Coal

Prophecy Coal — Fulfilling Asia’s Energy Needs

Overview

Prophecy Coal Corp. (TSX:PCY,OTCQX:PRPCF,FWB:1P2) is an internationally diversified thermal coal production company that controls over 1.4 billion tonnes* of open-pittable thermal coal in Mongolia (839 Mt measured, 579 Mt indicated) between 2 distinct deposits. In November 2011, the Mongolian government issued Prophecy an official permit to construct a 600MW power plant at the site of its Chandgana deposit and the company released results of an independent project feasibility study in January 2012. The company’s second project at Ulaan Ovoo, was commissioned for production in November 2010. Prophecy Coal holds 22.5 million shares of Prophecy Platinum (TSX.V: NKL).

Investment Highlights

• Mongolia is one of the fastest growing economies in the world, with consistent and growing energy deficits currently offset through costly imports from Russia
• Mongolia borders China, the largest importer of coal, whose demand is expected to rise with ever-increasing growth
• Prophecy Coal’s Chandgana power plant will enable the sale of power, rather than coal, to China
• 600MW Mine Mouth power plant fully permitted; first of its kind in Mongolia

Key Projects

Chandaga Power Plant – East / Central Mongolia

Prophecy initiated the licensing process required for the construction of a planned 4,200MW (Phase I of 600 MW and Phase II of 3,600 MW) mine mouth power plant in 2010. On November 15, 2010, the company received the approval of its Detailed Environmental Impact Assessment (DEIA) pertaining to the Changdana power plant project. In February 2011, the company received approval of a mining license from the Mineral Resources Authority of Mongolia for the 141 million tonne Chandgana Tal resource. In September 2011, Prophecy received the official endorsement of the Chandgana power plant from the Mongolian Ministry of Natural Resources and Energy.

In November 2011, Prophecy was granted a license from the Mongolian government to construct the 600MW Chandgana mine-mouth power plant and the Company continues to methodically advance the project forward toward completion. Results of a feasibility study, completed by Evonik/Steag, were released in January 2012 and will form the basis of a power purchase agreement (PPA) with the Mongolian energy concern which should be finalized in Q2 2012.

Prophecy Coal’s 100% owned Chandgana coal project is in the northeast part of the Nyalga coal basin, located in the southeast of central Mongolia. The Chandgana coal project consists of two major deposits, Chandgana Tal, with a 100% measured resource of 141 million tonnes, and Chandgana Khavtgai, with a 100% measured and indicated resource of 1,048 million tonnes (509mt measured and 539mt indicated). A mere 9 km apart, the projects are both close to important infrastructure – towns, roads, and electric transmission lines.

Most of the coal resource at both projects lies in a single, flat seam that ranges from 37.7 to 45.4 m thick and is very shallow. At Chandgana Tal, the resource has an average in-place strip ratio (bcm/tonne) of 0.5:1, while Chandgana Khavtgai has an average strip ratio of 1.9:1.

In March, the company received a 141 million ton mining license from the Mineral Resources Authority of Mongolia and began the licensing process required for the construction of the planned 4,200 MW mine mouth power plant. Prophecy Coal expects to receive approval for the permit by the end of the year and has, in the meantime, commissioned a bankable feasibility study and began discussing financing with several international investment bankers.

Ulan Ovoo – North-Central Mongolia

Prophecy Coal’s 100% owned Ulaan Ovoo coal deposit is approximately 430 km by paved highway from the capital city of Mongolia, Ulaanbataar, 17 km from the Russian border, and 120 km from both Mongolian and Russian rail networks.

Two major coal seams lie within the property, with total net coal thickness ranging up to 70 m and containing 209 million tons of measured and indicated bituminous thermal coal with a low strip ratio of 1.8:1. A Prefeasibility Study released in December 2010, estimated the total mineral reserve in the first phase of the Ulaan Ovoo project to be 20.7 Mt of low ash coal. The study also found that no coal washing would be required for the first 8 years of operations, allowing for a potentially low-cost mining operation.

