CIC Mmamabula Energy Project Update

Road Town, Tortola, British Virgin Islands (May 16, 2006) – CIC Energy Corp. (“CIC” or the “Company”) is pleased to provide an update on the Mmamabula Energy Project (“the Project”) in Southern Africa.  This update includes:

• commissioning of a Bankable Feasibility Study (“BFS”) to international financing standards,
• signing of a Memorandum of Understanding (“MoU”) with Eskom Holdings Limited (“Eskom”), South Africa’s electrical utility,
• appointment of Project Financing Counsel, and
• conditional approval to list on the Botswana Stock Exchange.

The BFS for the Project has commenced, the scope of which includes resource modeling and mine planning by Snowden Mining Industry Consultants, power station design and technology selection by Black and Veatch International Company, transmission and integration solutions and market and regulatory studies by Sad-Elec (Pty) Ltd., and World Bank-compliant water and environmental studies by Digby Wells and Associates.

The BFS will incorporate engineering and other studies previously announced for the project (see Consolidated Ophir Ventures Inc. News Release dated January 4, 2006).  These studies were originally intended to form the basis of a Pre-Feasibility Study for a coal mine and power station in conjunction with an initial resource estimate for the Mmamabula East prospecting license.  However, based on modifications to key project parameters and other factors, CIC has elected to proceed directly to a BFS.  These modifications include a significant increase in anticipated power production and a modification of the mining method for a portion of the deposit.  Based on positive exploration results, anticipated power production for the purposes of the BFS has been increased by 50%, from an approximately 8 Mt per annum coal mine with an associated 2,400 MW power station, to an approximately 12 Mt per annum coal mine with an associated 3,600 MW power station.  Along with this increase in project scale, for the purposes of the BFS the mining method has been changed from board and pillar for both the M2 and D1 seams, to board and pillar for the M2 seam and longwall mining for the D1 seam. 

CIC Energy Corp., its wholly owned subsidiary Meepong Resources (Pty) Ltd (“Meepong”) and Eskom have concluded a Memorandum of Understanding (“MoU”) in regard to the Project.  In the terms of the MoU, it is envisaged that the majority of the of the power generated by the project could be sold to Eskom under a long-term power purchase agreement (“PPA”), subject to various terms and conditions including, inter alia, any off-take agreements with the Botswana Power Corporation (“BPC”), the signing of the inter-governmental MoU between South Africa and Botswana and an inter-utility MoU between Eskom and BPC (both expected to be signed shortly), and agreement with respect to tariff and quality of the power.

A Steering Committee is currently being established to inter alia oversee the progress of the BFS, the Heads of Terms for the PPA between Eskom and Meepong Energy (Pty) Ltd (“Meepong Energy”), and thereafter a definitive PPA between Eskom and Meepong Energy. Meepong Energy is in the process of being incorporated in Botswana, and initially will be a 100% owned subsidiary of CIC and will be the vehicle through which CIC intends to obtain the requisite approvals and licenses to develop and operate the power plant.

Clifford Chance Europe LLP, an international law firm with extensive project finance experience in the energy sector has been appointed Project Finance Counsel.  Clifford Chance Europe LLP will consult to CIC in matters related to the completion of the BFS, agreements with governments and power utilities, engineering, procurement and construction (“EPC”) contracts and project financing.

The Botswana Stock Exchange (“BSE”) has conditionally approved the secondary listing of CIC on the BSE, pending publication in a local newspaper.  CIC anticipate listing on the BSE within a few weeks, under the symbol “ELC”.

The Phase I drill program concentrating on the “Mookane Block” in the Mmamabula East prospecting license is now complete.  The Phase II program, which includes ten drill rigs in the “Tuli Block” of the Mmamabula East prospecting license and two drill rigs on the Mmamabula South prospecting license, is currently ongoing and expected to be complete by July, 2006.  Based on the completed Phase I work, an updated independent, National Instrument 43-101 (“NI 43-101”) compliant resource estimate for the Mmamabula East prospecting license is in progress and will be released when it is received by the Company, which is expected to be within the next few weeks.

Mr. Gregory Kinross, CEO of CIC, states “We are extremely pleased with the progress that we are able to report to shareholders today.  The Project has advanced significantly since our initial involvement just 14 months ago and the signing of the MoU with Eskom signifies an important milestone in the project”.

CIC is a TSX listed company engaged in the advancement of the Mmamabula Energy Project, which includes the Mmamabula East and Mmamabula South prospecting licenses, located in the Mmamabula Coal Fields of south-eastern Botswana, 120 km north of the capital city of Gaborone and adjacent to the Waterberg Coal Fields, located in the northern part of South Africa.  The Southern Africa region is projected to require significant new baseload power generation capacity beginning in 2011.  To address this shortfall, the Company is currently conducting a BFS for a major, integrated 12Mt per annum coal mine and associated 3,600 MW power station at the Mmamabula Energy Project which will supply the regional power grid, commencing in 2011.

CIC is well-funded, with a treasury of approximately CDN$ 61M. The Company has 41,361,521M shares outstanding and 48,759,111M shares fully diluted.  For additional information on CIC and its projects visit the Company’s website at www.cicenergycorp.com or contact:

Fiona Childe, Ph.D., P.Geo.
VP Corporate Communications
Tau Capital Corp.
Tel: (416) 361-9636 x 227
Email: fchilde@taucapital.com

The TSX does not accept responsibility for the adequacy or accuracy of this release.

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 (including, without limitation, statements regarding the Company's plans with respect to the exploration and development of the Mmamabula Energy Project) 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 regarding targets, future production, goals, objectives, plans and future economic, market and other conditions.  Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to:  failure to complete a posit ive bankable pre-feasibility study on the Mmamabula Energy Project and/or the related power station; failure to outline additional mineral resources of sufficient grade and/or quality to support the proposed 3,600 MW power station; 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 the Mmamabula Energy Project 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 and/or transmission agreement with Eskom; failure to raise additional funds to finance the development of the proposed mine and/or power station; uncertainty of outcome of any litigation or claims; or other fa ctors (including exploration, development and operating risks).  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.  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 n ot be put on such statements due to the inherent uncertainty therein.