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Representation of 600 MW Chandgana power plant

September 2012 Corporate Presentation

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Page 1: September 2012 Corporate Presentation

Representation of 600 MW Chandgana power plant

Page 2: September 2012 Corporate Presentation

2

Red Hill Energy (total spent $30million)

2005 Acquired Ulaan Ovoo ($10million)

2006 Expands Ulaan Ovoo to 208 mt – 174 mt measured and

34 mt indicated ($5million)

Acquired Chandgana Tal ($5million)

Expands Chandgana Tal to 140 mt measured ($3million)

2007 Discovers Chandgana Khavtgai ($2million)

2008 Expands Chandgana Khavtgai to 1 bt - 500 mt measured

and 500 mt indicated ($8million)

2010 Prophecy Coal Acquired Red Hill ($20million)

Page 3: September 2012 Corporate Presentation

Prophecy Coal (total spent $60million)

2010 Filed Feasibility Study Ulaan Ovoo, Received Mine License

Drilled Chandgana Khavtgai (Khavtgai Uul)

Commissioned Ulaan Ovoo to production ($30million)

Drilled Chandgana, File Technical & Economic Studies ($8million)

Filed Environmental Impact Assessment (Power Plant)

2011 Received Chandgana Mine License

Received EIA (Power Plant)

Filed Power Plant Technical & Economic Studies

Received Power Plant Construction License

2012 Acquiring Tethys’ Vale claims ($10million)

Negotiate EPC and PPA 3

Page 4: September 2012 Corporate Presentation

4

Prophecy 1.2 billion tonnes* & Tethys’ Vale historic resource estimate of 2.3 billion tonnes**

*Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai consists of 509

mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana Khavtgai Technical Report by

Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person

under NI 43-101 at time of report. And the Chandgana Tal resource estimate is also based on the September 2007 NI 43-101 Chandgana Tal Technical Report by Behre Dolbear

& Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear & Company (USA), Inc., who is an independent Qualified Person under NI 43-

101.. Chandgana Tal has a strip ratio of 0.5:1 and Chandgana Khavtgai has a strip ratio of 2.2:1.. ** According to records reviewed by Prophecy, Tethys applied on March 15,

2011 to register a resource estimate of 2.33 billion tonnes of thermal coal for the Tugalgatai licenses with the Minerals Resource Council of Mongolia. This 2.33 billion tonnes is a

historical estimate under NI43-101. The resources registered by Tethys were not prepared in accordance with NI 43-101 and should not be relied upon. The assumptions,

parameters, and methods used to prepare the historical estimate are unknown. A qualified person has not done sufficient work to classify the historical estimate as a current

mineral resource; and Prophecy is not treating the historical estimate as a current mineral resource. The 2.3 billion is in the A, B and C categories of reserves estimated using the

Mongolian (similar to former Soviet) method. Because the methodology and assumptions of the Mongolian reserve estimation method are different than CIM, JORC and US the

reserves categories are not easily equated.

Page 5: September 2012 Corporate Presentation

Resource: 1.2 Billion Tonnes* – 650 mt measured

and 550 mt indicated, 3,300kcal/kg NAR,

Basin 300 sqkm, Target 3.5 to 5 Billion tonnes

Next to Paved Road, 120km from Rail

0.5:1 Strip Ratio*, Mining License Issued

600MW Construction License Issued (first IPP)

50km to East Grid and 150km to West Grid

350km From China, 1,110km Beijing.

*Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai

consists of 509 mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana

Khavtgai Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who

was an independent Qualified Person under NI 43-101. And the Chandgana Tal resource estimate is also based on the September 2007 NI 43-101 Chandgana Tal

Technical Report by Behre Dolbear & Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear & Company (USA), Inc., who is an

independent Qualified Person under NI 43-101.. Chandgana Tal has a strip ratio of 0.5:1 and Chandgana Khavtgai has a strip ratio of 2.2:1.

