Prophecy Coal Corporation announced that Ulaan Ovoo, Mongolia, coal mining operations have been temporarily suspended since July 2012 because the current stockpile of coal is sufficient to meet contractual supply obligations through the balance of 2012. Approximately 80 mining staff were laid off and paid aggregate severance of approximately USD 100,000 to comply with local employment laws.

Some 15 staff members remain on site for equipment and site maintenance, shipping and security operations during the shutdown. With little local employment competition, the local labor force is expected to remain available for prompt rehire when needed. The shutdown is expected to run for approximately 6 months but could end sooner if any significant new coal sale agreements are entered into.

Start up can be effected in a matter of weeks. Management is using the downtime to work with Mongolian officials to seek road and bridge improvements and to open Zeltura border to facilitate Russia export sales. The overall effect of the suspended operations will be modestly cash flow positive as Ulaan Ovoo operations had not yet achieved break even levels. The Company's priority is to conclude Chandgana power plant JV discussion.

Source - Prophecy Coal

(www.coalguru.com)