Prophecy Completes Transportation Study On Its Ulaan Ovoo Coal Project And Tenders For Trucking Contracts From Mine Site To Railroad Offload

Vancouver, British Columbia, June 4, 2010: Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTC: PRPCF, Frankfurt: 1P2) reports that it has received an independent transportation Study for trucking of coal from its proposed Ulaan Ovoo mining operations to Mongolia's Sukhbaatar Railroad Station (Trans-Mongolian Railway) to fulfill secured capacity to transport a minimum of 1.5 million tonnes of coal annually to Russia and/or China.

The Sukhbaatar Station borders Russia and is located 120km (75 miles) by road east of Prophecy's 208.8 million tonne (174.5 Measured, 34.3 Indicated) Ulaan Ovoo coal project. Coal produced at the proposed Ulaan Ovoo mining operations will be hauled by trucks from Ulaan Ovoo mine site via public road to the Sukhbaatar Railroad station. The coal will then be transported to the eastern seaboard port of Vladivostock via Trans-Siberian Railway. Vladivostock is a leading coal port to the world's largest coal importing nations, Japan South Korea and Taiwan. Coal prices comparable to Ulaan Ovoo's quality have been exceeding US$ 85 per tonne at Vladivostock.

The independent transportation study was prepared by RandTip of South Africa. RandTip specializes in the short and long distance hauling of coal for clients such as X-Strata, Amcoal and Eskom(SA).

RandTip and representatives from Mercedes Benz of Germany visited Ulaan Ovoo in May of this year and produced a cost study taking into consideration the condition of the haul road, its ongoing maintenance requirements, equipment selection, and the travelling speed at which payload can be safely carried.

Based on a 50,000 tonne per month throughput (600,000 tonnes a year), the optimal cost per tonne is estimated to be $11.91/t based on 17 haul trucks with 60 tonne pay load and 2 cycles per day.

Based on a 175,000 tonne per month throughput (2,100,000 tonnes per year), the optimal cost per tonne is estimated to be $10.65/t based on 58 haul trucks with 60 tonne pay load and 2 cycles per day.

The cost per tonne estimates include truck leasing, driver, maintenance, fuel, and G&A. Mercedes Benz have confirmed the leasing availability of a truck fleet for Prophecy with 10 week lead time.

The entire cost table based on various throughput, truckload, and cycles can be accessed at www.prophecyresource.com. Prophecy has thus completed its mining and transportation cost model, which is being incorporated into a prefeasibility being prepared by Wardrop Engineering Inc, wholly owned by Tetra Teck Inc (NASDAQ: TTEK) to be released in early July of this year. Prophecy is currently engaged in multi party discussion on securing Ulaan Ovoo coal off-take agreements. About Ulaan Ovoo

The Ulaan Ovoo project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad which links the project to the vast coal markets of Russia and Asia.

On May 11, Prophecy entered into a mine services agreement with Leighton Asia Ltd. for the equipment leasing and mining operation at the Ulaan Ovoo coal deposit. Mine site establishment will commence in July, 2010 to ensure 250,000-tonne production in 2010. The pay-as-you-go contract mining and equipment leasing cost for 2010 is $3.7 million. The 2011 target is 2 million tonnes and Leighton expects to present similar contract terms on a cost-per-tonne basis.

On May 21, Prophecy secured rail loading facilities to transport over 1.5 million tonnes per year of Mongolian Coal to Russia and China.

The project contains 174.5 million tons Measured, 34.3 million tons Indicated and 35.9 million tons of Inferred thermal coal. The coal is of excellent low ash (<15%) and sulfur quality (<1%) at 5,204 KCAL/KG which is highly desired regionally. SGS Coal Quality by Seam Specification is available to down load at Prophecy's website. The average seam thickness of the resource is 53.9 metres with a stripping ratio of 2.0:1 on the first 140 million tons and requires no washing for the first 50 million tonnes of production.

The Mongolian government has granted the Ulaan Ovoo project a 30 year mining license that can be extended by an additional 40 years. The project has met Mongolian environmental approvals as per the Mongolian Ministry of Nature and the Environment which approved a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP). As the last step to commence mining, Prophecy filed for its Ulaan Ovoo operating permit in April including necessary license, mine plan, and environmental approvals. The Company anticipates obtaining the permit by summer 2010.

The material in this news release has been reviewed and approved by Danniel Oosterman P. Geo, a Prophecy geologist and also a Qualified Person as defined by NI 43-101.

For more information about Prophecy, please contact Paul McKenzie at +1.604.642.2625 ext. 107 or John Lee at +1.800.851.1528.




Ulaan Ovoo Truck Route
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Ulaan Ovoo's Connection to Russia's Trans-Siberian Railway
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The material in this news release has been reviewed and approved by Danniel Oosterman P. Geo, a Prophecy geologist and also a Qualified Person as defined by NI 43-101. For more information about Prophecy, please contact Scott Parsons at +1.604.642.2625 ext. 106 or John Lee at +1.800.851.1528

About Prophecy


Prophecy Resource Corp is a near term coal producer with 1 billion tonnes of Measured and Indicated open-pittable thermal coal resources in Mongolia. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Company's other focus is in Nickel Sulphide in Canada, where Prophecy owns 100% of the Lynn Lake Nickel Sulphide project in Manitoba and 10% stake in Victory Nickel (TSX: NI). The Company is currently reviewing additional opportunities for growth.  


For more information about Prophecy, please contact John Lee at +1.800.851.1528.
ON BEHALF OF THE BOARD OF DIRECTORS
Prophecy Resource Corp.
"JOHN LEE"
John Lee
Chairman


Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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.