Prophecy’s Chandgana Coal Field April 2011 Chandgana Power Plant Project Large, scalable power plant • 600 MW power plant license granted (Nov. 2011) • Proposed Phase 1: 600MW • Proposed Phase 2: 3,600MW (export to China) Abundant low cost coal • Low strip ratio of 0.5:1* • M&I resource 1.2 billion tonnes+ • Low ash and low sulphur • Mining license obtained for 140Mt Chandgana Tal • 150 km from transmission line Timeline • Finalize PPA, EPC contractor, and project financing (2012) 150km to grid 2 km 350km to China • Construction starts (Estimated Q2 2013) • Start up phase (Estimated Q2 2015)Certain statements contained in this Presentation, including statements which may contain words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", or similar expressions, and statements related to matterswhich are not historical facts, are forward-looking information within the meaning of securities laws. Such forward-looking statements, which reflect management’s expectations regarding Prophecy’s future growth, results of operations,performance, business prospects and opportunities are based on certain factors and assumptions and involve known and unknown risks and uncertainties which may cause the actual results, performance, or achievements of theCompany to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this Presentation include, without limitation, statementsregarding the development and production of the Company’s Chandgana Power Plant and other information concerning possible or assumed future results of operations of Prophecy. Although Prophecy has attempted to identifyimportant risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results notanticipated, estimated or intended. Accordingly, readers should not place any undue reliance on forward-looking statements as such information may not be appropriate for other purposes. We disclaim any intention or obligation toupdate or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by law. **Chandgana consists of two properties - Chandgana Tal and Chandgana Khavtgai.Chandgana Tal has a strip ratio of 0.5:1 and Chandgana Khavtgai has a strip ratio of 2.2:1.
CONSTRUCTION 2013 – 3 YEARS FINANCIAL MODELTPP & Lines Capex $744 Million NPV / IRR $364.7 Million / 21.9%Plant Capacity 4 x 150MW Debt / Equity 70 / 30Coal Output 2.7 Mt p.a. Interest rate / 10% / 12% Discount rateElectricity Tariff $0.06 /kwh Project life / 30 year / 10 yearCoal Pricing $15.5 /t Loan Term IRR Sensitivity /Opex + Debt Payment $0.023 + $0.025 /kwh + 6% IRR / + 0.01 /kwh Tariff Representation of 600MW Chandgana Power Plant * FS January 2011 by Steag Germany - Power Plant only, not NI 43-101
Representation of 600MW Chandgana Power Plant Prophecy Coal’s Ulaan Ovoo Mine – April 2011 Ulaan Ovoo Thermal Coal Mine Directors and Advisors John Lee - Chairman & CEOHigh Quality Abundant Thermal Coal+ • BSEE, BA Econ: Rice University • (ar) Min 5,000 kcal/kg, Max 1% sulphur, 11.3% ash • Founder of Prophecy Coal / Prophecy Platinum (TSX.V: NKL) • 20 year+ mine life Greg Hall - Director • Resource: 208 Mt (M&I) • Co-founder of Prophecy Coal / Prophecy Platinum (TSX.V: NKL) • Former Director at SilvercorpLow Cost Mining Jivko Savov - Director • Single seam, 50 meters thickness, strip ratio 1.8: 1 • Deputy CEO of En+ and • Deputy Chairman of EuroSibEnergoProduction Michael Deats - Director • 2011: 200,000 tonnes mined and sold • Ex-Managing Director of BP Coal South Africa • 2012: Estimated 300,000 – 500,000 tonnes Chuluunbaatar Baz - Director • Market to: Mongolia, China, Russia • Chairman of Monnis Group Mongolia Harald Batista - Advisor • Prominent member of Batista family of Brazil • EBX Group; Vale Inco Corporate Structure & Information Ulaan Ovoo Seam Cross Section Shares: Issued and Outstanding 201,109,422 Fully Diluted 237,537,242+Ulaan Ovoo: 174 million tonnes of measured and 34 million tonnes of indicated. Ulaan Ovoo’s resource numbers are from Market Capitalization $90M CADthe Dec 2010, 43-101 Prefeasibility Study by Wardrop Engineering. Chandgana: 650 million tonnes of measured and 538million tonnes of indicated coal. Chandgana’s resource numbers are from the September 2007, 43-101 Technical Report by Investment Holdings** $87M CADBehre Dolbear & Company (USA), Inc. for Chandgana Tal and from the September 2010, 43-101 Technical Report by **As of 03/02/2012Kravits Geological Services, LLC for Chandgana Khavtgai.