Prophecy Resource Corp.
TSX VENTURE : PCY
FRANKFURT : 1P2
OTCQX : PRPCF

Prophecy Resource Corp.

November 15, 2010 08:31 ET

Prophecy Resource Corp.: Detailed Environmental Impact Assessment Approved for 600 MW Pit-Mouth Powerplant by Prophecy's 1.2 Billion Tonne Chandgana Coal Project, Mongolia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 15, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) reports that a Detailed Environmental Impact Assessment (DEIA) pertaining to the construction of a pit-mouth 600MW coal fired power plant by Prophecy's 1.2-billion-tonne Chandgana Coal Project has been approved by the Mongolian Ministry of Nature and the Environment.

The DEIA is a 139 page document that was prepared for Prophecy by the leading independent Mongolian environmental consulting firm. The DEIA considered social and labour issues, climate and environmental circumstances representative of the proposed power plant. The approved study concluded that there are no major impediments to the project and provided recommendations on best practices for conservation of the environment and the community.

According to the preliminary plan of construction as outlined in the DEIA, the 600MW power station will be built and put into operation within 20 months and supply electricity through connection of 220 KW electricity transmission lines from the power plant to the Central Energy System (150km away) and Eastern Energy System (60km away). 2 x 220 kV Central Electricity System (CES) transmission lines power 90% of Mongolian electricity demand. Furthermore, Chandgana is right on the path of a Government approved future CES grid extension.

With the DEIA, the Mongolian Ministry of Nature and the Environment concluded, "that the 600MW Chandgana power station project can be fully implemented, provided the measures to reduce adverse impacts and measures to prevent possible unexpected accidents envisaged in the detailed environmental impact assessment will be considered and taken to operate the power station."

John Lee CEO of Prophecy Resource Corp stated that: 

"The DEIA approval is a major milestone clearing the way for full scale permitting in early 2011. Prophecy is committed to investing heavily in Mongolia and looks forward to working with all major Mongolian stakeholders to ensure Chandgana's smooth rollout to providing affordable and reliable electricity to sustain the country's rapid growth."

With a population of 2.7 million and an aging installed base of 650 MW, Mongolia runs an energy deficit of over 120 MW, which is made up from Russian electricity import at over US 7cents per kilowatt hour. The deficit is expected to balloon to 500MW by 2013 fueled by its GDP growth and new mission-critical mill and smelter openings.

Chandgana is approximately 1,000 km from Beijing and 350km from the Chinese border. Mongolia's Choibalsan City, where Mongolian East Energy System ends, is merely 70km from the Chinese border. Chandgana's endowed base of 1.2 billion tonnes is ideally suited for future 4,200MW to 10,000 MW installed base; vast potential exists to supply Chandgana electricity to China via dedicated 800kv DC lines.

The initial 2x300 MW power plants will be built on Prophecy owned land and serviced by 2.4 million tonnes of coal annually from Prophecy's 150-million-tonne Chandgana Tal coal project with a strip ratio of 0.5 to 1. Future plant expansions will be serviced by Prophecy's 1.05 billion tonne Chandgana Khavtgai coal project (9km from Tal) with a strip ratio of 2 to 1. Chandgana Tal has a renewable 40-year mining license and the coal mine can be fully commissioned within 90 days, as was the case for Prophecy's Ulaan Ovoo Coal Mine, Northern Mongolia.

Details of the Chandgana Coal Projects are summarized in the following table:

  Measured Indicated Heating Value Ash Sulfur Strip Thickness
Khavtgai 524.3mt 545.7mt 4,354 kcal/kg 12.66% 0.72% 1.9:1 37.7 m
Tal 141.3mt   4,238 kcal/kg 12.49% 0.68% 0.53:1 45.4 m
Total 665.6mt 545.7mt          

Prophecy has received expressions of interest from several local and international entities. Prophecy is evaluating proposals and offers on power off take, design and constructions of plant and transmission lines, and investment. Prophecy would like to caution that discussions are early stage that there are no assurances of positive conclusions in the imminent horizon.

The technical information in this news release has been reviewed and approved by Danniel Oosterman P. Geo, a Prophecy geologist and also a Qualified Person as defined by NI 43-101. 

Please visit www.prophecyresource.com for 3D diagrams of Chandgana coal deposits, cross sections and Mongolia electricity grid.

About Prophecy Resource

Prophecy Resource Corporation 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). Prophecy's Ulaan Ovoo coal deposit in Mongolia is in production. In Canada Prophecy owns Wellgreen PGM Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba, and a 10% equity stake in Victory Nickel. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in discovery of a mineral resource. 

ON BEHALF OF THE BOARD OF DIRECTORS of Prophecy Resource Corp.

John Lee, Chairman

Forward Looking Statements: 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 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 general economic, market or business conditions, and other risks detailed herein and from time to time in the filings made by the companies with securities regulators. 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 businesses, investors should review the annual filings that are available at www.sedar.com.

This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended ("the U.S. Securities Act") or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

To view the maps associated with this release, please click: http://media3.marketwire.com/docs/pcy-maps.pdf.

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.

Contact Information