The move is part of Prophecy's plan to focus resources primarily on its coal properties, while still benefiting from the potential of its nickel assets. The Mongolian thermal coal producer has over 1.4 billion tonnes of surface minable thermal coal resources, with its main property being the Ulaan Ovoo coal mine.
The Wellgreen property covers an area of about 22 square miles in the Yukon Territory, Canada, while the 22.9 million ton Lynn Lake nickel asset is located in Manitoba, which Prophecy acquired in October 2009.
Under the terms of the transaction, Pacific Coast Nickel Corp (PCNC) issued 450 million of its common shares to Prophecy. Of these shares, Prophecy has retained 225 million shares and plans to distribute 180.8 million PCNC common shares to Prophecy shareholders today, the company said.
Prophecy has also reserved 44.2 million common shares which it will disperse to holders of Prophecy options and warrants when these are exercised. Following the transaction, PCNC will consolidate its share capital on a ten old for one new basis, Prophecy said.
As a result of the transaction, Prophecy shareholders will receive 0.095 of a PCNC post-consolidation share for each Prophecy share held. Each option and warrant holder of Prophecy will also receive the same number of PCNC shares when exercised.
PCNC will also change its name to Prophecy Platinum Corp, but retain its existing trading symbol, while Prophecy will be renamed Prophecy Coal Corp and retain its existing trading symbol as well. Both companies are expected to trade under their new names within two to five days.
After the transaction, Prophecy will own 22.5 million common shares of PCNC, or more than 42% on an outstanding fully-diluted basis.