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Prophecy Coal secures Far East Russian seaboard port access

Canada-based Prophecy Coal Corp. (TSX: PCY) said on Tuesday that it has arranged with the port of Sovgavan in the State of Khabarovsk, Russia to have initial access to the port for 25,000 tonnes per month starting in June, offering the company's Ulaan Ovoo thermal coal mine access to the Asian seaborne export coal markets.

The port, located at the Russian Far Eastern seaboard, is privately-owned and can handle seagoing vessels up to 160 metres in length, and has a loading capacity of 6,000 tonnes per day, offering direct connections to Trans-Siberian railroads and Russian state highways.

Prophecy said that access to port allocation could expand to 50,000 tonnes per month, reflecting 300,000 to 600,000 tonnes annually. The coal company has also been assigned a coal storage area at the port.

The pact opens Prophecy up to a large number of coal buyers, it said.

In other news, Prophecy’s Ulaan Ovoo mine in Mongolia, which began production this year, has so far produced 200,000 tonnes of coal year to date, of which 50,000 tonnes is being stockpiled at the mine and at Sukhbaatar rail siding destined for Sovgavan port. The average quality of the total 200,000 tonnes of stockpiled coal is 4,200 Kcal/kg NAR.

The Ulaan Ovoo coal mine has measured and indicated mineral resources of 208 million tonnes. Thus far, over $25 million has been committed or invested in the equipment and commissioning of the mine.

In May, Prophecy received its second mining fleet and expects to get 18 coal transport trucks by the end of the month, which are expected to reduce transportation costs from hauling coal from the mine to the Sukhbataar rail station.

The company also said that as a result of fuel rationing undertaken by the Mongolian government, it is monitoring its fuel consumption and optimizing production rates to sustain mining and coal transportation activities for the remainder of the year.