Correction: Drilling Completed at Prophecy's Chandgana-Khavtgai Coal Project, Updated NI 43-101 Resource Report Is Expected by August
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/21/10 -- A correction is being issued with respect to the release for Prophecy Resource Corp. (TSX VENTURE: PCY)(PINK SHEETS: PRPCF)(FRANKFURT: 1P2) that disseminated today, June 21, 2010 at 9:00 AM ET. The incorrect company name was added to the title. The release is re-issued with the correct title.
Prophecy Resource Corp. ('Prophecy' or the 'Company') (TSX VENTURE: PCY)(PINK SHEETS: PRPCF)(FRANKFURT: 1P2) is pleased to report the successful completion of its spring exploration program on its 100% owned Chandgana-Khavtgai license in Khentii aimag (province), Mongolia. The work program consisted of 12 drill holes for a total of 2,205 metres including 903 metres of core drilling, and five lines of seismic geophysical survey for a total of 7.4 line km.
The focus of the current work program is aimed at increasing the confidence in the inferred Mineral Resources such that they can be elevated to the Measured and Indicated category. The drilling confirms that nearly all of the resource is contained in a single 18-60 metre thick coal seam found 10 to 250 meters below the surface and covering an area of approximately 1,800 hectares. Further, preliminary results indicate the coal resources and coal quality will be confirmed and the geological limits to the resource are more accurately mapped.
An existing Mineral Resource estimate for Chandgana Khavtgai is provided in the Technical Report prepared by Mr C. M. Kravits (2008) available at SEDAR.com. The Measured and Indicated Mineral Resources are 657 Mt. There is an additional 409 Mt of inferred Mineral Resources.
In addition to Chandgana Khavtgai, Prophecy also owns 100% of the 141 Mt Chandgana Tal coal project which is 9 km away within the Nyalaga basin. Prophecy is targeting a potential 1 billion tonnes of Measured and Indicated coal in the basin. A new NI 43-101 resource report incorporating the recent drilling is expected to be completed in August.
The Changana thermal coal deposits are located near the Mongolian power grid and could fuel a Mine Mouth Power Plant Complex which could provide power to Mongolia, Russia and China. Prophecy intends to commission a Power Plant/Mine complex study this year.
Additional Information on Prophecy's Coal projects
Chandgana Khavtgai and Tal projects ('Chandgana')
The Nyalga coal basin, of which Chandgana-Khavtgai and Chandgana Tal are part, ranks among one of the largest coal deposits in Mongolia. The Chandgana Khavtgai license is located in southeast central Mongolia and is a sister property to Prophecy's 100% owned Chandgana Tal property located 9 km to the northeast. These licenses are contiguous to Vale's largest coal deposit in Mongolia. The Chandgana projects have a combined Measured and Indicated coal resource of 798 Mt with an additional 409 Mt inferred resources.
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COAL RESOURCES
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Assurance-of-Existence Category
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Property Measured (Mt) Indicated (Mt) Inferred (Mt)
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Chandgana-Khavtgai 187.7 469.3 409.0
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Chandgana-Tal 141.3 0 0
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The coal at Chandgana is thermal coal that on an air-dried basis averages 10.34% ash, 0.53% sulphur and has a heating value of 4,358 kcal/kg (7,842 Btu/lb). Most of the coal resource is contained in a single seam 18 to 60 meters in thickness with good outcrop access and an average strip ratio of approximately 2.1:1.
Chandgana is only 160 km from the railway and 2 x 220 kV Central Electricity System (CES) transmission line that powers 90% of Mongolia electricity demand and the line which also connects to the Russian Republic. The project is located right in the path of a government proposed Mongolian transmission grid extension. Chandgana is 300 km east of Ulaan Bataar and 400 km from the China border. The project lies only 16 km from the paved Mongolian Highway AO51.
Ulaan Ovoo Project
The Ulaan Ovoo Coal Project is located in northern Mongolia, only 12 km from an established border crossing station with Russia. The project has an NI 43-101 Measured and Indicated Mineral Resource of 208.8 Mt. consisting of 174.5 million tons Measured and 34.3 million tons Indicated and a further 35.9 million tons of Inferred thermal coal. Please see the May 2009 Pre-Feasibility Study conducted by Minarco-MineConsult of Sydney, Australia which demonstrates the economic potentials of the project. This report is available at the Company's profile at www.sedar.com.
The coal is of low ash (less than 15%) and sulfur quality (less than 1%) at 5,204 kcal/kg (9,365 Btu/lb). A Coal Quality by Seam Specification prepared by SGS Laboratories is available at Prophecy's website. The average seam thickness over the deposit is 53.9 metres. Ulaan Ovoo is scheduled to start production at the rate of 50,000 tonnes a month in 2010, ramping up to 150,000 tonnes a month in 2011 with a life-of-mine stripping ratio of 2.0:1.
Visit www.prophecyresource.com for cross sections of Chandgana Khavtgai, Drill locations, Nyalga basin licenses map, and a map of Mongolia's central energy grid.
This news release has been reviewed and approved by Christopher M. Kravits, PGeo, and a Qualified Person as defined in NI 43-101. Mr. Kravitz has 34 years of U.S. and international relevant coal geology experience. He has been active in Mongolia since 2007.
ABOUT PROPHECY RESOURCE
Prophecy Resource Corporation is an internationally diversified company engaged in developing, energy, nickel and platinum group elements projects. The company controls over 1 billion tonnes of open-pittable thermal coal in Mongolia. In Canada Prophecy owns Lynn Lake Nickel Project, a 10% equity stake in Victory Nickel and agreed to merge with Northern Platinum (TSX-V: NTH) on June 15, 2010. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
ON BEHALF OF THE BOARD OF DIRECTORS of Prophecy Resource Corp.
John Lee, Chairman
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 expected production or 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 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 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 its business, investors should review its filings that are available at www.sedar.com.
'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
+1.604.642.2625 ext 106
Prophecy Resource Corp.
John Lee
+1.800.851.1528
john@prophecyresource.com
www.prophecyresource.com