#Mining News; Prophecy (TSX: $PCY.V, OTCQX: $PRPCF) Reports 2.08
Million Tonnes of Indicated Resource Grading: 455 g/t Silver, 3.19% Zinc, 2.18%
Lead (594 g/t Ag Eq.) for Pulacayo Project
Vancouver, British Columbia, November 22, 2017 – Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTCQX:PRPCF,
Frankfurt:1P2) has received an independent technical report with an effective date of October 20, 2017 titled “Updated
Mineral Resource Estimate and Technical Report for the Pulacayo
Project” (the “Report”). The Report was prepared by Mercator Geological Services Limited (“Mercator”) on the Company’s Pulacayo
project (the “Project”) and has been filed under the Company’s profile on the System for Electronic Document Analysis and
Retrieval (“SEDAR”) at www.sedar.com.
The Project is located in
Bolivia, 107 km northeast of Sumitomo Corporation’s San Cristobal silver mine,
185 km southwest of Coeur Mining, Inc.’s San Bartolome silver mine, and 139 km
north of Pan American Silver Corp.’s San Vicente silver mine.
The Report describes resources estimated
following the guidelines of the CIM Definition Standards for Mineral Resources
and Mineral Reserves.
Two mineral resource
estimates were disclosed according to the requirements of National Instrument
43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”) –
one for the Pulacayo deposit and the second for the Paca deposit.
Pulacayo Deposit
Results of the mineral
resource estimate prepared by Mercator for the Pulacayo deposit are presented
below in Table 1. The Report filed on SEDAR documents the resource estimate.
The Report outlined 2.08
million tonnes at a weighted average grade of Ag 455 g/t, Pb 2.18%, Zn 3.19%
(Ag Eq. 594 g/t) in the indicated category and 0.48 million tonnes at a
weighted average grade of Ag 406 g/t, Pb 2.08%, Zn 3.93% (Ag Eq. 572 g/t) in
the inferred category. The
contained metal content estimated by the Company, of the indicated category
resources is 30.4 million ounces of silver, 100.0 million pounds of lead,
146.3 million pounds of zinc. The contained metal content estimated by the Company, of the
inferred category resource is 6.3 million ounces of silver, 22.0
million pounds of lead, and 41.6 million pounds of zinc (more
resource details in the table below).
Table 1. Pulacayo Indicated
and Inferred Mineral Resource Statement Details
|
Pulacayo Mineral Resource Statement – Effective October
20, 2017
|
|
Ag Eq. Cut-Off (g/t)
|
Category
|
Tonnes*
|
Ag (g/t)
|
Pb (%)
|
Zn (%)
|
Ag Eq. (g/t)
|
|
400
|
Indicated
|
2,080,000
|
455
|
2.18
|
3.19
|
594
|
|
Inferred
|
480,000
|
406
|
2.08
|
3.93
|
572
|
Notes:
(1) Mineral
resources are estimated in conformance with the CIM Standards referenced in NI
43-101.
(2) Raw
silver assays were capped at 1,700 g/t, raw lead assays were capped at 15% and
raw zinc assays were capped at 15%.
(3) Silver
equivalent Ag Eq. (g/t) = Ag
(g/t)*89.2% + (Pb% *(US$0.94/ lb. Pb /14.583 Troy
oz./lb./US$16.50 per Troy oz. Ag)*10,000*91.9%) + (Zn% *(US$1.00/lb.
Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000*82.9%).
(4) Metal
prices used in the silver equivalent calculation are US$16.50/Troy oz. Ag,
US$0.94/lb Pb and US$1.00/lb. Zn. Metal recoveries used in the silver
equivalent equation reflect historic metallurgical results disclosed by
Apogee Silver Ltd. (Porter et al., 2013).
(5) Metal
grades were interpolated within wire-framed, three-dimensional silver domain
solids using Geovia-Surpac Ver. 6.6.1 software and inverse distance squared
interpolation methods. Block size is 10m(X) by 10m(Z)
by 2m(Y). Historic mine void space was removed from the model prior to
reporting of resources.
