Pacific Coast Nickel Corp. Purchases Wellgreen PGM and Lynn Lake Nickel Projects From Prophecy Resource Corp.

Vancouver, British Columbia, January 18, 2011: Prophecy Resource Corp. ("Prophecy") (TSX-V:PCY, OTC: PRPCF, Frankfurt: 1P2) and Pacific Coast Nickel Corp. ("PCNC") (TSX-V: NKL) (the "Companies") are pleased to announce that they have entered into a binding letter of agreement dated January 17, 2011 (the "Agreement") whereby PCNC will acquire Prophecy’s Nickel PGM projects by issuing common shares to Prophecy. (the "Transaction").

Terms of the Transaction

Pursuant to the Agreement, PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects located in the Yukon Territory and Manitoba respectively (the "Properties") by issuing up to 550 million common shares of PCNC to Prophecy. PCNC currently has 55.7 million shares outstanding.
Following the Transaction,

  • Prophecy will own approximately 90% of PCNC.
  • PCNC will consolidate its share capital on a 10 old for 1 new basis.
  • Prophecy will change its name to "Prophecy Coal Corp." and PCNC will be renamed as "Prophecy Platinum Corp.
  • Prophecy intends to distribute half of its PCNC share to shareholders pro rata in accordance with their holdings (the "PCNC Distribution").

Based on the closing price of the common shares of PCNC on January 17, 2011, being $0.195 per share, the gross value of the Transaction is $107,250,000.

John Lee, the current Chairman of PCNC, is appointed Interim CEO of PCNC effective immediately. PCNC thanks Mr. James Walchuk, departing PCNC CEO for his invaluable experience and service to PCNC.

Highlights of the Transaction

  • Prophecy shareholders realize the value of Prophecy’s Canadian projects through PCNC distribution.
  • PCNC becomes a mid-tier resource firm with substantial Nickel PGM assets, including Wellgreen (Yukon), Lynn Lake (Manitoba), and Las Aguilas (Argentina) projects.
  • Prophecy sets pure focus on its Mongolian coal operation, while holding equity positions in PCNC and Victory Nickel Inc.
  • PCNC will have Prophecy as a major shareholder, and leverage the marketing and technical expertise of Prophecy.

John Lee, Chairman and CEO of Prophecy states: "This transaction unlocks the intrinsic value of Prophecy’s assets. Investors will have a choice to own Prophecy Coal for 1.4-billion-tonne coal exposure, or own Prophecy Platinum for unique and significant Nickel PGM exposure."

Further Detail Regarding the Transaction

It is contemplated that the Transaction will be completed by way of a Plan of Arrangement, structured in such a way that will result in the financial terms of the Transaction being met. The parties have agreed to complete the Transaction by May 31, 2011.

Holders of share purchase warrants of Prophecy will be entitled to participation in the PCNC Distribution in accordance with the terms of their respective warrants. Holders of stock options of Prophecy will not be entitled to participation in the PCNC Distribution.

In addition to the terms as set forth above, Prophecy has agreed to fund up to $2,000,000 of qualified flow through expenditures on the Properties over the period commencing as of the date of the Agreement until December 31, 2011 and has agreed to make a payment of $600,000 to Victory Nickel Inc. necessary to keep the Lynn Lake property in good standing until April 2012.

The boards of PCNC and Prophecy have each appointed a special committee to review the Transaction. John Lee and Greg Hall, as members of the boards, and in respect of John Lee, as Chairman and CEO, of both Companies, have abstained from voting in respect of the Agreement and will abstain from voting in respect of matters involving the Transaction. The board of PCNC will remain unchanged.

The final structure and ratios of the Transaction will be subject to the receipt of final tax, corporate and securities law advice and receipt of a positive fairness opinion from an independent advisor by each of Prophecy and PCNC.

Completion of the Transaction is conditional upon:

  • PCNC and Prophecy, if required, shareholders having approved the Transaction;
  • receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange (the "Exchange");
  • receipt of approval of the British Columbia Supreme Court, if applicable;
  • receipt by both Companies of a positive fairness opinion concerning the Transaction as prepared by an independent advisor;
  • Prophecy shareholders or PCNC shareholders not having exercised rights to dissent over more than 5% of the shares of Prophecy or 5% of the PCNC shares;
  • certain other customary conditions.

Projects being Acquired by PCNC

The Wellgreen PGM Ni-Cu Project

The Wellgreen PGM Ni-Cu property covers an area of approximately 22 square miles in the Yukon Territory, Canada. The property has easy road access, located approximately 35 kilometres northwest of Burwash Landing, Yukon, 15 km from the paved 2 lane Alaska Highway and 402 km from Alaska’s Haines deep sea port. Wellgreen is part of Kluane Ultramafic Nickel belt, which is second largest behind the Thompson Belt in Canada and remains vastly unexplored. In 1972, Hudbay milled 171,652 tons grading 2.23% Copper and 1.39% Nickel. A total of 701 holes (182 surface, 519 underground) totalling 53,222 meters (28,303 meter surface, 24,919 meters underground) by previous operators. A historic, non 43-101 compliant geological resource (1989) estimated 55 million tonnes of 0.36% Ni, 0.35% Cu, 0.78 g/t PGM at Wellgreen.  A qualified person has not done sufficient work to classify the historical estimate as current mineral resources and the Company is not treating the historical estimate as current mineral resources but as a  historical estimate that should not be relied upon.

