Prophecy Coal Corp is pleased to announce that it has entered into a Memorandum of Understanding (the “MOU”) with one of the world”s largest power generation groups with installed capacity of over 100 gigawatts and annual power generation of over 450,000 gigawatt hours (the “Strategic Partner”) to jointly develop the Company”s Chandgana Power Plant project (the “Project”) in Mongolia. The Strategic Partner has completed preliminary due diligence on the Project, including a site visit, and held several months of discussions with Prophecy prior to signing the MOU.The MOU sets out the proposed terms of the cooperation and timeline of implementation of a transaction between the Strategic Partner and Prophecy. The Company cautions that the MOU is not binding and should not be relied upon as a guarantee that a transaction will be completed.
The execution of this MOU is a positive step for Prophecy and its shareholders towards recovering value for the substantial effort and capital that the Company has spent over the past two years to develop the Project. The Company is in active discussions with other power generation companies to complete a consortium to drive the Project towards completion.
Prophecy Coal Corp. is a Canadian listed company engaged in developing energy projects in Mongolia. The Company”s wholly-owned subsidiary Prophecy Power Generation LLC is advancing plans for a proposed 600 MW mine-mouth power plant, which has been permitted by the Mongolian government, adjacent to its Chandgana coal deposit. Chandgana Coal LLC, another Prophecy wholly-owned Mongolian subsidiary, is expected to supply 3.5 million tonnes of coal per year to Prophecy Power for 25 years. Chandgana Coal LLC controls over 1.2 billion tonnes of thermal coal in the measured and indicated categories, including two mining licenses containing 141 million tonnes of measured resource with a strip ratio of 0.7:1. Substantially all of the Company”s resources are not mineral reserves, hence they do not have demonstrated economic viability. The Company cautions the Chandgana project is in Mongolia and requires substantial capital to develop.
