Prophecy Reports M&I; Resource of 22.9 Million Tons at 0.57% Ni (263 Million Pounds of Nickel) at Lynn Lake Deposit in Manitoba

Prophecy Resource Corp. (TSX.V: PCY; OTC: PCYRF; Frankfurt: 3P1) (the "Company" or"Prophecy") is pleased to announce the results of an updated independent mineral resource estimate on the Lynn Lake Nickel-Copper property (the "Property") located in the historic Lynn Lake Nickel Camp in Manitoba.

The property is estimated to contain a Measured and Indicated resource of 22.9 million tons at 0.57% nickel and 0.3% copper, together with an Inferred resource of 8.1 million tons at 0.51% nickel and 0.28% copper. The estimate uses a 0.4% Nickel equivalent (NiEQ %) cutoff. The
results are summarized in the following Table:

The updated estimate was completed by Wardrop Engineering Inc ("Wardrop") on January 28, 2010 and prepared in accordance with National Instrument 43-101 ("NI 43-101") Standards of Disclosure for Mineral Projects.

The current estimate updates previous estimates produced by Wardrop in October 2005 and 2007, using ordinary kriging methodology, and includes mineralisation from the N, O and G zones. It has been calculated from an extensive database of 3,709 drill holes with an aggregate length of 399,088 meters (1,309,345 feet). NiEQ% was calculated using a Nickel price of $7.22/lb and a Copper price of $2/lb. Metal recoveries were assumed to be 100% for both Nickel and Copper, as metal recovery options such as bio-leach are being investigated with results pending.

The current estimate does not include mineralisation from the Disco zone discovery made in 2008 which includes intercepts of 47 meters of 0.7% nickel and 18 meters of 1.5% nickel, located 1.5km away from the outlined resource. Wardrop determined that there is not enough drill
information to generate an inferred resource for the Disco Zone at this time.

The mineral resource estimate model was completed by Todd McCracken, P. Geo, Principal Geologist with Wardrop Engineering Inc. The material in this news release has been reviewed and approved by Mr. McCracken, a Qualified Person as defined by NI 43-101 and J.W. Morton P. Geo, a director of Prophecy and also a Qualified Person as defined by NI 43-101.

About Prophecy Resource Corp.

Prophecy is a Canadian company focused on the acquisition of advanced mineral assets. On October 2009, Prophecy entered into an agreement to acquire 100% of Lynn Lake from Victory Nickel Inc. The project is located in the Lynn Lake Nickel Camp, northern, Manitoba approximately 320 km by road northwest of the Thompson mining camp. Historically, Lynn Lake is the third largest nickel producing region in Canada offering excellent mining infrastructure. In October 2009, Prophecy entered into an option agreement to acquire 100% of the Lynn Lake Project from Victory Nickel Inc. (see our news release of October 21, 2009).

Prophecy in January 2010 acquired 80% of a Titan-Vanadium project in Ontario. The project has access to excellent infrastructure with past drill intercepts of 142 meters of 0.27% Vanadium (0.48% Vanadium Pentoxide) from hole RA-5-21 and 174 meters of 0.26% Vanadium (0.46%
Vanadium Pentoxide) from hole RA-5-10. The mineralization started from surface to an open vertical depth of 500 meters. The complete horizontal and vertical extent of the deposit is still to be determined.

Prophecy also holds a 60% interest in the Okeover Copper-Molybdenum property in B.C. where, in 2006, Dr. N.C. Carter, PhD, P.Eng, completed a technical report on the Okeover Property pursuant to NI 43-101 that estimated an inferred mineral resource of 86.8 million tons grading 0.31% copper and 0.014% MoS2 at a 0.20% copper cut-off grade. This report is available at www.sedar.com.

ON BEHALF OF THE BOARD

John Lee
Chairman

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.


Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.  

 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 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 company 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 failure to obtain necessary approvals in respect of the Transaction, 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 their businesses, investors should review their annual filings that are available at www.sedar.com.

"Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release."


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.

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*Ulaan Ovoo: 174 million tonnes  of measured and 34 million tonnes of indicated coal. Ulaan Ovoo’s resource numbers are from the Behre Dolbear & Company (USA), Inc  report referenced in the Dec 2010, 43-101 Prefeasibility Study by Wardrop Engineering. Chandgana consists of two properties-Chandgana Tal and Chandgana Khavtgai. Chandgana Tal consists of 141 mt of measured resource. Chandgana Khavtgai consists of 509 mt measured and 539 mt indicated resource. Chandgana Khavtgai’s resource estimates are based on the September 2010 NI 43-101 Chandgana Khavtgai Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person under NI 43-101 at the time of report preparation. And the Chandgana Tal resource estimate is also based on the September 2007 NI 43-101 Chandgana Tal Technical Report by Behre Dolbear & Company (USA), Inc..The report is authored by Mr. Gardar G. Dahl, Jr., CPG of Behre Dolbear & Company (USA), Inc., who is an independent Qualified Person under NI 43-101.