URUGUAY Project Overview

Magmatic Nickel-Copper Sulfide Exploration in Uruguay

At least three major Proterozoic basement terranes, one containing a significant Archean component, are present in Uruguay. These terranes are partially covered by Phanerozoic sedimentary rocks ranging from Cambrian to Quaternary, but are exposed in eastern and southern Uruguay. The three major terranes collided and rifted at various geological times, from the Early Proterozoic to the Neo-Proterozoic or Cambrian. Prophecy Platinum has First Administrative Rights over five Prospection Permits in Uruguay for magmatic nickel-copper sulfide exploration. These comprise the Cerro Chato (3,176-hectares), Molles North (4,283-hectares), Molles South (200-hectares), Quebracho (8,502-hectares) and Polanco (12,000-hectares) Prospection Permits

The Prospection Permits were identified by Company geologists as a result of countrywide targeting, followed by field reconnaissance, in 2008. Regional focus was on steep crustal-penetrating structural zones marginal to Precambrian cratonic blocks, with the presence of sulfidic metasedimentary cover rocks and, in some cases, historically reported ultramafic rocks. Multi-element Ni-Cu-Cr-Co anomalies in historical regional geochemical data led Company geologists to identify prospective ultramafic-mafic intrusive suites in all of the Prospection Permits.

Cerro Chato Prospection Permit

First-phase exploration was completed on the Cerro Chato Permit in early December 2008.  This initial stage was comprised of geological mapping and prospecting, ground magnetics (on 400m spaced lines, with 200m spaced lines over the ultramafic intrusion in the north-central portion of the Permit) and detailed stream sediment sampling. It was possible, with systematic geological traverses, to construct a reasonable geological map of the Permit area, particularly by extrapolation using the results of the ground magnetic survey.

Analytical results (4-acid digestion, ICP-MS) for rock chip samples and stream sediment samples were received from SGS Laboratory, in Argentina, at the end of February 2009. Some initial observations on the geochemical results, as they relate to the mapped geology and the ground magnetic survey, are summarized below.

The results of the work to date at Cerro Chato defined two prospective areas for follow-up with TEM surveys: One area covers the central portion of a large ultramafic body located in the north-central part of the permit, including its likely down-dip extent to the northeast, and a second area is centered on a differentiated gabbroic-ultramafic body in the northwestern part of the permit.

Dunite-Peridotite-Pyroxenite Ultramafic Intrusion in the North-Central Part of Permit:

Geology & Magnetics

• The ultramafic intrusion is >3.5km in strike and elongated in a NW-SW trend, based on geological mapping and on a ground magnetic survey conducted in November 2008.
• A strong positive magnetic response defines the ultramafic body. Preliminary magnetic modeling indicates an approximately 35° dip (plunge) to the northeast, for the thicker trough-like central dunite-peridotite phase of the intrusion.
• The geometry of the intrusion is interpreted as a trough-shaped central body (dunite, grading upward and outward to peridotite [harzburgite]) with thinner "wings" (of peridotite and pyroxenite) to the northwest and southeast of the main mass of the intrusion.
• The most olivine-rich rocks (dunite, olivine-rich harzburgite) occur along the southwestern contact of the intrusion, and likely represent olivine cumulates in a flow-through, channelized sill-form intrusion.
• The basal contact of the intrusion is not exposed.
• The intrusion was probably emplaced at or near the contact of the basement granitic gneisses with the overlying iron formation-argillite-quartzite sequence.
• At the scale of the geological map, the intrusion at its southeastern known extent is interpreted to converge with the metasedimentary sequence, although the intrusive contact is not exposed.

Rock Chip Samples

• Numerous rock samples are elevated Ni (seven = 1st class), especially in the central part of intrusion. The elevated Ni response is largely coincident with elevated Co (2nd class).
• There is one sample weakly elevated in Cu (3rd class), independent of Ni & Co, near the inferred central-southwestern contact of the intrusion.

