Prophecy Coal has announced a private placement of 60 million shares in a bid to raise Can$8.4 million to fund construction of the Chandgana power plant. The placement will be issued as a combination of units and special warrants in order to keep the share issuance under 25% of the company’s outstanding common shares.
Strategic Asian partner NewMargin Prophecy Coal has subscribed 40 million units of the placement, which remains subject to approval of the Toronto Stock Exchange.
The 600MW Chandgana mine-mouth thermal power plant will be built adjacent to the company’s Chandgana coal deposit in central Mongolia’s Khentii province. The power plant will be the largest facility of its type in the country.
Earlier this month, Prophecy received a loan from a major international bank to fund 85% of the development and construction of the power plant. The loan is subject to approval from relevant authorities in Mongolia and China as well as the completion of due diligence on the project.
Prophecy’s chairman John Lee says, “The company continues to engage closely with all relevant Mongolian government agencies and Ministries to complete the power purchase agreement (PPA) timely.
“Prophecy would like to thank all Mongolian government officials and working group members for their time and effort dedicated to the project. The proposed construction starting date is quarter 2 of 2013 with a signed PPA,” he said.
Prophecy has also recently received a letter of intent from a qualified contractor regarding an equity investment in up to 20% of the project.