Chandgana deposit & power plant site

5

Page 6: September 2012 Corporate Presentation

Chandgana

Coal

Power Transmission

Power Plant Proposed Installed capacity:

Program 1: 600 MW (connect to CES, EES of Mongolia) Program 2: 3,000 MW+ (connect to China)

350km to China 150km to grid

2 km

Central Energy system (CES)

Eastern Energy system (EES) 6

Page 7: September 2012 Corporate Presentation

7

Oyu Tolgoi (Cu), Tavan Tolgoi (Coal)

Page 8: September 2012 Corporate Presentation
Page 9: September 2012 Corporate Presentation

9

Blue Sky Tower, UB Oyu Tolgoi, Mongolia Central Tower, UB

Tavan Tolgoi, Mongolia ShangriLa Hotel, UB

Page 10: September 2012 Corporate Presentation

Source: Energy International Corporation, Eurasia

Capital’s Mongolia Outlook Report

0

200

400

600

800

1000

1200

1400

1600

2010 2011 2012 2013 2014 2015

Russia

EES

CES

Supply

MW

Russia

East Supply

Central Supply

Power Supply and GDP Growth Forecast

CES – Central Energy System

EES – Eastern Energy System 10

$16

$14

$12

$10

$8

$6

$4

$2

GD

P,

US

$b

n

Page 11: September 2012 Corporate Presentation

762 819 862 934

1,313 1,394

1,483 1,544 1,625

1,728

2,030

2,321

0

500

1000

1500

2000

2500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030

Power Demand Forcast by 2030

*Source Asian Development Bank 11

MW

Page 12: September 2012 Corporate Presentation

* SOURCE ENERGY INTERNATIONAL

Page 13: September 2012 Corporate Presentation

* SOURCE ASIAN DEVELOPMENT BANK

Page 14: September 2012 Corporate Presentation

14

*Source ERA

In 2002: Electricity and heat retail prices increased by 4.4% and 12.4-30.0% on average, respectively. In 2005: A growth in electricity and heat end user prices represented 8.5% and 19.3% on average, respectively. In 2007: Electricity price was increased by 4.4%. Heat prices in Darkhan and Erdenet cities were increased by 20.1-26.4%. In 2008: Electricity price was increased by 27.8%. Heat prices in Ulaanbaatar city were increased by 39.0%. Hot water use tariff for residential consumers in an apartment was increased by 61.3-141.9%. In 2009: Electricity price was increased by 17.35%. Heat prices in Ulaanbaatar, Darkhan and Erdenet cities were increased by 14.5%. In 2010: Electricity price and heat tariffs increased in WES, Dalanzadgad, Nalaikh, and Baganuur districts.

Page 15: September 2012 Corporate Presentation

15

*Source ERC

115 115 115 115 115

79.8 87.4

95.7

110.0 115.0

0

20

40

60

80

100

120

140

2010.01.15 2011.01.01 2011.07.01 2012.07.15 2013.07.01

Үнэ нэмэгдүүлэх бодит шаардлага (Real need to increase the price) Хэрэглэгчдэд борлуулах үнэ (Retail/end cost)

Page 16: September 2012 Corporate Presentation

16

* SOURCE ERA

Page 17: September 2012 Corporate Presentation

17

• 50km to East Grid, 150km to West Central Grid • Supply East, Central, South, Just in time to meet shortage • Phase 1a (150MW x 2, T-lines) starts 2013, expected rollout

2016 • Phase 1b (150MW x 2) starts 2014, expected rollout 2017 • Capex Phase 1a: ~$700million, Phase 1b: ~$500million • Debt(10yr) to Equity : 70 to 30 • Tariff (cost +), Lower than Russian import • Approximate Tariff* breakdown: Fuel 15%, O&M 10%, Debt & Interest 40% Tax 11%, Equity 24% *Full Financial worksheet available

