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Prophecy and Northern Platinum Ltd. Sign Definitive Agreement, Northern Shareholder Meeting Set For September 3

Vancouver, British Columbia, July 16, 2010: Prophecy Resource Corp. ("Prophecy") (TSX-V:PCY, OTC: PRPCF, Frankfurt: 1P2) and Northern Platinum Ltd ("Northern") (TSX-V: NTH) (together, the "Companies") are pleased to announce that they have signed a definitive agreement (the "Arrangement Agreement") in connection with the business combination (the "Transaction") announced in their joint news release dated June 15, 2010. Prophecy has agreed to issue 0.5 common shares and 0.1 warrants (an "Arrangement Warrant") for each common share of Northern Platinum. Each whole Arrangement Warrant will entitle the holder to acquire one additional common share of Prophecy at an exercise price of $0.80 that will expire 18 months following the Transaction closing date.

The Transaction

The Transaction will be effected by way of court approved statutory plan of arrangement under the Business Corporations Act (British Columbia) involving Prophecy, Northern and its securityholders. Northern will amalgamate with a wholly owned subsidiary of Prophecy and all of the securityholders of Northern will exchange their Northern securities for securities of Prophecy (the "Securities Exchange").

In order to make the Transaction efficient from a taxation perspective, pursuant to the Arrangement, Northern will issue to all of its shareholders, an option to acquire 0.20 of a Northern share at a price of $0.40 per share for a period of 18 months (a "Northern Arrangement Option") and each Northern Arrangement Option will be exchanged for an Arrangement Warrant.   

The Securities Exchange will be conducted such that for each one share of Northern held, a Northern shareholder will receive 0.50 of a common share of Prophecy and 0.1 of an Arrangement Warrant.  Holders of convertible securities of Northern will receive convertible securities of Prophecy such that each former Northern security will be exchanged for a Prophecy security, exercisable for that number of Prophecy shares that is equal to the number of Northern Shares that would otherwise have been issuable thereunder multiplied by 0.50 with the exercise price of such Prophecy convertible security being adjusted to equal the exercise price of the applicable Northern convertible security divided by 0.50.

As a result of the Transaction, the Northern securityholders will become Prophecy securityholders, Northern will become a wholly owned subsidiary of Prophecy and Northern will apply for voluntary delisting of its common shares from the TSX Venture Exchange. Following the Transaction, Prophecy will have a total of approximately 121,173,794 shares issued and outstanding, as well as options and warrants entitling holders to purchase approximately 37,310,490 common shares.

Prophecy formed a special committee comprised of two independent directors, the mandate of which was to consider the fairness of the Transaction and the Arrangement. Northern retained M Partners Inc. to act as its financial advisor to consider the fairness of the Arrangement to the shareholders of Northern from a financial point of view.

In addition, as at the date hereof, certain shareholders of Northern who hold an aggregate of 11 million common shares and 5 million warrants, representing approximately 43% of Northern’s common shares on a fully diluted basis, have signed support agreements pursuant to which they have agreed to vote all of the Northern shares beneficially owned by them in favour of the Transaction.

Required Approvals

The Transaction is subject to customary conditions, including receipt of regulatory, shareholder and court approvals.

Northern has scheduled an annual and special meeting of its shareholders to be held on September 3, 2010 at which it will seek the shareholder approvals required in connection with the Transaction. It is anticipated that materials for such meeting will be mailed to Northern shareholders on or about August 6, 2010. Subject to satisfaction of all conditions, completion of the Transaction is expected to occur on or before September 10, 2010.

For further information, please contact John Lee, Co-Chairman and CEO of Prophecy, at +1.800.851.1528 or Mel de Quadros, President and CEO, at 604.669.2066.

On Behalf Of The Board Of Directors Of:

Prophecy Resource Corp.
Co-Chairman and CEO
Telephone 1.800.851-1528
Email: [email protected]

Northern Platinum Limited
President and CEO
Mel De Quadros
Telephone 604.669.2066
Email: [email protected]

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.