Prophecy Secures Far East Russian Sea Port Allocation and Provides Ulaan Ovoo Mine Production Update
June 14 2011 - 8:33AM
Marketwired
Prophecy Coal Corp. ("Prophecy") (TSX VENTURE: PCY)(OTCQX:
PRPCF)(FRANKFURT: 1P2) (the "Company") is pleased to have entered
into an arrangement with the Port of Sovgavan in the State of
Khabarovsk, Russia whereby Prophecy will have initial access to
port allocation of 25,000 tonnes per month starting in June,
potentially expandable to 50,000 tonnes per month, representing
300,000 to 600,000 tonnes annually.
Prophecy will also be assigned a coal storage area at the port.
This arrangement provides Prophecy's Ulaan Ovoo thermal coal mine
with immediate access to the Asian seaborne export coal markets.
The Sovgavan Port is strategically located at the Russian Far
Eastern seaboard. The port is privately owned and can accommodate
seagoing vessels up to 160 meters in length with the depth of
loading site of 9.5 meters. The port has loading capacity of 6,000
tonnes per day and direct connections to Trans-Siberian railroads
and uncongested Russian state highways.
Securing of the port opens Prophecy to a significant number of
coal buyers, and the Company is currently placing top priority to
conclude rail transport within Russia and coal off take
contracts.
Prophecy's Ulaan Ovoo mine commenced production in 2011. Year to
date the mine has produced a total of 200,000 tonnes of coal,
currently being stockpiled. The average quality is 4,200 kcal/kg
NAR with 5% ash and 0.5% sulphur. Those attributes compare
favorably to the coal being purchased by local Russian and
Mongolian power plants. Within the inventory, there are 50,000
tonnes of 5,200 kcal/kg NAR coal with 5% ash and 0.5% sulphur,
which are stockpiled separately at the mine and at the Sukhbaatar
rail siding, destined for Sovgavan port.
In total, over $25 million has been committed or invested in the
equipment and commissioning of the mine. In May, Prophecy received
its second full set of mining fleet. The Company expects to receive
by June 30, 18 Skania coal transport trucks, which are expected to
reduce transportation costs from hauling coal from the mine to the
Sukhbataar rail station. The company going forward expects higher
production ratio of 5,200 NAR coal in relation to total production
as the mine gradually reaches steady state.
With respect to the diesel rationing currently being undertaken
by the Mongolian government, Prophecy is monitoring its diesel
supply closely and optimizing production rates to sustain mining
and coal transportation activities for the remainder of 2011.
Prophecy's Ulaan Ovoo coal mine has a measured and indicated
mineral resource of 208 million tonnes (Measured 174 mt, Indicated
34 mt) detailed in a NI-43-101 technical report by Minarco Mine
Consulting dated May 8, 2009.
This news release has been reviewed and approved by Christopher
M. Kravits, P.Geo 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.
About Prophecy Coal
Prophecy Coal is a Mongolian thermal coal producer with over 1.4
billion tonnes of surface minable thermal coal resources.
Prophecy's Ulaan Ovoo coal mine is operational. Prophecy's
Chandgana 600MW mine mouth power plant project has received a
mining license and Detailed Environmental Impact Assessment (DEIA)
approval. The Company is in the process of obtaining a power plant
license from the Mongolian Ministry of Natural Resources and
Energy. Prophecy Coal also owns equity stakes in Prophecy Platinum
Corp., 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 of Prophecy Coal Corp.
John Lee, 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 the
allocation and storage at the port of Sovgavan, expected
transportation cost reduction and production of 5,200 NAR coal in
relation to total production, 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 company
are forward-looking statements that involve various risks and
uncertainties. Although Prophecy believes 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 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 Coal Corp. David Jan Chief Financial Officer
1-800-358-5865 djan@prophecycoal.com www.prophecycoal.com
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