Prophecy Secures Rail Loading Facilities to Transport Over 1.5 Million Tonnes Per Year of Mongolian Coal to Russia and China

VANCOUVER, B.C. - May 25, 2010, : Prophecy Resource Corp. (TSX.V: PCY; OTC: PCYRF; Frankfurt: 1P2) reports it has signed an agreement securing the loading  of and the capacity to transport 1.5 million tonnes of coal annually through Mongolia's Sukhbaatar Railroad Station (Trans-Mongolian Railway) with the option to increase capacity based on availability. 

The Sukhbaatar Station is located 120km (75 miles) by road east of Prophecy's 208.8 million tonne Ulaan Ovoo coal project. The station is located only 8km south of the Russian/Mongolian Naushki border linking with the Trans Siberian Railroad.  The Trans-Mongolian and Trans-Siberian Railroads share the same track gauge and have been providing cross border Mongolian/Russian trade since 1949. The Trans-Siberian Railroad services Russia's largest coal export facilities at Vladivostok and Vanino ports at the eastern seaboard where coal is exported to the world's top coal importing nations Japan, Taiwan and South Korea. Thermal coal comparable to Ulaan Ovoo's quality currently trades betweenUS$85-100 per tonne FOB at Vladivostok representing up to $150 million in annual coal sales based on minimum transportation capacity contracted by Prophecy.

The Trans-Mongolian Railroad connects to China's Erenhot (Erlian) port, which is 1,093 km south from Sukhbaatar and opens Ulaan Ovoo to China, the largest consumer of coal in the world. China consumed 3 billion tones of thermal coal in 2009 and plans to double its thermal coal import to 170 million tones in 2010 from last year.

On  May 21, 2010, Prophecy contracted Leighton Asia Ltd., ("Leighton") a wholly owned subsidiary of the Leighton Group, Australia, the world's largest contract miner to produce 250,000 tonnes of coal at Ulaan Ovoo in 2010, with further plans to mine 2 million tonnes of coal in 2011. Having established the mine plan and secured rail transport, Prophecy is finalizing a truck leasing agreement to provide hauling of coal from mine site to Sukhbaatar, thus rounding up the entire transportation logistics to Chinese and Russian markets.


Ulaan Ovoo Truck Route
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Ulaan Ovoo's Connection to Russia's Trans-Siberian Railway
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About Ulaan Ovoo


Prophecy has 100% interest in the 208.8 million tonne Ulaan Ovoo project that features Bituminous (5,204 kcal/kg), low ash (12.46%), low sulphur (0.40%) thermal coal highly desired regionally. The deposit features a single massive coal seam 45-80 m thick from surface with an average strip ratio of 2:1 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.

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 controls over NI-43-101 compliant Measured and Indicated mineral resources of 232 million pounds of nickel, 1 billion tonnes of coal and 116 million pounds of copper as well as inferred resources of 82 million pounds of nickel, 500 million tonnes of coal, and 593 million pounds of copper.  The Company's Ulaan Ovoo Coal Project, Mongolia is expected to be in production this year. Prophecy will hold properties with significant exposure to vanadium and titanium.  All Prophecy's coal assets are located in Mongolia with its remaining assets located in Canada. The Company is currently reviewing additional opportunities for growth. 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.  


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.