Location & Landholdings
CIC Energy’s coal resource is located in the Mmamabula Coalfields of southeastern Botswana, adjacent to the country’s main road and rail corridor which links the country’s capital, Gaborone, with its second-largest city, Francistown.

The Mmamabula Coalfields form the extension of South Africa’s Waterberg Coalfields, which contain approximately half of South Africa’s coal reserves, along with Eskom’s 3,690 MW (net capacity) Matimba power station and Exxaro Resources Limited’s 19 million tonne per annum Grootegeluk coal mine.  Exxaro has also been contracted to supply a further 14 million tonnes per annum to Eskom’s approximately 4200 MW Medupi  power station, now under construction.

The two non-contiguous exploration licences, Mmamabula East (50,840 hectares) and Mmamabula South (14,000 hectares), are wholly owned by CIC Energy’s Botswana subsidiary, Meepong Resources (Proprietary) Limited.

Geology, Exploration & Mineral Resources
Since commencement of exploration by CIC Energy and its predecessor, Coal Investment Corp., in mid-2005, up to twelve drill rigs have been active concurrently on CIC Energy’s Mmamabula Coal Field. In excess of 180,000 metres has been drilled in over 2,200 holes and the exploration drilling program was essentially complete as of May 2008.

As announced in a news release of August 14, 2008, the global mineral resource estimate for the Mmamabula Coal Field totals approximately 2.93 billion tonnes (“Bt”) in the measured and indicated categories. This is an increase in the region of 28% from the previously reported 2.28 Bt.  An approximate 38 million tonnes (“Mt”) is further reported in the inferred category (see Tables 1 to 5 and Figure 1).

Table 1 – Mmamabula Global Mineral Resource Estimate (D1 + M2 Seams: Mmamabula East incorporating the Mookane, Dovedale, Serorome and Border Blocks and Mmamabula South) (effective date: August 14, 2008)

Of the almost 3 billion tonnes of coal at the Mmamabula Coal Field, work done by CIC Energy’s mining team indicates that the resource can potentially deliver an extractable tonnage of 1.8 billion tonnes (run-of-mine).  This estimate is based on applying open cast mining methods over 33% of the area and bord and pillar with pillar extraction mining methods for the remainder of the resource. 

Based on the analysis that has been performed, CIC Energy anticipates that the 1.8 billion tonnes of run-of-mine production, after beneficiation, could yield the following coal products: 880 Mt of thermal coal suitable for power generation, 440 Mt of high quality export coal, and 195 Mt of coal suitable for CIC Energy’s Coal-to-Hydrocarbons Project. This product mix is based on the different coal qualities suited for these three potential markets. The estimated qualities of these coal products are included in Figure 2 below.

¹The qualities and quantities of the coal products are estimates based upon the following: interpretation of geologic data obtained from drill holes and other sampling techniques, feasibility studies which derive estimates of cash operating costs based upon anticipated tonnage and grades of coal to be mined and processed, ground conditions, the configuration of the coal seams, expected recovery rates of coal from the seams, estimated sales revenues and operating costs from coal beneficiation activities, anticipated climatic conditions and other factors. No assurances can be given that the indicated qualities or quantities of coal will be produced.  In particular, any change to the quality requirements or change to the mining methods as a result of production cost inputs would impact the coal product quantities. 

To date five coal-bearing areas have been defined on Mmamabula: the Mookane, Serorome, Dovedale and Border Blocks (from west to east) at Mmamabula East, as well as a single block at Mmamabula South, herein referred to as “Mmamabula South” (See Figure 1). Drill hole spacings for the Mmamabula South, Mookane, Dovedale, Serorome and Border Blocks are typically set at 500 metres (“m”) by 500 m.

Based on quality and thickness, two coal seams have been identified as the principal economic targets at CIC Energy’s Mmamabula Coal Field; these are the D1 and M2 seams. On the main Mmamabula East licence, the two seams are relatively flat lying and in the areas of economic interest occur at depths of less than 100 m below surface. The D1 and M2 seams have average mineable thickness of approximately five and three metres, respectively.

