October 23, 2018
Last week, Toronto listed Prophecy Development Corp. (TSX: PCY, OTCQX: PRPCF) announced the appointment of Gerald Panneton as the Prophecy’s President and new Chief Executive Officer, effective October 10, 2018, replacing Prophecy’s founder John Lee, who will remain as Chairman of the Board of Directors of the Company.
Prophecy is developing the Gibellini project – the only large-scale, open-pit, heap-leach vanadium project of its kind in North America. Located in Nevada, Gibellini has the largest NI 43-101 compliant measured and indicated primary vanadium resource known in the USA and is currently undergoing EPCM and EIS preparation. Further information on Prophecy can be found at www.prophecydev.com.
Vanadium pentoxide price reached all time high of $31.5/lb (www.vanadiumprice.com) from 2016 low of $2.5/lb due to Chinese upgrading of vanadium intensity in steel re-enforcement bars in the construction industry, as well as increasing vanadium usage in the aerospace industry and large scale vanadium batteries in the utility industry.
Mr. Panneton is a geologist with over 30 years experience in mineral exploration and development, and was the founder, President and CEO of Detour Gold Corporation ("Detour Gold") from its incorporation in July 2006 until November 2013. Under his leadership, the Detour Lake project grew over tenfold from 1.5 million ounces in resources to over 16 million ounces in reserves and into production. Today, the Detour Lake mine ranks as one of the largest gold mines in Canada. Mr. Panneton helped raise approximately $2.6 billion in capital while at Detour Gold.
Mr. Panneton and his Detour Gold team were the recipients of the PDAC 2011 Bill Dennis Award for Canadian mineral discoveries and prospecting success of the year.
Mr. Panneton commented that: “I am very excited to join the Prophecy team to work on the Gibellini vanadium project in Nevada. The Gibellini project represents an excellent opportunity to be developed in the very near future, as it stands to be a low-cost producer due to its very low strip ratio, and a low-cost heap leach operation in the mining friendly state of Nevada. I envision the Gibellini open pit project to have an excellent chance of expanding its resource base, in much the same way that I lead Detour Gold in exploring, financing and developing the Detour Lake project to become Canada's top gold mine with an annual gold production in excess of 500,000 oz today.”
John Lee commented that: “Gerald and I spent some time recently in Nevada, kicking rocks at Gibellini, and meeting and talking to regulators, community leaders, geologists and engineers. It's clear Gerald shares the same passion as Prophecy’s team for the Gibellini project and there is great chemistry”.
From August 2016 to October 2017, Mr. Panneton was also President and CEO of NewCastle Gold Ltd. ("NewCastle Gold"), for the Castle Mountain gold project in California, before NewCastle Gold was acquired via merger with Trek Mining Inc. and Anfield Gold Corp. (now named Equinox Gold Corp.). Serious track records
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From 1994 to 2006, Mr. Panneton was with Barrick Gold Corporation ("Barrick Gold") where for the last six years of his tenure, he was Director of Advanced Projects and Evaluations for the exploration and corporate development group. He was very instrumental in bringing the Tulawaka and Buzwagi projects in Tanzania into production after the Pangea Goldfields Inc. acquisition in 2000.
In a recent investor-intel skype interview (at https://twitter.com/johnlee25893955?lang=en),Gerald was asked why he took on this role at this point in his career?
Gerald Panneton: It is very simple. I am a shareholder too. More importantly is that I have already built three mines during my career; two at Barrick and one with the Detour Lake project. You do not join a company because you just want to join a company. There must be a reason. The main reason is that Prophecy Development or PCY ticker is undervalued, tremendously undervalued compared to the value of the vanadium deposit.
Also, Louis Dionne was appointed to the Company’s Board of Directors. Mr. Dionne is a corporate director, mining consultant, and professional engineer who has spent over 30 years in the operation and development of gold properties. He served as President and Chief Executive Officer of Richmont Mines Inc., a Canadian gold producer until 2005. Richmont was acquired by Alamos Gold Inc. for $833 million in September 2017.
