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

Prophecy Resource Corp.

December 20, 2010 17:24 ET

Prophecy Files Amended and Restated Financial Statements

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) has filed on SEDAR amended and restated unaudited interim financial statements and management's discussion & analysis ("MD&A") (collectively the "Amended Documents") for the interim period ended June 30, 2010.

The Corporation is filing the Amended Documents following a review by the British Columbia Securities Commission ("BCSC") completed in conjunction with the Company's proposed short form prospectus offering (as announced December 2, 2010, December 3, 2010 and December 16, 2010).

The changes were made to rectify certain errors in reporting and allocations on the Company's balance sheet, including

  • certain non-cash items, such as future income tax liabilities and mineral properties acquisition through issuance common shares, were incorrectly including the statements of cash flows for the three and six months ended June 30, 2010.
  • due to a total of $473,203 expenditures incurred by Prophecy Holdings Inc., was incorrectly consolidated and included in the consolidated statements of operation. The restatement reduces the net loss for the three and six months ended June 30, 2010 by $473,203.
  • cash and cash equivalents as at June 30, 2010 were overstated by $2,700,000.

For the six months ended June 30, the Company reported a restated net loss of $2,040,952 compared to $2,514,155 as previously reported.

Total assets at June 30, 2010 has been restated at $58,909,436 compared to $68,512,410 as previously reported.

Prophecy appointed a new CFO on October 4, and the restated financial statements have no material impact on the company's existing operation.

Readers are encouraged to review the Amended Documents in full under the Corporation's profile on SEDAR at www.sedar.com.

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). Prophecy's Ulaan Ovoo coal mine is fully commissioned and in production. 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. See the description of risks and uncertainties and underlying factors and assumptions relevant to the offering and "forward looking information" contained herein and to the Company's business, including its exploration and development activities, contained in the second amended and restated preliminary prospectus dated December 16, 2010 (which are incorporated herein by reference). The "forward-looking statements" contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.

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.

"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."

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