D1 seam coal  qualities across the Mmamabula East licence area are mostly suitable for thermal power generation with raw coal calorific values (“CV”) of approximately 20.8 megajoules per kilogram (“MJ/kg”) for the D1 seam and 22.6 MJ/kg for the M2 seam. Work to date by CIC Energy and past operators on the M2 seam indicates that coal qualities, generally increase from west to east, with the potential for higher-quality export coal in the M2 seams of the Mookane, Dovedale and Border Blocks. Mmamabula South is suitable for thermal power generation.

Based on current mining cost parameters, approximately 33% of the Mmamabula coal resource could be extracted economically by open cut mining methods and underground bord and pillar mining methods using conventional continuous miners is being planned for the remaining 67%. Alternative mining methods (such as underground long wall extraction) that could further optimize resource utilization are also being investigated.

Washability studies for the D1 and M2 seams in all the current resource estimate areas indicate that washing is an effective method of reducing the sulphur content of the coal from between 1.51% and 3.48% to between approximately 0.24% and 0.57%, at a cut point density of 1.8 g/cm3. Washability analysis indicates theoretical yields of between 75.27% and 88.74% at a cut point density of 1.8 g/cm3. Ongoing studies by CIC Energy are examining partially washing sized coal as an alternative method to reduce sulphur contents.

The following structural characteristics have been noted in the four resource areas modeled during the course of the latest resource estimation process; please note that the Mmamabula South Block has not been remodeled:

Dovedale Block:
The D1 seam mineral resource varies in thickness from 1.82 m to 6.20 m, with an average thickness of 3.5 m and occurs at depths from surface of between 21 m to 110 m, with an average depth to roof of 76 m. The seam dips shallowly at 0.5o to 4.0o, to the east in the western portion of the area and to the southeast or northwest, on either side of a northeast-trending palaeo high. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.65 m to 4.87 m, with an average thickness of 3.28 m and occurs at depths from surface of between 12 m to 143 m, with an average depth to roof of 99m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 2% has also been applied to the resource to account for faulting along the southern edge of the resource.

Serorome Block:
The D1 seam mineral resource varies in thickness from 1.8 m to 8.60 m, with an average thickness of 4.34 m and occurs at depths from surface of between 14m to 83m, with an average depth to roof of 40 m. The seam dips shallowly at 0.5o to 1.4o, predominantly eastwards to the east of a northwest-trending palaeo high. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 2.0 m to 6.54 m, with an average thickness of 3.47 m and occurs at depths from surface of between 24 m to 108 m, with an average depth to roof of -58 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 5% has been applied to the resource to account for faulting along the southern edge of the resource.

Border Block:
The D1 seam mineral resource varies in thickness from 1.50 m to 9.30 m, with an average thickness of 3.20 m and occurs at depths from surface of between 11 m to 114 m, with an average depth to roof of 108 m. The seam dips shallowly at 0.5o to 1.4o, predominantly to the southeast, southeast of a northeast-trending palaeo high. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.50 m to 6.38 m, with an average thickness of 3.20 m and occurs at depths from surface of between 14 m to 146 m, with an average depth to roof of 82 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 5% has been applied to the resource to account for faulting along the southern edge of the resource.

Mmamabula South:
The D1 seam mineral resource varies in thickness from 1.6 m to 11.8 m, with an average thickness of 6.0 m and occurs at depths from surface of between 29 m to 144m, with an average depth to roof of 89 m. The seam dips at 0 degrees to 5 degrees, predominantly to the southwest and northwest. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.5 m to 4.3 m, with an average thickness of 3.2m and occurs at depths from surface of between 33 m to 169 m, with an average depth to roof of 106 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. A discount of 20% has been applied to the resource to account for faulting which has split the resource area into 11 separate faulted blocks. Interpretive vertical throws of around 50 m separate the faulted blocks.

Mookane Block:
The D1 seam mineral resource varies in thickness from 1.00 m to 9.05 m, with an average thickness of 5.69 m and occurs at depths from surface of between 28 m to 121 m, with an average depth to roof of 61 m. The seam dips shallowly at 0.5o to 1.4o, predominantly to the west, west of a northwest-trending palaeo high. The M2 seam mineral resource, which occurs approximately 20 m stratigraphically below the D1 seam, varies in thickness from 1.50 m to 6.50 m, with an average thickness of 3.29 m and occurs at depths from surface of between 25 m to 143 m, with an average depth to roof of 76 m. The M2 seam has a comparable dip to the D1 seam. Weathering to an average depth of 30 m has affected the D1 and M2 seams in places. Only coal seams where the seam roof is below the weathered horizon are reported in the current mineral resource estimate. No discount has been made for interpreted geological loss due to interpreted continuity of the ore body.