From 1981, Mr. Dionne worked for Camflo Mines Ltd., American Barrick Resources Corporation, and Barrick Gold as Senior Vice President Operations until 2003, where he also provided technical input and leadership in the area of corporate mergers and acquisitions. Mr. Dionne obtained his Bachelor’s degree in Mining Engineering from Laval University. He also served as a director with Detour Gold, Aurizon Mines Ltd. and other boards.
Nick Hodge of the outsider Club (https://www.outsiderclub.com/) on Friday issued an alert to its subscribers with following highlights:
“An updated, 2018 PEA pegged the after-tax NPV at US$338.3 million and the IRR at 50.8%. Gibellini contains 129.28 million pounds of vanadium pentoxide (V205) grading 0.294%. The current mine plan envisions producing 9.65 million pounds annually for over 13 years, paying back its capital cost of US$116.8 million in 1.72 years. The after tax net present value of the Gibellini vanadium project is north of US$338 million, meaning Prophecy is trading at a significant discount to its project value.
That was all done at a vanadium price of $12.73 per pound. Vanadium prices are currently twice that.
Two weeks after my March trip, Prophecy put out a news release that Northwest Nonferrous had entered into a technical advisory and cooperation agreement to advance the Gibellini project. And they may become an equity holder.
Couple this with the fervor in vanadium that is expected to continue, including China becoming a net importer, and the sector is ripe for increased valuations from which I believe Prophecy will benefit.
Plus it has the additional benefits of an experienced Chinese partner, an oxidized black shale ore that doesn’t need roasting, and a streamlined permitting process with the tailwind of a newly-supportive government.
Shares have been as high at C$0.50 in the past year but now trade at ~C$0.285.
We are buying Prophecy Development Corp. (TSX-V: PCY)(OTC: PRPCF) below C$0.50.”
“Gibellini Vanadium Project, Eureka County Nevada, NI 43-101 Technical Report on Preliminary Economic Assessment” filed May 29, 2018 "
Gibellini Video Footage can be viewed at
Independent Speculator Interviews with Prophecy Chairman can be viewed at
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Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Forward-looking statements in this news release relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the PEA representing a viable development option for the project; (ii) construction of a mine at the project and related actions; (iii) estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods; (iv) the estimated amount of future production, both produced and metal recovered; and (vi) life of mine estimates and estimates of operating costs and total costs, cash flow, net present value and economic returns including internal rate of return estimates from an operating mine constructed at the project. All forward-looking statements are based on Prophecy’s or its consultants’ current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include: (i) the presence of and continuity of vanadium mineralization at the project at estimated grades; (ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results; (iii) infrastrucature construction costs and schedule; (iv) the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times; (v) currency exchange rates; (vi) vanadium sale prices; (vii) appropriate discount rates applied to the cash flows in the economic analysis; (viii) tax rates applicable to the proposed mining operation; (ix) the availability of acceptable financing on reasonable terms; (x) projected recovery rates and use of a process method, that although well-known and proven on other commodity types like copper, has not been previously brought into production for a vanadium project; (xi) reasonable contingency requirements; (xii) success in realizing proposed operations; and (xiii) assumptions that project environmental approval and permitting will be forthcoming from county, state and federal authorities. The economic analysis is partly based on Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these Mineral Resources will be realized. Currently there are no Mineral Reserves on the Gibellini property. Although the Company’s management and its consultants consider these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.
These factors should be considered carefully, and readers should not place undue reliance on Prophecy’s or its consultant’s forward-looking statements. Prophecy or its consultants believe that the expectations reflected in the forward-looking statements contained in this news release and the documents incorporated by reference herein are reasonable, but no assurance can be given that these expectations will prove to be correct. In addition, although Prophecy and its consultants have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Prophecy or its consultants undertake no obligation to release publicly any future revisions to forward-looking statements to reflect events or circumstances after the date of this news or to reflect the occurrence of unanticipated events, except as expressly required by law.