Page 18: September 2012 Corporate Presentation

18

• National Electricity Transmission Grid Co. of Mongolia (NETGCO) is buyer

• NETGCO is owned by MOF, MMRE, and SPC

• EDNs collect customer tariff and deposit in escrow

• IPP collects from escrow

• PPA (ver 10), Meter at Plant Site

• Target tariff price indexed for Mongolia/US CPI

• Target sign date Q1, 2013

Page 19: September 2012 Corporate Presentation

19

• RFP issued in Jan 2012, 6 Chinese EPC bids • CFB, air cooled, Mine Mouth • June 30, 3 shortlist, Design Specification Discussion • October 1, Award EPC • 2012: Leveling Site • Q1, 2013: Foundation Concrete • Q1, 2016: 2 x 150MW, Transmission lines • Q1, 2017: total 4 x 150MW • Capex: $1 billion to $1.2 billion

Page 20: September 2012 Corporate Presentation

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• From Chandgana Mine (Chandgana Coal LLC), Licensed

• 3million tonne a year, 3,300 NAR, 0.8% Sulphur

• Mine Mouth Set up, 1.2 billion* tonnes resource

• Chandgana Coal LLC owned by Prophecy Coal Corp.

• $15.5/tonne delivered, annual CPI indexation

• Coal price flexible at start, additional return to Power Plant Sponsor possible

*Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai

consists of 509 mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana

Khavtgai Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC.,

who was an independent Qualified Person under NI 43-101 at time of report. And the Chandgana Tal resource estimate is also based on the September 2007 NI

43-101 Chandgana Tal Technical Report by Behre Dolbear & Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear &

Company (USA), Inc., who is an independent Qualified Person under NI 43-101.. Chandgana Tal has a strip ratio of 0.5:1 and Chandgana Khavtgai has a strip ratio of 2.2:1..

Page 21: September 2012 Corporate Presentation

21

• Government Tender Closed May 1, 2012

• GDF/Sojitz/Posco awarded right to negotiate

• 450 MW gross + heat, built in UB next to CHP3

• Various issues (concession law, land, coal supply, water)

• Construction > 48 months (Prophecy Estimation)

• Co-exist: CHP5 (UB, North), Chandgana (East, South, UB)

2012: 800MW (Russia supplies 150MW), 2017: 1500MW

GAP of 850MW By 2017 (Eliminate Russia supply)

CHP5 net 400MW, Chandgana net 500MW

Page 22: September 2012 Corporate Presentation

22

Chandgana (IPP) CHP5 (Concession)

Ownership Prophecy Power Generation LLC (100%)

GDF Posco Sojitz Newcom

Coal Chandgana Coal LLC Baganuur, Shivee Ovoo

Site Chandgana Mine Mouth UB, by CHP3 (land issue)

Size Phase 1a: 150MWx2 1b: 150MWx4 total

150 MW x 3

Market East, South, UB UB, North

EPC Chinese EPC, Final by Oct Posco?

Status IPP Licensed – PPA stage Concession, Not licensed yet

Request Construction Spring 2013 ?

Operation Start Early 2016 (est 30 months) ? (Korean EPC is 5 yr)

Page 23: September 2012 Corporate Presentation

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Energy Authority of Mongolia ("EA") has entered into a Cooperation Covenant (the "Covenant") with Prophecy to bring the 600 MW Chandgana Power Project online by 2016. Prophecy shall construct and commission the Chandgana Power Plant according to the license issued, with 100 MW Net Electric Output starting from the 1st quarter of 2016, up to 200 MW from the 3rd quarter of 2016, 300 MW from the 1st quarter of 2017, and 400 MW from the 3rd quarter of 2017. Prophecy shall link the Central and Eastern Energy Systems As the Mongolian government's implementation agency, the EA confirms the need to purchase the Net Electric Output described in Clause 3 of the Covenant, to satisfy the electricity energy demands of the central and eastern regions. The obligations and liabilities of the Parties provided in the Covenant shall serve as the guidelines, and basic terms and conditions of the “Power Purchase Agreement” (PPA) to be further entered into between the Seller (Prophecy’s East Energy Development LLC) and Buyer (National Electricity Transmission Grid Company of Mongolia, NETGCO). May, 2012

