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Prophecy Coal ships 650 tonnes from Ulaan Ovoo to Buryatia, Russia

Vancouver-based thermal coal producer Prophecy Coal Corp. (TSE:PCY) said on Wednesday that it has exported 650 tonnes of thermal coal from its Ulaan Ovoo mine, in Mongolia, to the Republic of Buryatia, in Russia.

The shipment, which is the equivalent of ten wagons, was loaded on to rail at Sukhbartaar rail station and crossed the border into Buryatia through Naushki.

The coal was sold to Energy LLC, a Buryatia-registered company, and then consumed in local Buryat power stations and boilers, Prophecy said in a statement.

"This is a historic event, as this is the first ever shipment of Mongolian coal to Buryatia, Russia, and we believe that Ulaan Ovoo coal will become a significant source to feed the energy sector of this region,” said Minister of Buryat, J. Batuyev.

Prophecy said the shipment to Buryatia helps it determine local sales logistics, wagon loading times, export requirements and customs procedures to ensure smooth operations for future coal export of larger quantities.

The thermal coal producer has been engaged collaboratively with a number of government and private entities to open the Zeltura border post, to facilitate trade between Mongolia’s Selenge province and Russia’s Buryatia province.

The opening of Zeltura border, which is 15 kilometres from the Ulaan Ovoo mine, would allow Prophecy to easily sell coal to Russian industrial consumers, translating into significant transportation savings for Prophecy, the company added.

Currently, Prophecy is preparing and ordering wagons for its July shipment destined for the port of Sovetskaya Gavani, for which the company has secured an annual capacity of 300,000 tonnes.

Earlier this month, the company announced that it had 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 Ulaan Ovoo access to the Asian seaborne export coal markets.

The port, located at the Russian Far Eastern seaboard, is privately-owned and has a loading capacity of 6,000 tonnes per day, offering direct connections to Trans-Siberian railroads and Russian state highways.

The Ulaan Ovoo coal mine, which began production this year and has thus far produced 200,000 tonnes of coal year to date, has measured and indicated mineral resources of 208 million tonnes. To date, more than $25 million has been committed or invested in the equipment and commissioning of the mine.