Prophecy
Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY - News)(Pinksheets:PRPCF
- News)(Frankfurt:1P2 - News)
Dear
All,
I
am pleased to provide this "Letter from the Chairman" of Prophecy
Resource Corp. and to share with you my optimism for 2011 and beyond.
2010
was highlighted by several accomplishments including 5 successful mergers and
acquisitions, namely:
-- The acquisition of the Lynn
Lake mine from Victory Nickel Inc.
-- The acquisition of Titan
Vanadium from Randsburg Gold Corp.
-- The acquisition of Lynn
Gabbros from VMS Ventures Inc.
-- The merger with Red Hill
Energy Inc.
-- The merger with Northern
Platinum Ltd.
Additionally
we:
-- Advanced our (i)1.2bt Chandgana Coal-Fired
Power Plant project to EIA
approval;
-- Commissioned our (ii)200mt Ulaan Ovoo Coal Mine to
Production;
-- Made new discoveries at our
Lynn Lake Project;
-- Discovered high-grade
(iii)500meters+ PGE-Ni-Cu intercepts at our
Wellgreen
Project;
-- Assembled an advisory team
including Mike Deats, Rob McEwen, and Harald
Batista;
-- Commenced trading on both the Xetra and OTCQX and maintained active
volumes; and
-- Concluded total equity raises
of over $50 million and a $10 million loan
facility.
When
I began Prophecy in October of 2009 we had $500,000 in market capitalization;
today our market capitalization exceeds $170 million and we are well-funded
for our 2011 business plan. In 2010 Prophecy traded over 130 million shares
on the TSX Venture Exchange. (Not included are trading of Red Hill and
Northern Platinum shares during the acquisition periods, which represents 20
million additional shares of trading.)
Prophecy's
objectives for 2011 include the following:
-- Conclude long term Ulaan Ovoo coal off take
agreements with regional
Russian power
plants;
-- Commence shipments of Ulaan coal to Asian customers via Russia's eastern
coal ports;
-- Produce and transport between
1 and 1.5 million tonnes of coal at Ulaan
Ovoo
in 2011;
-- Increase profit margins at Ulaan Ovoo with owner equipment
and Zeltura
port opening;
-- Secure Chandgana
power purchase off take MOUs with Mongolian entities;
-- Obtain Government cooperation
and full licensing on our Chandgana Power
Plant;
-- Secure equity and debt
financing for Chandgana Power Plant construction;
-- Consider a possible spin-off
of Prophecy's Canadian assets; and
-- Seek additional listings.
We
conclude the year with 35% to 40% ownership by institutions and insiders,
including major Mongolian shareholders. In 2011 I will continue to direct
Prophecy's transformation from a Canadian junior company to a profitable coal
producer with a fast developing asset base and an internationally recognized
management team. In 2011 I intend to attract additional cornerstone investors
to raise our international profile.
I
want to thank our team, and particularly our shareholders for your un-wavered
support and patience. I also want to particularly extend my foremost
gratitude to Mr. G. Arnold Armstrong, the founder of Red Hill Energy, for his
faith in me to head the post Prophecy-Red Hill merger entity.
I
met recently with Mr. Rob McEwen and was reminded that he began as an
investor with no public company management experience before heading
Goldcorp, where he transformed that company from $50million in market
capitalization to over $8 billion. GoldCorp's share
price achieved a compounded annual growth rate of 32% under his tenure. Peter
Munk
,was in the hotel business before founding Barrick,
which is now the world's largest gold producer. I am deeply inspired by Rob,
and believe investor confidence and trust are earned by our hard work,
integrity, and determination to build Asia's next major energy company. If we
put our heads down and execute our well defined plan, with shareholder value
in mind, the share price and everything else will take care of itself.
I
invite you to be part of Prophecy and share with us an exciting future.
Happy
Holidays.
Sincerely,
John
Lee
Chairman
and CEO
john@prophecyresource.com
(i)208.8 million tonnes (174.5
Mt Measured, 34.3 Mt Indicated) and (35.9 Mt Inferred) Ulaan
Ovoo (See Press Release December 16, 2010)
(ii)656.6
million tonnes Measured, 545.7 million tonnes Indicated (Chandgana Tal
& Chandgana Khavtgai)
(See press release August 16, 2010)
(iii)
(Hole 177): 525.90m of 0.55 g/t PGM+Au, 0.26% Ni,
0.17% Cu, (Hole 178): 566.78m of 0.39% of 0.52 g/t PGM+Au,
0.23% Ni, 0.16% Cu (September 27, 2010 News)
About
Prophecy Resource
Prophecy
is an internationally diversified company engaged in developing energy,
nickel and platinum group metals projects. The Company controls over 1.4
billion tons of open-pittable thermal coal in
Mongolia (839 Mt Measured, 579 Mt Indicated). Prophecy's Ulaan
Ovoo coal deposit in Mongolia is in production. In
Canada, Prophecy owns Wellgreen PGM Project in
Yukon, Lynn Lake Nickel Sulphide Project in
Manitoba, and a 10% equity stake in Victory Nickel. Mineral resources that
are not mineral reserves do not have demonstrated economic viability.
ON
BEHALF OF THE BOARD OF DIRECTORS of Prophecy Resource Corp.
John
Lee, Chairman
Forward
Looking Statements: This news release includes certain statements that may be
deemed "forward-looking statements". All statements in this
release, other than statements of historical facts, including, without
limitation, statements regarding future plans and objectives, and
specifically the 2011 objectives, of Prophecy are forward-looking statements
that involve various risks and uncertainties. Although Prophecy believes the
expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance
and actual results or developments may differ materially from those in the
forward-looking statements. Forward-looking statements are based on a number
of material factors and assumptions. Factors that could cause actual results
to differ materially from those in forward-looking statements include general
economic, market or business conditions, and other risks detailed herein and
from time to time in the filings made by the companies with securities
regulators. Mineral exploration and development of mines is an inherently
risky business. Accordingly the actual events may differ materially from
those projected in the forward-looking statements. See the description of
risks and uncertainties and underlying factors and assumptions relevant to
the offering and "forward looking information" contained herein and
to the Company's business, including its exploration and development
activities, contained in the short form prospectus dated December 21, 2010
(which are incorporated herein by reference). The "forward-looking
statements" contained herein speak only as of the date of this press
release and, unless required by applicable law, the Company undertakes no
obligation to publicly update or revise such information, whether as a result
of new information, future events or otherwise.
"Neither
the TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release."
Contact:
Contacts:
Prophecy Resource Corp.
Scott Parsons
+1.604.642.2625 ext. 106
Prophecy Resource Corp.
Paul McKenzie
+1.604.642.2625 ext. 107
Prophecy Resource Corp.
John Lee
+1.800.851.1528
john@prophecyresource.com
www.prophecyresource.com
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