Prophecy Signs Toll Milling LOI to Produce Zinc-Silver and Lead-Silver Concentrates from Pulacayo Project, Bolivia

Vancouver, British Columbia (FSCwire) - Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTC:PRPCD, Frankfurt:1P2N) is pleased to announce that it has signed a letter of intent (“LOI”) for toll milling services with the Bolivian company, Empresa Minera Señor de Maica (the “Service Provider”) whereby the Service Provider will provide dedicated toll milling services at its ore processing facility (the “Processing Plant”) located in Potosi, which is a 2.5 hour drive by car, on paved road from Pulacayo.

The toll milling services will entail the processing of mined product, to be supplied by the Company, utilizing conventional crushing, grinding and flotation technology to produce zinc-silver and lead-silver concentrates.

The Processing Plant will be dedicated to mined product supplied exclusively by the Company to optimize recoveries and avoid co-mingling with mined product from third parties so that during the contract term, only mined product supplied by the Company will be processed at the Processing Plant.

The Service Provider will provide toll milling services for a minimum of 5,000 tons of mined product per month, at a fixed price (in US dollars) per tonne of mined product processed.

The Service Provider will be responsible for all costs incurred in providing the toll milling services, which will include (but not be limited to) the cost of power, water, chemicals, labour, fuel, unloading of mined product from the Company’s trucks at the Processing Plant location, loading of concentrate onto the Company’s trucks at the Processing Plant location, management of the tailing facility and other costs associated with providing the toll milling services.

The Company will commence supply of the mined product to be processed at the Processing Plant on or about April 1, 2017. The grade of the mined product to be supplied by the Company will be: silver 100 to 200 g/t, zinc up to 5% and lead up to 5%.

The Service Provider will guarantee minimum metal recoveries for silver of 80%, zinc 70% and lead 70%.

The proposed payment terms are: 20% in advance, paid in the first week of each month, and the remaining 80% balance when the concentrate is ready to be loaded onto the Company’s trucks.

The Company will have the right to have its personnel present at the Processing Plant and to supervise the processing of mined product supplied by the Company at all times. 

The Service Provider will be solely responsible for management of the Processing Plant and its tailing facility, and for any damage including environmental damage caused by the Processing Plant and its tailing facility operations.

The Service Provider is an experienced private enterprise that owns and operates multiple ore processing facilities in and around Potosi.  Pictures of the Service Provider’s ore processing facility are available at www.prophecydev.com.

The LOI will expire without any effect to Prophecy or the Service Provider if a final toll milling service contract is not signed on or before April 1, 2017. The proposed term of the final contract for toll milling services will be 18 months.

The mined material to be supplied by the Company is expected to be mined from its Paca and/or Pulacayo deposits located within the Company’s Pulacayo project concessions.

Mercator Geological Services Limited produced the Paca, and Pulacayo technical reports, which are compliant with National Instrument 43-101, disclose the resource estimates prepared according to the CIM Definition Standards for Mineral Resources and Reserves, and were filed on SEDAR by the Company. The resource estimates by Mercator and contained metals estimated by the Company are as follows:

Contained metals in September 9, 2015 Paca*** mineral resource estimate:

Contained metals in June 16, 2015 Pulacayo*** mineral resource estimate:

 *Figures are rounded to nearest 100,000 or 0.1 million

 **Ag Eq. cut-off value adopted by the Company

 ^***Based on the resource estimate Ag Eq. cut-off value adopted by the Company

A positive production decision would not be based on a feasibility study of mineral reserves demonstrating economic and technical viability so would carry increased uncertainty and the risk of failure as to the mining method and profitability.

Qualified Persons

The technical content of this news release was reviewed and approved by Christopher M. Kravits, CPG, LPG, who is a Qualified Person within the meaning of NI 43-101. Mr. Kravits is a consultant to the Company and serves as its Qualified Person and General Mining Manager.

About Prophecy

Prophecy Development Corp. is a Canadian public company listed on the Toronto Stock Exchange that is engaged in developing mining and energy projects in Mongolia, Bolivia and Canada.  Further information on Prophecy can be found at www.prophecydev.com.

Prophecy Development Corp.
ON BEHALF OF THE BOARD

“JOHN LEE”
Executive Chairman

For more information about Prophecy, please contact Investor Relations:

+1.888.513.6286

ir@prophecydev.com

www.prophecydev.com

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

Certain statements contained in this news release, 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 applicable 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 to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These estimates and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies, many of which, with respect to future events, are subject to change and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by Prophecy. In making forward-looking statements as may be included in this news release, Prophecy has made several assumptions that it believes are appropriate, including, but not limited to assumptions that: there being no significant disruptions affecting operations, such as due to labour disruptions; currency exchange rates being approximately consistent with current levels; certain price assumptions for coal, prices for and availability of fuel, parts and equipment and other key supplies remain consistent with current levels; production forecasts meeting expectations; the accuracy of Prophecy’s current mineral resource estimates; labour and materials costs increasing on a basis consistent with Prophecy’s current expectations; and that any additional required financing will be available on reasonable terms. Prophecy cannot assure you that any of these assumptions will prove to be correct.

Numerous factors could cause Prophecy’s actual results to differ materially from those expressed or implied in the forward-looking statements, including the following risks and uncertainties, which are discussed in greater detail under the heading “Risk Factors” in Prophecy’s most recent Management Discussion and Analysis and Annual Information Form as filed on SEDAR and posted on Prophecy’s website: Prophecy’s history of net losses and lack of foreseeable cash flow; exploration, development and production risks, including risks related to the development of Prophecy’s mineral properties; Prophecy not having a history of profitable mineral production; the uncertainty of mineral resource and mineral reserve estimates; the capital and operating costs required to bring Prophecy’s projects into production and the resulting economic returns from its projects; foreign operations and political conditions, including the legal and political risks of operating in Bolivia, which is a developing jurisdiction; amendments to local Bolivian laws which may have an adverse impact on the Company’s operations; title to Prophecy’s mineral properties; environmental risks; the competitive nature of the mining business; lack of infrastructure; Prophecy’s reliance on key personnel; uninsured risks; commodity price fluctuations; reliance on contractors; Prophecy’s need for substantial additional funding and the risk of not securing such funding on reasonable terms or at all; foreign exchange risks; anti-corruption legislation; recent global financial conditions; the payment of dividends; and conflicts of interest.

These factors should be considered carefully, and readers should not place undue reliance on Prophecy’s forward-looking statements. Prophecy believes 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 has 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 undertakes 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.

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