Prophecy & Sojitz Corp. Sign Cooperation Agreement to Jointly Market Ulaan Ovoo Coal to China
VANCOUVER, BRITISH COLUMBIA, Jun 07, 2010 (MARKETWIRE via COMTEX) -- Prophecy Resource Corp. ("Prophecy" or the "Company") /quotes/comstock/11v!e:pcy (CA:PCY 0.65, +0.07, +12.07%) /quotes/comstock/11i!prpc.f (PRPCF 0.57, +0.00, +0.55%) (FRANKFURT: 3P1) and Sojitz Corporation of Japan have entered into an exclusive agreement to jointly market thermal coal from Prophecy's 208 million tonne Ulaan Ovoo coal deposit to buyers in China. The agreement also covers Japan and Korea, provided that the Coal is sold through the Chinese land border from Mongolia.
By capitalizing on its extensive expertise in international coal trade, Sojitz Corp. and its Beijing affiliate, China (Sojitz (China) Co., Ltd., will assist Prophecy on a best efforts basis in securing letters of intent and/or offtake agreements from potential coal buyers for its thermal coal in advance of planned 2010 mining operations. Sojitz will also advise Prophecy on the best pricing parameters including volatility concerns as they applies to specific markets.
Sojitz is a widely respected international corporation involved in a multitude of businesses including but not limited to energy (coal, LNG, oil & gas), metals, chemical and functional materials and machinery. Its extensive coal operations are comprised of a trading and an investment arm, from which they draw synergies. Sojitz creates sales volume for coal from various locals including Australia, Russia, Indonesia and China. They are the leading coal importer to Japan. Additionally they focus on offshore trade, especially to China, through their Chinese coal sales subsidiary.
Mr. Lee, Chairman of Prophecy, stated today that: "The marketing agreement between ourselves and Sojitz is the result of year long cultivating discussions. Prior to entering this agreement, our Japanese partner conducted extensive due diligence including several Ulaan Ovoo site visits. This agreement symbolizes the confidence we now have in each other and speaks to the desirability of Prophecy coal in the vast and lucrative Asian marketplace."
The index for power-station thermal coal prices at Australia's Newcastle port, which is seen as a benchmark for coal prices throughout Asia, recently exceeded USD $107 per metric ton, 55% higher than a year ago. Wardrop Engineering visited Ulaan Ovoo and is developing a prefeasibility study specific to the reserves and economic sensitivities of the Ulaan Ovoo deposit. The study is expected to be released in 45 days.
On May 11, Prophecy entered into a mine services agreement with Leighton Asia Ltd. for the equipment leasing and mining operation at the Ulaan Ovoo coal deposit. Leighton Asia is a wholly owned subsidiary of the world's largest contract miner, the Leighton Group. Mine site establishment will commence in July, 2010, to ensure 250,000-tonne production in 2010, with 57,500 tonnes in August, ramping up to 100,000 tonnes per month by December, 2010. The pay-as-you-go contract mining and equipment leasing cost for 2010 is $3.7 million and Prophecy is fully funded to meet this obligation. The 2011 target is 2 million tonnes and Leighton expects to present similar contract terms on a cost-per-tonne basis after receiving the prefeasibility mine plan from Wardrop.
The Ulaan Ovoo project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad which links the project to the vast coal markets of Russia and Asia. On May 21, Prophecy secured rail loading facilities to transport over 1.5 million tonnes per year of Mongolian Coal to Russia and China. Prophecy is currently engaged in multi party discussion on off-take agreements.
The project contains 174.5 million tons Measured, 34.3 million tons Indicated and 35.9 million tons of Inferred thermal coal. The coal is of excellent low ash (less than 15%) and sulfur quality (less than 1%) at 5,204 KCAL/KG which is highly desired regionally. SGS Coal Quality by Seam Specification is available to down load at Prophecy's website. The average seam thickness of the resource is 53.9 metres with a stripping ratio of 2.0:1 on the first 140 million tons.
This news release has been reviewed and approved by Danniel Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person under National Instrument 43-101.
About Prophecy
Prophecy controls over NI-43-101 compliant Measured and Indicated mineral resources of 263 million pounds of nickel, 1 billion tonnes of coal and 116 million pounds of copper as well as inferred resources of 82 millions pounds of Nickel, 500 million tonnes of coal, and 593 million pounds of copper. The Company's Ulaan Ovoo Coal Project, Mongolia is expected to be in production this year. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Prophecy also holds properties with significant exposure to vanadium and titanium. All of Prophecy's coal assets are located in Mongolia with its remaining assets located in Canada. The Company is currently reviewing additional opportunities for significant growth.
