Prophecy Coal Corp. (CVE:PCY) reported Wednesday it has intercepted a 19-meter-thickness coal seam at its Ilch Khujirt property, in Mongolia.
The newly acquired property, which encompasses 4,773 hectares, is located 17 kilometres northeast of its producing Ulaan Ovoo coal mine.
Vancouver-based Prophecy drilled hole RHJ-11-01 on Ilch, confirming the presence of coal, and providing information for future exploration.
On an air dried basis, assay results of the coal core found inherent moisture of 20.96%, ash of 14.52%, volatile matter of 29.83%, fixed carbon of 34.69% and total sulfur of 0.35%.
“We believe through systematic exploration, there exists great potential to discover additional coal seams of minable depths in the surroundings of Ulaan Ovoo mine," said chairman and CEO, John Lee.
The company said though that these are preliminary results because core recovery was poor and more drilling is needed.
“Due to its shallow nature, the coal seam has the potential to be mineable. This new information is being reviewed and additional surface mapping will be performed to plan additional drilling,” the company said in a statement.
As part of an options deal with a private Mongolian company, Prophecy can acquire 100% ownership of Ilch for US$2 million within the first year, or US$4 million in the second year after the agreement signing.
Prophecy Coal is a diversified thermal coal production company. It controls 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia.
The Ulaan Ovoo coal mine is in production, and the Chandgana mine mouth power plant is currently being permitted.