Prophecy Resource Corp.
TSX VENTURE : PCY
FRANKFURT : 1P2
OTCQX : PRPCF

Prophecy Resource Corp.

August 26, 2010 03:00 ET

Prophecy Provides Update on Ulaan Ovoo Mine Preparation, Mongolia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 26, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) Referring to the Mine Services Agreement between itself and Leighton Asia Limited, Prophecy announced today that Leighton has established the required infrastructure and deployed all necessary equipment and manpower (on schedule) to execute long term mining operations at Prophecy's 100% owned Ulaan Ovoo Coal Project, Northern Mongolia.

Ulaan Ovoo site establishment commenced on 13 July 2010 to ensure that the commissioning of the 250,000 tonnes starter pit will take place as planned as of September 2010 with 57,500 tonnes in the first month ramping up to 100,000 tonnes per month by December 2010.

Operation Statistics: To date Leighton has removed and stockpiled approximately 30,696 BCM of topsoil and 209,095 BCM of overburden which is approximately some 28,089 BCM of overburden ahead of schedule in preparation for mining.

Equipment: Operational equipment deployed by Leighton includes three 773C Cat dump trucks, one 385D Cat excavator, one D8R Cat dozer, one 160H Cat grader, one 928G Cat loader, two 10,000lt water tankers, one 3,000lt fuel truck, two CD150 dewatering pumps, three Allmand portable lighting plants and four diesel generators of varying capacity.

Manpower: The current labour force can be categorised as follows:

  Expat Mongolian    
Prophecy 1 3   Mine Manager, Translator, Driver
Leighton 2 9   Mining Staff & Camp Manager
Wagner 0 11   Machine Operators & Mechanics
Contractors 0 26   Camp Staff, Security, Water Truck Operator
Total 3 49    

Bridge Construction: The design of the concrete bridges that will replace all existing wooden bridges along the haul road has been completed and the foundation slabs are currently being poured. Completion of the bridge upgrade by the end of September will enable the trucking of coal from the mine site to Nauski.

Zeltura Border Opening: Prophecy has been informed that Russian and Mongolian governments have agreed to open the Zeltura border crossing on a permanent basis. Zeltura port is 15km by road from Ulaan Ovoo mine site and could present significant reduction on the transportation cost. The exact timing of the border opening is not known at this time.

Infrastructure: The workshop, office complex and mine camp with facilities for 80 people on site have been erected and the area is fenced off for security and safety purposes.

Wardrop Prefeasibility Study: The Company is working with Wardrop to clarify taxation, royalty, and off take pricing. The release of Wardrop's final report is expected in September of this year.

Off-Take discussions are on-going with parties who have expressed written interests to procure coal directly at the mine site. Prophecy has also formally invited government site inspection, which is required prior to mine-starting.

Leighton Asia have been operating across Asia for 35 years in all facets of mining including mine development, operation and management, resource optimisation, mine planning, cost estimating, machine maintenance ,mine infrastructure, crushing, processing and materials handling. Its strength lies in the ability to develop competitive, innovative, practical solutions for its clients.

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.

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 2:1The project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad linking the project to the vast coal markets of Russia and Asia. 

About Prophecy

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 Lynn Lake Nickel Project, a 10% equity stake in Victory Nickel and agreed to merge with Northern Platinum (TSX-V: NTH) on June 15, 2010. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

ON BEHALF OF THE BOARD OF DIRECTORS OF PROPHECY RESOURCE CORP.

John Lee, Chairman

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 regarding 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 companies 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 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 its business, investors should review its filings that are available at www.sedar.com.

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.

Contact Information