09.09.2011 permitting process in mongolia, mr. john lee
TRANSCRIPT
The information contained in this presentation (“Presentation”) has been prepared by Prophecy Resources Corp. (“Company”) and is being communicated for generalbackground informational purposes only. The Presentation has not been independently verified and the information contained within is subject to updating, completion, revision,verification and further amendment. Neither the Company, nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has authority to give, anyrepresentations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof,or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) andliability therefore is expressly disclaimed. Information contained in this Presentation is the property of the Company. It is made available strictly for the purposes referred toabove. Neither the communication of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with anytransaction. This Presentation does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securitiesin the Company, nor shall it, or the fact of its communication, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract orcommitment whatsoever with respect to such securities. The communication of this Presentation in or to persons in certain jurisdictions may be restricted by law and personswho may rceive communication of this Presentation should inform themselves about, and observe, any such restrictions in advance of communication to them of this Presentation.In particular, this Presentation has not been approved by an authorised person pursuant to Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and accordinglyit is being delivered in the United Kingdom only to persons to whom this Presentation may be delivered without contravening the financial promotion prohibition in Section 21 ofthe FSMA. Those persons are described in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Order”) and include persons who have professionalexperience in matters relating to investments and who fall within the category of person set out in Article 19 (investment professionals) of the Order. In addition, other than alimited number of persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the US Securities Act of 1933, as amended) or accredited
investors (as defined in the National Instrument 45/106), neither this Presentation nor any copy of its may be transmitted into the United States of America or Canada ordistributed directly or indirectly, in the United States of America or Canada, or to any resident thereof except in compliance with the applicable securities laws. Any failure tocomply with these restrictions may constitute a violation of applicable US or Canadian securities laws. By accepting communication of this Presentation, the recipient representsand warrants that it is a person to whom this Presentation may be communicated without a violation of the laws of any relevant jurisdiction. This Presentation is not to becommunicated to any other person or used for any other purpose and any other person who receives communication of this Presentation should not rely or act upon it. Infurnishing this Presentation, the Company does not undertake or agree to any obligation to provide the attendee with access to any additional information or to update thisPresentation or to correct any inaccuracies in, or omissions from, this Presentation that may become apparent either during, or at any time after this Presentation. ThisPresentation contains or incorporates by reference “forward-looking information” which means disclosure regarding possible events, conditions, acquisitions, or results ofoperations that is based on assumptions about future conditions and courses of action and includes future oriented financial information with respect to prospective results ofoperations, financial position or cash flows that is presented either as a forecast or a projection, and also includes, but is not limited to, statements with respect to the futurefinancial and operating performance of the Company any of its subsidiaries and other considerations as set out in more detail in the documents filed by the Company with theToronto Stock Exchange. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “proposes”, “expects”, “is expected”, “budget”,“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions,events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and otherfactors which may cause the actual results, performance or achievements of the Company and/or its current and proposed subsidiaries to be materially different from any futureresults, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of thisPresentation and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise.Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. In addition, investors are cautioned that thispresentation may contain information about mineral properties adjacent to or near the Company’s properties and in which the Company has no right or interest. Mineral depositson such adjacent or near properties are not indicative of the mineral deposits, if any, which may be found on the Company’s properties. Mineral resources that are not mineralreserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Disclaimer
