Prophecy Resource Corp. ("Prophecy") (TSX VENTURE: PCY)(OTCQX:
PRPCF)(FRANKFURT: 1P2) and Pacific Coast Nickel Corp. ("PCNC") (TSX
VENTURE: NKL) (the "Companies") are pleased to announce that they
have entered into an amending agreement (the "Amending Agreement")
in respect of the binding letter of agreement dated January 17,
2011 ("LOI") whereby PCNC will acquire Prophecy's Nickel PGM
projects by issuing common shares to Prophecy (the
"Transaction").The Amending Agreement was entered based on
independent fairness opinion each received by Prophecy and PCNC.
The Amending Agreement has been approved by the independent special
committees of each of Prophecy and PCNC and the terms of the
Amending Agreement were determined to be fair to the shareholders
of Prophecy and PCNC by the independent fairness opinion authors
engaged by each of Prophecy and PCNC.
In accordance with Exchange policies, the shares of PCNC are
currently halted from trading and will remain so until certain
documentation concerning the Transaction has been reviewed and
accepted by the Exchange.
Terms of the Transaction
Pursuant to the Amending Agreement, the parties, in consultation
with their independent advisors agreed to amend the terms of the
Transaction such that PCNC will acquire the Wellgreen PGM Ni-Cu and
Lynn Lake nickel projects located in the Yukon Territory and
Manitoba respectively (the "Properties") by issuing 450 million
common shares of PCNC to Prophecy. PCNC currently has 55.7 million
shares outstanding.
As previously announced, following the Transaction and pursuant
to the LOI, as amended:
-- Prophecy will own approximately 90% of PCNC (85% fully diluted).
-- PCNC will consolidate its share capital on a 10 old for 1 new basis.
-- Prophecy will change its name to "Prophecy Coal Corp." and PCNC will be
renamed as "Prophecy Platinum Corp.
-- Prophecy intends to distribute half of its PCNC share to shareholders
pro rata in accordance with their holdings (the "PCNC Distribution").
Prophecy has also agreed to fund up to $2,000,000 of qualified
flow through expenditures on the Properties over the period
commencing as of the date of the Agreement until December 31, 2011
and has agreed to make a payment of $600,000 to Victory Nickel Inc.
necessary to keep the Lynn Lake property in good standing until
March 2012.
Further Detail Regarding the Transaction
It is contemplated that the Transaction will be completed by way
of a Plan of Arrangement. The parties have agreed to complete the
Transaction by May 31, 2011 and it is anticipated that a definitive
agreement in respect of the Transaction will be signed by February
28, 2011.
Completion of the Transaction is conditional upon:
-- PCNC and Prophecy shareholders having approved the Transaction at
special general meetings expected to be held in April 2011;
-- receipt of all necessary regulatory approvals, including the approval of
the TSX Venture Exchange (the "Exchange");
-- receipt of approval of the British Columbia Supreme Court;
-- Prophecy shareholders or PCNC shareholders not having exercised rights
to dissent over more than 5% of the shares of Prophecy or 5% of the PCNC
shares, if applicable;
-- certain other customary conditions.
Further information pertaining to the Properties and Prophecy is
available at Prophecy's SEDAR profile at www.sedar.com, where
investors may review technical reports prepared in respect of the
Properties and Prophecy's annual and interim financial
statements.
About Prophecy Resource
Prophecy Resource Corporation is an internationally diversified
company engaged in developing energy, nickel and platinum group
metals projects. The company controls over 1.4 billion tons of
open-pittable thermal coal in Mongolia (839 Mt Measured, 579 Mt
Indicated). Prophecy's Ulaan Ovoo coal mine is fully commissioned
and in production. In Canada Prophecy owns Wellgreen PGM Ni-Cu
Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba,
and a 10% equity stake in Victory Nickel. Mineral resources that
are not mineral reserves do not have demonstrated economic
viability.
About PCNC
Pacific Coast Nickel Corp is a Canadian based nickel and copper
base metal exploration company actively exploring properties in
Canada, Argentina and Uruguay. Included in the Company's property
portfolio is the Burwash property located adjacent to the Wellgreen
Mine (a former nickel and copper producer) near Burwash, Yukon
Territory, Canada. PCNC in December optioned the Las Aguilas
Nickel-PGM project in Argentina, which contains an historic, non
43-101 compliant resource of 2.2mt of 0.52% Ni, 0.50% Cu, 1.16 g/t
PGM. A qualified person has not done sufficient work to classify
the historical estimate as current mineral resources and PCNC is
not treating the historical estimate as current mineral resources
but as a historical estimate that should not be relied upon. PCNC
has also established a wholly owned subsidiary in Uruguay which has
identified and acquired a number of prospective nickel-copper
exploration targets.
ON BEHALF OF THE BOARD OF DIRECTORS of
Prophecy Resource Corp. Pacific Coast Nickel Corp.
"John Lee" "John Lee"
John Lee, Chairman and CEO John Lee, Chairman and Interim CEO
Cautionary Statements: Completion of the transaction is subject
to a number of conditions, including regulatory approval,
shareholder approvals, a definitive agreement and approval of the
British Columbia Supreme Court if applicable. There can be no
assurance that the transaction will be completed as proposed or at
all. Investors are cautioned that, except as disclosed in the
Management Information Circular to be prepared in connection with
the transaction, any information released or received with respect
to the Transaction may not be accurate or complete and should not
be relied upon. Trading in the securities of exploration and
development stage resource companies should be considered highly
speculative.
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 timing
of the Transaction, future share ownership of PCNC, Prophecy's
intentions in respect of the PCNC Distribution, potential
mineralization, the estimation of mineral resources, the
realization of mineral resource estimates, interpretation of prior
exploration and potential exploration results, the timing and
success of exploration activities generally, the timing and results
of future resource estimates, permitting time lines, metal prices
and currency exchange rates, availability of capital, government
regulation of exploration operations, environmental risks,
reclamation, title, and future plans and objectives of the
companies are forward-looking statements that involve various risks
and uncertainties. Although PCNC 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
failure to obtain necessary approvals in respect of the
Transaction, unsuccessful exploration results, changes in project
parameters as plans continue to be refined, results of future
resource estimates, future metal prices, availability of capital
and financing on acceptable terms, general economic, market or
business conditions, risks associated with operating in foreign
jurisdictions, uninsured risks, regulatory changes, defects in
title, availability of personnel, materials and equipment on a
timely basis, accidents or equipment breakdowns, delays in
receiving government approvals, unanticipated environmental impacts
on operations and costs to remedy same, and other exploration or
other risks detailed herein and from time to time in the filings
made by the companies with securities regulators. Readers are
cautioned that mineral resources that are not mineral reserves do
not have demonstrated economic viability. 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 PCNC 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.
Completion of the Transaction is subject to a number of
conditions, including Exchange acceptance and disinterested PCNC
shareholder approval. The transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Transaction will be completed as proposed or at
all.
Investors are cautioned that, except as disclosed in the
Management Information Circular and/or Filing Statement to be
prepared in connection with the transaction, any information
released or received with respect to the Transaction may not be
accurate or complete and should not be relied upon. Trading in the
securities of PCNC should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed Transaction and has neither approved nor disapproved
the contents of this press release.
"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. Paul McKenzie +1-604-642-2625
ext. 107 Prophecy Resource Corp. Scott Parsons +1-604-642-2625 ext.
106 Prophecy Resource Corp. and Pacific Coast Nickel Corp. John Lee
1-800-851-1528 john@prophecyresource.com /
info@pacificcoastnickel.com www.prophecyresource.com /
www.pacificcoastnickel.com
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