To date, exploration work at Ulaan Ovoo includes over 110 drill holes, more than 1,200 analyzed coal laboratory samples, hydrological and rock mechanics surveys, detailed mapping, and several advanced mining, engineering, and scoping studies.

The Ulaan Ovoo mine began production in 2011 and has stockpiled over 200,000 tons of domestic and export quality coal. Prophecy Coal exported 650 tons of thermal coal in June and arranged with the Port of Sovgavan, located at the far eastern seaboard of Russia’s Khabarovsk state, for access to port allocation of 25,000 tons per month. The company is also aiming to secure access to year-round Russian border crossing 17 km from the site. In August, Prophecy Coal completed off-take agreements with Mongolian and Russian buyers for a total of 92,000 tons and is actively negotiating further off-take agreements with regional power plants as well as with prospective Asian customers.

Management

John Lee, CFA – CEO & Chairman

John Lee is an entrepreneur with degrees in economics and engineering from Rice University. He was appointed Chairman and CEO of Prophecy in October 2009. In a little over a year and under John’s leadership, Prophecy grew from having minimal assets to owning substantial coal and PGM assets in Mongolia and Canada. Prophecy is only the second Canadian public company to commission a mine to production in Mongolia, a country where John calls his second home.

Irina Plavutska, CGA – Interim CFO

Ms. Plavutska is a professional accountant with over 20 years of diverse international experiences in financial reporting, auditing, and accounting. She is a member of Certified General Accountants Association of British Columbia. Ms. Plavutska earned a Masters Degree in Economics from the University of Business and Economics in Ukraine, and has held senior accounting positions, such as corporate controller, at numerous Canadian international and professional service companies for the past several years. She is fluent in Russian and English.

Paul Venter – VP Energy, Operations, & Director

Mr. Venter has been a Prophecy director since August 2010. He is an industry recognized and seasoned professional with over 30 years of experience with BHP and Eskom in the mining, power generating, and transport industry. In 2006 he extended his focus to expand the business of a major strategic player in the coal and power generating industry in Russia, China and Mongolia.

Mr. Venter contributed significantly towards the commissioning of Prophecy’s Ulaan Ovoo mine in November and is now focusing on power generating opportunities in addition to Ulaan Ovoo operations. Mr. Venter holds a MDP (Mining) and various commercial qualifications. He was accepted as a member of the IRT (SA) in 1983.

Christiaan H.B. Van Eeden – VP Mining Operations Ulaan Baatar

Mr. Van Eeden is in charge of Mongolia mining operations and coal to liquids technology.

Mr. Van Eeden has 34 years of experience in coal mining and related industries including holding senior management positions pertaining to the engineering, mining and commercial functions of coal mines. His experience also includes the management of the mining and supply of 90-100 million tons of coal per annum, through various coal supply agreements, to Eskom the South African power utility. He is a former director of a Canadian mining company that developed a feasibility study for the establishment of a 2400 MW power plant with its associated coal mine in Botswana in Southern Africa. Also prior to joining Prophecy he was contracted by a large South African coal to liquids company to undertake mining and commercial evaluations for the feasibility studies of three large coal operations in China including negotiating coal supply agreements, as well as the analysis and evaluation of the business plans of five large coal mines in South Africa.

Mr. Van Eeden has a BSC Eng degree as well as a B Proc law degree. He also holds certificates of competence in mining and engineering, a legal requirement for managing coal mines in South Africa.

Joseph W. Li, CGA – General Manager & Corporate Secretary

Mr. Li is a Certified General Accountant (B.C) and has an Honours Bachelor of Commerce (Laurentian University). For the past 13 years, he was a senior auditor with the B.C. Ministry of Finance, a position which allowed him to gain valuable insights in how diverse businesses of all sizes are operated. Mr. Li strengthens Prophecy’s corporate governance.

Directors

John Lee – CFA, CEO, & Chairman

John Lee is an entrepreneur with degrees in economics and engineering from Rice University. He was appointed Chairman and CEO of Prophecy in October 2009. In a little over a year and under John’s leadership, Prophecy grew from having minimal assets to owning substantial coal and PGM assets in Mongolia and Canada. Prophecy is only the second Canadian public company to commission a mine to production in Mongolia, a country where John calls his second home.