1. History of Prophecy in Mongolia: 12 months
2. Accomplishment
Ulaan Ovoo
Invested Heavily, Equipment from Mongolia firms
90%+ Mongolia hires
30,000 tonnes to Darhan and Edernet
Upgrade road and bridge: look to commit further
Chandgana
EIA, Mining License Granted,
Final Power Plant License Waiting
International Bankers and Contractors in Progress
Our History and Records
Leadership: Management Team
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John Lee, CFA – Chairman / CEO
• Entrepreneur (BSEE, BAEcon: Rice U.) Started PCY in Oct 2010
• PCY market cap $1 million to $200 million in 14 months
Irina Plavutska, CGA - Interim CFO
• 20 years+ senior financial experience
Paul Venter – Director / VP Operations (Ulaan Baator)
• 30+ years mining/power experience with BHP/Eskom/En+
• Focus on Russian and Mongolian coal since 2006 with En+
Ronnie Van Eeden - VP Mining Operations(Ulaan Baator)
• 30+ years mining experience with Eskom / Sasol
• Management of the mining and supply of 90 to 100mt/year
Leadership: Directors
5
Chuluunbaatar Baz
• President and Chairman of Monnis Group
• Monnis has over 1,000 employees, top 10 company in Mongolia
Jivko Savov
• Deputy CEO of En+, company owned by Oleg Derispeska
• Ex-Chairman of Rusal, Chairman of EurosibEnergo
Michael Deats
• Ex-Managing Director of BP Coal South Africa, Ex-Director of Eskom
Greg Hall
• Director of various public resource companies
• Formerly at Haywood Securities, Canaccord Capital, Leede Financial
Our secrets to permitting
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Local Partnership
Shareholder, Supply Chain, Marketing
Commitment to Mongolia
Time to cultivate trust
What’s in there for Mongolia
Adhere to the mining code
Rule of law prevails in a democratic country
MongoliaEnergy consumption CLOSELY CORRELATES to GDP
Mongolia Economy growing VERY FAST (10%+)
No new power plant last 20 years
Mongolia today relies on VERY COSTLY power import
From Russia at 9c kwh (More than Canadian)
Diesel Fiasco
Current Power Plant Emission Standards VERY LOW
Mongolia Power
Supply / Demand Forecast
Source: Energy International9
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014 2015
Russia
EES
CES
Demand
Supply
MW
Deficit of
744 MW
Emission StandardsPM emissions from CHP2 and CHP3 are 20+ g/kWh
SO2 and NOx emissions from CHP2 and CHP3 are
6.6 g/kwh and 7.7 g/kWh.
20 MW
40 MW
Proposed Installed capacity:
Phase I: 4x150 MW (connect to CES, EES of Mongolia)
Phase II: 6x600 MW (connect to North East China)
Chandgana
Coal Mine600 MW Thermal
Power Plant on site
Power Transmission
to CES, EES,
SouthGobi, & China
14Source: Prophecy
Russia
Mongolia
China
Mongolia is currently
importing power from
Russia at a rate of
$0.08 per kWh
Chandgana – Power Plant Concept
Modern Plant with best environment & efficiency standards
less water, less coal, less pollution
(PM 1g vs 20g kwh, SO2/NOx 2g vs 6g kwh)
Build Plant with Best Safety standards with Mongolian Content
more skilled employment
Be most reasonable on Tariffs and Encourage/Welcome Auction
transparency, speed
Prophecy’s Commitment
Reduce Black Outs
Reduce Pollution
Energy Independence – No more Russian imports
Export Electricity – Sell Electricity, not the other way round
Save Money
Benefit
Let’s Work Together
Government:
Quick comments, reasonable in negotiation
Community:
Support Our Project, Give us feedback
Voice your Support
Prophecy:
Listen, Work with all levels
Bring capital and best expertise
Create win-win for Prophecy and Mongolia
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013 2014 2015
Feasibility Submitted
• Power Plant
License Granted
• Bankable
feasibility study
Conclude PPA
Conclude Project Financing
Construction
Complete
Chandgana: Project timeline
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Already obtained:
- Environmental assessment approval
- Mining license
- Ministry Endorsement
Mongolia Power
Supply / Demand Forecast
Source: Energy International20
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014 2015
Russia
EES
CES
Demand
Supply
MW
Deficit of
744 MW
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Monoglia Office: Monnis Tower 8th Floor
www.prophecycoal.com
2nd Floor, 342 Water Street
Vancouver, BC , Canada
1.604.569.3661
PCY (tsx-v)
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