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Prophecy Signs Non-Binding Joint Development Agreement with Chinese Partner to Invest in Chandgana Power Plant in Mongolia
Vancouver, British Columbia, December 22, 2015 – Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2) is pleased to announce today, the signing of a non-binding Joint Development Agreement (“JDA”) with a Chinese partner (the “Strategic Partner”) to invest in the Company’s 600 MW Chandgana power plant in Mongolia.
Prophecy Power Generation LLC, a wholly-owned subsidiary of Prophecy, is developing the Chandgana coal-fired power plant project (the “Chandgana Power Plant”) which includes the construction of a 600 MW (4X150 MW) coal-fired mine-mouth power plant in two phases.
Further to the Company’s press releases dated November 14, 2012 and August 19, 2015, the Strategic Partner has established a presence in Mongolia and represents the overseas investment subsidiary of a large-scale Chinese state-owned power generation group. The Strategic Partner had previously executed a Memorandum of Understanding and Exclusivity Agreement with Prophecy.
Under the JDA, the companies will create a consortium, whereby the Strategic Partner will provide legal, financial and technical experts to assist Prophecy to negotiate and finalize the Concession Agreement (“CA”), Power Purchase Agreement (“PPA”) and Tariff Agreement with the relevant Mongolian Ministries and Agencies. Upon satisfactorily completing these agreements, the Parties intend to enter into an investment arrangement that will result in the Strategic Partner owning a minimum 51% stake in the Chandgana Power Plant.
With the signing of the JDA today, and the Engineering Procurement and Construction Contract with SEPCO2 dated December 18, 2015, Prophecy has requested the Mongolian Energy Ministry to expedite the signing of the CA and PPA.