is pleased to provide the following update on EPC (Engineering, Procurement, Construction), PPA (Power Purchase Agreement), and project financing in connection with its proposed 600 MW Chandgana power plant project in Mongolia.
In the past 90 days, 4 Chinese EPC companies have reviewed information in our project data room and conducted project site visits in Mongolia. In addition, there are several other international companies that have expressed written interest in bidding on the required EPC contracts. Prophecy has prepared and distributed an RFP (Request For Proposal), and expects to have key EPC proposals by March 31, 2012. As part of any successful proposal, an EPC firm is expected to bring in a lender for debt financing to contribute to the overall project financing. The Company expects to conclude EPC selection in Q2, 2012.
Since obtaining the power plant construction license in November 2011, Prophecy has been in close dialog with the Mongolian Ministry of Natural Resources and Energy regarding the drafting and signing of the Chandgana PPA. To date, there have been several meetings between Prophecy and officials in various departments within the Ministry. In January, a working commission on the PPA was constituted and endorsed by the Minister. Prophecy is working closely with the commission towards a fair and balanced PPA. The goal is to conclude the PPA and EPC selection at the same time.
Separately, Prophecy has met in Beijing with Chinese government-sponsored policy banks currently involved in Mongolian projects, as well as private equity firms engaged in international energy production projects. IPP (independent power plant) projects in Asia, offering stable yields, have garnered interest from institutional investors and Prophecy expects Chandgana to be similarly viewed. Whilst not a certainty, Prophecy is optimistic that upon signing a successful PPA, the Company can secure the necessary equity funding in 2012 to move the project towards construction in Q2, 2013.
, Prophecy wishes to clarify that the feasibility study announced in that release was for the power plant project only, which is a study that does not fall under National Instrument 43-101 (Standards of Disclosure for Mineral Projects). No feasibility study has yet been prepared on the related coal deposit resource so there can be no assurance that the projected annual volume of coal required by the plant would be available from Chandgana, or any other potential coal source. The Qualified Person endorsement in the news release referred only to the resource information contained therein and not to the power plant information.
About Prophecy CoalProphecy Coal Corp. is a Canadian listed company engaged in developing energy projects in Mongolia. The company has over 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia. Prophecy Coal's Ulaan Ovoo coal mine is in production and its Chandgana mine mouth power plant has been permitted. Prophecy Coal is the controlling shareholder of Prophecy Platinum Corp (TSX-V: NKL). Mineral resources that are not mineral reserves do not have demonstrated economic viability. Further information on Prophecy Coal can be found at
ON BEHALF OF THE BOARD OF DIRECTORS Prophecy Coal Corp.
"JOHN LEE"
John Lee
CEO/Chairman
For more information about Prophecy, please contact
Chris Ackerman
Manager, Investor Relations
1-800-459-5583
cackerman@prophecycoal.com
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. 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.
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 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 company 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 failure to obtain
necessary approvals in respect of the Transaction,
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 their businesses,
investors should review their annual filings that are
available at .
"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."
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.
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