Prophecy scores loan for Mongolian expansion

VANCOUVER-based miner Prophecy Coal has taken a $US10 million loan with Toronto’s Waterton Global Value to complete the purchase of its newly acquired Tugalgatai coal licenses in Mongolia.
Prophecy scores loan for Mongolian expansion Prophecy scores loan for Mongolian expansion Prophecy scores loan for Mongolian expansion Prophecy scores loan for Mongolian expansion Prophecy scores loan for Mongolian expansion

Courtesy Prophecy Coal.

Justin Niessner

The one-year loan bears interest at 14% and will require a 2.5% structuring fee from Prophecy as well as issuance of 2.8 million of the miner’s common shares.

“The proceeds will fully fund completion of the acquisition of Tugalgatai coal licenses which are expected to significantly increase our coal resources,” Prophecy chief executive John Lee said.

Formal acquisition of the Tugalgatai licenses will represent an expansion of the Prophecy’s Chandgana project which hosts a thermal coal resource of 650 million tonnes (measured) and 540Mt (indicated).

Waterton Global portfolio manager Cheryl Brandon said the resource investment company was looking forward to helping Prophecy expand in the Chandgana coal basin.

“The Waterton Global facility provides the required capital to complete the recently announced $10 million coal license acquisition and implement the company’s production growth strategy in the region.”

By consolidating the 300sq.km Chandgana basin, Prophecy hopes to employ greater economices of scale at the Chandgana mine mouth power plant and furhter develop coal to chemicals and coal gasification projects.

Prophecy Coal has more than 1.4Bt of surface mineable thermal coal resources on two coal properties in Mongolia.

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