Apogee Enters Into Definitive Agreement With Prophecy Coal Corp.

TORONTO, ONTARIO--(Marketwired - Nov. 4, 2014) -

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Apogee Silver Ltd. ("Apogee" or the "Company") (TSX VENTURE:APE) has entered into a definitive agreement (the "Definitive Agreement") with Prophecy Coal Corp. ("Prophecy") (TSX:PCY), whereby Prophecy has agreed to acquire Apogee's wholly owned subsidiaries Apogee Minerals Bolivia S.A. and ASC Bolivia LDC (the "Subsidiaries"), which in turn hold the Pulacayo-Paca Silver Lead Mining Project in Bolivia (the "Proposed Transaction").

In connection with the Proposed Transaction, which was previously announced on October 15, 2014, Prophecy has agreed to pay Apogee a cash fee in the amount of $250,000, of which $125,000 has been received upon entering into the Definitive Agreement and the remaining $125,000 will be payable upon closing. In addition, Prophecy will issue to Apogee 60 million common shares of Prophecy (the "Consideration Shares") to be placed in escrow. The parties had previously announced that Prophecy would issue 60 million non-voting Class B convertible shares to Apogee but have revised this structure pursuant to the terms of the Definitive Agreement. Upon closing the parties will enter into an escrow agreement whereby the Consideration Shares shall be released from escrow upon certain escrow release conditions being satisfied as follows: (a) over a two year period with the first tranche being released from escrow within 12 months of closing; (b) on an accelerated basis in the event that the Prophecy common shares are trading above certain price thresholds for a period of no less than five consecutive trading days on the TSX; or (c) in the event of certain major triggering events relating to Prophecy. Prophecy has agreed to assume within certain limitations all liabilities, including legal and tax liabilities, associated with the Subsidiaries and the Pulacayo Paca project.

Currently, Prophecy has 251,878,634 common shares issued and outstanding as of the date hereof. Assuming all of the Consideration Shares were released from escrow as of today's date, Apogee would hold a 19.2% interest in Prophecy. Based on the closing price of the Prophecy shares as at November 3, 2014 (being $0.065), the issuance of 60 million Prophecy shares represents an implied value of $3,900,000 to Apogee.