[2008-07-21]  CIC Energy Makes a Loss
CIC Energy (TSX: ELC, BSE: CIC Energy) reported a loss for the three month period ended May 31, 2008 of US$2,6 million (P16.7m) or $0.05 per share (basic and diluted), and a loss for the six month period of $4,089,000 (P26.3m) or $0.08 per share (basic and diluted).
The loss for the three and six month periods are attributable to non-capitalised exploration expenditures, administration and personnel costs, the company said in a statement on Wednesday. Capitalized exploration costs amount to $105 million (P674.1 million), with exploration costs for the six-month period totaling $18 million (P115.6 million).
The first phase of the Mmamabula energy complex, was to have involved the construction of a 2, 100 to 2, 400-MW power station and a ten-million ton a year associated mine.
A second phase envisaged another power station and mine of the same size. However, after a number of delays, CIC Energy announced last month that it had been unable to conclude a contract with the preferred engineering, procurement and construction (EPC) contractor before a deadline for securing manufacturing slots for big long-lead-time equipment passed. The company is now looking at other configurations for the project, which will likely mean building a smaller plant to begin with, and then adding more capacity at a later stage. CIC said in May that it was approaching the offtakers for the project South African power utility Eskom and the Botswana Power Corporation with proposed changes to the risk allocations for the project, which it would have needed to satisfy prospective lenders.
No agreements were reached before the window passed to secure the manufacturing slots for big equipment like the boiler and turbines, and so the company will not be able to go ahead as planned with the project.
CIC Energy president Greg Kinross said last month that the company would continue to discuss the changes with power-strapped Eskom and the BPC, both of which had included Mmamabula in their plans to meet surging energy demand in the region.

Source: ALLAFRICA