Prophecy Coal

Prophecy Coal Corporation (TSX-V: PCY, OTC-QX: PRPCF, Frankfurt: 1P2) is an internationally diversified thermal coal production company that in November 2010 saw its first coal project, Ulaan Ovoo commissioned for production. The company controls over 1.4 billion tonnes of open-pittable thermal coal in Mongolia (839 Mt Measured, 579 Mt Indicated) between 2 distinct deposits with power plant plans for its second deposit (Chandgana's) well under way. Additionally Prophecy Coal Corp holds the Okeover Copper project and the Titan, Vanadium Iron ore & Titanium projects in Canada.

Ulaan Ovoo thermal coal mine

Location: Mongolia

Status: Operational

Located in the Selenge province, Mongolia, (approximately 17 kilometers from the Russian border) the Company holds a 55 year mining license with a 45 year option for extension on the Ulaan Ovoo mine. The mine has over 20 million tonnes of proven coal reserves and nearly 209 million tonnes of measured and indicated coal resources. The average life-of-mine coal qualities for Ulaan Ovoo indicates a high export quality thermal coal product which is low in ash (11.3%), low sulphur (1.0%) and export quality heating value of 5,040 kcal/kg (all information as per NI 43-101 compliant as per Waldrop pre-feasibility study dated Dec 2010).

The mine is currently being operated by Leighton Asia Limited (“Leighton”), a premier mining services firm that established mining infrastructure, mining plans and the mining operation for Prophecy. The site was established in July 2010 and with the granting of the mining permit in November 2010, the mine commenced operations in just four months. The mine’s low strip ratio coal (2:1) is conducive to open-pit mining. The coal seam is a single seam and is 50 metres in depth. Overall, once fully operational the mine is a top-quartile low cost producer.

 As at June 2011, the Company has committed over $25 million developing and capitalizing the mine. The mine also keeps its costs low by having its own mining fleet (2 complete suites) and its own coal haul trucks to transport the coal to the local Sukhbataar rail station. Year to date to June 2011, the mine has moved over 1.5 million bank cubic meters of waste and produced nearly 230,000 tonnes of coal with over 20,000 tonnes stockpiled at the Sukhbataar station ready for export. 

The Company has secured port access on the far east coast of Russia at a private port of Sovgavan in the state of Khabarovsk. The port is strategically located along the Trans-Siberian rail lines and provides access to meet the rising demand in meeting Asian’s energy needs, particularly in China and Korea. The initial port agreement is for 25,000 tonnes per month and potentially expandable to 50,000 tonnes per month. Meanwhile, Prophecy is also in off-take negotiations with local Russian and Mongolian power plants to ensure a diversified sales program.

The Company has over 33,000 hectares of mining licenses in the area offering tremendous upside for further expansion in the region.

Chandgana Coal Properties

Location: Mongolia

Status: Development

The properties consist of the Chandgana Tal and Chandgana Khavtgai coal deposits, which are within nine kilometers of each other in the Nyalga coal basin in Mongolia, and is approximately 400 kilometers from the Chinese border. Chandgana holds approximately 1.2 billion tonnes of measured and indicated resources over 100 square kilometers. The average life-of-mine coal qualities are ash of 10.1%, sulphur of 0.60% and over 3,600 Kcal/kg of heating value (all information per NI 43-101Technical Report prepared by Christopher Kravits, CPG, LPG dated September 2010).

The Properties’ coal seams are approximately 40 meters depth and are low strip ratio (0.5:1), both of which make it conducive to low cost open-pit mining.  The coal qualities and abundance of coal make the deposit suited for a mine-mouth power plant, which the Company intends to build through the Chandgana Power Plant project.

The Chandgana Power Plant project would have its coal sourced from the Chandgana Coal Properties and built on site. The initial phase of the project would be to build 600 megawatts (“MW”) of electricity to meet Mongolia’s energy deficit. This phase would require approximately 2.4 million to 2.8 million tonnes of coal per year. The second phase of the Power Plant project is to build an additional 3600 MW which would be sold to China, which is approximately 400 kilometers away. The proposed power plant is adjacent to paved roads, 160 kilometers from the Central Mongolian railroad, adjacent to a 45 kilovolts (“kv”) electrical distribution line and within 150 kilometers from a 2 x 220kv electrical transmission line.

