Prophecy Acquires Prospective Claims Near Its Ulaan Ovoo Mine In Mongolia
05 May 2011 - 6:30AM
Marketwired
Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:
PCY)(OTCQX: PRPCF)(FRANKFURT: 1P2) announces that it has entered
into an Option Agreement ("Agreement") with a private Mongolian
company ("Seller") holding an exploration license near Prophecy's
Ulaan Ovoo mine, pursuant to which Prophecy has been granted the
right to acquire 100% ownership for US$2 million within the first
year, or US$4 million in the second year of the execution of the
Agreement.
The 4,773-hectare property has an existing, fully transferable
exploration license located 17 km northeast of Prophecy's producing
Ulaan Ovoo coal mine. It is contiguous to Prophecy's existing
exploration license covering 7,392 hectares. These exploration
licenses are located in the same structural basin as the Ulaan Ovoo
Mine. Recent reconnaissance programs including geophysical work to
date indicates the presence of shallow sedimentary rocks up to
100meters in thickness, which demonstrates the potential for coal
discovery. Prophecy plans to commence drilling operations on the
4,773 hectare property in June 2011.
Pursuant to the Agreement, Prophecy has the right to acquire
100% of the property by making the following payments to the
Seller:
US$200,000 on agreement signing (paid); and
US$1,800,000 before April 21, 2012, 50% payable in Prophecy
shares.
Or
US$200,000 on agreement signing (paid);
US$500,000 on April 22, 2012; and
US$3,300,000 before April 21, 2013, 50% payable in Prophecy
shares.
A 2% net royalty on production from the Property is payable to
the Seller, which can be purchased at any time at Prophecy's
discretion for US$1,000,000 on or before April 21, 2013. Half (1/2)
of the royalty purchase price shall be payable through the issuance
of common shares of Prophecy.
The transaction is subject to regulatory approval, including the
approval of the TSX Venture Exchange.
This news release has been reviewed and approved by Christopher
M. Kravits, PGeo who is a Qualified Person as defined in NI 43-101.
Mr. Kravits has 34 years of US and international relevant coal
geology experience. He has been active in Mongolia since 2007.
Please visit www.ProphecyResource.com to review property claim
maps with proposed drill holes and geophysical surveys.
About Prophecy Resource
Prophecy Resource Corp. is an internationally diversified
company engaged in developing energy, nickel and platinum group
metals projects. The company controls over 1.4 billion tonnes of
surface minable thermal coal resources in Mongolia. Prophecy's
Ulaan Ovoo coal mine is fully operational and its Chandgana mine
mouth power plant is currently being permitted. In Canada, Prophecy
owns the Wellgreen PGM Project in Yukon and Lynn Lake Nickel
Sulphide Project in Manitoba, both of which it has agreed to sell
to Pacific Coast Nickel Corp. Prophecy also owns equity stakes in
Victory Nickel Inc. and Compliance Energy Corp. Mineral resources
that are not mineral reserves do not have demonstrated economic
viability.
ON BEHALF OF THE BOARD OF DIRECTORS
Prophecy Resource Corp.
John Lee, CEO/Chairman
Forward Looking Statements: This news release includes certain
statements that may be deemed "forward-looking statements". All
statements in this release, other than statements of historical
facts, including, without limitation, statements regarding future
plans and objectives of the companies are forward-looking
statements that involve various risks and uncertainties. Although
Northern and Prophecy believe the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking statements. Forward-looking statements are based on
a number of material factors and assumptions. Factors that could
cause actual results to differ materially from those in
forward-looking statements include general economic, market or
business conditions, and other risks detailed herein and from time
to time in the filings made by the companies with securities
regulators. Mineral exploration and development of mines is an
inherently risky business. Accordingly the actual events may differ
materially from those projected in the forward-looking statements.
For more information on Northern and Prophecy and the risks and
challenges of their businesses, investors should review their
annual filings that are available at www.sedar.com.
This press release does not constitute an offer to sell or a
solicitation to buy any of the securities in the United States. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended ("the U.S.
Securities Act") or any state securities law and may not be offered
or sold in the United States or to U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws
or an exemption from such registration is available.
"Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release."
Contacts: Prophecy Resource Corp. Scott Parsons 604.642.2625
ext. 106 Prophecy Resource Corp. Paul McKenzie 604.642.2625 ext.
107 Prophecy Resource Corp. John Lee CEO/Chairman 1.800.851.1528
john@prophecyresource.com www.ProphecyResource.com
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