October 07, 2013 08:32 ET
Prophecy Coal Signs Additional Coal Off-take Agreement
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 7, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to announce that it has entered into a coal sale contract (the "Contract") for the sale of 30,000 tonnes of coal per month from the Company's Ulaan Ovoo mine (the "Mine") to a buyer at the Mine gate.
Under this Contract, 30,000 tonnes of coal per month will be sold by the Company and picked up by the buyer at the Mine gate. The buyer is a new customer with substantial presence in the region and this Contract is separate from sales contracts announced in news releases dated August 12, 2013 and August 28, 2013.
The first shipment date is planned in November per buyer's request.
Update on Restarting Ulaan Ovoo
The Company's mining operation of Ulaan Ovoo mine has been curtailed since July 2012.
Prophecy has started pit dewatering, recalling leased mining equipment, hiring, and diesel/parts procurement to bring the Mine back into production, with November 2013 as the target re-start date.
Update on Transportation and Sales
The Company has sold and transported coal to customers in September, 2013. The coal was loaded from existing stockpiles at the Mine site and was trucked to Sukbhaatar railway siding, and was then transported by rail to five customers. Full sales payments are collected as orders are filled on a first-come, first serve basis. The road and bridge conditions between the Mine and Sukhbaatar at the present time are normal.
Currently, the Company has executed coal sales contracts totaling approximately 60,000 tonnes per month (including the latest Mine gate Contract). Fulfilling all the off-take agreements is contingent on the Mine restart as the quantity and quality of the existing stockpile are insufficient to supply customer demand beyond October,
2013 Sales and delivery forecasts will be provided once the Company commences full mining and trucking operation.
Update on Zeltura border and Coal
According to the Mongolian government General Working Plan and Resolution 120 passed on September 11, 2012, the status of Zeltura border is officially listed as "Under Renovation", which means it is neither open nor closed. In the past months, Prophecy has been in discussion with various Ministries and has offered assistance to renovate associated Zeltura infrastructure including but not limited to customs clearing facility at the Mine site, and road improvement from the Mine site to Zeltura, all of which are necessary to enable coal transport through Zeltura. Road improvement, which requires a feasibility study and environmental impact assessment studies, are expected to be completed by the Company by year end. The road improvement project is expected to take 2 to 4 months based on the tenders received. The Company recently executed a coal sales contract of significant quantity with a buyer in Russia, which is contingent on the ability to transport coal through the Zeltura border. While the Company is pleased with the overall progress, it cannot offer certainty or a definitive time frame to start transporting coal through Zeltura.
Visit www.prophecycoal.com for a map of the Company's Ulaan Ovoo mine.
About Prophecy Coal
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www.marketwired.com/press-release/...ement-tsx-pcy-1838331.htm