Page 24: September 2012 Corporate Presentation

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51% 29%

20%

Power Plant JV

StrategicSponsor

PESponsor

Prophecy

Strategic Sponsor: • Granted right to 51% power plant • Granted EPC (option) and O&M • Fund Prophecy Operation to PPA • Lead arranger of power plant financing PE Sponsor participates in financing Prophecy retained 20% carried interest by -contributing license and local knowledge -finalize PPA, EPC,FUEL SUPPLY contracts -expert team to move the project forward.

Page 25: September 2012 Corporate Presentation

25

70%

30%

Project Financing (~$1.2b*)

Debt

Equity

Debt Financing: Exim, CDB, EPC Supplier Phase 1a (150MW x 2, 155km T-line to West) $700 million x 70% = $490million Phase 1b (total 150MWx4, 205km T-line East-West) $500 million x 70% = $350million Equity Financing: Strategic Sponsor, PE Sponsor Phase 1a (2013) : $700million x 30% = $210million Phase 1b (2014) : $500million x 30% = $150million

*EPC estimate, could be less Will be firmed by Oct 31

Page 26: September 2012 Corporate Presentation

2013 2014

Strategic Sponsor (IPP) (51%) $130 $95

Private Equity Sponsor (29%) $80 $55

Prophecy (20% carry) 0 0

Total $210 $150

Equity Commitment by year ($million)

Based in total EPC $1.2 billion, equity to debt of 30 / 70

Prophecy gets 20% free carry by contributing license and local knowledge, finalize PPA, EPC,FUEL SUPPLY contracts, and expert team to move the project forward.

Page 27: September 2012 Corporate Presentation

27

20%

80%

Coal JV

Power Sponsor Prophecy Strategic Sponsor buys 20% of Coal JV (one time upfront payment) Prophecy will develop Coal Mine (total ~$70million) Power Plant Sponsor will finance its 20% Guarantee supply to plant for 25 years Starting price $15.5/t, possible to reduce Coal price to accelerate plant payback

Page 28: September 2012 Corporate Presentation

2nd Phase 3,000+MW

Would enable Mongolia to export power directly into China

28

Source: SSE, sxcoal, McQuarie Research

Beijing

Page 29: September 2012 Corporate Presentation

29

• Commissioned in 2006 by China State Grid

• 3,600 MW (600MW x 6) built in Mongolia

• CAPEX and Tariff calculated

• Based on a coal deposit owned by Mongolian Gov’t

• The Feasibility Study is available upon request

Propose: 3,600 MW Feasibility Study (2012) 3,600 MW Export MOU (2013) 3,600 MW License (2013), Construction (2014), Power on (2017)

Page 30: September 2012 Corporate Presentation

30

Page 31: September 2012 Corporate Presentation

100% Owned – Status: Commissioned

Resource: 209 million tonnes*

1.8: 1 Strip Ratio – Single 50 meter

seam

Production:

2011: 200,000 tonnes

2012: 300,000 tonnes (est.)

5,100 kcal/kg NAR, next to road, 10km

from Russian Border

$52 million invested

May 2011

*Coal resources of 174 million tonnes measured and 34 million tonnes indicated from the NI 43-101 Behre Dolbear report prepared in 2007.

**Information based on Dec. 2010, 43-101 Prefeasibility Study by Wardrop Engineering. The qualified persons responsible for the preparation of this

NI 43-101 Technical Report and PFS are Brian Saul, P. Eng. (Mining) and Dr. Steve Krajewski, P. Geo., MSME (Resource Estimate Review).