Stream Sediment Samples

• There is a1.5km long trend comprising 14 stream sediment samples, with elevated Ni (11 samples = 1st or 2nd class), Cu (8 samples =2nd or 3rd  class), Co (9 samples =1st or 2nd class) and Cr (6 samples = 1st or 2nd class) along the southeastern (interpreted basal) contact of ultramafic intrusion, and within the thickest part of the intrusion.

Recommended Follow-up Exploration

• At a minimum, a 2km NW-SE x 1.5km SW-NE area, coincident with the thickest (trough-like) part of the ultramafic intrusion, and with the coincident elevated Ni-Cu-Co-Cr trend defined by the stream sediment samples, should be covered by a TEM survey. However, it is recommended that an additional 500m to 1km extent be covered in a north-easterly direction with large-loop TEM survey, to investigate the potentially important trough-like plunge extent of the intrusion to the northeast.

Differentiated Gabbroic-Ultramafic Intrusion in the Northwestern Portion of Permit:

Summary of Geology & Magnetics

• Several outcrops of gabbro & melagabbro, and one outcrop of talc-tremoliteserpentine altered ultramafic rock (originally olivine-bearing), were sampled. The outcrops lie along the northeastern edge of an oval-shaped magnetic anomaly.  Otherwise, the mafic and ultramafic rocks in this area are poorly exposed.
• The magnetic response indicates that the magnetic body is approximately 1km SW-NE x >1.75km SE-NW in size, and that it extends off the permit to northwest, beyond the limits of the ground magnetic survey.
• The intrusion was probably emplaced very near the contact of the underlying granite and granite gneiss with the overlying lower part of the iron formationargillite-quartzite metasedimentary sequence.

Rock Chip Sample Results

• Elevated Cu (1st to 3rd class) is present in 3 samples of melagabbro & gabbro from the northwestern part of the permit.
• Coincident Ni (2nd class) & Cr (2nd class) are present in one rock sample of talctremolite- serpentine altered ultramafic rock (meta-peridotite or olivine-pyroxenite) located near the eastern border of the northern gabbroic-ultramafic body.

Stream Sediment Sample Results

• There is a good correlation between Cu (1st & 2nd class) and Co (1st & 2nd class) toward the inferred eastern margin [possibly the basal contact, based on the location of the ultramafic outcrop] of the gabbroic-ultramafic body.
• There is coincident elevated Cu (1st class), Ni (2nd class), Co (2nd class), Cr (2nd class) in a stream sediment sample from near the ultramafic outcrop at the inferred eastern side of the gabbroic-ultramafic intrusion.

Recommended Follow-up Exploration

• The area of the northern gabbroic-ultramafic intrusion should be covered by a 1.5- km x 1.5-km TEM survey.
• An additional area to north of present permit may be open for acquisition. This would cover the likely strike extent of the differentiated mafic-ultramafic body.

Molles North Permit: Initial Geological Reconnaissance Mapping & Rock Chip Sampling over the Eastern Half of Permit

In early December 2008, three days were spent conducting reconnaissance geological traverses and rock chip sampling in the Molles North Permit, Uruguay. The traverses were guided to some extent by the presence of composite Ni-Cr, locally with Cu, anomalies present in historical regional stream sediment data collected under a French BGRM program.

This initial investigation was reconnaissance in nature, aimed at determining the presence of any significant mafic-ultramafic intrusions, and associated Cu & Ni background concentrations, in order to decide whether further work (including completion of geological mapping, a ground magnetic survey, and detailed stream sediment sampling) was warranted.

Geologic Results, Molles North Permit

• The initial geological reconnaissance traverses succeeded in locating several trends of mafic (melagabbro), ultramafic (dunite-peridotite-pyroxenite), and possibly differentiated (mafic-ultramafic) intrusions. Individually, these maficultramafic intrusive trends are up to 3km in length and 500meters wide, generally along a northwesterly elongate direction, although one ultramafic body strikes E-W.
• The northwesterly orientation and the stratigraphic level of emplacement of the intrusions (that is, above gneissic granitic basement and within a metasedimentary sequence of iron-formation, argillite, and quartzite) is very similar to the geological setting at the Cerro Chato Permit.
• Disseminated magmatic sulfides were observed in some of the melagabbros at Molles North.
• Rock chip sampling returned eight samples containing > 100-ppm Cu (including up to 395-ppm Cu in a melagabbro with disseminated sulfides). Three of the melagabbroic rock chip samples containing Cu > 100-ppm (Cu = 106, 165, 395 ppm) also contain Ni > 100-ppm (Ni = 107, 100.4, 114 ppm respectively). Some ultramafic samples contain Ni > 2100-ppm (up to 3009-ppm Ni), indicating the presence of prospective olivine-bearing ultramafic rocks, and Cr up to 4340-ppm. Three ultramafic samples contain Co > 100 ppm.

