May 17, 2013 08:00 ET Prophecy Reaches 25-Year Tariff Agreement for the Chandgana Power Project
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 17, 2013) - Prophecy Coal Corp. (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) ("Prophecy" or "The Company") is pleased to announce that the Company has received official correspondence from the Head of the Chandgana project working group (the "Working Group") designated by the Mongolian Ministry of Energy, outlining the terms of a tariff agreement reached by the Working Group and Prophecy Power Generation LLC ("PPG", wholly owned subsidiary of Prophecy), for the Chandgana coal mine mouth power plant project (the "Power Project").
The major terms of the tariff agreement include:
An initial tariff for the first year of the Power Project plant operation; and A weighted average tariff for the remaining 24 years of power plant operation.
The Company is pleased to announce that the tariff numbers are in-line with PPG's final proposal submission to the Working Group in February 2013.
The Working Group was constituted in 2012 and consists of 11 members including officials and experts from the Ministry of Energy, the Energy Regulatory Commission ("ERC"), National Electricity Transmission Grid Company ("NETGCO") and private companies operating in the energy sector of Mongolia.
The Working Group in the past several months has held numerous meetings with PPG to advance and conclude the tariff structure and advance the Power Purchase Agreement ("PPA") incorporating all major technical, legal and commercial aspects of the Project.
Prophecy believes that the Tariff Agreement is a major catalyst that could lead to the Company:
Concluding the PPA with the Working Group in an expedited manner; Finalizing joint venture discussions with several major Independent Power Plant ("IPP") enterprises, whereby the Company is targeting a significant infusion of capital and expertise from IPP partner(s); and Advancing final selection of an Engineering, Procurement and Construction ("EPC") turnkey contractor for the Power Project.
The Company would like to thank all members of the Working Group for their professional dedication in advancing the Chandgana Power Project, and congratulate them for achieving this major tariff agreement milestone. With all major construction, environmental, mining, land use licenses and/or permits already in place, Prophecy looks forward to involving all stakeholders in building possibly the country's first major thermal IPP project.
Qualified Person
Mr. Christopher Kravits, LPG, CPG, is a qualified person as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Kravits is not considered independent of Prophecy given the large extent that his professional time is dedicated solely to, and his position as Manager of Mining with Prophecy Coal Corp. Mr. Kravits has reviewed and approved the technical and scientific disclosure within this news release.
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