Preparations Underway for Mongolian Coal Production

VANCOUVER, B.C. - March 18, 2010, : Prophecy Resource Corp. (TSX.V: PCY; OTC: PCYRF; Frankfurt: 3P1) and Red Hill Energy Inc. ("Red Hill") are pleased to provide an update on recent activities underway to expedite production from Red Hill's 100% owned Ulaan Ovoo thermal coal project ("the Project") in northern Mongolia. The preparations are being conducted by Red Hill with the full support of Prophecy, Red Hill's proposed merger partner (Please see joint Prophecy and Red Hill March 4, 2010 news).

Red Hill Energy has engaged Wardrop Engineering Inc., a leading international mining engineering company, to conduct a Preliminary Economic Assessment ("PEA") on the 208 million tonne Ulaan Ovoo coal project (174.5 Measured, 35.9 Indicated and 34.3 Inferred). The new study will incorporate project economics based on current substantial increases in international coal prices since the project's Pre-feasibility Study was completed over 10 months ago. The PEA will also emphasize an immediate production scenario that will utilize truck transport on existing roads to the central railroad thereby deferring the construction of a 120km spur line. Wardrop personnel are currently in Mongolia undertaking the PEA.

Red Hill Energy is in discussions with international mining contractors, including those with extensive experience operating inside Mongolia. Red Hill and Prophecy intend to finalize mine plans and a turn-key contract to bring the Project into production this year. Specific details will be provided in a forthcoming Red Hill-Prophecy news release.

Red Hill is also pleased to have entered into a royalty purchase agreement with Dunview Services Limited, a private British Virgin Islands company, whereby Red Hill will acquire a 2% net smelter returns royalty held by Dunview over the mining licenses forming part of the Ulaan Ovoo project for the payment of US$130,000 in cash and 2,000,000 Class A Shares. The completion of the royalty purchase is conditional upon the completion of the merger with Prophecy. The royalty purchase is subject to regulatory approval, including the approval of the TSX Venture Exchange.

Arnold Armstrong, Chairman and CEO of Red Hill, stated that: "We intend to transform Red Hill from a junior company to a producer in 2010, and together with Prophecy we will have a strong pipeline of resource projects from which to build a company with a diversified revenue generating base."

Additional project information is available at www.redhillenergy.com and www.prophecyresource.com.

Prophecy Resource Corp.
John Lee - Chairman and CEO
For further information:
John Lee
Telephone 1.800.851.1528
Email: [email protected]
www.prophecyresource.com

Red Hill Energy Inc.
G. Arnold Armstrong - Chairman and CEO
For further information:
Paul McKenzie (President):
Telephone 604.642.COAL (2625)
Email: [email protected]
www.redhillenergy.com



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.