Prophecy & Sojitz Corp Sign Cooperation Agreement to Jointly Market Ulaan Ovoo Coal to China

Vancouver, British Columbia, June 7, 2010: Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTC: PRPCF, Frankfurt: 1P2) and Sojitz Corporation of Japan have entered into an exclusive agreement to jointly market thermal coal from Prophecy's 208 million tonne Ulaan Ovoo coal deposit to buyers in China. The agreement also covers Japan and Korea, provided that the Coal is sold through the Chinese land border from Mongolia.

By capitalizing on  its extensive expertise in international coal trade, Sojitz Corp and its Beijing affiliate, China (Sojitz (China) Co., Ltd., will assist Prophecy on a best efforts basis in securing letters of intent and/or offtake agreements from potential coal buyers for its thermal coal in advance of planned 2010 mining operations.  Sojitz will also advise Prophecy on the best pricing parameters including volatility concerns as they applies to specific markets. The agreement term is one year which can be mutually extended.

Sojitz is a widely respected international corporation involved in a multitude of businesses including but not limited to energy (coal, LNG, oil & gas), metals, chemical and functional materials and machinery. Its extensive coal operations are comprised of a trading and an investment arm, from which they draw synergies. Sojitz creates sales volume for coal from various locals including Australia, Russia, Indonesia and China. They are the leading coal importer to Japan. Additionally they focus on offshore trade, especially to China, through their Chinese coal sales subsidiary.

Mr. Lee, Chairman of Prophecy, stated today that:  "The marketing agreement between ourselves and Sojitz is the result of year long cultivating discussions. Prior to entering this agreement, our Japanese partner conducted extensive due diligence including several Ulaan Ovoo site visits.  This agreement symbolizes the confidence we now have in each other and speaks to the desirability of Prophecy coal in the vast and lucrative Asian marketplace."

The index for power-station thermal coal prices at Australia's Newcastle port, which is seen as a benchmark for coal prices throughout Asia, recently exceeded USD $107 per metric ton, 55% higher than a year ago. Wardrop Engineering visited Ulaan Ovoo and is developing a prefeasibility study specific to the reserves and economic sensitivities of the Ulaan Ovoo deposit. The study is expected to be released in 45 days.

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. Leighton Asia is a wholly owned subsidiary of the world's largest contract miner, the Leighton Group. Mine site establishment will commence in July, 2010, to ensure 250,000-tonne production in 2010, with 57,500 tonnes in August, ramping up to 100,000 tonnes per month by December, 2010. The pay-as-you-go contract mining and equipment leasing cost for 2010 is $3.7 million and Prophecy is fully funded to meet this obligation. The 2011 target is 2 million tonnes and Leighton expects to present similar contract terms on a cost-per-tonne basis after receiving the prefeasibility mine plan from Wardrop.

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 21, Prophecy secured rail loading facilities to transport over 1.5 million tonnes per year of Mongolian Coal to Russia and China. Prophecy is currently engaged in multi party discussion on off-take agreements.

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 for download 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.

This news release has been reviewed and approved by Danniel Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person under National Instrument 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 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.  

John Lee

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.