Prophecy Resource Corp. ("Prophecy") (TSX VENTURE: PCY)(OTCQX:
PRPCF)(FRANKFURT: 1P2) and Pacific Coast Nickel Corp. ("PCNC") (TSX
VENTURE: NKL)(PINK SHEETS: PNIKF)(FRANKFURT: P94) (the "Companies")
are pleased to announce the commencement of an expansion drilling
program on its Wellgreen PGM Ni-Cu Project, located in the Yukon
Territory, Canada. The program has been commenced by Prophecy and
will be completed by PCNC following the completion of the
arrangement transaction ("Arrangement") whereby PCNC will acquire
the Lynn Lake and Wellgreen properties from Prophecy.
The program will comprise of 8,000 meters of solid-core diamond
drilling from May to September with up to 3 drills to test minimum
17 infill and exploration targets. This phase of drilling is
designed to augment the existing resource which is currently being
updated to National Instrument 43-101 compliant standards by
Wardrop Engineering ("Wardrop"), a Tetra-tech Company. The resource
estimate (based on 701 drillings before 2011) is expected to be
released in July of this year. The 2011 drilling is aimed to
further augment the resource estimate.
In 1972, Hudbay Minerals Inc. milled 171,652 tons grading 2.23%
Copper and 1.39% Nickel on the Wellgreen mine. The mine then ceased
operations due to low nickel prices, geological complexity, and
poor ground conditions. Drillings by several past operators have
verified the presence of significant amount of lower grade
nickel-copper and PGM-bearing mineralization highlighted by
intercepts of 496.1 meters of 0.596 g/t PGM+Au, 0.27% nickel, 0.18%
copper and 0.02% cobalt (refer to September 27, 2010 press
release). The grades and type of disseminated mineralization at
Wellgreen are highly analogous to those observed in Minnesota's
Duluth Complex.
The Prophecy 2011 program will consist of a series of step-back
and infill holes targeting the bulk disseminated sulphide zones
that stratigraphically overlie the known massive sulphide zones
stretching over 2.2km
Step-outs to the east will examine the potential of Wellgreen
where aeromagnetic data and mapping indicate a continuation of the
mineralized host-pluton, the Quill Creek mafic-ultramafic
intrusion, which extends for at least 2.3 km in that direction, and
has undergone minimal prior drilling.
Overview of Wellgreen:
-- Wellgreen is part of Kluane Ultramafic Nickel belt, which is the second
largest behind the Thompson Belt in Canada and remains vastly
unexplored.
-- Wellgreen was discovered in 1952 and optioned to Hudson Bay Mining and
Smelting Ltd. (now Hudbay Minerals Inc.). Over a 20 year period,Hudbay
sank 4 shafts and developed over 4 km of underground workings.
-- A total of 701 holes (182 surface, 519 underground) totalling 53,222
meters (28,303 meters surface, 24,919 meters underground) were
historically drilled by the following mining and exploration companies:
Hudbay, Chevron, All North, Galactic, Archer Cathro, Coronation, and
Northern Platinum.
-- A historic, non-NI 43-101 compliant geological resource (1989) estimated
at 55 million tonnes grading 0.35% copper, 0.36% nickel, and 0.78 g/t
PGM.
-- Prophecy holds 91 claims in two groups under renewable 21-year mining
leases totaling approximately 22.1 square km.
-- A shear zone was discovered in 2005 with rock samples yielding up to
70.1 g/t Palladium, and 77.3 g/t Platinum and 1.37 g/t Rhodium
($2,240/oz) over a 3km strike.
-- A Fugro helicopter-borne Mag and EM survey conducted in 2008
demonstrated that the magnetic signature of the peridotite extends
approximately 6 km on Prophecy's ground.
-- Past exploration and production focused on high-grade underground
massive sulphide.
-- Prophecy is re-examining the surveys, geology, past drill cores, and
economics of Wellgreen for a disseminated sulphide open pit scenario.
In July 2010, a NI 43-101 report (available on sedar) on the
Wellgreen property from Wardrop stated, "The potential within the
Quill Creek Ultramafic intrusion on the Wellgreen property is in
the range of 77 to 254 million tonnes at 0.26 to 0.38% nickel, 0.26
to 0.36% copper, 0.32 to 0.47 g/t platinum and 0.23 to 0.38 g/t
palladium based on the assumption of a specific gravity of 3.22,
strike length of 4000 to 7000 metres, depth of 200 to 250 metres
and a width of 30 to 35 metres."
On May 31, 2011, the Companies' respective shareholders have
approved the Arrangement whereby PCNC will acquire the Lynn Lake
and Wellgreen nickel properties from Prophecy. Refer to the June 1,
2011 joint news release issued by the Companies on the
Arrangement.
Visit www.prophecyresource.com or www.pacificcoastnickel.com for
detailed drill map and 3D modeling of the Wellgreen deposit.
This news release has been reviewed and approved by Danniel
Oosterman, P.Geo. who is a Qualified Person as defined in NI
43-101.
About Prophecy Resource
Prophecy Resource Corp. is an internationally diversified
company engaged in developing energy, nickel and platinum group
metals projects. The company controls over 1.4 billion tonnes of
surface minable thermal coal resources in Mongolia. Prophecy's
Ulaan Ovoo coal mine is operational and its Chandgana mine mouth
power plant is currently being permitted. In Canada, Prophecy owns
the Wellgreen PGM Project in the Yukon Territory and Lynn Lake
Nickel Sulphide Project in Manitoba, both of which it has agreed to
sell to Pacific Coast Nickel Corp. Prophecy also owns equity stakes
in Victory Nickel Inc. and Compliance Energy Corp. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
About PCNC
Pacific Coast Nickel Corp is a Canadian based Nickel PGM
exploration company with projects in Canada, Argentina and Uruguay.
PCNC's Burwash property is located adjacent to Prophecy's Wellgreen
project in the Yukon Territory, Canada. On April 4, 2011, PCNC
agreed to buy Wellgreen and Lynn Lake projects from Prophecy
Resource Corp by issuing 450 million Pacific Coast Nickel shares to
Prophecy.
ON BEHALF OF THE BOARD OF DIRECTORS of
Prophecy Resource Corp. Pacific Coast Nickel Corp.
John Lee, Chairman and CEO John Lee, Chairman and Interim CEO
Cautionary Statements: Completion of the transaction is subject
to a number of conditions, including regulatory approval,
shareholder approvals, a definitive agreement and approval of the
British Columbia Supreme Court if applicable. 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
Management Information Circular to be prepared in connection with
the transaction, any information released or received with respect
to the Transaction 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 Transaction, future share ownership of PCNC, Prophecy's
intentions in respect of the PCNC Distribution, 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
Transaction, 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
Management Information Circular and/or Filing Statement to be
prepared in connection with the transaction, any information
released or received with respect to the Transaction 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. / Pacific Coast Nickel Corp.
Joseph Li 1.800.362.7366 or 604.642.2625 ext. 105
joseph@prophecyresource.com www.prophecyresource.com /
www.pacificcoastnickel.com
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