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Road Town, Tortola, British Virgin Islands (June 12, 2006) – CIC Energy Corp. (“CIC” or the “Company”) (TSX:ELC, BSE:CIC Energy) announces that a settlement has been reached in the dispute between the “Highland Star Group” (“HSG”) and Meepong Investments (Pty) Limited (“Meepong Investments”), CIC, Meepong Resources (Pty) Ltd. (“Meepong Resources”), and the original shareholders of Meepong Investments, as outlined in a CIC news release dated April 23, 2006.
Based on advice furnished by legal counsel, CIC remains confident that the HSG claims continue to be unfounded and without merit both in fact and in law. Nevertheless, the Board of Directors has decided that the rapid settlement of this matter is in the best interest of the Company. The board concluded that without having resolution to the dispute it would be difficult to complete the project financing within the Company’s planned timeframe, as Counsel had advised the Company that it could take up to 24 months for the dispute to be finally resolved through the Botswana courts. Under the terms of the settlement, CIC has agreed to pay the HSG a total of US$18,500,000.
Mr. Gregory Kinross, CEO of CIC, states “Settlement of the HSG dispute removes a potential impediment, due to the time required to bring resolution to the issue, for the Mmamabula Energy Project to proceed through a Bankable Feasibility Study (“BFS”) and towards financial close. In a news release dated May 16, 2006 the Company announced the signing of a Memorandum of Understanding with Eskom, South Africa’s electrical utility. CIC anticipates the Company's treasury is sufficient to take the Mmamabula Energy Project through completion of a BFS and is currently advancing towards achieving significant milestones set out for the project.”
Appointment of Additional Financial Advisor
The Company is pleased to report that it has appointed Investec Bank Limited (“Investec”), an international recognized specialist banking group, as financial advisor. ABSA Bank, which is a subsidiary of Barclays Bank, will continue in its role as project advisor and mandated debt advisor and arranger.
Investec has been appointed in order to assist the Company in expeditiously concluding joint venture agreements with an independent power producer (“IPP”) and a major mining company, to develop the Mmambula Energy Project. The Company has pre-selected several IPP’s and mining companies as potential partners with whom negotiations have commenced.
Listing on the Botswana Stock Exchange
Further to conditional listing announced in a CIC news release of May 16, 2006, the Company is pleased to announce that it has commenced trading on the Botswana Stock Exchange (“BSE”), under the name “CIC Energy”.
About CIC Energy Corp.
CIC is a TSX/BSE-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 South Africa’s Waterberg Coal Fields.
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 has a treasury of approximately CDN$ 38.5M, 41,486,521M 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
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 positive Bankable 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; inability to enter into joint venture agreements with an IPP and a major mining company to develop and operate the proposed power station and/or coal mine and/or failure to raise additional funds to finance such development: or other factors (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 not be put on such statements due to the inherent uncertainty therein.
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