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Vancouver, British Columbia, February 10, 2014 – Prophecy Coal Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2) is pleased to follow up its announcement of November 4, 2013, and report its preliminary figures on coal production and sales volumes from its 100% owned Ulaan Ovoo mine ("Ulaan Ovoo") in Mongolia for the fourth quarter ended December 31, 2013:
In early November 2013, the Company resumed mining operations at Ulaan Ovoo. Mining and road conditions to the Sukhbaatar rail siding ("Sukhbaatar") are currently normal and coal is being sold on a continual basis to a number of Prophecy customers. The Company is pleased with coal production and sales volumes.
Russia
In 2014, the Company sold and successfully delivered a coal shipment from Sukhbaatar to a Russian customer. The coal was approximately 5,300kcal/kg GCV, 0.5% Sulphur, and 5% ash. Management recently visited a number of Russian coal end users with the goal of establishing continuous shipments to Russia in 2014.
In addition, the Mongolia Ministry of Road and Transportation recently issued the terms of reference ("TOR") for the Zeltura Road feasibility study. After the TOR were issued, Prophecy started the feasibility study on upgrading the road from Ulaan Ovoo mine to Zeltura border.
Given that the mine is just 17km from the Zeltura border (as opposed to approximately 120km from the mine to Sukhbaatar), re-opening of the Zeltura border would reduce the transportation cost and potentially further increase coal sales to Russia. After the study is complete (target May 2014) and if accepted by the Ministry of Road and Transportation, the road upgrade can begin and is expected to take up to four months based on preliminary tenders received. The Company will advise when feasibility is completed and if accepted.
Concurrently, the Company is working with the Ministry of Finance on creating a customs clearing zone at Ulaan Ovoo for Russian exports. While the Company is pleased with the overall progress and appreciates the support from the Mongolian and Russian authorities, it cannot offer certainty or a definitive time frame to start transporting coal through Zeltura.
Chandgana
In July 2013, the Company applied for a concession with the Ministry of Economic Development (MOED) for the 600MW Chandgana mine mouth power project. Already with the power plant land use right, construction license, and coal mining license, Chandgana is an advanced green-field project designed to supply much needed electricity to a rapidly growing domestic Mongolia market. After extensive document submissions and discussions, the Mongolian Cabinet approved Chandgana as a concession project in January 2014. Subject to negotiations, a concession project may be entitled to stable tax rates, favorable VAT and customs duties, as well as other forms of government subsidies, endorsement and support; all of which can enhance bankability and lead to better financing options for the project. While the Company is pleased with the overall progress and appreciated support from various Mongolian authorities, it cannot offer certainty or a definitive time frame to conclude the Concession Agreement with MOED, or the Power Purchase Agreement with the Ministry of Energy.
As Prophecy’s results of operations for the 2013 fiscal year have not yet been finalized, the preliminary results included in this press release are subject to change as a result of the period-end closing process and the audit of Prophecy’s financial statements by its independent registered public accounting firm. Please see "Caution Concerning Preliminary Financial Results" below. Management and the Board of Directors look forward to providing further detail once the 2013 fiscal year figures are finalized
For the full version of the new release and disclaimer, please visit http://prophecycoal.com/prophecy-coal-reports-preliminary-fourth-quarter-coal-production-and-operation-update/
About Prophecy Coal
Prophecy Coal Corp. is a Canadian company listed on the Toronto Stock Exchange engaged in developing energy projects in Mongolia. Further information on Prophecy Coal can be found at www.prophecycoal.com.
For more information about Prophecy, please contact
Bekzod Kasimov
Manager, Business Development
+976 – 9901 2672
bekzod@prophecycoal.com
www.prophecycoal.com
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