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Prophecy Coal Clarifies Q1-2011 Financial Statement Disclosures

As a result of a review by the British Columbia Securities Commission, Prophecy Coal is issuing the following press release to clarify its Q1-2011 disclosure.

Vancouver, British Columbia, August 11, 2011: Prophecy Coal Corp. (“Prophecy” or the “Company”) (TSX-V: PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces at the request of the British Columbia Securities Commission, the Company has today filed amended Q1-2011 financial statements and management discussion and analysis (MD&A).

The changes include reconciliation between the Company equity in accordance with previous GAAP and current IFRS accounting regulations as at March 31, 2010. The amendments in MD&A include further discussion on the Company’s operations, Prospectus offering, quarterly results, and related party transactions.

The amended financial statements and MD&A do not have an impact on operations or cash flows of the Company. The amended filings provide further clarification in the notes to the financial statements and further discussion on the Company’s operations in the MD&A. The amended documents are available on SEDAR (www.sedar.com) and the Company’s website.

Prophecy Coal Announces CFO Departure and Appointment of Interim CFO

Prophecy Coal also announces that CFO David Jan has left the company effective immediately to pursue other opportunities. Irina Plavutska, currently corporate controller of Prophecy, has been appointed Interim CFO.  Ms. Plavutska is a professional accountant with over 20 years of diverse international experiences in financial reporting, auditing, and accounting. She is a member of Certified General Accountants Association of British Columbia.

John Lee, Chairman of Prophecy states: “Irina is very capable and we will take our time to find the CFO with the right fit and experience”

About Prophecy Coal
Prophecy Coal Corp. (formerly Prophecy Resource Corp) is a Mongolian coal company engaged in developing energy projects. The company controls over 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia. Prophecy Coal's Ulaan Ovoo thermal coal mine is in preproduction and its Chandgana mine mouth power plant is currently being permitted. Prophecy Coal is the controlling shareholder of Prophecy Platinum Corp (TSX-V: NKL). Mineral resources that are not mineral reserves do not have demonstrated economic viability. Further information on Prophecy Coal can be found at www.prophecycoal.com

ON BEHALF OF THE BOARD OF DIRECTORS of Prophecy Coal Corp.

"JOHN LEE"
John Lee
Chairman

For more information about Prophecy, please contact
Joseph Li
General Manager
1-800-362-7366
[email protected]

Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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.  

 Forward Looking Statements: This news release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, including, without limitation, statements potential mineralization, the estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the company are forward-looking statements that involve various risks and uncertainties. . Although Prophecy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include failure to obtain necessary approvals in respect of the Transaction, unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with operating in foreign jurisdictions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Prophecy and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.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."

This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (“the U.S. Securities Act”) or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.