Prophecy Initiates Deep IP survey and Bulk Tonnage Metallurgical Testing at Lynn Lake Nickel Sulphide Project, Manitoba
VANCOUVER, B.C. - March 24, 2010, : Prophecy Resource Corp. (TSX.V: PCY; OTC:
PCYRF; Frankfurt: 3P1) is pleased to report on the following field exploration and metallurgical testing operations currently in progress on its Lynn Lake Nickel Sulphide Project located in Manitoba, Canada.
The Lynn Lake mine was operated by Sherritt-Gordon from 1953 to 1976 and ranked as the third largest nickel producer in North America, after only the Sudbury and Thompson mining camps.
Wardrop Engineering Inc., in a National Instrument 43-101 report dated March 15, 2010 (available at www.sedar.com), estimated Lynn Lake to contain a Measured and Indicated resource of 22.9 million tons at 0.57% nickel and 0.3% copper, and an Inferred resource of 8.1 million tons at 0.51% nickel and 0.28% copper. (0.4% nickel equivalent cutoff) as outlined in the following table.
The above resource estimate does not include the recent Disco Zone discovery located within 1.5 km of the outlined resource. The Lynn Lake project has immediate access to electrical power and rail transportation and can be operated year-round.
IP Survey to Explore Extensions to Disco Discovery
In 2008, the near-surface Disco Zone ("Disco") was discovered within 1.5 km of the existing resource outlined at Lynn Lake. Disco drill intercepts include 47 meters of 0.7% nickel and 18 meters of 1.5% nickel east of the primary trend, which is believed to reside on a secondary and previously unexplored structural trend. Disco remains open along strike and at depth beyond the 400 meters tested in 2008.
Prophecy has retained Matrix Geotechnologies Ltd. to conduct an Induced Polarization ("IP") survey utilizing proprietary 3D techniques with a high proven drilling success rate. The IP can effectively penetrate to depths of 600 meters (2,000 ft), where historical mining at Lynn Lake reached depths of 914 meters (3,000 ft). The survey will concentrate on areas to the east of the primary historic mine trend where no previous surveying has explored at comparable penetration depths. Prophecy intends to prioritize drill targets based on the results from this IP survey, which are anticipated some time in April 2010.
Bulk Tonnage Bioleach Metallurgical Testing
In 2007, a bioleaching bench test was performed at the Process Research Associates Ltd. laboratory ("PRA") in Vancouver. PRA used thiobacillus thiooxidans adapted to the nickel ore. The test procedure yielded 92.5% nickel recovery and 81% copper recovery. The test was based on 60 kg of rock samples from Lynn Lake.
Prophecy has commissioned Mintek Laboratories, in conjunction with Wardrop Engineering, to conduct large scale pilot metallurgical testing. Five tonnes of samples are being air sealed at Lynn Lake for shipment to Mintek in South Africa, a world leader renowned for mineral processing and research. Mintek's metallurgical testing process involves flotation method development, production of concentrate, bioleach setup, amenability and optimization pilot tests. Final results are expected in November 2010 and, if favourable, will be incorporated into the planned Lynn Lake Feasibility Study.
John Lee, Chairman and CEO of Prophecy Resource Corp. stated today that:
"Lynn Lake is one of a select few Nickel Sulphide deposits worldwide that is in a geopolitically safe jurisdiction with excellent infrastructure. Nickel prices have doubled from a year ago and we intend to commission Lynn Lake to production responsibly in the quickest time frame permissible."
This news release has been reviewed and approved by Danniel Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person under National Instrument 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS
Prophecy Resource Corp.
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.
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.