Prophecy Detects Strong IP Anomaly At Its Disco Nickel-Copper-Cobalt Deposit, In Lynn Lake, Manitoba
Vancouver, British Columbia, July 07, 2010 - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTC: PRPCF, Frankfurt: 1P2) announced today that it has received the first results of a property-wide surface induced polarization ("IP") survey conducted during the late-spring of 2010. To date, results have been modeled for the area coinciding with the Disco deposit that was discovered during 2008. Results indicate a strong chargeability anomaly centred 200 meters below the existing Disco deposit--approximately 475 meters from surface--that extends on gridlines to the south, for a total strike length of approximately 150 meters. This anomaly appears to increase in intensity with depth, beyond 610 meters from surface, where the survey was able to penetrate. The current extent of the Disco deposit is approximately 60 meters long, with mineralization encountered to 275 meters depth-to-top. The chargeability and resistivity strongly resemble that of known mineralization such as that of the 'N' orebody, which hosts an 11 MT Measured and Indicated resource (0.4 MT Measured, 10.7 MT Indicated) grading 0.6% nickel and 0.3% copper (0.5% NiEQ cut-off).
The company also conducted a borehole IP survey on the longest hole at the Disco Zone--hole designation LLN-034-- which has detected conductivity at 575 meters depth, and coincides spatially with the ground IP anomaly. This strong IP anomaly occurs below the Disco Zone IP anomaly and is only one of a number of new IP anomalies discovered during the survey. Off-hole chargeability and conductivity was also discovered west of LLN-034 at 342 meters depth.
This newly discovered, south-extending, anomaly begins approximately 120 meters below the Disco deposit, exhibiting a stronger magnitude of chargeability with depth. The trend of the anomaly is consistent with the geological model and observed structures in drillcore that suggest the presence of a southwest trending structure that may be a splay or conjugate structure to the main mine trend that hosted 11 orebodies, most of which were mined out from 1952 to 1976. Lynn Lake mineralization typically occurs as vertically extensive mineralized zones that have been faulted locally, such that an orebody is often comprised of several 'blocks' of mineralization. The high depth-to-width ratio, and faulted lower contact of the Disco Zone appears to follow this model; these new anomalies may represent shifted mineralized blocks that have been observed in the Lynn orebodies. Prophecy Resource Corp intends to test this hypothesis with a drill program scheduled to commenced mid-summer 2010.
The Disco deposit was discovered by previous operators on the project during the spring of 2008. Significant mineralization was intercepted in 15 drillholes with mineralized intercepts featuring hole LLN-043 which intercepted 47.1 meters of 0.7% nickel, 0.5% copper 0.02% cobalt, and LLN-015 which intercepted 18 meters of 1.5% nickel, 0.7% copper and 0.04% cobalt. Mineralization was intercepted down to 275 meters from surface, and drilling delineated a vertically-extensive mineralized body, truncated by faults to the west and at depth. The morphology, occurrence, and mineralization of the Disco deposit is characteristic of the morphology of the orebodies mined at Lynn Lake during its historic operations, over which period more than 20 million tons of nickel was mined over a 24 year mine life. Currently, 22.9 million Measured and Indicated tons of material grading 0.57% nickel and 0.3% copper (1,017,558 Measured & 21,884,121 Indicated) remains in situ on the Lynn Lake nickel property, hosted in the 'N' and 'O' orebodies. (see Prophecy news, February 3, 2010) The Disco deposit is separate from this resource.
The company is currently awaiting data interpretation and modeling for other areas covered by the ground IP survey, which consisted of 42 line kilometres at 250 grid-spacing (approximately 75 meters), covering most of the A-plug intrusion (1 x 3 kilometres), and will report these results when they are compiled.
This news release has been reviewed and approved by Danniel J. Oosterman, PGeo, and a Qualified Person as defined in NI 43-101. For more information about Prophecy, please contact Paul McKenzie at +1.604.642.2625 ext. 107 or John Lee at +1.800.851.1528
About Prophecy Resource
Prophecy Resource Corporation is an internationally diversified company engaged in developing, energy, nickel and platinum group elements projects. The company controls over 1 billion tonnes of open-pittable thermal coal in Mongolia (503 MT Measured, 503 MT Indicated) (see Prophecy news, January 21, 2010 and Red Hill Energy news March 26, 2010) In Canada Prophecy owns Lynn Lake Nickel Project, a 10% equity stake in Victory Nickel and agreed to merge with Northern Platinum (TSX-V: NTH) on June 15, 2010. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
ON BEHALF OF THE BOARD OF DIRECTORS of Prophecy Resource Corp.
Chairman and CEO
Lynn Lake Mining Leases
3D Model of Disco Anomaly
3D Image of Borehole IP for LLN-034
2D Quantitative Section
2D Quantitative Section
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements: This news release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, including, without limitation, statements potential mineralization, the estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the company are forward-looking statements that involve various risks and uncertainties. . Although Prophecy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include failure to obtain necessary approvals in respect of the Transaction, unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with operating in foreign jurisdictions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Prophecy and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.com.
"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended ("the U.S. Securities Act") or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.