Jivko Savov – Director

Mr. Savov spent over 12 years in the energy and power sector within asset management, business development and structured finance roles across a number of international companies. Currently, Mr. Savov is Deputy Chief Executive Officer of En+ Group and is in charge of capital markets and fund raising activities. Mr. Savov served as a Managing Director of Power and Energy at En+ since joining in 2006, and as a Chairman and Deputy Chairman of EurosibEnergo.

Michael J. Deats – Director

Michael J Deats, a Wits University Graduate, is an internationally-renowned Mining Engineer with an impressive and diverse background that includes leadership roles in some of the largest Energy and Mining operations in the world. The majority of Mr. Deats’ career was spent with Iscor South Africa, ultimately becoming responsible for overseeing the entirety of the firm’s vast mining operations. In addition to directing operations at the Sishen Iron Ore export mine and Grootegeluk coal mine, Mr. Deats personally introduced fully-mechanised longwall coal mining at Durban Navigation Colliery.

Mr. Deats’ background further includes directorships with BP Southern Africa, BP Coal Southern Africa, The Richards Bay Coal Terminal Company/ The Transvaal Coal Owners Association and, perhaps most notably, with Eskom. During his tenure with Eskom, he was responsible for the management/direction of that utility’s primary energy acquisition, later taking over direction of the entire power generation function.

Mr. Deats remains actively engaged in consulting in the nuclear field/mining engineering areas and governmental regulatory work. He is also an elected trustee with BP Southern Africa Pension Fund and the Arcelor-Mittal Pension Fund.

Chuluunbaatar Baz – Director

Mr. Chuluunbaatar is the President and Chairman of the Monnis Group of Companies, Mongolia (“Monnis”). Monnis, headquartered in Ulaanbaatar, Mongolia, is one of Mongolia’s largest industrial holding companies. With over 1,000 employees and 12 subsidiaries, Monnis has, under Mr. Chuluunbaatar’s leadership, become a national leader in insurance, construction, logistics, technology, real-estate, geological services, mining support services, energy, automobile and automotive parts distribution, international freight forwarding, foreign trade, air services, communications, and corporate finance advisory services.

Paul Venter – VP Energy Operations & Director

Mr. Venter has been a Prophecy director since August 2010. He is an industry recognized and seasoned professional with over 30 years of experience with BHP and Eskom in the mining, power generating, and transport industry. In 2006 he extended his focus to expand the business of a major strategic player in the coal and power generating industry in Russia, China and Mongolia.

Mr. Venter contributed significantly towards the commissioning of Prophecy’s Ulaan Ovoo mine in November and is now focusing on power generating opportunities in addition to Ulaan Ovoo operations. Mr. Venter holds a MDP (Mining) and various commercial qualifications. He was accepted as a member of the IRT (SA) in 1983.

Christiaan H.B. (Ronnie) Van Eeden, VP Mining Operations Ulaan Baatar and Country Manager

Mr. Van Eeden is in charge of Mongolia mining operations and coal to liquids technology. Mr. Van Eeden has 34 years of experience in coal mining and related industries including holding senior management positions pertaining to the engineering, mining and commercial functions of coal mines. His experience also includes the management of the mining and supply of 90-100 million tons of coal per annum, through various coal supply agreements, to Eskom the South African power utility. He is a former director of a Canadian mining company that developed a feasibility study for the establishment of a 2400 MW power plant with its associated coal mine in Botswana in Southern Africa.

Also prior to joining Prophecy he was contracted by a large South African coal to liquids company to undertake mining and commercial evaluations for the feasibility studies of three large coal operations in China including negotiating coal supply agreements, as well as the analysis and evaluation of the business plans of five large coal mines in South Africa.

Ronnie has a BSC Eng degree as well as a B Proc law degree. He also holds certificates of competence in mining and engineering, a legal requirement for managing coal mines in South Africa.

