Prochecy Coal Професи

Prophecy Secures Rail Loading Facilities to Transport Over 1.5 Million Tonnes Per Year of Mongolian Coal to Russia and China

VANCOUVER, B.C. - May 25, 2010, : Prophecy Resource Corp. (TSX.V: PCY; OTC: PCYRF; Frankfurt: 1P2) reports it has signed an agreement securing the loading  of and the capacity to transport 1.5 million tonnes of coal annually through Mongolia's Sukhbaatar Railroad Station (Trans-Mongolian Railway) with the option to increase capacity based on availability. 

The Sukhbaatar Station is located 120km (75 miles) by road east of Prophecy's 208.8 million tonne Ulaan Ovoo coal project. The station is located only 8km south of the Russian/Mongolian Naushki border linking with the Trans Siberian Railroad.  The Trans-Mongolian and Trans-Siberian Railroads share the same track gauge and have been providing cross border Mongolian/Russian trade since 1949. The Trans-Siberian Railroad services Russia's largest coal export facilities at Vladivostok and Vanino ports at the eastern seaboard where coal is exported to the world's top coal importing nations Japan, Taiwan and South Korea. Thermal coal comparable to Ulaan Ovoo's quality currently trades betweenUS$85-100 per tonne FOB at Vladivostok representing up to $150 million in annual coal sales based on minimum transportation capacity contracted by Prophecy.

The Trans-Mongolian Railroad connects to China's Erenhot (Erlian) port, which is 1,093 km south from Sukhbaatar and opens Ulaan Ovoo to China, the largest consumer of coal in the world. China consumed 3 billion tones of thermal coal in 2009 and plans to double its thermal coal import to 170 million tones in 2010 from last year.

On  May 21, 2010, Prophecy contracted Leighton Asia Ltd., ("Leighton") a wholly owned subsidiary of the Leighton Group, Australia, the world's largest contract miner to produce 250,000 tonnes of coal at Ulaan Ovoo in 2010, with further plans to mine 2 million tonnes of coal in 2011. Having established the mine plan and secured rail transport, Prophecy is finalizing a truck leasing agreement to provide hauling of coal from mine site to Sukhbaatar, thus rounding up the entire transportation logistics to Chinese and Russian markets.

Ulaan Ovoo's Connection to Russia's Trans-Siberian Railway
Click to enlarge

About Ulaan Ovoo

Prophecy has 100% interest in the 208.8 million tonne Ulaan Ovoo project that features Bituminous (5,204 kcal/kg), low ash (12.46%), low sulphur (0.40%) thermal coal highly desired regionally. The deposit features a single massive coal seam 45-80 m thick from surface with an average strip ratio of 2:1 and requires no washing for the first 50 million tonnes of production. The Mongolian government has granted the Ulaan Ovoo project a 30 year mining license that can be extended by an additional 40 years. The project has met Mongolian environmental approvals as per the Mongolian Ministry of Nature and the Environment which approved a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP). As the last step to commence mining, Prophecy filed for its Ulaan Ovoo operating permit in April including necessary license, mine plan, and environmental approvals. The Company anticipates obtaining the permit by summer.

The material in this news release has been reviewed and approved by Danniel Oosterman P. Geo, a Prophecy geologist and also a Qualified Person as defined by NI 43-101. For more information about Prophecy, please contact Scott Parsons at +1.604.642.2625 ext. 106 or John Lee at +1.800.851.1528

About Prophecy

Prophecy controls over NI-43-101 compliant Measured and Indicated mineral resources of 232 million pounds of nickel, 1 billion tonnes of coal and 116 million pounds of copper as well as inferred resources of 82 million pounds of nickel, 500 million tonnes of coal, and 593 million pounds of copper.  The Company's Ulaan Ovoo Coal Project, Mongolia is expected to be in production this year. Prophecy will hold properties with significant exposure to vanadium and titanium.  All Prophecy's coal assets are located in Mongolia with its remaining assets located in Canada. The Company is currently reviewing additional opportunities for growth. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  

For more information about Prophecy, please contact John Lee at +1.800.851.1528.
ON BEHALF OF THE BOARD OF DIRECTORS
Prophecy Resource Corp.
"JOHN LEE"
John Lee
Chairman

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.