Mr. John Lee reports

PROPHECY REPORTS MEASURED 524.3 MT AND INDICATED 545.7 MT COAL RESOURCES AT CHANDGANA KHAVTGAI, MONGOLIA

The measured and indicated coal mineral resources within Prophecy Resource Corp.'s Chandgana Khavtgai coal project located in east-central Mongolia exceed one billion tonnes of coal.

The resource estimate is based on information from exploration programs completed in 2007 and this year. This year's program included 13 drill holes totalling 2,250 metres of infill drilling, eight seismic geophysical lines totalling 11.3 kilometres and total magnetic field mapping of 5.1 square kilometres. A total of 274 core samples were obtained for analysis.

The exploration program confirmed the continuation of the major coal seam (averaging 37.7 metres) at Khavtgai. Further, the exploration program has increased the confidence in the previously defined inferred portion of the Khavtgai project's coal resource in to indicated and measured mineral resources. Khavtgai is estimated to contain a measured and indicated coal resource of 1.07 billion tonnes of which 524.3 million tonnes (49 per cent) is in the measured category and 545.7 million tonnes (51 per cent) is in the indicated category.

The Khavtgai coal project and neighbouring Chandgana Tal (Tal) coal project, both 100 per cent owned by Prophecy, are approximately nine kilometres apart. Analytical results of the core samples confirm the coal has desirable thermal coal characteristics, including low ash, low-sulphur content and moderate heating value. The average in-place coal quality for Khavtgai has ash (air dried) 12.66, sulphur (air dried) 0.72 and gross calorific value (air dried) 4,354 kilocalories per kilogram (7,837 British thermal units per pound). By comparison, the average in-place coal quality for Chandgana Tal has ash (air dried) 12.49, sulphur (air dried) 0.68 and gross calorific value (air dried) 4,238 kilocalories per kilogram (7,628 British thermal units per pound).

                                     RESOURCES
                             (in millions of tonnes)

           Measured Indicated  Heating value  Ash     Sulphur  Strip   Thickness

Khavtgai   524.3     545.7     4,354 kcal/kg  12.66%  0.72%    1.9:1   37.7 m
Tal        141.3               4,238 kcal/kg  12.49%  0.68%    0.53:1  45.4 m
           -----     -----
Total      665.6     545.7

The combined resource estimates for the Chandgana projects total 1,211.3 million tonnes of measured and indicated mineral resources of thermal coal. Both projects have low stripping ratios, 0.53:1 in the case of Tal and 1.9:1 in the case of Khavtgai, with respective average coal seam thicknesses of 45.4 and 37.7 metres.

The projects are adjacent to a 45-kilovolt electrical distribution line and within 150 kilometres from a two-by-220-kilovolt electrical transmission line. Prophecy has received a mining licence for Tal and intends to convert Khavtgai's exploration licence to a mining licence in 2011.

The Tal starter pit is well suited for a mine-mouth power plant with extremely low strip ratio with Khavtgai to supplement mine production in later years. The projects are next to a paved road and within 160 kilometres of the Central Mongolian Railroad, which can facilitate transport of construction equipment. The company intends to commission a mine feasibility study on Chandgana Tal and is conducting multiple site visits with power plant engineers from multinational companies. Prophecy would like to caution that discussion of power plants is preliminary and there is no assurance of project feasibility.

The updated NI 43-101 resource report incorporating the final resource estimate and coal quality information at Khavtgai will be filed within 45 days on SEDAR. This news release has been reviewed and approved by Christopher M. Kravits, PGeo, who is a qualified person as defined in NI 43-101. Mr. Kravits has 34 years of United States and international relevant coal geology experience. He has been active in Mongolia since 2007.

Visit the company's website for a detailed drill map.