Prophecy Coal Професи

Prophecy Coal Obtains Credit Facilities Totaling $7 Million To Advance Chandgana Project

VANCOUVER, BRITISH COLUMBIA, December 30, 2011: Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX: PCY) (OTCQX: PRPCF) (Frankfurt: 1P2) is pleased to announce that it has executed a term sheet for a secured debt facility of up to $5 million (the "Debt Facility") with a leading resource lender and a $2 million inter-company loan facility agreement (the “Inter-Co Facility”) with its controlled affiliate, Prophecy Platinum Corp.  The Debt Facility is currently subject to completion of the lender’s due diligence, TSX approval and completion of customary credit documentation.

The Debt Facility is due in fourteen months after its drawdown and bears interest at 10% per annum, compounded quarterly.  A structuring fee of $50,000 is payable in cash as well as up to 1 million common shares of Prophecy Coal.  The common shares issuable to the lender will be subject to a four month hold period. The Debt Facility is secured by a general security agreement and by a pledge of a number of Prophecy Platinum shares which must remain at 300% of the amount owed under the Debt Facility.

The Inter-Co Facility provides the Company and Prophecy Platinum with the ability to request a demand loan from the other company of up to $2 million at an interest rate of 14.4% per annum, compounded annually.  Special committees of independent directors from both companies reviewed and approved the Inter-Co Facility.  The size and nature of the Inter-Co Facility make it exempt from related party transaction rules including minority shareholder approvals.

John Lee, Chairman and CEO of Prophecy Coal states: “These facilities should carry Prophecy Coal towards completing Power Plant Project Financing in 2012.  The company currently has no debt and over $120 million in assets.”

About Prophecy Coal

Prophecy Coal Corp. is a Canadian listed company engaged in developing energy projects in Mongolia. The company has over 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia. Prophecy Coal's Ulaan Ovoo coal mine is in production and its Chandgana mine mouth power plant has been 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 Prophecy Coal Corp.
"JOHN LEE"
John Lee
CEO/Chairman 

For more information about Prophecy, please contact
Chris Ackerman
Manager, Investor Relations
1-800-459-5583
[email protected]
www.prophecycoal.com

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.