Width (m) |
D1S(1)
RD4 |
TTIS
(Mt) |
D1M(2)
Width (m) |
D1M
RD |
MTIS(3)
(Mt) |
|
MEASURED (MEAS) |
511.26 |
6.50 |
1.57 |
48.8 |
5.29 |
1.56 |
39.0 |
|
INDICATED (IND) |
3060.47 |
5.73 |
1.56 |
269.8 |
4.53 |
1.54 |
210.0 |
|
TOTAL MEAS & IND |
|
|
|
318.6 |
|
|
249.0 |
|
INFERRED |
796.39 |
5.69 |
1.57 |
70.9 |
4.52 |
1.55 |
55.4 |
|
M2 SEAM RESOURCES (air dryed basis) |
|
RESOURCE
CLASSIFICATION |
AREA
(ha) |
M2
Width (m) |
M2
RD |
TTIS
(Mt) |
MTIS3
(Mt) |
|
MEASURED (MEAS) |
519.30 |
3.20 |
1.52 |
24.5 |
24.5 |
|
INDICATED (IND) |
4952.15 |
3.41 |
1.51 |
248.5 |
248.5 |
|
TOTAL MEAS & IND |
|
|
|
273.0 |
273.0 |
|
INFERRED |
1629.63 |
3.46 |
1.56 |
85.4 |
85.4 |
Notes:
-
D1S horizon excludes poor quality floor coal from the D1 seam.
-
D1M horizon excludes at least 1.0 m of roof coal for geotechnical stability and poor quality roof coal.
-
No geological loss has been included as there is no indication from drilling to date of the presence of dykes or other geological structures likely to result the destruction/absence of coal, apart from those that have already been accounted for in the model.
- "RD" means relative density.
Resource Qualities
|
D1M RAW QUALITIES (air dryed basis) |
|
|
Raw Density
(g/cm3) |
Volatiles
% |
Inherent Moisture
% |
Ash
% |
Fixed Carbon
% |
Calorific Value
(MJ/kg)(2) |
Sulphur
% |
|
MEASURED (MEAS) |
1.56 |
22.49 |
3.88 |
25.36 |
48.28 |
21.11 |
1.45 |
|
INDICATED (IND) |
1.54 |
22.30 |
4.44 |
24.14 |
49.59 |
21.36 |
1.85 |
|
TOTAL(1) MEAS & IND |
1.54 |
22.33 |
4.35 |
24.33 |
49.38 |
21.32 |
1.79 |
|
INFERRED |
1.55 |
22.22 |
4.17 |
24.47 |
49.14 |
21.16 |
1.80 |
|
M2 RAW QUALITIES (air dryed basis) |
|
|
Raw Density
(g/cm3) |
Volatiles
% |
Inherent Moisture
% |
Ash
% |
Fixed Carbon
% |
Calorific Value
(MJ/kg)(2) |
Sulphur
% |
|
MEASURED (MEAS) |
1.56 |
24.23 |
3.74 |
21.67 |
50.34 |
23.30 |
1.56 |
|
INDICATED (IND) |
1.51 |
24.33 |
3.95 |
21.81 |
50.46 |
23.06 |
1.83 |
|
TOTAL(1)
MEAS & IND |
1.51 |
24.32 |
3.93 |
21.80 |
50.45 |
23.08 |
1.81 |
|
INFERRED |
1.56 |
22.89 |
3.87 |
26.11 |
47.25 |
21.48 |
1.65 |
Notes:
- Average weighted on MTIS.
- "MJ/kg" means mega joule per kilogram.
These resources are a potential supply of coal to a coal-fire power station consuming 22.0 MJ/kg coal on a run of mine basis. The supply of coal from the above resources is dependant on the application of suitable technology to reduce the in situ sulphur content from 1.8% to less than 1.0%. The technologies available to be benchmarked include coal washing, fluid-gas desulphurisation or fluidised bed combustion with addition of a suitable sorbent such as limestone. The washability results indicate that beneficiation of the coal will not adversely effect overall product yields.
In order to ascertain if there are any significant issues that may materially affect the estimated coal resources tabulated in the above tables, Snowden has reviewed environmental, legal, social impact and mining studies conducted by Digby Wells and Associates (2005) and Snowden (2006), respectively. Following review of the above reports, Snowden does not believe that there are any significant issues that may materially affect the above resource estimates with respect to known environmental, permitting, legal, title, taxation, socio-political, and marketing issues.
The qualified persons, as such term is defined in National Instrument 43-101 - Standards of Disclosure for Minerals Projects ("NI 43-101"), who prepared Snowden's technical report were Derek J. Loveday (B.Sc.Honours, Pr.Sci Nat) and C.M. Williams (M.Sc., GDE, Pr.Sci Nat). Mr. Loveday and Mr.Williams are independent of the Company for the purposes of NI 43-101.
Mr. Loveday, a resources consultant working for Snowden verified all data (including sampling, analytical and test data underlying the information) disclosed in this Press Release
Directors and Officers of CIC Energy Corp.
The board of directors of the Company consists of the following individuals: Sandra Cowan, Francis Crothers, Mandla Gantsho, Reuel Jethro Khoza, Gregory Kinross, Deenadayalen Konar, Blackie Marole, Elvidge Mhlauli and Warren Newfield. Reuel Jethro Khoza and Warren Newfield will initially serve as Co-Chairs of the board of directors.
Senior management of the Company includes: Gregory Kinross as Chief Executive Officer, Sue Myburgh as Chief Financial Officer, and Francois Badenhorst as Chief Operating Officer. Solomon Tlhapane has been appointed as Honourary President (non-management) of the Company.
A profile of each of these individuals (including their occupations for the previous five years) is set out in the Management Information Circular of Ophir dated February 1, 2006, as filed with the Canadian Securities Administrators on the System for Electronic Document Analysis and Retrieval (SEDAR).
Forward-Looking Statements
This press release and the Report contain forward looking information. Such forward looking information includes, among other things, statements regarding targets, estimates and/or assumptions in respect of mineral resources, mineral resource qualities, future production, goals, objectives, plans and future economic, market and other conditions, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward looking statement include, but are not limited to: failure to complete a positive pre-feasibility study on Mmamabula East and/or the power generation plant; the grade, quality and recovery of coal which is mined varying from estimates; inflation; changes in exchange rates; fluctuations in coal and electricity prices; delays in the development of Mmamabula East caused by unavailability of equipment, labour or supplies, climatic conditions or otherwise; delays or failures in obtaining regulatory permits and/or licences respecting mining, power generation and/or power transmission lines; availability of water at cost effective prices; inability to enter into a power purchase agreement; failure to raise additional funds; uncertainty of outcome of any litigation or claims; or other factors. Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances, except as required by law.
For further information, please contact:
CIC Energy Corp.
c/o Tau Capital Corp.
110 Sheppard Avenue East, Suite 610
Toronto, Ontario M2N 6Y8
Canada
Attention: Alan Friedman
Telephone: (416) 361-9636
Facsimile: (416) 361-3153
Email: friedman@taucapital.com
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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