31

Page 32: September 2012 Corporate Presentation

32

Blending Plant Demand: 2mt pa

~350kms

Ulaan Uvoo

Gusinoozersk TPP Demand: 1mt pa

Ulan- Ude TPP 1 & 2 Demand: 1mt pa

Transmission Line

Transmission Line to UB

Page 33: September 2012 Corporate Presentation

Top Free-On-Rail Domestic Pricing = USD 38/t, up 50% YOY Mine gate pricing = USD 25/t conditional on opening Zeltura (Russian export) Current production stopped • Bridge repair (estimated to year end) • Received support to transport through Zeltura • Stockpiled 180,000t on site (for remainder 2012 sales)

Page 34: September 2012 Corporate Presentation

Shares 227 million (basic); 263 million (diluted)

Market

Capitalization ~$42 million (52week high $200m, 52week low $42m)

Ownership 50% Retail, 30% Institutional, 20% Management & Directors

Marketable

Securities $38million

Locations Canadian Office: Vancouver, BC Canada

Mongolian Office: Ulaanbaatar, Mongolia

*As of 08/29/12 34

Page 35: September 2012 Corporate Presentation

35

John Lee, CFA – Chairman / CEO

• Founder of Prophecy Coal Corp. and Prophecy Platinum Corp.

VP Sharma – Technical Advisor

• 40 years experience in the power. Joined CLP Group in 1978. Former Director-

Head of India, Managing Director of GPEC and CEO of CLP Power India, Regional

Business Manager CLP Power Asia.

Jivko Savov - Director

• Deputy CEO of En+, company owned by Oleg Derispeska

• Former Chairman of Rusal, Chairman of EuroSibEnerg

Joseph Li - General Manager, Corporate Secretary, Director

• Former Senior Auditor with the BC Ministry of Finance; oversaw successful spin-

out of Prophecy Platinum Corp. and acquistion of Shakespeare project.

Michael Deats - Director

• Former Managing Director of BP Coal South Africa, Ex-Director of Eskom

Page 36: September 2012 Corporate Presentation

CANADIAN OFFICE

342 Water Street – 2nd Floor

Vancouver, BC

Canada V6B 1B6

Phone: 604-569-3661

Fax: 604-569-3617

Toll Free: 1-800-459-5583

[email protected]

MONGOLIAN OFFICE

8/F Monnis Tower, Chinggis

Ave.

1st Khoroo, Sukhbaatar District

Ulaanbaatar, Mongolia

Tel: +976.11.331669

Fax: +976.11.312721

[email protected]

36

Page 37: September 2012 Corporate Presentation

The information contained in this presentation (“Presentation”) has been prepared by Prophecy Resources Corp. (“Company”) and is being communicated for general background informational purposes only. The

Presentation has not been independently verified and the information contained within is subject to updating, completion, revision, verification and further amendment. Neither the Company, nor its shareholders, directors,

officers, agents, employees, or advisors give, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in

this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability

therefore is expressly disclaimed. Information contained in this Presentation is the property of the Company. It is made available strictly for the purposes referred to above. Neither the communication of this Presentation

nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction. This Presentation does not constitute, or form part of, any offer or invitation to sell or issue,

or any solicitation of any offer to subscribe for or purchase any securities in the Company, nor shall it, or the fact of its communication, form the basis of, or be relied upon in connection with, or act as any inducement to

enter into, any contract or commitment whatsoever with respect to such securities. The communication of this Presentation in or to persons in certain jurisdictions may be restricted by law and persons who may rceive

communication of this Presentation should inform themselves about, and observe, any such restrictions in advance of communication to them of this Presentation. In particular, this Presentation has not been approved by

an authorised person pursuant to Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and accordingly it is being delivered in the United Kingdom only to persons to whom this Presentation may be

delivered without contravening the financial promotion prohibition in Section 21 of the FSMA. Those persons are described in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Order”)

and include persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 (investment professionals) of the Order. In addition, other than a

limited number of persons reasonably believed to be qualified institutional buyers (as defined in Rule 144A under the US Securities Act of 1933, as amended) or accredited investors (as defined in the National Instrument

