Prophecy Resource Corp. ("Prophecy") (TSX VENTURE: PCY)(OTCQX:
PRPCF)(FRANKFURT: 1P2) and Pacific Coast Nickel Corp. ("PCNC") (TSX
VENTURE: NKL) ("PCNC", and collectively with Prophecy, the
"Companies") are pleased to announce that further to their
announcements on January 18, 2011 and February 17, 2011, they have
signed the definitive arrangement agreement ("Arrangement
Agreement") to sell Prophecy's Wellgreen PGM Ni-Cu and Lynn Lake
Nickel projects (the "Projects") to PCNC.
Pursuant to the Arrangement Agreement, the transaction will be
implemented by way of a plan of arrangement under the Business
Corporations Act (British Columbia) (the "Arrangement"). Prior to
the Arrangement, Prophecy will transfer the assets comprising the
Projects, as well as $2 million cash, to a newly incorporated
subsidiary ("Spinco"), PCNC will then acquire 100% of the shares of
Spinco in exchange for the issuance of 450,000,000 common shares in
the capital of PCNC (the "PCNC Shares"), of which 225,000,000 PCNC
Shares will be retained by Prophecy and 225,000,000 PCNC Shares
will be distributed or reserved for distribution on a pro rata
basis to holders of Prophecy shares on a fully diluted basis ("PCNC
Distribution"). Prophecy may also grant up to 500,000 options prior
to the effective time of the Arrangement.
Upon completion of the Arrangement, Prophecy and its
shareholders will hold approximately 88.97% of the issued and
outstanding shares of PCNC. Following the completion of the
Arrangement, Prophecy will change its name to "Prophecy Coal Corp."
and PCNC will consolidate its share capital on a 10:1 basis and be
renamed as "Prophecy Platinum Corp.".
The effective date of the Arrangement and the PCNC Distribution
(the "Effective Date") is expected to be in early May. It is not
possible at this time to determine a Prophecy shareholder's exact
entitlement to PCNC Shares as a result of the Arrangement. As of
the date of this press release, there are 189,669,994 Prophecy
shares issued and outstanding and 47,650,658 Prophecy options and
warrants issued and outstanding. Assuming those numbers were
unchanged on the Effective Date, each Prophecy shareholder would be
entitled to 0.9482 of a pre-consolidation PCNC Share, and each
Prophecy convertible securityholders, when exercising their options
or warrants, as the case may be would receive one Prophecy share
and 0.9482 of a pre-consolidation PCNC Share. In the event that
more Prophecy shares, options or warrants are issued and
outstanding on the Effective Date, the number of PCNC Shares to
which a Prophecy shareholder shall be entitled to will be reduced
in accordance with their pro rata holdings.
Prophecy and PCNC will each be convening a shareholders meeting
to consider and approve the Arrangement and related transactions.
It is expected that the shareholder meetings will occur in early
May. A joint management information circular containing detailed
disclosure regarding the Arrangement and related transactions will
be mailed to Prophecy and PCNC shareholders.
Completion of the Arrangement is subject to a number of
conditions, including the approvals of the shareholders of Prophecy
and PCNC, the Supreme Court of British Columbia, and the TSX
Venture Exchange, as well as other customary conditions. The
Arrangement Agreement and related information circular will be
filed and available for public download at www.sedar.com.
About Prophecy
Prophecy Resource Corporation 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 mine is fully
commissioned.
About PCNC
Pacific Coast Nickel Corp is a Canadian based nickel and copper
base metal exploration company actively exploring properties in
Canada, Argentina and Uruguay.
ON BEHALF OF THE BOARD OF DIRECTORS of Prophecy Resource
Corp.
John Lee, Chairman and CEO
Pacific Coast Nickel Corp.
John Lee, Chairman and Interim CEO
Cautionary Statements: Completion of the Arrangement is subject
to a number of conditions, including regulatory approval,
shareholder approvals, and approval of the British Columbia Supreme
Court. There can be no assurance that the transaction will be
completed as proposed or at all. Investors are cautioned that,
except as disclosed in the joint management information circular to
be prepared in connection with the Arrangement and related
transactions, any information released or received with respect to
the Arrangement may not be accurate or complete and should not be
relied upon. Trading in the securities of exploration and
development stage resource companies should be considered highly
speculative.
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 timing
of the Arrangement, future share ownership of PCNC, Prophecy's
intentions in respect of the distribution of PCNC Shares, potential
mineralization, the estimation of mineral resources, the
realization of mineral resource estimates, interpretation of prior
exploration and potential exploration results, the timing and
success of exploration activities generally, the timing and results
of future resource estimates, permitting time lines, metal prices
and currency exchange rates, availability of capital, government
regulation of exploration operations, environmental risks,
reclamation, title, and future plans and objectives of the
companies are forward-looking statements that involve various risks
and uncertainties. Although PCNC and Prophecy believe 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
failure to obtain necessary approvals in respect of the
Arrangement, unsuccessful exploration results, changes in project
parameters as plans continue to be refined, results of future
resource estimates, future metal prices, availability of capital
and financing on acceptable terms, general economic, market or
business conditions, risks associated with operating in foreign
jurisdictions, uninsured risks, regulatory changes, defects in
title, availability of personnel, materials and equipment on a
timely basis, accidents or equipment breakdowns, delays in
receiving government approvals, unanticipated environmental impacts
on operations and costs to remedy same, and other exploration or
other risks detailed herein and from time to time in the filings
made by the companies with securities regulators. Readers are
cautioned that mineral resources that are not mineral reserves do
not have demonstrated economic viability. 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. For more information on PCNC and
Prophecy and the risks and challenges of their businesses,
investors should review their annual filings that are available at
www.sedar.com.
This press release does not constitute an offer to sell or a
solicitation to buy any of the securities in the United States. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended ("the U.S.
Securities Act") or any state securities law and may not be offered
or sold in the United States or to U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws
or an exemption from such registration is available.
Completion of the transaction is subject to a number of
conditions, including Exchange acceptance and disinterested PCNC
shareholder approval. The transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Transaction will be completed as proposed or at
all.
Investors are cautioned that, except as disclosed in the joint
management Information circular and/or to be prepared in connection
with the transaction, any information released or received with
respect to the Arrangement may not be accurate or complete and
should not be relied upon. Trading in the securities of PCNC should
be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved
the contents of this press release.
"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."
Contacts: Prophecy Resource Corp. Paul McKenzie 1.604.642.2625
ext. 107 Prophecy Resource Corp. Scott Parsons +1.604.642.2625 ext.
106 Prophecy Resource Corp. John Lee 1.800.851-1528
john@prophecyresource.com www.prophecyresource.com Pacific Coast
Nickel Corp. John Lee 1.800.851-1528 john@pacificcoastnickel.com
www.pacificcoastnickel.com
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