The Power Plant project received in November 2010 a Detailed Environmental Impact Assessment from the Mongolian Ministry of Nature and the Environment. The project has also received a mining license of 141 million tonnes from the Mongolian Mineral Resource Authority. In April 2011, the Company submitted a Power Plant project feasibility study to the Mongolian Ministry of Natural Resources and Energy to obtain a license to generate electricity. The Company expects to receive the license by late Q3 2011. Meanwhile, the Company has commissioned a bankable feasibility study (“BFS”) on the power plant project which it expects to be completed early Q4 2011. After obtaining the electrical license, the Company will commence negotiations on a power purchase agreement. The Company has also commenced discussions with global banks on project financing. Should everything proceed as planned, power plant construction would start in the spring of 2013 with the “power on” at the power plant in the spring of 2015.

Prophecy’s mines and exploration projects are located in Mongolia, a politically stable mining friendly jurisdiction where foreign companies have the right to own 100% of Mongolian mining assets.

John Lee CFA, CEO and Chairman

John Lee is an entrepreneur with degrees in economics and engineering from Rice University. He was appointed Chairman and CEO of Prophecy in October 2009. In a little over a year and under John's leadership, Prophecy grew from having minimal assets to owning substantial coal and PGM assets in Mongolia and Canada. Prophecy Coal Corp. is the first Canadian public company to license a thermal coal power plant in Mongolia and only the second to commission a mine to production in that country. Prophecy Platinum controls one of the key PGM Ni projects in Canada; a deposit with an estimated resource of 1 million ounces of PGM and Gold, a further 11 million ounces inferred and legitimate blue sky potential. John Lee is also Chairman of Prophecy Platinum Corp.

Irina Plavutska MEc, CGA, Interim CFO

Ms. Plavutska is a professional accountant with over 20 years of diverse international experiences in financial reporting, auditing, and accounting. She is a member of Certified General Accountants Association of British Columbia. Ms. Plavutska earned a Masters Degree in Economics from the University of Business and Economics in Ukraine, and has held senior accounting positions, such as corporate controller, at numerous Canadian international and professional service companies for the past several years. She is fluent in Russian and English.

Paul Venter, VP Energy Operations and Director

Mr. Venter has been a Prophecy director since August 2010. He is an industry recognized and seasoned professional with over 30 years of experience with BHP and Eskom in the mining, power generating, and transport industry. In 2006 he extended his focus to expand the business of a major strategic player in the coal and power generating industry in Russia, China and Mongolia. Mr. Venter contributed significantly towards the commissioning of Prophecy's Ulaan Ovoo mine in November and is now focusing on power generating opportunities in addition to Ulaan Ovoo operations. Mr. Venter holds a MDP (Mining) and various commercial qualifications. He was accepted as a member of the IRT (SA) in 1983.

Patrick Langlois B.Com, MBA, CFA, Vice President Corporate Development

Patrick Langlois has extensive investment banking and venture capital experience, with past roles that have included Director of Investment Banking at Stonecap Securities and Managing Director of Investment Banking at Laurentian Bank Securities. Mr. Langlois has provided corporate finance expertise across a broad spectrum of industries, advising numerous corporations regarding public offerings, private placements, as well as mergers and acquisitions. Mr. Langlois holds an M.B.A. from Université de Sherbrooke, as well as a CFA designation and membership in the CFA Institute.

Joseph W. Li CGA, General Manager and Corporate Secretary

Mr. Li is a Certified General Accountant (B.C.) and has a B.Com (Hons) from Laurentian University. For 13 years, Joseph was a Senior Auditor with the B.C. Ministry of Finance, a position which allowed him to gain valuable insight into how diverse businesses and organizations of all sizes are operated. Mr. Li has been the General Manager and Corporate Secretary of Prophecy Coal Corp. since January, 2011, and oversaw the successful spinoff of Prophecy Platinum Corp.

DIRECTORS

John Lee CFA, CEO and Chairman

John Lee is an entrepreneur with degrees in economics and engineering from Rice University. He was appointed Chairman and CEO of Prophecy in October 2009. In a little over a year and under John's leadership, Prophecy grew from having minimal assets to owning substantial coal and PGM assets in Mongolia and Canada. Prophecy Coal Corp. is the first Canadian public company to license a thermal coal power plant in Mongolia and only the second to commission a mine to production in that country. Prophecy Platinum controls one of the key PGM Ni projects in Canada; a deposit with an estimated resource of 1 million ounces of PGM and Gold, a further 11 million ounces inferred and legitimate blue sky potential. John Lee is also Chairman of Prophecy Platinum Corp.

