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

Chairman and Chief Executive Officer

Mr. Lee is an entrepreneur with degrees in economics and engineering from Rice University and is a Chartered Financial Analysis (CFA) holder. He was appointed Chairman and CEO of Prophecy in October 2009. In a over a year, and under John's leadership, Prophecy has grown from having minimal assets to owning substantial coal assets in Mongolia and nickel and PGM assets in Canada.

Christian (Ronnie) Van Eeden

Vice-President Operations

Mr. Van Eeden has over 34 years of experience in coal mining and related industries including holding senior management positions pertaining to the engineering, mining and commercial functions of coal mines, including managing the mining 100 million tonnes of coal per annum to Eskom the South African power utility. He has a BSC Eng degree as well as a B Proc law degree, while also holding certificates of competence in mining and engineering, a legal requirement for managing coal mines in South Africa.

David Jan, CA

Chief Financial Officer

Mr. Jan is a Chartered Accountant with over 20 years of experience in progressively senior financial experience in publicly traded coal mining and natural resource companies. His past roles include internal audit, controller, treasury, corporate finance/development and investor relations. He joins the company from Western Coal where he was head of investor relations prior to its merger with Walter Energy.

Prophecy Coal's common stock trades on the TSX Venture Exchange and the Frankfurt Stock Exchange.

Last updated: June 15, 2011

Symbol:

TSX-V: PCY

OTC-QX: PRPCF

Frankfurt Stock Exchange: 1P2

Shares Outstanding: 190,831,086