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

Prophecy Resource Corp.

November 29, 2010 08:31 ET

Prophecy Drills 71.17 Metres of 0.52% NiEq (0.310% Nickel, 0.466 g/t PGMS +Au and 0.223% Copper) From Surface at Wellgreen Project, Yukon

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 29, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) reports that it has received additional assays results from its 100% owned Wellgreen PGM Ni-Cu property in Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October, 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52% NiEq (0.310% Nickel, 0.466 g/t PGMs + Au and 0.233% Copper) and ended in mineralization. 2010 drilling has concluded due to winter conditions and will resume in spring of 2011.

Results from holes WS10-179 through 183 (and hole WS06-153 from previous program) are outlined in the following five tables (all intercepts reported in metres):

WS10-183

FROM   TO   LENGTH   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
0.00   43.59   43.59   0.094   0.257   0.2262   0.224   0.031   0.015   0.481   0.41
43.59   88.82   45.23   0.020   0.007   0.006   0.020   0.006   0.004   0.032   0.03
88.82   116.74   27.92   0.149   0.300   0.347   0.235   0.043   0.021   0.625   0.52

WS10-182

FROM   TO   LENGTH   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
0.00   71.17   71.17   0.223   0.310   0.277   0.153   0.036   0.022   0.466   0.52

WS10-181

FROM   TO   LENGTH   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
10.21   291.02   280.91   0.051   0.165   0.079   0.095   0.011   0.012   0.185   0.24

WS10-180

FROM   TO   LENGTH   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
5.49   23.16   17.68   0.143   0.280   0.196   0.287   0.030   0.015   0.513   0.44
23.16   244.94   221.77   0.031   0.176   0.082   0.114   0.010   0.013   0.206   0.25

WS10-179

FROM   TO   LENGTH   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
0.91   179.71   178.79   0.030   0.159   0.093   0.109   0.009   0.013   0.211   0.23

WS06-153

FROM   To   Length   Cu %   Ni %   Pt g/t   Pd g/t   Au g/t   Co %   Pt+Pd+Au   NiEq %
1.22   524.64   523.42   0.1704   0.2319   0.2870   0.2740   0.0563   0.0149   0.617   0.43
Note that Nickel Equivalent is based on US metal prices of: Copper - $2.46/lb, Nickel - $8.36/lb, Cobalt - $15.63/lb, Gold - $973/oz, Platinum - $1,746/oz, Palladium - $564/oz, and assumes 100% metal recoveries. 

Hole WS10-179 to WS10-182 were drilled west of WS10-177 (with 525.90 m of 0.17% Cu, 0.26% Ni with 0.550 g/t PGMs+Au), on 50 metre vertical spacing above and to the north of hole 153, which was drilled by Coronation Minerals in 2006 (as shown in the above table).

Hole 182 encountered 71 meters of 0.52% NiEq sulphide mineralization and remains open at depth from surface. This hole ended in mineralization and was stopped by Northern Platinum for budgeting reasons. Holes WS10-179 to 181 were drilled too shallow to intersect the deeper and better mineralized zone which was intersected by hole WS06-153 (with 523.42 m of 0.43% NiEq). 

Drill hole WS10-183 was drilled on the south end of the main East Zone to test surface mineralization. The hole encountered 27.92 metres assaying 0.149% Cu, 0.30% Ni, with 0.625 g/t PGM+Au (0.52% NiEq) and was stopped 100 metres short of the projected foot wall due to severe winter conditions. Those results are encouraging as the grade typically enhances towards the footwall. It is planned to re-drill and deepen this hole in spring 2011.

Holes 182 and 183 demonstrate the near surface mineralization within existing resource boundaries where only underground resources were calculated.

The assays do not include the rarer PGMs such as Rhodium (Rh), Ruthenium (Ru), Osmium(Os) and Iridium (Ir), which could further enhance the total PGM grades. Extensive tunnel sampling results released on Nov 3, 2010 shows extensive rarer PGM values with grades reaching 6g+/t of combined Rh+Ru+Os+Ir. A total of 470 drill core samples from the 2006 to 2010 drill programs that assayed better than 1g/t Pt or Pd are being assayed for Rhodium, Osmium, Ruthenium, and Iridium with results pending.