The current approach at Wellgreen has been to define the project’s full potential as a large, bulk tonnage, open pit operation. An independent NI 43-101 report prepared for Prophecy by Wardrop Engineering ("Wardrop") dated July 2010 indicates that the potential of the Wellgreen property ranges between 77 to 254 million tonnes at 0.26 to 0.38% Nickel, 0.26% to 0.36% Copper, 0.55 to 0.85 g/t Platinum and Palladium, based on a strike length range of 4,000 to 7,000m and a width of 30 to 35m. The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in any discovery of a mineral resource.  Subsequent to Wardrop’s Wellgreen Report Prophecy intercepted encouraging mineralization at Wellgreen including 496.06 meters of 0.596 g/t PGM+Au, 0.27% Ni, 0.18% Cu, 0.02% Co from Surface. (Please refer to Prophecy September 27th news). Prophecy currently is assaying past drill cores for Iridium, Osmium, Ruthenium, and Rhodium to obtain the full PGM grades at Wellgreen, and Prophecy intends to start drilling in April when weather permit.

The Lynn Lake Nickel Project 

In October 2009, Prophecy entered into an agreement to acquire a 100% interest in The Lynn Lake Nickel Project from Victory Nickel Inc. (TSX: NI).  The deposit is in Manitoba, Canada, which is mining friendly and also adjacent to a power line, rail line, and airport. Lynn Lake contains Measured and indicated mineral resources of 22.9 million tons of grading, of 0.57% nickel and 0.30% copper and 8.1 million tonnes of Inferred Resource at 0.51% Nickel & 0.28% Copper (Wardrop Technical Report May, 2010). Approximately 50% of the host rock remains unexplored. An exciting 2008 discovery, the Disco Zone, includes intercepts of 47 meters of 0.7% nickel located 1.5km away from the outlined resource. A 3,000m 2010 drill program intercepted an additional discovery zone, the Tango Zone, details of which are outlined in Prophecy news release, December 6, 2010.  The aforementioned Wardrop resource estimate does not include either the Disco Zone or Tango Zone discoveries. Prophecy recently completed extensive induced polarization (geophysics) programs and has initiated bulk tonnage metallurgical testing at Lynn Lake in preparation for a combination of infill and exploratory drill programs and a forthcoming feasibility study at Lynn Lake.

The information concerning the current mineral properties controlled by Prophecy, as described in this news release, has been reviewed and approved by Danniel Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person under National Instrument 43-101.

In accordance with Exchange policies, the shares of PCNC are currently halted from trading and will remain so until the documentation required by the Exchange for the Transaction can be provided to the Exchange.

Further information pertaining to the Properties and Prophecy is available at Prophecy’s SEDAR profile at, where investors may review technical reports prepared in respect of the Properties and Prophecy’s annual and interim financial statements.

About PCNC

Pacific Coast Nickel Corp is a Canadian based nickel and copper base metal exploration company actively exploring properties in Canada and Uruguay. Included in the Company’s property portfolio is the Burwash property located adjacent to the Wellgreen Mine (a former nickel and copper producer) near Burwash, Yukon Territory, Canada. PCNC in December optioned the Las Aguilas Nickel-PGM project in Argentina, which contains an historic , non 43-101 compliant resource of 2.2mt of 0.52% Ni, 0.50% Cu,  1.16 g/t PGM. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources and the Company is not treating the historical estimate as current mineral resources but as a  historical estimate that should not be relied upon.The Company has also established a wholly owned subsidiary in Uruguay which has identified and acquired a number of prospective nickel-copper exploration targets.

About Prophecy Resource

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 and in production. In Canada Prophecy owns Wellgreen PGM Ni-Cu Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba, and a 10% equity stake in Victory Nickel. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


John Lee
Telephone 1.800.851.1528
Email: [email protected]

Pacific Coast Nickel Corp.
"John Lee"
John Lee
Chairman and Interim CEO
Telephone 1.800.851-1528
Email: [email protected]

Mineral resources that are not mineral reserves 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 TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.  

 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 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 company are forward-looking statements that involve various risks and uncertainties. . Although Prophecy believes 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 Prophecy and the risks and challenges of their businesses, investors should review their annual filings that are available at

"Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release."

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.

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*Ulaan Ovoo: 174 million tonnes  of measured and 34 million tonnes of indicated coal. Ulaan Ovoo’s resource numbers are from the Behre Dolbear & Company (USA), Inc  report referenced in the Dec 2010, 43-101 Prefeasibility Study by Wardrop Engineering. Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai consists of 509 mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana Khavtgai Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person under NI 43-101 at the time of report preparation. And the Chandgana Tal resource estimate is also based on the September 2007 NI 43-101 Chandgana Tal Technical Report by Behre Dolbear & Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear & Company (USA), Inc., who is an independent Qualified Person under NI 43-101.