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Monday, July 25, 2011 4:04:16 PM
By: The Canadian Press
Posted: 07/20/2011 7:29 PM
VANCOUVER - The board of Prophecy Coal Corp. (TSXV:PCY) has adopted a defensive plan to give the company's shareholders and directors time to consider alternatives should a hostile takeover attempt emerge.
"Prophecy management believes the company is very undervalued, thus vulnerable given the rise in value of its equity holding in Prophecy Platinum," John Lee, chairman of Prophecy Coal, said in an announcement Wednesday.
Prophecy Coal shares closed Wednesday at 72 cents. That was unchanged from Tuesday's close but up 36 per cent from July 13, a day before the platinum company released a new resource estimate for its Wellgreen property in Yukon.
Shares of Prophecy Platinum jumped 114 per cent to $1.59 and Prophecy Coal shares gained 26 per cent to 67 cents on July 14. The two companies were the most active on the TSX Venture Exchange on July 15, a day after the estimate.
Prophecy Platinum's shares closed Wednesday at $3.52, making Prophecy Coal's 22.5 million shares in that company worth about $79 million — compared with a total market value of about $137 million for the coal company.
Apart from its shares in the metals miner, Prophecy Coal controls more than 1.4 billion tonnes of thermal coal on two properties in Mongolia. Thermal coal is used primarily as fuel for power stations.
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