VANCOUVER, Jan. 25 /PRNewswire-FirstCall/ -
Lynn Gabbros Property in Northern Manitoba ------------------------------------------
Further to a news release dated January 12, 2010, Prophecy Resource Corp. has received TSX Venture Exchange approval and closed a purchase agreement with VMS Ventures Inc. (TSX.V.VMS) whereby Prophecy has the right to acquire a 100% interest in the Lynn Gabbros property located in Manitoba, Canada, near Prophecy's Lynn Lake nickel-copper project. Under the terms of the purchase agreement, Prophecy has issued 750,000 shares in its capital stock and will reimburse VMS Ventures Inc. for exploration expenditure obligations up to June 1, 2010 of up to $100,000. Prophecy paid a finder's fee of $24,000 in connection with this acquisition.
The Lynn Lake nickel camp is located in northern Manitoba, about 320 kilometres by road, northwest of the Thompson mining camp. Historically, Lynn Lake is the third largest nickel producing region in Canada. Sherritt Gordon Mines Ltd. mined the Lynn Lake nickel-copper deposits from 1953 to 1976. The Main and EL gabbro plugs produced 20,151,146 tonnes of ore at an average grade of 1.023% nickel and 0.535% copper from two mines over the 24 year period.
Prophecy currently has the option to earn a 100% interest in the main gabbroic plug from Victory Nickel Inc. According to a technical report dated December 5, 2007, prepared by Wardrop Engineering for Independent Nickel Inc., the main plug contains a National Instrument 43-101-compliant measured and indicated resource of 17 million tonnes with an average grade of 0.62% nickel and 0.31% copper. (This technical report can be accessed under Independent Nickel's filing at SEDAR.) By acquiring the Lynn Gabbros claims, which include five gabbro plugs, from VMS Ventures, Prophecy now has six of the seven known gabbro plugs in the Lynn Lake area and is now the dominant player in terms of land size and resource base in the Lynn Lake nickel camp. A map of the grabbos identified at Lynn Lake can be accessed at Prophecy's website.
PRIVATE PLACEMENT OF $828,580 -----------------------------
Prophecy has now closed the second and final tranche of a private placement announced December 9, 2009 of 2,761,936 units to raise a total of $828,580. Each unit consists of one share and one half-warrant, with each full warrant exercisable to purchase an additional share of the Company at $0.40 until January 25, 2012. Proceeds from the private placement will be applied to acquisition costs and exploration of the Lynn Lake project and for working capital. Finder's fees totalling $28,120 cash were paid in respect to a portion of this placement.
All of the shares, warrants and any shares issued upon exercise of the warrants issued pursuant to the private placement as well as the shares issued in consideration of the Lynn Gabbros property are subject to a hold period and may not be traded in Canada until May 26, 2010. Following completion of these transactions, Prophecy will have 29,892,266 common shares issued and outstanding.
ON BEHALF OF THE BOARD (signed) "John Lee" ----------- John Lee Chairman
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.
SOURCE Prophecy Resource Corp.