(6) Block
density factors reflect three-dimensional modeling of drill core density
determinations.
(7) Mineral
resources are considered to have reasonable expectation for economic
development using underground mining methods based on the deposit history,
resource amount and metal grades, current metal
pricing and comparison to broadly comparable deposits elsewhere.
(8) Rounding
of figures may result in apparent differences between tonnes, grade and
contained ounces.
(9) Mineral
resources that are not mineral reserves do not have demonstrated economic
viability.
(10) * Tonnes are rounded to
nearest 10,000.
The contained metals estimated
by the Company based on in the October 20, 2017 resource estimate by Mercator
are presented in Table 2.
Table 2: Contained Metals
Based on October 20, 2017 Pulacayo Deposit** Mineral Resource Estimate
|
Metal
|
Indicated Resource
|
Inferred Resource
|
|
Silver
|
30.4 million oz.
|
6.3 million oz.
|
|
Lead
|
100.0 million lbs.
|
22.0 million lbs.
|
|
Zinc
|
146.3 million lbs.
|
41.6 million lbs.
|
**Based
on the resource estimate Ag Eq. cut-off value of 400 g/t and 100% recovery;
figures are rounded to the nearest 100,000th increment
Between 2006 and 2012, a
total of 69,739 metres of diamond drilling (226 surface and 42 underground
drill holes) was conducted at Pulacayo, results of which support the mineral
resource estimate reported in this news release. The Pulacayo site is currently permitted for production at a
milling rate of 560 tonnes per day and no known legal, political,
environmental, or other risks that would materially affect potential future
development have been identified by Prophecy at the effective date of the
current (October 20, 2017) mineral resource estimate.
Approximately 85% of the
resource tonnage identified at the 400 g/t Ag Eq. cut-off value occurs within
150 meters vertical distance from the main San Leon tunnel, which may
facilitate future mineral extraction.
Historic Pulacayo
production was predominantly from the Tajo vein system which extends over a
strike length of more than 2.5 km and to a depth of at least 1,000 meters. Prior resource drilling only covered
approximately 20% of the Tajo vein system strike length. With new drilling, Prophecy feels that there
is potential to discover additional resources along the Tajo structure.
The Company’s research
has shown that relatively few silver underground deposits have been defined at
resource cut-off values of 400 g/t Ag Eq. or more.
Paca Deposit
The Paca
deposit is located in Bolivia approximately 7 km north of the Pulacayo deposit.
Results of the mineral
resource estimate prepared by Mercator for the Paca deposit are presented below
in Table 3. The Report described previously and filed on SEDAR documents
the resource estimate.
The Report outlined 2.54
million tonnes at a weighted average grade of Ag 256 g/t, Pb 1.03%, Zn 1.10%
(Ag Eq. 342 g/t) in the inferred category. The contained metal content
estimated by the Company, of the inferred category resources is 20.9 million ounces
of silver, 57.7 million pounds of lead, 61.6 million
pounds of zinc. (more resource details in the table below).
Table 3. Paca Inferred Mineral Resource Statement Details
|
Paca Mineral Resource Statement – Effective October
20, 2017
|
|
Ag Eq. Cut-Off (g/t)
|
Category
|
Tonnes*
|
Ag (g/t)
|
Pb (%)
|
Zn (%)
|
Ag Eq. (g/t)
|
|
200
|
Inferred
|
2,540,000
|
256
|
1.03
|
1.10
|
342
|
Notes:
(1) Mineral resources are
estimated in conformance with the CIM Standards referenced in NI 43-101.
(2) Raw silver assays were
capped at 1,050 g/t, raw lead assays were capped at 5% and raw zinc assays were capped at 5%.
(3) Silver equivalent Ag Eq.
(g/t) = Ag (g/t) + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz./lb./US$16.50 per
Troy oz. Ag)*10,000) + (Zn% *(US$1.00/lb.
Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000). 100 % metal
recoveries are assumed based on lack of comprehensive metallurgical results.