Patrick Langlois B.Com, MBA, CFA, Vice President Corporate Development

Patrick Langlois has extensive investment banking and venture capital experience, with past roles that have included Director of Investment Banking at Stonecap Securities and Managing Director of Investment Banking at Laurentian Bank Securities. Mr. Langlois has provided corporate finance expertise across a broad spectrum of industries, advising numerous corporations regarding public offerings, private placements, as well as mergers and acquisitions. Mr. Langlois holds an M.B.A. from Université de Sherbrooke, as well as a CFA designation and membership in the CFA Institute.

Joseph W. Li CGA, General Manager and Corporate Secretary

Mr. Li is a Certified General Accountant (B.C.) and has a B.Com (Hons) from Laurentian University. For 13 years, Joseph was a Senior Auditor with the B.C. Ministry of Finance, a position which allowed him to gain valuable insight into how diverse businesses and organizations of all sizes are operated. Mr. Li has been the General Manager and Corporate Secretary of Prophecy Coal Corp. since January, 2011, and oversaw the successful spinoff of Prophecy Platinum Corp.

Board of Director

John Lee CFA, CEO and Chairman

John Lee is an entrepreneur with degrees in economics and engineering from Rice University. He was appointed Chairman and CEO of Prophecy in October 2009. In a little over a year and under John’s leadership, Prophecy grew from having minimal assets to owning substantial coal and PGM assets in Mongolia and Canada. Prophecy Coal Corp. is the first Canadian public company to license a thermal coal power plant in Mongolia and only the second to commission a mine to production in that country. Prophecy Platinum controls one of the key PGM Ni projects in Canada; a world-class deposit with an estimated resource of 1 million ounces of PGM and Gold, a further 11 million ounces inferred and legitimate blue sky potential. John Lee is also Chairman of Prophecy Platinum Corp.

Jivko Savov, Director

Mr. Savov spent over 12 years in the energy and power sector within asset management, business development and structured finance roles across a number of international companies. Currently, Mr. Savov is Deputy Chief Executive Officer of En+ Group and is in charge of capital markets and fund raising activities. Mr. Savov served as a Managing Director of Power and Energy at En+ since joining in 2006, and as a Chairman and Deputy Chairman of EurosibEnergo.

Michael J Deats, Director

Michael J Deats, a Wits University Graduate, is an internationally-renowned Mining Engineer with an impressive and diverse background that includes leadership roles in some of the largest Energy and Mining operations in the world. The majority of Mr. Deats’ career was spent with Iscor South Africa, ultimately becoming responsible for overseeing the entirety of the firm’s vast mining operations. In addition to directing operations at the Sishen Iron Ore export mine and Grootegeluk coal mine, Mr. Deats personally introduced fully-mechanised longwall coal mining at Durban Navigation Colliery.

Mr. Deats’ background further includes directorships with BP Southern Africa, BP Coal Southern Africa, The Richards Bay Coal Terminal Company/ The Transvaal Coal Owners Association and, perhaps most notably, with Eskom. During his tenure with Eskom, he was responsible for the management/direction of that utility’s primary energy acquisition, later taking over direction of the entire power generation function.

Mr. Deats remains actively engaged in consulting in the nuclear field/mining engineering areas and governmental regulatory work. He is also an elected trustee with BP Southern Africa Pension Fund and the Arcelor-Mittal Pension Fund.

Chuluunbaatar Baz, Director

Mr. Chuluunbaatar is the President and Chairman of the Monnis Group of Companies, Mongolia (“Monnis”). Monnis, headquartered in Ulaanbaatar, Mongolia, is one of Mongolia’s largest industrial holding companies. With over 1,000 employees and 12 subsidiaries, Monnis has, under Mr. Chuluunbaatar’s leadership, become a national leader in insurance, construction, logistics, technology, real-estate, geological services, mining support services, energy, automobile and automotive parts distribution, international freight forwarding, foreign trade, air services, communications, and corporate finance advisory services.

Paul Venter, VP Energy Operations and Director

Mr. Venter has been a Prophecy director since August 2010. He is an industry recognized and seasoned professional with over 30 years of experience with BHP and Eskom in the mining, power generating, and transport industry. In 2006 he extended his focus to expand the business of a major strategic player in the coal and power generating industry in Russia, China and Mongolia.