45/106), neither this Presentation nor any copy of its may be transmitted into the United States of America or Canada or distributed directly or indirectly, in the United States of America or Canada, or to any resident thereof

except in compliance with the applicable securities laws. Any failure to comply with these restrictions may constitute a violation of applicable US or Canadian securities laws. By accepting communication of this

Presentation, the recipient represents and warrants that it is a person to whom this Presentation may be communicated without a violation of the laws of any relevant jurisdiction. This Presentation is not to be

communicated to any other person or used for any other purpose and any other person who receives communication of this Presentation should not rely or act upon it. In furnishing this Presentation, the Company does

not undertake or agree to any obligation to provide the attendee with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation that may

become apparent either during, or at any time after this Presentation. This Presentation contains or incorporates by reference “forward-looking information” which means disclosure regarding possible events, conditions,

acquisitions, or results of operations that is based on assumptions about future conditions and courses of action and includes future oriented financial information with respect to prospective results of operations, financial

position or cash flows that is presented either as a forecast or a projection, and also includes, but is not limited to, statements with respect to the future financial and operating performance of the Company any of its

subsidiaries and other considerations as set out in more detail in the documents filed by the Company with the Toronto Stock Exchange. Often, but not always, forward-looking statements can be identified by the use of

words such as “plans”, “proposes”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or

state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may

cause the actual results, performance or achievements of the Company and/or its current and proposed subsidiaries to be materially different from any future results, performance or achievements expressed or implied by

the forward-looking statements. Forward-looking statements contained herein are made as of the date of this Presentation and the Company disclaims any obligation to update any forward-looking statements, whether as

a result of new information, future events or results or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. In addition, investors are

cautioned that this presentation may contain information about mineral properties adjacent to or near the Company’s properties and in which the Company has no right or interest. Mineral deposits on such adjacent or near

properties are not indicative of the mineral deposits, if any, which may be found on the Company’s properties. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX

nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release. 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 matters which 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 the Company 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, statements regarding

the development and production of the Company’s Chandgana Power Plant and other information concerning possible or assumed future results of operations of Prophecy. Material risks and uncertainties which could

cause actual results to differ materially from such forward-looking statements include, but are not limited to, exploration, development and production risks, risks related to the Company not having a history of mineral

production, risks related to the development of the Chandgana Power Plant, risks related to the uncertainty of mineral resource and mineral reserve estimates, the cyclical nature of the mining industry, risks related to the

availability of capital and financing on acceptable terms, commodity price fluctuations, currency exchange rate and interest rate risks, 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, and unanticipated environmental impacts on

operations and costs to remedy same. Assumptions underlying our expectations regarding forward-looking statements or information contained in this Presentation include, among others, that all required third party

contractual, regulatory and governmental approvals will be obtained for the development, construction and production of the Company’s properties, there being no significant disruptions affecting operations, whether due to

labour disruptions, currency exchange rates being approximately consistent with current levels, certain price assumptions for coal, prices for and availability of diesel, parts and equipment and other key supplies remaining

consistent with current levels, production forecasts meeting expectations, the accuracy of the Company’s current mineral resource and reserve estimates, labour and materials costs increasing on a basis consistent with

the Company’s current expectations and that any additional required financing will be available on reasonable terms. Although Prophecy has attempted to identify important 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 not anticipated, 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 to update or revise any forward looking

statements, whether as a result of new information, future events or otherwise, except as required by law.

Disclaimer

37

Page 38: September 2012 Corporate Presentation

Total Electricity Consumption

Source: China Electricity Council

0

1000

2000

3000

4000

5000

6000

2007 2008 2009 2010 2011 2012E

Billion

kWh

38

Page 39: September 2012 Corporate Presentation

Source: International Energy Agency (IEA Statistics © OECD/IEA, http://www.iea.org/stats/index.asp), Energy Statistics and Balances of Non-OECD Countries and Energy Statistics of OECD Countries.

Ele

ctr

ic p

ow

er

co

nsu

mp

tio

n

(kW

h p

er

cap

ita

)

39

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2006 2007 2008 2009

Mongolia

China

India

Japan

USA