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

Prophecy Resource Corp.

September 27, 2010 11:55 ET

Prophecy Initiates 1,000-Meter Step-Out Drill Program at Wellgreen PGM-Ni-Cu Resource Property, Yukon Canada; Assays from 6-Hole Summer Drill Program Pending

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 27, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) announces drilling has commenced at its 100% owned Wellgreen PGM Ni Cu resource project, Yukon, Canada. The Wellgreen property is located approximately 35 kilometres northwest of Burwash Landing, Yukon, 15 km from the paved 2 lane Alaska Highway and 402 km from Alaska's Haines deep sea port. Prophecy acquired 100% of Wellgreen by merger with Northern Platinum on September 23, 2010. Prophecy retained key operations personnel from Northern Platinum and the Wellgreen program is now being guided by Dr. John Morganti P.Eng, a member of Prophecy's Advisory Board. and Mr John McGoran P.Geol. a former Northern Platinum Director and recently appointed Director of Prophecy Resource Corp.

Overview of Wellgreen:

  • Wellgreen is part of Kluane Ultramafic Nickel belt, which is second largest behind the Thompson Belt in Canada and remains vastly unexplored.
  • Wellgreen was discovered in 1952 and optioned to Hudson Bay Mining and Smelting Ltd. (now Hudbay). Over a 20 year period Hudbay sank 4 shafts and developed over 3 km of underground workings.
  • In 1972, Hudbay milled 171,652 tons grading 2.23% Copper and 1.39% Nickel. PGM's while present, was neither assayed for nor credited during Hudson Bay Mining's tenure at Wellgreen.
  • A total of 701 holes (182 surface, 519 underground) totalling 53,222 meters (28,303 meter surface, 24,919 meters underground) were historically drilled by the following mining and exploration companies: Hudbay, Chevron, All North, Galactic, Archer Cathro, Coronation, and Northern Platinum.
  • A historic, non-43-101 compliant geological resource (1989) estimated 42.37 million tonnes grading 0.35% Cu, 0.36% nickel, 0.51 g/t Pt and 0.34 g/t Pd. at Wellgreen.
  • Prophecy holds 91 claims in two groups under renewable 21-year mining leases totalling approximately 22.1 square kilometres.
  • Past drilling and production focused on 2.2 km strike of known mineralization.
  • A Fugro helicopter-borne Mag and EM survey conducted in 2008 (available at www.prophecyresource.com) demonstrated that the magnetic signature of the peridotite extends approximately 6 kilometres on Prophecy's ground.
  • Past exploration and production focused on high-grade underground massive sulphide.
  • Prophecy is re-examining the surveys, geology, past drill cores, and economics of Wellgreen for a disseminated sulphide open pit scenario.

In July 2010, Prophecy commissioned a 43-101 report (available at www.prophecyresource.com) on the Wellgreen Property from Wardrop Engineering, a Tetra Tech Company (Wardrop). Wardrop consultant Todd McCracken P.Geol. wrote that:

"The potential within the Quill Creek Ultramafic intrusion on the Wellgreen property is in the range of 77 to 254 million tonnes at 0.26 to 0.38% nickel, 0.26 to 0.36% copper, 0.32 to 0.47 g/t platinum and 0.23 to 0.38 g/t palladium based on the assumption of a specific gravity of 3.22, strike length of 4000 to 7000 metres, depth of 200 to 250 metres and a width of 30 to 35 metres."

Prophecy's Plan

  • Assay 2,112 metres of drill core from Northern Platinum's 2010, 6-hole drill program. The recent drill program focused on expanding the eastern limit of the Wellgreen deposit (Prophecy has received preliminary data on this program and is compiling the results for a forthcoming Prophecy news release).
  • Prophecy has commenced 1,000 metres of step-out surface drilling (map available at www.prophecyresource.com) on 200 metre spacing beyond known mineralization.
  • Prophecy estimates that only 20% of the past drill cores have been assayed with focus on massive sulphide. The company intends to selectively assay historic core containing visible disseminated sulphide over long intercepts.
  • Assay all future and historic drill core for (not previously assayed) rare earth elements Rhodium, Rhenium, Ruthenium, Osmium and Iridium from 300+ drill core samples with combined Platinum and Palladium grades over 1g/t. The presence of these metals was confirmed by the Geological Survey of Canada.
  • During a 2005 surface exploration program, a north shear zone was discovered with rock samples yielding up to 70.1 g/t Palladium, and 77.3 g/t Platinum and 1.37g/t Rhodium ($2,240/oz) over a 3km strike. Prophecy intends to follow up on this exciting discovery zone with additional drilling in 2011.

The company is inspecting the extensive volume of historic drill cores to identify and re-catalogue disseminated sulphide cores once considered waste but are now desirable in today's metals markets.

John Lee, CEO of Prophecy, stated today that: "We believe that Wellgreen represents a significant PGM and nickel copper discovery in Canada. Stillwater's recent takeover of Marathon PGM Corp demonstrates that PGM deposits in safe jurisdictions remain highly desirable."

Dr. John McGoran, Prophecy Director, added: "We are working closely with Wardrop for a comprehensive review and compilation of past drill data. With over 3,000 meters of past and new drilling in 2010, Prophecy is going to land a new look on Wellgreen as a bulk-tonnage, open pit PGM target."

The company intends to issue a 43-101 resource estimate at Wellgreen by early 2011.

This news release has been reviewed and approved by John McGoran, P.Geo., 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-pitable 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.

Contact Information

  • Prophecy Resource Corp.
    Paul McKenzie
    +1.604.642.2625 ext. 107
    or
    Prophecy Resource Corp.
    John Lee
    +1.800.851.1528
    www.prophecyresource.com