ENM Energem

    Energem secures interest in Stieglers Gorge Hydro-Electric Scheme project in
Tanzania

    TSX/AIM: ENM

    VANCOUVER, May 20 /CNW/ - Energem Resources Inc ("Energem" or "the
Company") is pleased to announce that it has executed a Memorandum of
Understanding ("MOU") with Infrastructural Development Finance (Pty) Ltd
("IDF") in terms of which it has, subject to further detailed contracts,
acquired a 40% interest in a proposed 900 megawatt hydro-electric scheme, the
Stieglers Gorge Hydro-Electric Scheme in Tanzania ("the Project") in
consideration for advancing a short term loan, approximately US$1.2 million
(the "Loan").
    The acquisition results from an undertaking to fund and assist in the
updating of historic engineering and feasibility studies relating to the
Project, to bring these studies to bankable feasibility status and to assist
in the raising of funding for the development and construction of the Project.
In the early 1980's, through a Norwegian Government initiative, a detailed
feasibility study of the Project was undertaken and completed ("the Historic
Feasibility"). The Historic Feasibility has now been made available to
Energem. Under the MOU, Energem will advance the Loan to IDF in order to
update the historic feasibility study to bankable status.
    The 1980's Project, whilst qualifying at the time in respect of all
engineering and environmental considerations, was shelved due to insufficient
regional electricity demand at the time to justify economic viability. This
position has now changed with demand for electricity in the region showing
considerable growth at a time when current infrastructure is unable to meet
existing demand.
    Energem's principal partner in the Project is IDF who has been granted
the rights to the Project by the Tanzanian Government to update the
feasibility study and thereafter potentially develop and construct the scheme,
which would be based on the Rufiji river at the Stieglers Gorge site in the
Selous Game Reserve. IDF is a private company with expertise in hydro-electric
power stations The remaining 60% in the Project is held by IDF (40%), a
private engineering consortium (10%) and the Rufiji Basin Development
Authority (RUBADA), an arm of the Tanzanian Government (10%).
    The rights to the Project are at all times subject to Tanzanian legal
regimes and regulatory process.
    Energem has appointed consulting engineers Jeffares & Green to examine
the historic feasibility studies relating to the Project. Jeffares & Green
have to date concluded that the historic studies were comprehensive and of a
high standard and would require limited updating to bring them up to current
standards for internationally acceptable bankable level.
    Based on a recent review of the information available from the Historic
Feasibility, the construction of a dam has a very limited environmental
impact, is expected to use only a minor fraction of the area of the Selous
Game Reserve, requires no resettlement of local communities and can provide
substantial down stream irrigation and flood control benefit to agricultural
development in the area, which is approximately 200 kilometres south west of
the port of Dar Es Salaam and reasonably well served by road and rail
infrastructure both inland and to the port.
    The current estimated capital cost of construction, subject to updating
of the studies, is in the order of some $2 billion with an estimated five year
construction period.
    Energem would seek to assist in the management, financing and logistics
support to the construction of the scheme.
    This project represents a natural adjunct to the Company's logistics
platform and strategic involvement in other African based clean and renewable
energy activities.

    This news release contains forward-looking statements which address
future events and conditions which are subject to various risks and
uncertainties. The actual results could differ materially from those
anticipated in such forward-looking statements as a result of numerous
factors, some of which may be beyond the Company's control. These factors
include: the availability of funds; the costs and availability of product;
fluctuations in fuel product sale prices; currency fluctuations; changes in
production costs; fluctuation in shipping costs; availability of shipping;
general market and industry conditions; political and regulatory instability
and risks associated with rights to title and ownership of assets.
    Forward-looking statements are based on the expectations and opinions of
the Company's management on the date the statements are made. The assumptions
used in the preparation of such statements, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such, undue
reliance should not be placed on forward-looking statements.

    Energem Resources Inc (TSX/AIM:ENM). is an Africa focussed company listed
on the Toronto Stock Exchange and on the London Stock Exchange's AIM market
and the holding company of a group of companies engaged in, mainly, several
African countries in the bio-fuels, oil and related sectors including
logistics and supply to the mining industry in South and Central Africa and
development of an up-stream oil exploration asset. The Company has offices
and/or logistics and support infrastructure in Johannesburg, London and a
number of African countries.

For further information: Rob Rainey in Johannesburg at telephone +27 11
372-3300, Fax +27 11 454-1673 or email: info(at)energem.com; Refer to our
website: www.energem.com; Canaccord Adams Limited, Robert Finlay, Andrew
Chubb, +44 207 050 6500; Smithfield, Reg Hoare, George Hudson, Will Henderson,
+44 207 360 4900
(ENM.)



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