Prophecy Coal (TSX:PCY) (OTCQX:PRPCF) Signs Coal Offtake Agreement with Direct Reduced Iron Manufacturing Plant in Mongolia - Video Summary Posted on www.InvestmentPitch.com
(Thomson Reuters ONE) -
Vancouver, British Columbia, May 25, 2012 - Prophecy Coal (TSX:PCY)
(OTCQX:PRPCF) (Frankfurt:1P2) has signed an offtake agreement for coal from one
of the company's coal projects in Mongolia. The company has entered into a coal
sales contract with a local Mongolian direct reduced iron (DRI) manufacturing
plant, for the sale of 22,100 tonnes of thermal coal from the company's Ulaan
Ovoo mine.
InvestmentPitch.com has produced a "video news alert" which provides a summary
of this news. If this link is not enabled, please visit www.InvestmentPitch.com
and enter "Prophecy Coal" in the search box.
The buyer has indicated that this initial purchase is to meet shortfalls from
current suppliers and that it would eventually like to increase the supply from
Prophecy to 300,000 tonnes on an annual basis. The buyer currently purchases in
excess of 850,000 tonnes of coal annually from various local suppliers.
Prophecy's pricing is competitive to offers received from Russia, and sets a
benchmark for Prophecy to continue offtake discussions with other local
industries in a surging Mongolian economy.The Mongolian government forecasts
19% GDP growth for 2013.
Prophecy's high quality thermal coal (NAR 5100 kcal/kg) is ideal for the
production of direct reduced iron, also known as sponge iron. DRI is produced
from direct reduction of iron ore in the form of lumps, pellets or fines, by a
reducing gas produced from burning coal. The coal must be lumpy and of high
calorific value, however temperature does not have to reach blast furnace
levels, hence coking coal is not required. The reducing gas from the coal is a
mixture majority of hydrogen (H(2)) and carbon monoxide (CO) which acts as a
reducing agent. This process of directly reducing the iron ore in solid form by
reducing gases from coal technology has been developed to overcome some of the
high costs and difficulties of conventional blast furnaces.
DRI product is one of the chief raw materials in steel-making, as it has higher
qualities and advantages compared to scrap irons and pig irons. DRI products are
in high demand and have been quoted in China at more than US$300 a tonne.
John Lee, Chairman and CEO of Prophecy stated, "As we move past the mine
establishment phase at Ulaan Ovoo, we anticipate steadily decreasing operating
cost and increasing sales quantity and price. Our goal is to make Ulaan Ovoo
operations cash flow positive in the near term without relying on Russian or
Chinese export markets."
The company continues to make progress on opening the Zeltura border crossing,
approximately 10 kilometres from the Ulaan Ovoo mine, to facilitate export to
Russia, which would then increase the total demand for Ulaan Ovoo coal past 1
million tonnes a year.
Prophecy's other Mongolian project, a proposed 600 mega watt mine-mouth power
plant, adjacent to the company's Chandgana coal deposit, has been permitted by
the Mongolian government. Negotiations on financing, power purchase agreement
and construction management are underway.
Prophecy Coal trades at $0.25, and with approximately 225 million shares
outstanding, is capitalized at $56 million.
For a more information on Prophecy Coal, and the company's other projects,
please visit their website www.prophecycoal.com, phone David Brook 800-358-5865
or email dbrook(at)prophecycoal.com.
InvestmentPitch.com is a multimedia company that provides a combined solution
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CONTACT:
InvestmentPitch.com
Barry Morgan, CFO
604-684-5524
bmorgan(at)investmentpitch.com
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Source: InvestmentPitch via Thomson Reuters ONE
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Datum: 25.05.2012 - 09:22 Uhr
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