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Prophecy: Fulfilling Asia's Energy Needs

Prophecy Resource Corp Announces Mine Commission Inspection Complete at Ulaan Ovoo in Mongolia. First Coal Shipment to Power Plant in Progress.

Vancouver, British Columbia, October14, 2010: Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2)  announces that an official government commission appointed by the Mongolian Ministry of Mineral Resources and Energy conducted the final permit inspection at Prophecy's Ulaan Ovoo mine site on October 4, 2010.

The permit inspection is the final step required for Prophecy to commence production operations at Ulaan Ovoo. During the October 4th visit, the commission, consisting of eight officials, drew satisfactory conclusions and Prophecy was instructed by the commission to begin coal production at the mine site and advised that receipt of the mine permit is imminent.

Prophecy advises that various members of the Mongolian media have recently publicized the official commissioning of the Ulaan Ovoo mine. The Company wishes to make its shareholders aware of this situation and that it has not endorsed and will not comment further on Mongolian press reports regarding mine commissioning until Prophecy has received the final permit from the Mongolian Ministry of Mineral Resources and Energy.

At present time, Leighton and Prophecy have deployed over 50 staff at Ulaan Ovoo with a full line of mining equipment to start production at the rate of 120,000 tonnes a month. Over 2 million tonnes of waste have already been removed to expose the project's massive coal seam at surface. Prophecy is looking to become the second Canadian company after SouthGobi Resources Ltd to receive a permit to mine in Mongolia.

Contract coal shipment to local power plants and beyond

Based on positive dialogue with the Mongolian Ministry of Mineral Resources and Energy, Prophecy is pleased to provide 10,000 tonnes of coal as a trial run to power stations in Darkhan and Erdenet, Mongolia's largest cities behind its capital Ulaanbaatar. At the Ministry's request, Prophecy has commenced mining and trucked the first coal shipment to Sukhbaatar rail station, ready to be transported to Darkhan power plant by rail.
Ulaan Ovoo is 10km from the Russian border and within 120km from Nauski TransSiberian railway station, enabling transportation of coal to Russia and by extension to Russia's eastern seaports.

The technical information 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, Paul McKenzie at +1.604.642.2625 ext. 107 or John Lee at +1.800.851.1528.

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 suitable for export markets. The deposit features single massive coal seam 45-80 m thick with an average strip ratio of 2:1. The Mongolian government has granted the project a fully transferable 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) specifically for Ulaan Ovoo.

About Prophecy Resource

Prophecy Resource Corporation is an internationally diversified company engaged in developing energy, nickel and platinum group metals projects. The company controls over 1.4 billion tons of open-pittable thermal coal in Mongolia (839 Mt Measured, 579 Mt Indicated). In Canada Prophecy owns Wellgreen PGM Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba, and a 10% equity stake in Victory Nickel. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


ON BEHALF OF THE BOARD OF DIRECTORS Prophecy Resource Corp.
"JOHN LEE"
John Lee
Chairman
Telephone 1.800.851.1528
Email: [email protected]

 



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.