Jivko Savov, Director

Mr. Savov spent over 12 years in the energy and power sector within asset management, business development and structured finance roles across a number of international companies. Mr. Savov served as a Managing Director of Power and Energy at En+ since joining in 2006, and as a former Chairman and Deputy Chairman of EurosibEnergo.

Michael J Deats, Director

Michael J Deats, a Wits University Graduate, is an internationally-renowned Mining Engineer with an impressive and diverse background that includes leadership roles in some of the largest Energy and Mining operations in the world. The majority of Mr. Deats' career was spent with Iscor South Africa, ultimately becoming responsible for overseeing the entirety of the firm's vast mining operations. In addition to directing operations at the Sishen Iron Ore export mine and Grootegeluk coal mine, Mr. Deats personally introduced fully-mechanised longwall coal mining at Durban Navigation Colliery.

Chuluunbaatar Baz, Director

Mr. Chuluunbaatar is the President and Chairman of the Monnis Group of Companies, Mongolia ("Monnis"). Monnis, headquartered in Ulaanbaatar, Mongolia, is one of Mongolia's largest industrial holding companies. With over 1,000 employees and 12 subsidiaries, Monnis has, under Mr. Chuluunbaatar's leadership, become a national leader in insurance, construction, logistics, technology, real-estate, geological services, mining support services, energy, automobile and automotive parts distribution, international freight forwarding, foreign trade, air services, communications, and corporate finance advisory services.

Paul Venter, VP Energy Operations and Director

Mr. Venter has been a Prophecy director since August 2010. He is an industry recognized and seasoned professional with over 30 years of experience with BHP and Eskom in the mining, power generating, and transport industry. In 2006 he extended his focus to expand the business of a major strategic player in the coal and power generating industry in Russia, China and Mongolia. Mr. Venter contributed significantly towards the commissioning of Prophecy's Ulaan Ovoo mine in November and is now focusing on power generating opportunities in addition to Ulaan Ovoo operations. Mr. Venter holds a MDP (Mining) and various commercial qualifications. He was accepted as a member of the IRT (SA) in 1983.

Greg Hall, Director

Mr. Hall is an independent business advisor to the mining industry. For over 30 years, Mr. Hall has focused on significant international exploration, development, and mining ventures, and all aspects of their structuring and finance. He recently retired as a director of Silvercorp Metals Inc (NYSE: SVM, TSX: SVM), China's largest primary silver producer and the lowest cost silver producer among its industry peers. His previous positions include: Director at Haywood Securities Inc.; Vice-President, Canaccord Capital Corporation; and Senior Vice-President of Leede Financial Markets Inc. He is a graduate of the Rotman School of Management, University of Toronto, SME Enterprise Board Program, and a Member of the Institute of Corporate Directors.

Paul McKenzie, Director

Mr. McKenzie has over 20 years experience working in international equities markets. His experiences include acquiring, selling, financing and developing multiple international mineral and energy projects in North America, South America and Asia. In his career he has acted as Director, Vice President and President of several resource companies. Mr. McKenzie also previously worked as a licensed equity trader at Brink Hudson Lefever in Vancouver, British Columbia.

Joseph W. Li CGA, General Manager and Corporate Secretary, Director

Mr. Li is a Certified General Accountant (B.C.) and has a B.Com (Hons) from Laurentian University. For 13 years, Joseph was a Senior Auditor with the B.C. Ministry of Finance, a position which allowed him to gain valuable insight into how diverse businesses and organizations of all sizes are operated. Mr. Li has been the General Manager and Corporate Secretary of Prophecy Coal Corp. since January, 2011, and oversaw the successful spinoff of Prophecy Platinum Corp.

ADVISORS

Harald Batista, Advisor

Dr. George Gale, Advisor

Enkbaatar Ochirbal, Advisor

Last updated: April 3, 2012

Symbol:

TSX: PCY
OTC-QX: PRPCF
Frankfurt Stock Exchange: 1P2

Shares Outstanding: 224,956,568

Options: 26,743,050 [+] Details

Warrants: 10,438,056[+] Details

Fully Diluted: 262,137,674

CUSIP Number: 74345B