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TSX-V: PCY 2060-777 Hornby Street
OTC: PRPCF Vancouver, BC
Frankfurt: 1P2 Canada
Email: [email protected] V6Z 1T7
Phone: +1.800.459.5583 Fax: +1.604.642.2629
Year End Letter from Chairman of Prophecy
Prophecy's objectives for 2011 include the following:
- Conclude long term Ulaan Ovoo coal off take agreements with regional Russian power plants;
- Commence shipments of Ulaan coal to Asian customers via Russia's eastern coal ports;
- Produce and transport between 1 and 1.5 million tonnes of coal at Ulaan Ovoo in 2011;
- Increase profit margins at Ulaan Ovoo with owner equipment and Zeltura port opening;
- Secure Chandgana power purchase off take MOUs with Mongolian entities;
- Obtain Government cooperation and full licensing on our Chandgana Power Plant;
- Secure equity and debt financing for Chandgana Power Plant construction;
- Consider a possible spin-off of Prophecy's Canadian assets; and
- Seek additional listings
Share structure as of January 3 2011:
outstanding shares: 184 981 199
warrants: 27 699 790
options:23 449 600
fully diluted: 236 130 589 shares
Prophecy Resource Corporation (TSX-V: PCY, OTC-QX: PRPCF, Frankfurt: 1P2 ) 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). In Canada Prophecy owns Wellgreen Platinum, Palladium and Rhodium Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba, and a 10% equity stake in Victory Nickel.
The 100% owned Ulaan-Ovoo coal deposit is strategically located 10 km from the Russian border and 120 km from both Mongolian and Russian rail links. The project contains 209 million tonnes of measured and indicated economically recoverable high quality, high volatile bituminous thermal coal with a 2:1 strip ratio. The caloric output is at 5,204 kcal/kg with low ash at 12.46% and very low sulfur of 0.40%. Coal thickness of 53 meters and first 8 years requires no washing with an estimated production cost of $10-$15/ton.
The second thermal coal deposit is the Chandgana Tal and Chandgana Khavtgai Coal Project, contatining 1,211 million tonnes of measured & indicated coal resource (NI 43-101). Click here for the resource page. The resource is contained almost entirely within a single coal seam averaging 37.7-45.4m with very few partings with a strip ratio of 1.9:1. The calorific value is 4,354 kcal/kg with low ash level of 12.49% and very low sulfur of 0.68%. Chandgana is within 160km from rail, 45 km North of the proposed railway, 16 km from paved highway, and 150 km from 2x220kv power line. It is ideally suited for a 600MW mine mouth power plant with extension to eventual 4,200MW.
The Wellgreen Nickel Copper Platinum, Palladium and Rhodium project in Yukon, Canada is the Company's flagship Platinum, Palladium and Rhodium project. The project is situated close to good infrastructure, main roads, electricity and water and Yukon is one of the most mining friendly jurisdictions in the world. The potential of Wellgreen property is in the range of 77 to 254 million tonnes at 0.26 to 0.38 % nickel, 0.26 to 0.36% copper, 0.55 to 0.85 g/t platinum and palladium, based on thestrike length range of 4000 to 7000 m, depth of 200 to 250 m and a width of 30 to 35 m.
The Lynn Lake Nickel Mine is the fourth largest known nickel sulphide deposit in Canada. The project covers the majority of the claims that were operated by Sherritt-Gordon from 1953-1978. An independent technical report done by Wardrop Engineering Inc., dated January 2010, confirms 22.9 million tons of measured and indicated resources at 0.57% Nickel and 0.30% Copper. This translates to over 262 million pounds of Nickel and 138 million pounds of Copper in situ. Click here for full NI 43-101 resource estimates.
In addition to the above resource, there are also exciting exploration opportunities. The recent 2008, near-surface, Disco Zone discovery is 1.5km away from the outlined deposit. The Disco Zone is 80m x 20m x 270m with drill highlights such as 18 meters of 1.5% nickel, 0.7% copper, 0.04% cobalt and 47.1 meters of 0.7% nickel, 0.5% copper and 0.02% cobalt. Click here for more drill results and to learn about the Disco Zone discovery.
Prophecy's other properties, including the Titan vanadium-titanium-iron project. A deposit in Ontario, Canada, between Angus and Flett Townships, with access to excellent infrastructure. Titan is estimated to contain an inferred resource of 49.0 million tonnes at 0.24% vanadium (0.43% vanadium pentoxide), 14.82% titanium dioxide, and 48.09% iron oxide. Click here for the full NI 43-101 resource estimates.
And the Okeover copper molybdenum project, which is 20 km north of Powell River on the B.C. coast.
In late 2006, N.C. Carter, PhD, P.Eng, completed a technical report on the Okeover Property pursuant to NI 43-101 that estimated an inferred mineral resource of 86.8 million tonnes grading of 0.31% copper (approximately 593 million lbs) and 0.014% MoS2 (approximately 15.9 million lbs of molybdenum disulfide) at a 0.20% copper cut-off for the North Lake Zone. North Lake is the best understood of the eight zones of mineralization known to exist on the Okeover property.