Prophecy Coal to purchase Tethys Mining exploration licenses

Prophecy Coal's  stocks (CVE:PCY) gained 13% today after announcing their binding agreement with Tethys Mining for coal exploration licenses.

The agreement, subject to approval from the Minerals Resource Authority of Mongolia, outlines the purchase agreement as including the Chandgana and Tugalgatai licenses.  The contract requires Prophecy to pay an initial $10 million and a subsequent 8.5% royalty of coals sales from the two licenses.

Estimations from the Tethys Mining company indicate a resources of 540 million tonnnes of thermal coal.

The transaction is scheduled for completion in Q3 2012.

Read more on Prophecy Coal's license agreement >>