Chandgana Coal-Fired Power Plant Project 600 MW (4X150 MW)

Chandgana Coal-Fired Power Plant Project 600 MW (4X150 MW)
The Chandgana Coal-Fired Power Plant Project includes building of a 600 MW (4X150 MW) coal
fired mine-mouth power plant. Phase one will be 300 MW (2 x 150MW). The power plant will be
located 7km from highway and 2km from the Chandgana Tal coal deposit (owned by Prophecy
Development Corp.) in Central Mongolia. The power plant license is currently held by Prophecy
Power Generation, a Mongolian subsidiary of Prophecy Development Corp.
Power Plant Location
Chandgana Power
The project is expected to deliver a number of measurable benefits to Mongolia:
• Contribute to pollution reduction - Various studies have linked Ulaanbaatar air pollution to
respiratory death and women miscarriages. Chandgana power plant will eliminate the need
of additional power plants in Ulaanbaatar and reduce dependence on power plant #3 and #4,
which emit heavy nitrogen and sulphur harmful participles in excess due to their age.
• Save water, coal transportation and operational cost - Chandgana power plant will be built
next to the Chandgana coal mine, 300 km east of Ulaanbaatar. This will avoid transporting 2
to 4 millions tonnes of coal to congested city (more than 100 wagons per day). Water will be
extracted from the mine and avoids sharing precious water resource (up to 6 million tonnes
per year, 16,000 tonnes per day) within city of Ulaanbaatar. Water Scarcity problem will
emerge in 2015 in Ulaanbaatar, and intensify from 2020 onwards. Assuming each UB resident
I consuming 20 liters of water a day, a new power plant will take water away from about
800,000 residents annually.
• Energy independence - Chandgana power plant project will reduce expensive power import
from Russia and China, and achieve Mongolia energy independence. Mongolia is projected to
import over 450 MW from Russia and China before 2018. Prophecy proposed electricity tariff
will be lower than import with exemption from income tax, VAT, customs duty. The power
plant is planned to start supplying power to Mongolian system from 2018.
• Relief on power supply shortage - Chandgana power plant is planned to supply power to
Mongolian system from 2018. Mongolia GDP roughly doubles every 5 years from mining
production. Currently installed capacity is 800MW and demand expects to double by 2020
• Stabilization of transmission grid - Prophecy will finance transmission line from Baganuur to
Chandgana in phase 1, and Chandgana to Choir in phase 2. The new lines will increase the
network stability and security of electricity supply in the Mongolian power grid.
• Good location - Chandgana is 300 km away from Ulaanbaatar, 150 km from Choir (further to
South Gobi) and 120 km from Choibalsan. Therefore, it can potentially provide power to
Ulaanbaatar, South and East.
• Project readiness – Chandgana power plant project is 3 years under development and is
ready for construction with construction license, environmental impact assessment, land use
rights, mining license. Over 10 EPC contractors expressed interest since 2012 and several
binding EPC proposals have been received with competitive price and short construction time
frame (36 months). Construction can start right after Concession Agreement, PPA, Tariff
Agreement and Financial Close.
• Extension to Coal to Gas and Coal to Liquid project – Chandgana is next to highway, has
plenty of land and estimated 3.5 billion tonnes of coal resource in the nearby basin. Once
power project is operational, it is natural progression to develop coal to gas and coal to liquid
• Private sector investment and boost employment – the development of the project will be
funded by the private sector and will serve to boost foreign direct investments to Mongolia
and Khentii province. Once in operation Chandgana power plant and mine is expected to hire
over 600 full time skilled local staff, become biggest revenue and skill employment generator
in Khentii and doubles Khentii’s GDP from current MNT86 billion to over MNT 160 billion.
Chandgana Power Plant Milestones
License / Approval
Power Plant Detailed Environmental Impact Assessment
Nov 2010
√ Received
Chandgana Coal Mining License
Jan 2011
√ Received
Power Transmission Line EIA Approval
Aug 2011
√ Received
600 MW Chandgana Power Plant Construction License
Nov 2011
√ Received
Chandgana Coal EIA Approval
Nov 2011
√ Received
Power Purchase Agreement
Sep 2012
Firm EPC Bids
Sep 2012
√ Received
Chandgana Coal Preliminary Economic Assessment
Nov 2012
√ Received
Project Finance Debt Term Sheet
Jan 2013
√ Received
Geotechnical Study
Feb 2013
√ Received
Chandgana Power Plant Land Use Approval
Mar 2013
√ Received
Water & Power Supplies to Site During Construction Permits
Mar 2013
√ Received
Preliminary Mobilization Work
Apr 2013
Electricity Tariff Proposal from the Working Group
May 2013
√ Received
Coal Supply Agreement
Jun 2013
√ Received
Application for Concession
Aug 2013
Project Qualified under Concession
Feb 2014
√ Approved
Invitation from Ministry of Economic Development to Negotiate on
Concession Agreement #7/2055
Oct 2014
√ Received
Chandgana Power Plant Project Location
Chandgana aerial view, 100 sqkm land
> 1 bt coal, featuring 40m thick coal
seam outcrop
Next Steps:
• Signing of the Concession Agreement and Power Purchase Agreement: 2015
• Award of the EPC contract: 2015
• Project Financing (Debt + Equity) 2015-2016
• Construction and COD: 2016-2019
2nd Floor, 342 Water Street
Vancouver, BC
Canada V6B 1B6
Email: [email protected]
Tel: +1.604.569.3661
Fax: +1.604.569.3617
Cautionary Note Regarding Forward-Looking Statements
This summary may include certain “forward-looking statements” within the meaning of applicable Canadian
securities legislation. All statements, other than statements of historical fact, included herein, including, without
limitation, statements regarding future plans and objectives of the Company , projected capital and operating
expenses, permitting approvals, timetable to permitting and production and the prospective mineralization of the
properties, are forward-looking statements that involve various risks, assumptions, estimates and uncertainties.
Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or 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". There can
be no assurance that such statements will prove to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Forward-looking information is subject to known and unknown
risks, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the
actual results of current exploration activities; acquisition risks; and other risks of the mining industry. Although the
Company has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors that cause results not to be as anticipated,
estimated or intended. These statements reflect the current internal projections, expectations or beliefs of Prophecy
Development Corp. (“the Company” or “Prophecy”) and are based on information currently available to the
Company. The Company does not undertake to update any forward-looking information, except in accordance with
applicable securities laws.
The technical content of the Company’s presentation was reviewed and approved by Chris Kravits P.Geo., who is a
Qualified Person within the meaning of National Instrument 43-101. Mr. Kravits has reviewed and approved the
scientific and technical aspects of this presentation.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources – The
information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States
investors are advised that while such terms are recognized and required by Canadian regulations, the United States
Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have a great
amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that
all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be
converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an
inferred mineral resource exists, or is economically or legally mineable.