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Prophecy Platinum To Downsize Offering, Appoints Interim CEO

Prophecy Platinum

(

CVE:NKL

) reported Monday it will downsize the brokered financing announced last week in a move to minimize share dilution.

The company also announced in Monday's press release it appointed John Lee as interim chief executive as it continues to find a permanent candidate.

Lee who is the third largest shareholder of Prophecy said he was disappointed with the financing terms announced last week for the $20 million offering.

Prophecy, spun-out by

Prophecy Coal

(CVE:PCY) last year, kyboshed the $20 million brokered placement, and has now arranged a non-brokered placement worth $11.25 million.

The platinum group metals company switched to a non-brokered placement to gain better control of the process and to lower financing costs.

The new financing consists of five million units priced at $2.25 each. The unit's are made up of one share and one purchase warrant.

Warrant holders have a right to buy one extra share for $3 each for a period of 24-months. The company also said finder's fees may be payable.

Proceeds will go toward advancing its Wellgreen property to pre-feasibility, for exploration, for mergers and acquisitions and for general corporate purposes.

The Wellgreen property, located in the Yukon Territory, has 289.2 million tonnes at an average grade of 1.18 gram per tonne (g/t). This includes platinum group metals plus gold, 0.38% nickel and 0.35% copper in the inferred category, according to a 43-101 resource estimate.

According to a preliminary economic assessment, the project is slated to produce 1.95 billion pounds of nickel concentrate, 2.05 billion pounds of copper and 7.11 million ounces of platinum plus palladium as well as gold over a 37-year mine life.

The study further noted the development of the Wellgreen deposit will produce a pre-tax internal rate of return of 38 per cent and a net present value of $3 billion, based on an eight per cent discount rate.

Initial capital costs are pegged at $863 million, including 25 per cent contingency. The deposit is to be processed using a conventional concentrator to produce bulk nickel-copper-platinum group element concentrate.

Shares rose 1.89 per cent climbing to $2.16 apiece in late morning trade on the TSX Venture Exchange.