Prophecy provides update on Ulaan Ovoo Mine preparation, Mongolia

Vancouver, British Columbia, August 26, 2010: Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) Referring  to the Mine Services Agreement between  itself and Leighton Asia Limited, Prophecy announced today that Leighton has established the required infrastructure and deployed all necessary equipment and manpower (on schedule) to execute long term mining operations at Prophecy’s 100% owned Ulaan Ovoo Coal Project, Northern Mongolia.

Ulaan Ovoo site establishment commenced on 13 July 2010 to ensure that the commissioning of the 250,000 tonnes starter pit will take place as planned as of September 2010 with 57,500 tonnes in the first month ramping up to 100,000 tonnes per month by December 2010.

Operation Statistics: To date Leighton has removed and stockpiled approximately 30,696 BCM of topsoil and 209,095 BCM of overburden which is approximately some 28,089 BCM of overburden ahead of schedule in preparation for mining.

Equipment: Operational equipment deployed by Leighton includes three 773C Cat dump trucks, one 385D Cat excavator, one D8R Cat dozer, one 160H Cat grader, one 928G Cat loader, two 10,000lt water tankers, one 3,000lt fuel truck, two CD150 dewatering pumps, three Allmand portable lighting plants and four diesel generators of varying capacity.

Manpower: The current labour force can be categorised as follows:

Bridge Construction: The design of the concrete bridges that will replace all existing wooden bridges along the haul road has been completed and the foundation slabs are currently being poured. Completion of the bridge upgrade by the end of September will enable the trucking of coal from the mine site to Nauski.

Zeltura Border Opening: Prophecy has been informed that Russian and Mongolian governments have agreed to open the Zeltura border crossing on a permanent basis. Zeltura port is 15km by road from Ulaan Ovoo mine site and could present significant reduction on the transportation cost. The exact timing of the border opening is not known at this time.

Infrastructure: The workshop, office complex and mine camp with facilities for 80 people on site have been erected and the area is fenced off for security and safety purposes.

Wardrop Prefeasibility Study: The Company is working with Wardrop to clarify taxation, royalty, and off take pricing. The release of Wardrop’s final report is expected in September of this year.

Off-Take discussions are on-going with parties who have expressed written interests to procure coal directly at the mine site. Prophecy has also formally invited government site inspection, which is required prior to mine-starting.

Leighton Asia have been operating across Asia for 35 years in all facets of mining including mine development, operation and management, resource optimisation, mine planning, cost estimating, machine maintenance ,mine infrastructure, crushing, processing and materials handling. Its strength lies in the ability to develop competitive, innovative, practical solutions for its clients.

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.


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 suitable for export markets. The deposit features single massive coal seam 45-80 m thick with an average strip ratio of 2:1The project is located within 10 km of the Russian border, northern Mongolia and is 120km (75 miles) east of the Central Mongolian Railroad linking the project to the vast coal markets of Russia and Asia. 

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 Lynn Lake Nickel Project, a 10% equity stake in Victory Nickel and agreed to merge with Northern Platinum (TSX-V: NTH) on June 15, 2010. 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.