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Prophecy Development Corp (2)
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Prophecy drills 35.5 m of 230 g/t AgEq at Pulacayo

2020-01-21 07:37 ET - News Release

Mr. Michael Doolin reports


Prophecy Development Corp. has released the first stepout diamond drilling results from its 100-per-cent-controlled Pulacayo silver project in the Potosi department of Bolivia. Borehole PUD 267 intercepted 10 metres of mineralization grading 147 grams per tonne silver, 9.8 per cent zinc and 2.0 per cent lead (539 g/t silver equivalent) within 35.5-metre mineralization grading 230 g/t AgEq starting 31.5 metres downhole.

PUD 267 marks Prophecy's first Pulacayo drill hole of the 2020 drilling campaign and the first drilling to be conducted on the property since 2012. A total of 268 historic Pulacayo drill holes were completed between 2008 and 2012 by the previous operator. The results of PUD 267 comes on the back of the success of Prophecy's first drill campaign at Paca (seven kilometres north of Pulacayo), where PND 110 intersected highest-ever grade at Paca of 12 metres of mineralization grading 1,085 g/t silver, starting 16 metres downhole (see company's Oct. 28, 2019, news release). These near-surface, high-grade intersections contribute positively to a potential district-style project economic assessment with consideration of open-pit mining scenarios. There are several other targets controlled by Prophecy within the district that are yet to be drilled but highly promising (that is, Pacamayo, Al Abra and Pero).

PUD 267 intercepted the Tajo vein system 83 metres west from PUD 041 which intersected 20 metres of mineralization grading 15.1 g/t Ag, 2.43 per cent zinc, 0.76 per cent lead at a similar depth to the mineralization encountered at PUD 267. PUD 041 (drilled in 2008) represents the westernmost drill hole that comprises the company's 2017 National Instrument 43-101-compliant Pulacayo resource (Eastern block). These results confirm that the Tajo vein system extends westward and occurs near surface, with a probable thickening component for a minimum 83-metre extension to the west of the Eastern block.

The Eastern block spans 1.4 km in strike, roughly 300 metres of vertical section and contains 30.4 million indicated silver ounces and 6.4 million inferred silver ounces estimated in the independent NI 43-101 report by Mercator of October, 2017 (see the company's press release dated Nov. 22, 2017).

PUD 267 was planned based on a vertical projection of Pulacayo's historic underground workings, which followed the Tajo vein system. These workings exist between 400 metres and 1,000 metres from the surface with mined grades of 10 per cent to 25 per cent Zn and 300 g/t to 800 g/t Ag (according to Hochschild mining records from 1914 to 1960). The results of PUD 267 reveal strong potential for existing mineralization from near surface in the intervening depths to the workings approximately 400 metres below.

The current 20-hole, 5,000-metre stepout program is due for completion in early February, with full assay results expected to be released throughout February.

"PUD 267 starts a sensational new chapter for Pulacayo. We're happy that our scientific approach to outlining our 2020 drilling program has yielded favourable results on its very first hole," said Joaquin Merino, Prophecy's vice-president for South American operations. "A successfully proven mineralized western extension of the Eastern block could considerably increase the Pulacayo in situ silver resource ounces. That is our main objective for 2020."

Prophecy has identified targets as far as 1.4 kilometres west of PUD 041 and is current drilling PUD 278, which is situated 600 metres west of PUD 041.

The Eastern block represents a very small portion of the Tajo vein system, which is over three km in strike and open to least 1,000 metres at depth. Although it is still early in the company's multiphase drill campaign, Prophecy is very pleased and highly encouraged by the drill progress to date to achieve the company's 2020 objective.

Reported widths are intercepted core lengths and not true widths, as relationships with intercepted structures and contacts vary. Based on core-angle measurements, true widths are estimated at approximately 61 per cent of reported core lengths.

Silver equivalent is calculated as follows: AgEq (g/t) equals Ag (g/t) times 89.2 per cent plus (Pb per cent times (94 U.S. cents/pound Pb divided by 14.583 troy ounces/pound/$16.50 (U.S.) per Troy ounces Ag) times 10,000 times 91.9 per cent) plus (Zn per cent times ($1 (U.S.)/pound Zn divided by 14.583 troy ounces/pound/$16.50 (U.S.) per Troy ounce Ag) times 10,000 times 82.9). This calculation incorporates metallurgical recoveries from testwork completed for Pulacayo in 2013.

Qualified person

The technical contents of this news release have been prepared under the supervision of Danniel Oosterman, vice-president, exploration. Mr. Oosterman is not independent of the company in that he is employed by it. Mr. Oosterman is a qualified person (QP) as defined by the guidelines in NI 43-101. Prophecy adopts industry-recognized best practices in its implementation of QA/QC methods. A geochemical standard control sample and a blank sample are inserted into the sample stream at every 20th sample. Duplicates are taken at every 40th sample. Standards and duplicates (including lab duplicates and standards) are analyzed using Thompson-Howarth plots. Samples are shipped to ALS Global Laboratories in Ururo, Bolivia, for preparation and then shipped to ALS Global laboratories in Lima, Peru, for analysis. Samples are analyzed using intermediate level four-acid digestion. Silver overlimits are analyzed using fire assay with a gravimetric finish. The ALS Laboratories sample management system meets all the requirements of International Standards ISO/IEC 17025:2017 and ISO 9001:2015. All ALS geochemical hub laboratories are accredited to ISO/IEC 17025:2017 for specific analytical procedures.

All samples are taken from HQ-diameter core and split in half by a diamond blade masonry saw. One-half of the core is submitted for laboratory analysis and the other half is preserved for reference at the company's secured core facility. Prior to sampling, all core is geotechnically analyzed and photographed and then logged by geologists.

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