John Lee Interview from the summerHere is an interview with John Lee with the original pdf file dated Aug 2010 that I found and I thought I'd share it with everyone.
All the best
CB
bullVestor: Can you update the progress at Ulaan Ovoo?
John Lee: There are several elements on Ulaan Ovoo to update
1. Rail Capacity – We have rail carts and a loading facility ready to transport the
coal to Russia.
2. Road to Rail station from Mine site – We have poured cement and are
replacing the wooden bridges with concrete ones so we can drive trucks
through.
3. On the mine site, Leighton is finalizing pre-mining activities. All of the mining
equipment is on site, the workshop and camp are almost finished
We have requested the final government inspection and upon completion of the
government visit, assuming all is in check, a permit will be issued typically within 5
business days and Prophecy will be ready to mine, transport and sell coal.
The whole Prophecy team is very pleased with the progress. You can watch videos
of the camp at www.prophecyresource.com. We did all of the above from start to
finish in 4 months.
bullVestor: Where will Ulaan Ovoo coal be sold and what are the expected
margins?
John Lee: Ulaan Ovoo is 8km from the Russian border, so we either sell the coal to
Russian companies at the Russian-Mongolia port of Nauski, or we can rail the coal
from Nauski to the eastern seaboard, where our coal is being sold at over $80/t. We
are looking into both options. Regarding margins, we are optimistic of finalizing off
take sales upon permit issuance. I focus on stabilizing production of 50,000 tonnes a
month for the first 6 months at good price, then look into increasing the production
rate and increasing margins. We will clarify the margin and end buyer very soon after
we receive the green light from the government to commence production.
bullVestor: How About Chandgana?
John Lee: Much progress has been made on Chandgana. We drilled extensively
during the summer and results are being compiled, we will be likely to convert the
majority of the Inferred resource to Measured and Indicated. This means we
potentially have over 1 billion tonnes of Measured and Indicated coal at Chandgana. I
visited Chandgana in July, it is easy to mine and it is very, very big. Its location and
quality is conducive to building a significant power plant on site and/or rail export. We
are investigating these options and discussions have started in this regard with
several significant parties. I expect good news flow from Chandgana by Q1 of 2011.
bullVestor: Why the Northern Platinum Acquisition, Why now?
John Lee: We believe Northern Platinum’s Wellgreen deposit could turn into one of
most significant PGM mines not just in Western Canada, but on the entire continent.
It already has 700,000 oz of Inferred resource and could expand to multimillion oz.
Wardrop published a technical report in July, stating the potential of Wellgreen to be
up to 254million tonnes at 0.26 to 0.38 % nickel, 0.26 to 0.36% copper, 0.32 to 0.47
g/t platinum and 0.23 to 0.38 g/t palladium, based on a strike length range of 4000 to
7000 m, depth of 200 to 250 m and a width of 30 to 35 m. We are confident the
deposit starts from surface. So you can see it could get really big in a hurry. I’d also
like to note that Terrane Metal’s Mt. Milligan was sold for $650 million with 450million
tonnes at 0.2% Copper and 0.4g gold, Wellgreen’s rock value is 4 – 5 times that of
Mt Milligan. I visited the property in June, I walked on it, climbed it, and touched it. It
is real and it is big.
We started discussion with Northern in March when our stock was over $1, and
concluded the talks in June. Wellgreen is an excellent project that is sought after. It is
in Yukon with low geopolitical risk. I fully expect the project to generate excitement
and to begin rewarding Prophecy shareholders soon after the merger closes
September 3.
bullVestor: Can you talk about Lynn Lake?
John Lee: We recently completed a ground IP survey over the entire property. This
had never been done before. We located 6 targets, including vertical extension of the
Disco discovery made in 2008. We are particularly intrigued with the Disco IP where
IP signals are continuous from surface all the way to 600meters at depths, the
signals ran stronger at bottom, we then tried to run to 800meters but the IP gave up.
We do intend to start drilling in September. 100 tonne rocks are at a leading lab in
South Africa going through production scale metallurgical testing. Nickel is back to
$10/pound; Lynn Lake is one of most advanced Nickel sulphide deposits in Canada.
As Nickel continues to gain momentum and we expand the discovery zones through
drilling, the project will gather increased investor attention.
bullVestor: What is it like working in Mongolia?
John Lee: I was in Mongolia for much of July and I am heading back there in August,
packing my bags as we speak. It is a big country with a lot of potential. Ulaan Baatar
has out grown itself and is experiencing pain from electricity, housing and traffic
problems to name a few. Mongolians are very literate, hard working and proud of
their heritage. It’s an amazing country. . I expect Prophecy to contribute to Mongolia’s
future by supplying coal to existing plants and by building a modern plant to supply
the city with much needed additional electricity in addition to lucrative export
electricity markets. I toured the power plant in Ulaan Baatar, it’s running at capacity
and importing electricity from Russia at extortionate rates. There is a lot of
opportunity for Prophecy to work with the Mongolian government to address the
needs of the country and its people.
bullVestor: What is the strategy and focus of Prophecy?
John Lee: To develop energy sources for the world, with coal to thermal plants, coal
gasification, vanadium and nickel for batteries. The coal will go in production in the
near term, and we will systematically develop our Canadian Nickel, Vanadium and
PGM resources in Canada.
bullVestor: Is Prophecy going to spin out its Nickel or Coal?
John Lee: We are still in asset gathering phase. Timing is everything. Spin out, buy
out, everything is on the table at the right valuation and timing.
bullVestor: Can you explain the weakness of the share price?
John Lee: All expanding companies have price swings. Prophecy has shares from a
March private placement that became free trading in late July, we have traded
through much of those shares. We know this since there were over 1 million shares
short ahead of free trading. A lot of people made money from Prophecy as our stock
was 5 cents in October 2009. The company has come a long way this year, and it’s a
fact we have minerals worth tens of billions of dollars in the ground, let’s not lose
sight of this accomplishment amid daily price swings. If you believe in the commodity
bull in coal, nickel, and PGM, then see as I do, weakness as a buying opportunity. I
myself for one am buying, the opportunity is too big to ignore.