Prophecy Coal Announces Zelter Border Approval

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Vancouver, British Columbia, September 19, 2014 – Prophecy Coal Corp. (“Prophecy” or the “Company”) (TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2) is pleased to announce the approval of the Company’s General Development Plan (the “GDP”) for the Zeltura border port in Selenge province, Mongolia.

Based on Article 17.4.5 of the Mongolian Border Control and Ports of Entry and Customs Law, Provision No. 4.8 of the Border Ports National Council of Mongolia (the “BPNC”) Charter and the decision of the 2nd meeting of the BPNC and with the purpose of implementing the 2012-2016 Government Action Plan, Resolution #01 was made on August 26, 2014 by the BPNC to:

1. approve the GDP for the Zeltura border port in Selenge province, Mongolia; and

2. instruct the Ports General Authority to take measures immediately to implement the GDP.

Given the approval of the GDP by the BPNC, the Company anticipates approval from the Mongolian Ministry of Road and Transportation for the Road Feasibility study previously submitted to it for the construction of a 17km road to connect the Ulaan Ovoo mine to the Zeltura border. Prophecy is also working with the Mongolian Customs General Administration for the establishment of a customs inspection and clearance area at its Ulaan Ovoo mine. The Company’s goal is to see the Zeltura border opened, and to transport its first shipment of coal through it, this year.

Ulaan Ovoo Sales in Russia

In 2014, the Company sold and successfully delivered coal shipments from Sukhbaatar rail siding to a number of Russian customers. Realized sale prices for coal with GCV of 4,500kcal/kg to 5,000kcal/kg with low ash (less than 10%) and low sulphur (less than 1%) ranged from 1,800-2,400 roubles per tonne (US $50-$65 per tonne). Sale prices are also dependent on the point of delivery in Russia. In just a few months, Prophecy and Ulaan Ovoo coal have earned a good reputation in the Russian Buryat region for supplier reliability and coal product quality.

The Russian market remains a prime focus for Ulaan Ovoo’s management, who remain confident about the prospect of increasing both the quantity of Russian sales and number of Russian customers over time. The opening of the Zeltura border is expected to significantly reduce transportation costs and thus, increase the Company’s sales margins and competitiveness in Russia.

About Prophecy

Prophecy Coal Corp. is a Canadian public company listed on the Toronto Stock Exchange that is engaged in developing energy projects in Mongolia. Further information on Prophecy Coal can be found at www.prophecycoal.com.

PROPHECY COAL CORP.
ON BEHALF OF THE BOARD

“JOHN LEE”
Executive Chairman

For more information about Prophecy, please contact Investor Relations:

Bekzod Kasimov
+1.604.563.0699
+1.888.513.6286
[email protected]
www.prophecycoal.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 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 Mongolia, which is a developing jurisdiction; 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 the 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.