Exhibit 99.1
Prophecy Announces Ulaan Ovoo Mine Start and Coal Sales in
Mongolia
Vancouver, British Columbia, March 18, 2019 – Prophecy
Development Corp. (“Prophecy”
or the “Company”) (TSX:PCY,
OTCQX:PRPCF, Frankfurt:1P2N) announces Mongolian Ulaan Ovoo Mine start up in
March and approximately 21,000 tonnes of coal production and sales.
Multiple local and international consumers have expressed interest
to buy Ulaan Ovoo coal; Prophecy is pleased with the rate of
progress and plans to report quarterly sales and operational
update.
Pictures and video are available at www.prophecydev.com.
With nameplate production capacity of 2 million tonnes per year,
Ulaan Ovoo is a fully-permitted large coal field featuring a
single, massive coal seam of 40 to 80 metre thickness outcropping
at surface with a low strip ratio carrying minimal technical
risk.
As reported in the Company news release dated October 16, 2018,
that the Company executed a lease agreement (the
“Lease”) with an arms-length private Mongolian company
(the “Lessee”) whereby the Lessee performs mining
operations at Prophecy’s Ulaan Ovoo coal mine, and will pay
Prophecy $2 (the “Production Royalty”) for every tonne
of coal shipped from the Ulaan Ovoo site premises. The Lessee is
responsible for all capital and operating expenses, government
taxes and royalties related to Ulaan Ovoo operation.
Since the signing of the Lease, the Lessee has spent approximately
$700,000 on supplies, housing and crew and restarted Ulaan Ovoo
with its own equipment. Lessee plans to start double shifts is
April to meet demand.
About Ulaan Ovoo:
Ulaan Ovoo is located in northern Mongolia, 17km from the Zeltura
border to Russia by dirt road, and 120km by road from
Mongolia’s Sukhbaatar railway station (which connects to the
Trans-Siberian railway network). Ulaan Ovoo produced over 500,000
tonnes of coal from 2012 to 2014 which was sold to 28 separate
Russian and Mongolian customers such as Erdenet Copper Mining
Corporation, UB Railway, and Khutul Cement before it was put on
standby in 2014.
The benchmark Newcastle thermal coal price has rebounded from a
2014 low of $61 per tonne to a current price of $98 per tonne,
which are levels not seen since 2011.
Ulaan Ovoo features an average strip ratio of 1.8 BCM waste/tonne
of coal. The coal mined yielded 5,000 kcal/kg GCV, less than 1%
sulphur and low ash (8 to 11%) which is well-suited for power
plants, cement plants and heat boiler applications. Wardrop
Engineering (Tetra Tech) estimated 174 Mt of measured and 34 Mt of
indicated coal resources in an NI 43-101 prefeasibility study in
2010.
All prices are in USD
Qualified Person
The technical contents of this news release have been prepared
under the supervision of Danniel Oosterman, VP, Exploration. Mr.
Oosterman is not independent of the Company in that he is employed
as a consultant to the Company and most of his income is derived
from the Company. Mr. Oosterman is a Qualified Person as defined in
NI 43-101.
About Prophecy
Prophecy
is developing the Gibellini project – the only large-scale,
open-pit, heap-leach vanadium project of its kind in North America.
Located in Nevada, Gibellini is currently undergoing EPCM and
Permit preparation. Prophecy also has mining projects in Mongolia
and Bolivia. Further information on Prophecy can be found at
www.prophecydev.com.
PROPHECY
DEVELOPMENT CORP.
ON
BEHALF OF THE BOARD
“John
Lee”
Executive
Chairman
For
more information about Prophecy, please contact Investor
Relations:
+1.888.513.6286
ir@prophecydev.com
www.prophecydev.com
Neither the Toronto Stock Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Toronto
Stock Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Cautionary Note Regarding Forward-Looking Statements
Certain
statements contained in this news release, including statements
which may contain words such as “expects”,
“anticipates”, “intends”,
“plans”, “believes”,
“estimates”, or similar expressions, and statements
related to matters which are not historical facts, are
forward-looking information within the meaning of applicable
securities laws. Such forward-looking statements, which reflect
management’s expectations regarding Prophecy’s future
growth, results of operations, performance, business prospects and
opportunities, are based on certain factors and assumptions and
involve known and unknown risks and uncertainties which may cause
the actual results, performance, or achievements to be materially
different from future results, performance, or achievements
expressed or implied by such forward-looking statements. These
estimates and assumptions are inherently subject to significant
business, economic, competitive and other uncertainties and
contingencies, many of which, with respect to future events, are
subject to change and could cause actual results to differ
materially from those expressed or implied in any forward-looking
statements made by Prophecy. In making forward-looking statements
as may be included in this news release, Prophecy has made several
assumptions that it believes are appropriate, including, but not
limited to assumptions that: all required third party contractual,
regulatory and governmental approvals will be obtained for the
development, construction and production of Prophecy’s
properties and the Chandgana power plant; there being no
significant disruptions affecting operations, whether due to labour
disruptions or other causes; currency exchange rates being
approximately consistent with current levels; certain price
assumptions for vanadium, silver, coal and other metals, prices for
and availability of fuel, parts and equipment and other key
supplies remain consistent with current levels; production
forecasts meeting expectations; the accuracy of Prophecy’s
current mineral resource estimates; labour and materials costs
increasing on a basis consistent with Prophecy’s current
expectations; any additional required financing will be available
on reasonable terms; and market developments and trends in global
supply and demand for vanadium, energy, silver, coal and other
metals meeting expectations. Prophecy cannot assure you that any of
these assumptions will prove to be correct.
Numerous
factors could cause Prophecy’s actual results to differ
materially from those expressed or implied in the forward-looking
statements, including the following risks and uncertainties, which
are discussed in greater detail under the heading “Risk
Factors” in Prophecy’s most recent Management
Discussion and Analysis and Annual Information Form as filed on
SEDAR and posted on Prophecy’s website: Prophecy’s
history of net losses and lack of foreseeable positive cash flow;
exploration, development and production risks, including risks
related to the development of Prophecy’s mineral properties;
Prophecy not having a history of profitable mineral production;
commencing mine development without a feasibility study; the
uncertainty of mineral resource and mineral reserve estimates; the
capital and operating costs required to bring Prophecy’s
projects into production and the resulting economic returns from
its projects; foreign operations and political conditions,
including the legal and political risks of operating in Bolivia and
Mongolia, which are developing countries and being subject to their
local laws; the availability and timeliness of various government
approvals, permits and licenses; the feasibility, funding and
development of Prophecy’s projects; protecting title to
Prophecy’s mineral properties; environmental risks; the
competitive nature of the mining business; lack of infrastructure;
Prophecy’s reliance on key personnel; uninsured risks;
commodity price fluctuations; reliance on contractors;
Prophecy’s need for substantial additional funding and the
risk of not securing such funding on reasonable terms or at all;
foreign exchange risk; anti-corruption legislation; recent global
financial conditions; the payment of dividends; the inability of
insurance to cover all potential risks associated with mining
operations; conflicts of interest; and cyber-security risks related
to the Company’s reliance on information technology
systems.
These
factors should be considered carefully, and readers should not
place undue reliance on Prophecy’s forward-looking
statements. Prophecy believes that the expectations reflected in
the forward-looking statements contained in this news release and
the documents incorporated by reference herein are reasonable, but
no assurance can be given that these expectations will prove to be
correct. In addition, although Prophecy has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Prophecy undertakes no obligation to release publicly any
future revisions to forward-looking statements to reflect events or
circumstances after the date of this news or to reflect the
occurrence of unanticipated events, except as expressly required by
law.