Prophecy Initiates 1,000-meter Step-Out Drill Program at Wellgreen PGM-Ni-Cu Resource Property, Yukon Canada. Assays from 6-hole Summer Drill Program Pending

Vancouver, British Columbia, September 27, 2010: Prophecy Resource Corp. (“Prophecy” or the “Company”) (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2)  announces drilling has commenced at its 100% owned Wellgreen PGM Ni Cu resource project, Yukon, Canada.. The Wellgreen property is located approximately 35 kilometres northwest of Burwash Landing, Yukon,,15 km from the paved 2 lane Alaska Highway and 402 km from Alaska’s Haines deep sea port... Prophecy acquired 100% of Wellgreen by merger with Northern Platinum on September 23, 2010. Prophecy  retained key operations personnel from Northern Platinum and the Wellgreen program is now being guided by Dr. John Morganti P.Eng, a member of Prophecy’s Advisory Board. and Mr John McGoran P.Geol. a former Northern Platinum Director and  recently appointed Director of Prophecy Resource Corp.

Overview of Wellgreen:

  • Wellgreen is part of Kluane Ultramafic Nickel belt, which is second largest behind the Thompson Belt in Canada and remains vastly unexplored.
  • Wellgreen was discovered in 1952 and optioned to Hudson Bay Mining and Smelting Ltd. (now Hudbay) . Over a 20 year period Hudbay sank 4 shafts and developed over 3 km of underground workings.
  • In 1972, Hudbay milled 171,652 tons grading 2.23% Copper and 1.39% Nickel. PGM’s while present, was neither assayed for or credited during Hudson Bay Mining’s tenure at Wellgreen..
  • A total of 701 holes (182 surface, 519 underground) totalling 53,222 meters (28,303 meter surface, 24,919 meters underground) were historically drilled by the following mining and exploration companies: Hudbay, Chevron, All North, Galactic, Archer Cathro, Coronation, and Northern Platinum.
  • A historic, non-43-101 compliant geological resource (1989) estimated 42.37 million tonnes grading 0.35% Cu, 0.36% nickel, 0.51 g/t Pt and 0.34 g/t Pd. at Wellgreen.
  • Prophecy holds 91 claims in two groups under renewable 21-year mining leases totalling approximately 22.1 square kilometres.
  • Past drilling and production focused on 2.2 km strike of known mineralization.
  • A Fugro helicopter-borne Mag and EM survey conducted in 2008 demonstrated that the magnetic signature of the peridotite extends approximately 6 kilometres on Prophecy’s ground.
  • Past exploration and production focused on high-grade underground massive sulphide.
  • Prophecy is re-examining the surveys, geology, past drill cores, and economics of Wellgreen for a disseminated sulphide open pit scenario.

In July 2010, Prophecy commissioned a 43-101 report on the Wellgreen Property from Wardrop Engineering, a Tetra Tech Company (Wardrop).  Wardrop consultant Todd McCracken P.Geol. wrote that :

 “The potential within the Quill Creek Ultramafic intrusion on the Wellgreen property is in the range of 77 to 254 million tonnes at 0.26 to 0.38% nickel, 0.26b to 0.36% copper, 0.32 to 0.47 g/t platinum and 0.23 to 0.38 g/t palladium based on the assumption of a specific gravity of 3.22, strike length of 4000 to 7000 metres, depth of 200 to 250 metres and a width of 30 to 35 metres.

Prophecy’s Plan

- Assay 2,112 metres of drill core from Northern Platinum’s 2010, 6-hole drill program. The recent drill program focused on expanding the eastern limit of the Wellgreen deposit (Prophecy has received preliminary data on this program and is compiling the results for a forthcoming Prophecy news release).

- Prophecy has commenced 1,000 metres of step-out surface drilling on 200 metre spacing beyond known mineralization.

- Prophecy estimates that only 20% of the past drill cores have been assayed with focus on massive sulphide. The company intends to selectively assay historic core containing visible disseminated sulphide over long intercepts.

- Assay all future and historic drill core for (not previously assayed) rare earth elements Rhodium, Rhenium, Ruthenium, Osmium and Iridium from 300+ drill core samples with combined Platinum and Palladium grades over 1g/t. The presence of these metals was confirmed by the Geological Survey of Canada.

-  During a 2005 surface exploration program, a north shear zone was discovered with rock samples yielding up to 70.1 g/t Palladium, and 77.3 g/t Platinum and 1.37g/t Rhodium ($2,240/oz) over a 3km strike. Prophecy intends to follow up on this exciting discovery zone with additional drilling in 2011.

The company is inspecting the extensive volume of historic drill cores to identify and re-catalogue disseminated sulphide cores once considered waste but are now desirable in today’s metals markets.

John Lee, CEO of Prophecy stated today that:: “We believe that Wellgreen represents a significant PGM and nickel copper  discovery in Canada. Stillwater,s  recent  takeover of Marathon PGM Corp demonstrates that PGM deposits in safe jurisdictions remain highly desirable.”

Dr. John McGoran, Prophecy Director added: “We are working closely with Wardrop for a comprehensive review and compilation of past drill data. With over 3,000 meters of past and new drilling in 2010, Prophecy is going to land a new look on Wellgreen as a bulk-tonnage, open pit PGM target.”

The company intends to issue a 43-101 resource estimate at Wellgreen by early 2011.

This news release has been reviewed and approved by John McGoran, P.Geo., and a Qualified Person as defined in 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.



Wellgreen Mine Cross-section
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Wellgreen 2580E Section
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Wellgreen 2800E Section
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Wellgreen 3000E Section
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Wellgreen 3400E Section
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Wellgreen Hole 177 - 178
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Wellgreen Hole 179 - 182
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Wellgreen Drill Hole Map
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About Prophecy Resource

Prophecy Resource Corporation is an internationally diversified company engaged in developing energy, nickel and platinum group metals projects. The company controls over 1.4 billion tons of open-pittable thermal coal in Mongolia (839 Mt Measured, 579 Mt Indicated). In Canada Prophecy owns Wellgreen PGM Project in Yukon, Lynn Lake Nickel Sulphide Project in Manitoba, and a 10% equity stake in Victory Nickel. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


ON BEHALF OF THE BOARD OF DIRECTORS Prophecy Resource Corp.
"JOHN LEE"
John Lee
Chairman
Telephone 1.800.851.1528
Email: [email protected]

 



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.