Table 2 – Updated Mineral Resource Estimate, Dovedale Block, (Mmamabula East)
(effective date: August 14, 2008)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate¹

D1 Seam Mineral Resource Estimate¹

M2 Seam Mineral Resource Estimate¹

¹ includes a 2% discount for interpreted geological loss due to faulting

Table 3 – Updated Mineral Resource Estimate, Serorome Block, (Mmamabula East)
(effective date: August 14, 2008)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate²

D1 Seam Mineral Resource Estimate²

M2 Seam Mineral Resource Estimate²

Table 4 – Initial Mineral Resource Estimate, Border Block (Mmamabula East)
(effective date: August 14, 2008)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate²

D1 Seam Mineral Resource Estimate²

M2 Seam Mineral Resource Estimate²

² includes a 5% discount for interpreted geological loss due to faulting

Table 5 – Previously Reported Mineral Resource Estimate, Mmamabula South
(effective date: May 24, 2007)
Due to rounding errors summation of measured and indicated resources may not total exactly

D1 + M2 Seams Mineral Resource Estimate³

D1 Seam Mineral Resource Estimate³

M2 Seam Mineral Resource Estimate³

³ includes a 20% discount for interpreted geological loss due to faulting

Table 6 – Updated Mineral Resource Estimate, Mookane Block, (Mmamabula East)
 (effective date: August 14, 2008)

D1 + M2 Seams Mineral Resource Estimate⁴

D1 Seam Mineral Resource Estimate⁴

M2 Seam Mineral Resource Estimate⁴

⁴ no discount was made for interpreted geological loss due to interpreted continuity of ore body

Qualified Person, Quality Assurance/Quality Control and Methodology
The "Qualified Person", as such term is defined by Canadian Securities Administrators (CSA) National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") who prepared the mineral resource estimates and other technical information presented on this page, is Ms. Lesley Jeffrey.  Ms. Jeffrey is an employee of the Company's subsidiary, Bon-Terra Mining (Proprietary) Limited, and is a member of the South African Council for Natural Scientific Professions and is deemed a "Competent Person" under the South African SAMREC Code. 

CIC Energy filed the sixth NI 43-101 technical report, on SEDAR on September 29, 2008.  The report is entitled “CIC Energy Corp.: Mmamabula Energy Complex, Southeastern Botswana, Project No. J912, National Instrument 43-101 Sixth Technical Report.”

Mr. Grant van Heerden, Pr.Sci.Nat., of SRK Consulting (South Africa) (Pty) Limited ("SRK") has reviewed, in principal, the processes and procedures used at the Mmamabula site in Botswana to generate geological information (drilling, logging and sampling) for input into the geological models.  SRK have also discussed with Ms. Jeffrey the methodology for coal resource estimation based on the geological models.  SRK concur with the procedures and methodologies used by the Company for geological model construction (physical models and coal quality models) as well as with the definition of coal resource blocks.  Mr. van Heerden is a member of the South African Council for Natural Scientific Professions and is deemed a "Competent Person" under the South African SAMREC Code.

All coal analyses were conducted by Witlab (Pty) Limited ("Witlab") in Witbank, South Africa. Witlab is independent of CIC Energy and specializes in the sampling and analysis of coal. Witlab is in the process of obtaining accreditation through the South African National Accreditation System.

For information with respect to geology, analytical methodology, Quality Assurance/Quality Control, and resource estimate methodology, block model and cut-offs see the Company's news release dated June 22, 2006. Note that whereas the current resource estimate for the Mookane Block uses no geological losses, the current resource estimates for the Dovedale Block, Serorome Block, Border Block and Mmamabula South use, respectively, 2%, 5%, 5% and 20% interpreted geological loss to account for successively more pronounced faulting within these areas.

- September 2008 -