Recommended Follow-up Exploration

• The geologic work, to date, is incomplete, but the presence of large-scale and possible strongly differentiated mafic-ultramafic intrusions, historical stream sediment anomalies in Ni-Cr-(Cu), and locally elevated Cu values in rock chip samples containing background disseminated magmatic sulfides suggest that completion of geological mapping, a ground magnetic survey, and detailed stream sediment sampling are warranted at the Molles North Prospection Permit.  This would bring the permit up to a level of information consistent with that achieved for the Cero Chato Permit, and facilitate attempts to define more precise targets for geophysical exploration, likely TEM.

Quebracho and Polanco Prospection Permits

The presence, but not the total extent, of significant ultramafic-mafic intrusions has also been confirmed to date on the Quebracho & Polanco Prospection Permits (Figure 1b), through reconnaissance exploration traverses designed to investigate multi-element Ni-Cu-Co-Cr anomalies in areas covered by historical regional stream sediment data.  Completion of geological mapping and sampling, ground magnetic surveys, and detailed stream sediment sampling are planned for these two Permits.

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Qualified Person under NI 43-101
Danniel Oosterman, P.Geo., a consultant of the Company is the qualified persons responsible for the technical information on this website.

Cautionary Note Regarding Mineral Resources and Mineral Reserves
Readers should refer to the Company's current technical reports and other continuous disclosure documents filed by the Company available on Sedar at www.sedar.com for further information on the mineral resource estimates of the Company's projects, which are subject to the qualifications and notes set forth therein, as well as for additional information relating to the Company more generally. Mineral resources which are not mineral reserves, do not have demonstrated economic viability. Inferred mineral resources have insufficient confidence to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability suitable for public disclosure. Neither the Company nor readers can assume that all or any part of an inferred mineral resource will be upgraded to indicated or measured mineral resource. Most projects at the inferred mineral resource stage do not ever achieve successful commercial production. Each stage of a project is contingent on the positive results of the previous stage and that there is a significant risk that the results may not support or justify moving to the next stage.

Quality Control and Quality Assurance
Prophecy Platinum executes a quality control program to ensure best practice in sampling and analysis. Samples are cut and split for assay with the remaining sample retained for reference. Blanks, Standard Reference Material (SRM), and duplicates were inserted into the sample stream every 20th sample. A duplicate sample is taken every 20th sample of core. The selected sample is sawn in half and then sawn in half again. The quartered core is then placed into two different sample bags with different sample numbers and sealed. The SRM material comes from Natural Resources Canada and Analytical Solutions Limited. These were inserted into the sample stream immediately after the second duplicate. The SRMs used are WMS-1a, WPR-1 and WGB-1. Sample Blanks are obtained from two sources; granodiorite from a local quarry and garden marble from hardware stores in Whitehorse, Yukon. A Blank sample is inserted into the sample stream after the SRM. Assayed samples are transported in sealed and secured bags for preparation at ALS Chemex Prep Lab located in Whitehorse, Yukon. Pulverized (pulp) samples are shipped for analysis to ALS Chemex Assay Laboratory in Vancouver, B.C. ALS Chemex is an ISO/IEC 17025:2005 accredited laboratory and registered under ISO 9001:2000.
Quality assurance and quality control are monitored using scatterplots, Thompson-Howarth plots and statistical analysis to ensure duplicates, blanks and standard data are reliable and indicate robustness of overall results. ALS Chemex quality-assurance procedures are also included in this process."

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