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 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.
John Lee
1.800.851.1528
john@prophecyresource.com
www.prophecyresource.com
SOURCE: Prophecy Resource Corp. mailto:john@prophecyresource.com
http://www.prophecyresource.com
Copyright 2010 Marketwire, Inc., All rights reserved.
By capitalizing on its extensive expertise in international coal trade, Sojitz Corp. and its Beijing affiliate, China (Sojitz (China) Co., Ltd., will assist Prophecy on a best efforts basis in securing letters of intent and/or offtake agreements from potential coal buyers for its thermal coal in advance of planned 2010 mining operations. Sojitz will also advise Prophecy on the best pricing parameters including volatility concerns as they applies to specific markets.
Sojitz is a widely respected international corporation involved in a multitude of businesses including but not limited to energy (coal, LNG, oil & gas), metals, chemical and functional materials and machinery. Its extensive coal operations are comprised of a trading and an investment arm, from which they draw synergies. Sojitz creates sales volume for coal from various locals including Australia, Russia, Indonesia and China. They are the leading coal importer to Japan. Additionally they focus on offshore trade, especially to China, through their Chinese coal sales subsidiary.
Mr. Lee, Chairman of Prophecy, stated today that: "The marketing agreement between ourselves and Sojitz is the result of year long cultivating discussions. Prior to entering this agreement, our Japanese partner conducted extensive due diligence including several Ulaan Ovoo site visits. This agreement symbolizes the confidence we now have in each other and speaks to the desirability of Prophecy coal in the vast and lucrative Asian marketplace."
The index for power-station thermal coal prices at Australia's Newcastle port, which is seen as a benchmark for coal prices throughout Asia, recently exceeded USD $107 per metric ton, 55% higher than a year ago. Wardrop Engineering visited Ulaan Ovoo and is developing a prefeasibility study specific to the reserves and economic sensitivities of the Ulaan Ovoo deposit. The study is expected to be released in 45 days.
On May 11, Prophecy entered into a mine services agreement with Leighton Asia Ltd. for the equipment leasing and mining operation at the Ulaan Ovoo coal deposit. Leighton Asia is a wholly owned subsidiary of the world's largest contract miner, the Leighton Group. Mine site establishment will commence in July, 2010, to ensure 250,000-tonne production in 2010, with 57,500 tonnes in August, ramping up to 100,000 tonnes per month by December, 2010. The pay-as-you-go contract mining and equipment leasing cost for 2010 is $3.7 million and Prophecy is fully funded to meet this obligation. The 2011 target is 2 million tonnes and Leighton expects to present similar contract terms on a cost-per-tonne basis after receiving the prefeasibility mine plan from Wardrop.
The Ulaan Ovoo project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad which links the project to the vast coal markets of Russia and Asia. On May 21, Prophecy secured rail loading facilities to transport over 1.5 million tonnes per year of Mongolian Coal to Russia and China. Prophecy is currently engaged in multi party discussion on off-take agreements.
The project contains 174.5 million tons Measured, 34.3 million tons Indicated and 35.9 million tons of Inferred thermal coal. The coal is of excellent low ash (less than 15%) and sulfur quality (less than 1%) at 5,204 KCAL/KG which is highly desired regionally. SGS Coal Quality by Seam Specification is available to down load at Prophecy's website. The average seam thickness of the resource is 53.9 metres with a stripping ratio of 2.0:1 on the first 140 million tons.
This news release has been reviewed and approved by Danniel Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person under National Instrument 43-101.
About Prophecy
Prophecy controls over NI-43-101 compliant Measured and Indicated mineral resources of 263 million pounds of nickel, 1 billion tonnes of coal and 116 million pounds of copper as well as inferred resources of 82 millions pounds of Nickel, 500 million tonnes of coal, and 593 million pounds of copper. The Company's Ulaan Ovoo Coal Project, Mongolia is expected to be in production this year. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Prophecy also holds properties with significant exposure to vanadium and titanium. All of Prophecy's coal assets are located in Mongolia with its remaining assets located in Canada. The Company is currently reviewing additional opportunities for significant growth.
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 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.
John Lee
1.800.851.1528
john@prophecyresource.com
www.prophecyresource.com
SOURCE: Prophecy Resource Corp. mailto:john@prophecyresource.com
http://www.prophecyresource.com
Copyright 2010 Marketwire, Inc., All rights reserved.
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