Mr. Venter contributed significantly towards the commissioning of Prophecy’s Ulaan Ovoo mine in November and is now focusing on power generating opportunities in addition to Ulaan Ovoo operations. Mr. Venter holds a MDP (Mining) and various commercial qualifications. He was accepted as a member of the IRT (SA) in 1983.

Greg Hall, Director

Mr. Hall is an independent business advisor to the mining industry. For over 30 years, Mr. Hall has focused on significant international exploration, development, and mining ventures, and all aspects of their structuring and finance. He recently retired as a director of Silvercorp Metals Inc (NYSE: SVM, TSX: SVM), China’s largest primary silver producer and the lowest cost silver producer among its industry peers.

His previous positions include: Director at Haywood Securities Inc.; Vice-President, Canaccord Capital Corporation; and Senior Vice-President of Leede Financial Markets Inc. He is a graduate of the Rotman School of Management, University of Toronto, SME Enterprise Board Program, and a Member of the Institute of Corporate Directors.

Paul McKenzie, Director

Mr. McKenzie has over 20 years experience working in international equities markets. His experiences include acquiring, selling, financing and developing multiple international mineral and energy projects in North America, South America and Asia. In his career he has acted as Director, Vice President and President of several resource companies. Mr. McKenzie also previously worked as a licensed equity trader at Brink Hudson Lefever in Vancouver, British Columbia.

Joseph W. Li CGA, General Manager and Corporate Secretary, Director

Mr. Li is a Certified General Accountant (B.C.) and has a B.Com (Hons) from Laurentian University. For 13 years, Joseph was a Senior Auditor with the B.C. Ministry of Finance, a position which allowed him to gain valuable insight into how diverse businesses and organizations of all sizes are operated. Mr. Li has been the General Manager and Corporate Secretary of Prophecy Coal Corp. since January, 2011, and oversaw the successful spinoff of Prophecy Platinum Corp.

Harald Batista – Advisor

Mr. Batista is an accomplished entrepreneur with over 2 decades of sales and marketing experience. He holds an MBA degree from Santa Clara University in California and is a member of the prominent Batista family in Brazil that includes Eliezer Batista, the founder of Vale do Rio Doce Company (now Vale Inco) and Eike Batista, the founder of EBX Group. EBX Group focuses on investment opportunities in infrastructure and natural resources, sectors in which Brazil presents important competitive differentials.

These investments are focused on MMX (mining), MPX (energy), LLX (logistics), OGX (oil and gas) and OSX (oil services). MMX, OGX, MPX and LLX are listed on Brazil’s Novo Mercado – at the Sao Paulo Stock Exchange (BOVESPA). The combined market capitalization of EBX Group companies exceeds US $50 billion.

Dr. George Gale – Advisor

Dr. George Gale has been a mineral deposit geologist for more than 40 years. Currently a director of VMS Ventures Inc. (TSX-V: VMS), he led the exploration activities that resulted in their discovery of the high-grade Manitoba Reed Lake VMS deposit in 2007.

Dr. Gale was the head of the Mineral Deposits Section of the Manitoba Geological Survey from 1977 to 1999. He will advise Prophecy’s exploration activities based on his extensive geological expertise in Manitoba.

Enkbaatar Orchirbal – Advisor

Mr. Ochirbal is a Mongolian national, who prior to joining Red Hill Energy Inc (now Prophecy Resource Corp) in 2005 was a Senior Manager with MineInfo LLC, one of Mongolia’s leading minerals and consulting companies. Prior to entering the mining sector, he spent over 16 years in various managerial positions in Mongolia’s financial and banking sectors. He is a former Department Head for the Mongolian Stock Exchange and Securities Commission, and former President of MS Invest LLC – the first Investment Fund in Mongolia in addition to being the former CEO of the Capitron bank.

Mr. Ochirbal holds a Commerce degree from the Mining & Economics Institute, Ukraine, an MBA from the Mongol Business University, Mongolia in addition to studying at the University of Hull, UK and Boston University. He is fluent in Mongolian, Russian, English and Czech languages.