Vancouver, British Columbia (FSCwire) - Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTC:PRPCD, Frankfurt:1P2N) is pleased to announce that it has signed a letter of intent (“LOI”) for toll milling services with the Bolivian company, Empresa Minera Señor de Maica (the “Service Provider”) whereby the Service Provider will provide dedicated toll milling services at its ore processing facility (the “Processing Plant”) located in Potosi, which is a 2.5 hour drive by car, on paved road from Pulacayo.
The toll milling services will entail the processing of mined product, to be supplied by the Company, utilizing conventional crushing, grinding and flotation technology to produce zinc-silver and lead-silver concentrates.
The Processing Plant will be dedicated to mined product supplied exclusively by the Company to optimize recoveries and avoid co-mingling with mined product from third parties so that during the contract term, only mined product supplied by the Company will be processed at the Processing Plant.
The Service Provider will provide toll milling services for a minimum of 5,000 tons of mined product per month, at a fixed price (in US dollars) per tonne of mined product processed.
The Service Provider will be responsible for all costs incurred in providing the toll milling services, which will include (but not be limited to) the cost of power, water, chemicals, labour, fuel, unloading of mined product from the Company’s trucks at the Processing Plant location, loading of concentrate onto the Company’s trucks at the Processing Plant location, management of the tailing facility and other costs associated with providing the toll milling services.
The Company will commence supply of the mined product to be processed at the Processing Plant on or about April 1, 2017. The grade of the mined product to be supplied by the Company will be: silver 100 to 200 g/t, zinc up to 5% and lead up to 5%.
The Service Provider will guarantee minimum metal recoveries for silver of 80%, zinc 70% and lead 70%.
The proposed payment terms are: 20% in advance, paid in the first week of each month, and the remaining 80% balance when the concentrate is ready to be loaded onto the Company’s trucks.
The Company will have the right to have its personnel present at the Processing Plant and to supervise the processing of mined product supplied by the Company at all times.
The Service Provider will be solely responsible for management of the Processing Plant and its tailing facility, and for any damage including environmental damage caused by the Processing Plant and its tailing facility operations.
The Service Provider is an experienced private enterprise that owns and operates multiple ore processing facilities in and around Potosi. Pictures of the Service Provider’s ore processing facility are available at www.prophecydev.com.
The LOI will expire without any effect to Prophecy or the Service Provider if a final toll milling service contract is not signed on or before April 1, 2017. The proposed term of the final contract for toll milling services will be 18 months.
The mined material to be supplied by the Company is expected to be mined from its Paca and/or Pulacayo deposits located within the Company’s Pulacayo project concessions.
Mercator Geological Services Limited produced the Paca, and Pulacayo technical reports, which are compliant with National Instrument 43-101, disclose the resource estimates prepared according to the CIM Definition Standards for Mineral Resources and Reserves, and were filed on SEDAR by the Company. The resource estimates by Mercator and contained metals estimated by the Company are as follows:
| Paca Mineral Resource Statement – Effective September 9, 2015 | ||||||
| Ag Eq. Cut-Off (g/t) | Category | Tonnes* | Ag (g/t) | Pb (%) | Zn (%) | Ag Eq. (g/t) |
| 300** | Inferred | 1,260,000 | 363 | 0.98 | 1.02 | 444 |
Contained metals in September 9, 2015 Paca*** mineral resource estimate:
| Metal | Inferred Resource* |
| Silver | 14.7 million oz. |
| Zinc | 28.4 million lbs. |
| Lead | 27.2 million lbs. |
| Pulacayo Mineral Resource Statement – Effective June 16, 2015 | ||||||
| Ag Eq. Cut-Off (g/t) | Category | Tonnes* | Ag (g/t) | Pb (%) | Zn (%) | Ag Eq. (g/t) |
| 500** | Indicated | 1,270,000 | 530 | 2.51 | 3.63 | 688 |
| Inferred | 350,000 | 419 | 2.47 | 4.58 | 620 | |
Contained metals in June 16, 2015 Pulacayo*** mineral resource estimate:
| Metal | Indicated Resource* | Inferred Resource* |
| Silver | 21.7 million oz. | 4.7 million oz. |
| Zinc | 101.6 million lbs. | 35.3 million lbs. |
| Lead | 70.3 million lbs. | 19.1 million lbs. |
*Figures are rounded to nearest 100,000 or 0.1 million
**Ag Eq. cut-off value adopted by the Company
***Based on the resource estimate Ag Eq. cut-off value adopted by the Company
A positive production decision would not be based on a feasibility study of mineral reserves demonstrating economic and technical viability so would carry increased uncertainty and the risk of failure as to the mining method and profitability.
Qualified Persons
The technical content of this news release was reviewed and approved by Christopher M. Kravits, CPG, LPG, who is a Qualified Person within the meaning of NI 43-101. Mr. Kravits is a consultant to the Company and serves as its Qualified Person and General Mining Manager.
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| Concentrate Dewatering Area | Crushing Circuit |
About Prophecy
Prophecy Development Corp. is a Canadian public company listed on the Toronto Stock Exchange that is engaged in developing mining and energy projects in Mongolia, Bolivia and Canada. Further information on Prophecy can be found at www.prophecydev.com.
