www.prophecycoal.com
Prophecy Coal Corporation (TSX: PCY, OTC-QX: PRPCF, Frankfurt: 1P2) is an internationally diversified thermal coal production company that in November 2010 saw its first coal project, Ulaan Ovoo commissioned for production. The company controls over 1.4 billion tonnes of open-pittable thermal coal in Mongolia (839 Mt Measured, 579 Mt Indicated) between 2 distinct deposits with power plant plans for its second deposit (Chandgana's) well under way. Additionally Prophecy Coal Corp holds the Okeover Copper project and the Titan, Vanadium Iron ore & Titanium projects in Canada.
Prophecy Resource secures up to $10m of debt for Ulaan Ovoo Coal project
Vancouver-based Prophecy Resource (TSX-V: PCY) (OTCQX: PRPCF) (FSE: 1P2) has arranged a secured debt facility of up to $10 million with Waterton Global Value to fund the company`s Ulaan Ovoo Coal project in northern Mongolia.
Subject to certain drawdown conditions, the loan can be drawn down in three tranches: $2 million on the closing date, $3 million on the date Prophecy completes the acquisition of Northern Platinum (who it agreed to merge with in June) and $5 million when Prophecy completes an off-take agreement for the Ulaan Ovoo property.
In conjunction with the closing of the loan, the company will issue one million common shares to Waterton. If the third tranche of the loan is drawn, Prophecy will be obliged to issue a further one million shares to Waterton, subject to a four month hold period.
The loan is due to mature on August 31, 2011 and bears interest at 10% per year.
The proceeds of the loan will go towards continuing road improvement at the mine, along with infrastructure upgrade at the mine and at the rail station, fleet purchase and personnel recruits.
The company also now has a marketing budget to increase investor awareness throughout Mongolia, Asia and North America, it said.
Last week, Prophecy reported that its mine services agreeement with Leighton Asia was on track to execute mining operations at Ulaan Ovoo, as Leighton established the required infrastructure and deployed all the necessary equipment and manpower on schedule.
Ulaan Ovoo site establishment began on July 13 of this year to ensure that the commissioning of the 250,000 tonnes starter pit will take place as planned in September 2010, with 57,500 tonnes in the first month, ramping up to 100,000 tonnes per month by December 2010.
As of last week, Leighton had removed and stockpiled approximately 30,696 BCM of topsoil and 209,095 BCM of overburden, which is approximately some 28,089 BCM of overburden ahead of schedule in preparation for mining.
Prophecy is currently in discussions with parties who have expressed interest to procure coal directly at the mine site.
The mining company has a 100% interest in the 208.8 million tonne Ulaan Ovoo project that features Bituminous (5,204 kcal/kg), low ash (12.46%), low sulphur (0.40%) thermal coal suitable for export markets. The deposit features single massive coal seam 45-80 m thick with an average strip ratio of 2:1.
The project is 120km (75 miles) east of the Central Mongolian Railroad linking the project to the vast coal markets of Russia and Asia.
Prophecy is 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). In Canada, it owns Lynn Lake Nickel Project and a 10% equity stake in Victory Nickel.