(4) Metal prices used in the
silver equivalent calculation are US$16.50/Troy oz. Ag, US$0.94/lb Pb and US$1.00/lb
Zn and reflect those used for the Pulacayo deposit mineral resource estimate
reported above.
(5) Metal grades were
interpolated within wire-framed, three-dimensional solids using Geovia-Surpac
Ver. 6.7 software and inverse distance squared interpolation methods.
Block size is 5m (X) by 5m (Z) by 2.5m (Y). Historic mine void space
was removed from the model prior to reporting resources.
(6) A block density factor of
2.26g/cm³ was used and reflects the average of 799 density measurements.
(7) Mineral resources are
considered to have reasonable expectation for economic development using combined
underground and open pit methods based on the deposit history, resource amount
and metal grades, current metal pricing and comparison to broadly
comparable deposits elsewhere.
(8) Mineral resources that
are not mineral reserves do not have demonstrated economic viability.
(9) *Tonnes
are rounded to nearest 10,000.
The contained metals estimated by the Company based on the
October 20, 2017 resource estimate by Mercator are presented in Table 4.
Table 4. Contained Metals Based On October 20, 2017 Paca
Deposit** Mineral Resource Estimate
|
Metal
|
Inferred Resource
|
|
Silver
|
20.9 million oz.
|
|
Lead
|
57.7 million lbs.
|
|
Zinc
|
61.6 million lbs.
|
**Based
on the resource estimate Ag Eq. cut-off value of 200 g/t and 100% recovery;
figures are rounded to the nearest 100,000th increment
The resource estimate is based on results of 97 diamond
drill holes and 1 reverse circulation drill hole totaling 18,160 meters completed
between 2002 and 2007.
The geology of the Paca deposit includes a core zone of
feeder-style mineralization associated predominantly with brecciated andesite,
plus additional zones of shallowly dipping mantos-style mineralization that are
hosted by the surrounding volcano-sedimentary sequence. The Paca deposit remains open at depth
and along strike.
The Paca mineralization starts from surface and the deposit
may be amenable to open-pit mining and this will be evaluated further in the
future.
The Company’s research has shown that relatively few silver
open pit deposits have been defined at resource cut-off values of 200 g/t Ag
Eq. or more.
Project update
The Company’s Bolivian
subsidiary, ASC Bolivia LDC Sucursal Bolivia, has invested approximately US$28
million at Pulacayo and already acquired necessary environmental and social
licenses to mine at Pulacayo. The Company is working with the Bolivian
mining ministry and Corporacion Minera De Bolivia (COMIBOL) to obtain
authorization which will allow Prophecy to mine at Pulacayo while transitioning
from the current joint venture contract to a mining production contract.
Qualified Persons
The technical contents of
this news release have been prepared under the supervision of Christopher M.
Kravits, CPG, LPG, General Mining Manager of Prophecy. Mr. Kravits is a Qualified Person as
defined in NI 43-101. Mr. Kravits is a consultant to the Company and is not
independent of the Company since most of his income is derived from the
Company.
Peter Webster, P. Geo.,
of Mercator Geological Services Limited is one of the Qualified Persons within
the meaning of NI 43-101 responsible for preparation of Sections 3.0 to 8.0, 14.0
to 23.0 and 26 of the Report. He also
reviewed all Report sections, contributed to the Report Summary and Report Sections
24.0 and 25.0, and responsible for the mineral resource estimate addressed in
this news release. Michael P. Cullen, P. Geo., also of Mercator
Geological Services Limited is the other Qualified Person within the meaning of
NI 43-101 responsible for preparation of Sections 1.0 and 2.0, 9.0 through 13.0
of the Report. He also reviewed all
Report sections and contributed to the Report Summary.
About Prophecy
Prophecy Development
Corp. is a Canadian public company listed on the Toronto Stock Exchange that is
engaged in worldwide mineral and energy exploration and development. Further information
on Prophecy can be found at www.prophecydev.com.
