TSX-V Symbol: PCY
VANCOUVER, Oct. 21 /CNW/ - Prophecy Resource Corp. (TSX.V: PCY) has entered into an Option Agreement with Victory Nickel Inc. (TSX.T: NI) whereby Prophecy has the right to acquire a 100% interest in the Lynn Lake Nickel-Copper Project located in Manitoba, Canada.
The Lynn Lake Project is located in the historic mining town of Lynn Lake in northern Manitoba, about 320 kilometres by road access northwest of the Thompson mining camp. The property is the former Sherritt Gordon Mines Limited mine site known as the Lynn Lake A mine and Farley mine, comprised of 30 mineral leases covering an area of 590 hectares. The property was operated by Sherritt Gordon from 1953 to 1976 for a total of 24 years, with reported production of 22.2 million tons at an average grade of 1.023% nickel and 0.535% copper.
Under the agreement, Prophecy shall have the right to acquire a 100% interest in the Lynn Lake project by paying Victory an aggregate of $4,000,000 over a four year period and incurring an aggregate of $3,000,000 in Exploration Expenditures over a three year period.
As part of the agreement, Prophecy will also issue to Victory 10% of Prophecy's outstanding shares, post financing, and grant Victory the right to participate in future equity financings on a pro rata basis so that Victory may maintain its 10% interest in Prophecy.
In order to fund the initial property payment to Victory, Prophecy has agreed to a non-brokered private placement of 7,000,000 units at a price of $0.05 per unit for gross proceeds of $350,000. Each unit will be comprised of one common share and one-half of one share purchase warrant, with each warrant entitling the holder to purchase an additional share at an exercise price of $0.10 per share for a period of two years from the date of issue.
The foregoing transactions are subject to acceptance for filing by the TSX Venture Exchange.
Prophecy also wishes to announce the appointment of Mr. John Lee, CFA, as a Director of the Company, effective immediately.
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.
SOURCE PROPHECY RESOURCE CORP.
For further information: For further information: about Prophecy, please visit our web site at www.prophecyresource.com