The 2010 program has extended the 2008 resource to the east with widths as evidenced by hole WS10-177 (with 525.90 m of 0.17% Cu, 0.26% Ni and 0.550 g/t PGMs+Au) and WS10-178 (566.78m of 0.16% Cu, 0.23% Ni and 0.517 g/t PGMs+Au) which were drilled on the eastern edge of the resource envelope. The results from these two holes are highly encouraging as they demonstrate a potentially new mineralization trend starting and extending to the east across Arid Creek. The Fugro airborne magnetic anomaly over the eastern extension of the ultrabasic sill across Arrid Creek also demonstrates the potential for significant mineralization to the east of holes 177 and 178.

In 2011, Prophecy intends to drill to test:

  1. Areas to the east of WS10-177 and 178;
  2. Surface portion within existing resource boundaries, particularly on the East Zone; and
  3. Exploration drilling on the West Zone. 

Working closely with Wardrop Engineering Inc., Prophecy is examining and digitizing all prior Wellgreen drill and geological data, including 700 drill holes by Hudbay, Galactic, Coronation Minerals and Northern Platinum for detailed resource modeling.

Prophecy has also selected G&T Metallurgical Services of British Columbia to conduct a scoping-study level of independent metallurgical testing. The primary objectives are to characterize the master sample, using standard chemical and mineralogical analysis and to determine preliminary flotation response using conventional techniques.

John Lee, CEO of Prophecy, states:

"We continue to expand Wellgreen significantly to the east in addition to intercepting new ore grade mineralization from surface. The Wellgreen grades compare very favorably to the Polymet Deposit in the Duluth Complex in Minnesota." He added, "Marathon PGM's takeover by Stillwater Mining Corp demonstrates that quality PGM deposits in Canada are highly desired. Recent increases in Palladium prices and the renewed assaying for Rhodium and other rare PGMs at Wellgreen significantly enhance the project's appeal and potential."

Cross sections and locations of holes 177 to 183 as well as Fugro airborne magnetic survey are available at www.prophecyresource.com.

More details about Wellgreen

The Wellgreen claims include 7km strike and cover 22 square kilometers. Wellgreen is 15 km from the paved 2 lane Alaska Highway and 402 km from Alaska's Haines deep sea port. It is part of Kluane Ultramafic Nickel belt, which is second largest behind the Thompson Belt in Canada and remains vastly unexplored. 

Since 1952 exploration at Wellgreen was almost entirely focused on high-grade underground massive sulphide nickel and copper deposits. In 1972 Hudbay Minerals Inc. milled 171,652 tons grading 2.23% Copper and 1.39% Nickel at Wellgreen and while Platinum Group Metals and other valuable minerals were present they were neither assayed for nor credited.

An historic (non NI 43-101 compliant) resource of 55 million tonnes grading 0.35% Cu, 0.36% Ni, 0.82 g/t Platinum and Palladium. (prefeasibility study by WGM April 21, 1989) was estimated at Wellgreen, which equates to over 1.4 million oz of Platinum Group Metals and 400 million pounds of Nickel in situ. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources and the Company is not treating the historical estimate as current mineral resources but as a historical estimate that should not be relied upon.

An independent NI 43-101 report prepared for Prophecy by Wardrop Engineering ("Wardrop") dated July 2010 indicates that the potential of the Wellgreen property ranges between 77 to 254 million tonnes at 0.26 to 0.38% Nickel, 0.26% to 0.36% Copper, 0.55 to 0.85 g/t Platinum and Palladium, based on a strike length range of 4,000 to 7,000m and a width of 30 to 35m. The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in discovery of a mineral resource. 

Assay QA/QC procedures at Wellgreen are as follows:

  • The mineralized intervals of drill core are cut using a core saw. After cutting the core, one-half of the core is bagged for assay using security seals.
  • The samples are then delivered to ALS Chemex Laboratories in Whitehorse, Yukon, for sample preparation. The pulps were sent to ALS Vancouver for assays; the rejects were returned to Wellgreen for secure storage.
  • In addition to the laboratory's quality control program, a rigorous on-site quality assurance and quality control program is implemented involving the insertion of blanks, standards and splits to ensure reliable assay results.

This technical data in this news release has been reviewed and approved by Mel de Quadros, Ph.D., P.Eng., a consultant and a qualified person as defined in NI 43-101.

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 of Prophecy Resource Corp.

John Lee, Chairman

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 regarding 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 general economic, market or business conditions, and other risks detailed herein and from time to time in the filings made by the companies with securities regulators. 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 businesses, investors should review its annual filings that are available at www.sedar.com.

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