Prophecy Obtains Full Mining License for its 141-million-tonne Chandgana Tal Coal Deposit, Mongolia

Vancouver, British Columbia, February 8, 2011: Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2)  reports today that it has received the full mining license from the Mineral Resources Authority of Mongolia for the Chandgana Tal ("Tal") Deposit in Mongolia. Tal contains 141 million tonnes of Measured coal* and is located 9 kms north of Prophecy’s Chandgana Khavtgai project (over 1 billion tonnes Measured/Indicated coal)*.

Previously only a small portion of Tal possessed mining license status.  The full mining license represents the second significant milestone granted to Prophecy towards its planned 600 MW mine mouth power plant in the Chandgana Projects area ("Power Plant Project"). In November of 2010, the Mongolian Ministry of Nature and the Environment granted environmental approval for the Power Plant Project (see Prophecy news, November 15, 2010).

*The following table outlines the resource estimates and the quality and stripping ratios of  Prophecy’s  Coal Projects:

Tal will be the starter pit and supply an estimated 2.4 million tonnes per year of coal to the Power Plant Project. The starter pit features a 0.5 to 1 strip ratio; Khavtgai will supplement mine production in later years. The Power Plant Project is next to a paved road and within 160 km of the Central Mongolian Railroad, which can facilitate transport of construction equipment. The Project is adjacent to a 45kv electrical distribution line and within 150km from a 2x220kv electrical transmission line.

Further to receiving mining license and environmental approval on the Power Plant Project, Prophecy is pleased to announce that a 170 page Mongolian Power Plant Project Feasibility Study has been completed, details of which will be released after final translations and review by Mr. Paul Venter, and Mr. Michael Deats, Prophecy directors with combined over 75 years of experience in the coal mining and power generating industry in Russia, Mongolia, South Africa and sub-Sahara territories.  They have overseen construction and operation of thermal power plants upward of 3600 MW in installed capacity.


Power Line Plan for Chandgana



For more information about Prophecy, please contact Paul McKenzie at +1.604.642.2625 ext. 107 or John Lee at +1.800.851.1528.

This news release has been reviewed and approved by Danniel Oosterman, PGeo, Prophecy Geologist who is a Qualified Person as defined in NI 43-101. 

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). Prophecy's Ulaan Ovoo coal mine is fully commissioned and in production. In Canada Prophecy owns Wellgreen PGM Ni-Cu 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.