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Stock Quote: TSX:ELC     Last - 1.78    Volume - 571,400    Day High - 1.79    Day Low - 1.75    Date - 8/10/2012
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Company Overview

CIC Energy Corp.’s Mmamabula Energy Complex intends to maximize the value of the large Mmamabula coalfield in Botswana, Africa. The following projects are planned for development:

  • Export Coal Project
  • Domestic Power Project (“DPP”)
  • Mmamabula Energy Project (“MEP”)
  • Coal-to-Hydrocarbons (“CTH”) Project

In the spring of 2011, CIC Energy revised its corporate strategy to focus on the Export Coal Project as its primary project, rather than its power projects.

Botswana has been a stable democracy for over 40 years and has an A2 credit rating from Moody’s. The country provides a favourable foreign investment climate with no exchange controls and low tax rates.

Exploration drilling at the Mmamabula Coal Field has largely been completed and CIC Energy’s properties have a Canadian NI 43-101 global mineral resource estimate of approximately 2.4 billion tonnes of coal (98% in the measured category.)* This coal resource has the potential to supply a coal export business as well as multiple power stations and a coal-to-hydrocarbons plant.

Export Coal Project

The Export Coal Project envisions seaborne traded steam coal from the Mmamabula Coal Field being exported to international markets from the west coast of southern Africa. Plans for this project include:

  • Dedicated mines with multi-product (double stage) beneficiation plants, as well as a rapid rail load-out  
     
  • An approximately 1,500 kilometer Trans Kalahari Rail line (“TKR”) is planned to be constructed by a transportation consortium that could include CIC Energy.  Currently, the preferred rail route is to the west coast of southern Africa, through Botswana to a port in Namibia.  
     
  • Upgrading of a Namibian port, including a tippler to offload the rail wagons and stockpiling capacity to accommodate sufficient coal to load large ocean going vessels using a high a capacity ship loader

MRN Runge, Dowling Reynard and Associates (Pty) Limited and Aurecon assisted in conducting pre-feasibility studies on behalf of CIC Energy on the multi-product mines, beneficiation plants, rail and port options for the Export Coal Project. These studies were completed in 2009. 

In 2010 the governments of Botswana and Namibia completed a study on the TKR project.  Currently, the governments of Botswana and Namibia are evaluating Expressions of Interest (“EOI”) received in response to its solicitation for EOI to develop the TKR and a port in Namibia.

Domestic Power Project

The Domestic Power Project (“DPP”) is a 300 MW power station and associated coal mine that is planned for development at the Mmamabula Coal Field.  Electricity from the power station will be targeted to supply Botswana.

CIC Energy is currently considering several alternatives for the development of the DPP, however a decision regarding these alternatives remains pending.

Mmamabula Energy Project

The Mmamabula Energy Project (“MEP”) is a planned 1,200 megawatt (net) power station and integrated coal mine to be located at the Mmamabula Coal Field in Botswana.  The MEP is targeted to supply South Africa with electricity. Nonwithstanding the suspension of the MEP as explained below, this project remains the most advanced independent power producer (“IPP”) project that can meet the demand for new baseload capacity in South Africa in the medium term.

In December 2009, CIC Energy suspended all development activities for the MEP unrelated to the regulatory approval process in South Africa, after South Africa’s first integrated resource plan (“IRP1”) was made public and unexpectedly did not cover the time period relevant for the MEP.  In May 2011, South Africa’s second integrated resource plan (“IRP2010”) was completed and unfortunately did not provide any opportunity for CIC Energy to supply power to South Africa prior to 2019, and then only in smaller amounts than 1,200 megawatts.

As a result, the MEP remains on ‘hold’ and no target date has been set for Financial Close, the commencement of construction or any other activities.

Coal-to-Hydrocarbons  Project

The  Coal-to-Hydrocarbons (“CTH”) Project has the potential to convert some of the coal at the Mmamabula Coal Field to low sulphur diesel fuel. First synthesis gas (syngas) is produced by cleanly gasifying the coal.  Then the syngas can be converted to low sulphur diesel fuel and associated products.

CIC Energy received responses to a request for proposals from a group of international companies regarding the production of low sulphur diesel fuel. CIC Energy does not anticipate significant further expenditure on the CTH Project until such evaluations have been completed.

CIC Energy is listed on the Toronto Stock Exchange under the symbol “ELC” and on the Botswana Stock Exchange under “CIC Energy”.

*Technical reference click here

- January 2012 -