About Mercator
Mercator Geological
Services Limited is a Canadian consulting firm founded in 1997 that offers a
broad range of professional project management services including technical
reporting to standards referenced in NI 43-101, exploration program management,
and professional staffing for both small and large mineral exploration
projects. Mercator has completed mineral
exploration and resource estimation programs both domestically and
internationally and prepared on behalf of Prophecy, the current mineral
resource estimates for the Pulacayo deposit and the Paca deposit.
PROPHECY DEVELOPMENT CORP.
ON BEHALF OF THE BOARD
“JOHN LEE”
Executive Chairman
For more information about Prophecy,
please contact Investor Relations:
+1.888.513.6286
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Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the Toronto Stock Exchange) accepts responsibility for the adequacy
or accuracy of this release.
Cautionary Note Regarding
Forward-Looking Statements
Certain
statements contained in this news release, including statements which may
contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”,
“estimates”, or similar expressions, and statements related to matters which
are not historical facts, are forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements, which reflect
management’s expectations regarding Prophecy’s future growth, results of
operations, performance, business prospects and opportunities, are based on
certain factors and assumptions and involve known and unknown risks and
uncertainties which may cause the actual results, performance, or achievements
to be materially different from future results, performance, or achievements
expressed or implied by such forward-looking statements. These estimates and
assumptions are inherently subject to significant business, economic,
competitive and other uncertainties and contingencies, many of which, with
respect to future events, are subject to change and could cause actual results
to differ materially from those expressed or implied in any forward-looking
statements made by Prophecy. In making forward-looking statements as may be
included in this news release, Prophecy has made several assumptions that it
believes are appropriate, including, but not limited to assumptions that: there
being no significant disruptions affecting operations, such as due to labour
disruptions; currency exchange rates being approximately consistent with
current levels; certain price assumptions for coal, prices for and availability
of fuel, parts and equipment and other key supplies remain consistent with
current levels; production forecasts meeting expectations; the accuracy of
Prophecy’s current mineral resource estimates; labour and materials costs
increasing on a basis consistent with Prophecy’s current expectations; and that
any additional required financing will be available on reasonable terms.
Prophecy cannot assure you that any of these assumptions will prove to be
correct.
Numerous
factors could cause Prophecy’s actual results to differ materially from those
expressed or implied in the forward-looking statements, including the following
risks and uncertainties, which are discussed in greater detail under the
heading “Risk Factors” in Prophecy’s most recent Management Discussion and
Analysis and Annual Information Form as filed on SEDAR and posted on Prophecy’s
website: Prophecy’s history of net losses and lack of foreseeable cash flow;
exploration, development and production risks, including risks related to the
development of Prophecy’s mineral properties; Prophecy not having a history of
profitable mineral production; the uncertainty of mineral resource and mineral
reserve estimates; the capital and operating costs required to bring Prophecy’s
projects into production and the resulting economic returns from its projects;
foreign operations and political conditions, including the legal and political
risks of operating in Bolivia, which is a developing jurisdiction; amendments
to local Bolivian laws which may have an adverse impact on the Company’s
operations; title to Prophecy’s mineral properties; environmental risks; the
competitive nature of the mining business; lack of infrastructure; Prophecy’s
reliance on key personnel; uninsured risks; commodity price fluctuations;
reliance on contractors; Prophecy’s need for substantial additional funding and
the risk of not securing such funding on reasonable terms or at all; foreign
exchange risks; anti-corruption legislation; recent global financial conditions;
the payment of dividends; and conflicts of interest.
These factors
should be considered carefully, and readers should not place undue reliance on
Prophecy’s forward-looking statements. Prophecy believes that the expectations
reflected in the forward-looking statements contained in this news release and
the documents incorporated by reference herein are reasonable, but no assurance
can be given that these expectations will prove to be correct. In addition,
although Prophecy has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. Prophecy
undertakes no obligation to release publicly any future revisions to
forward-looking statements to reflect events or circumstances after the date of
this news or to reflect the occurrence of unanticipated events, except as
expressly required by law.
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