Vancouver, British Columbia, January 5,
2011: Prophecy Resource Corp. (�Prophecy� or the �Company�) (TSX-V:PCY,
OTCQX: PRPCF, Frankfurt: 1P2) announced today that it has entered into a Memorandum of
Understanding (�MOU�) with JUST
Group ("JUST") of Mongolia pertaining to a minimum of
1.2 million tonnes of coal sales from
Prophecy's Ulaan Ovoo
mine.
For the next 3 years, JUST will purchase a minimum of 1.2 million tonnes of coal per year from Prophecy
(subject to production capacity) and re-sell this coal to end
users pursuant to back-to-back sales agreements entered into by all
relevant parties. JUST will assist Prophecy with customer acquisition,
revenue collection, customs, and rail transportation within Russia's
Buratya province (10km from Ulaan
Ovoo) and towards Russia's east seaports such
as Vladivostok and Vostochiny.
The minimum sales price at Nauski, the northern
Mongolian-Russian border crossing, is set at US$35 per tonne of coal, subject to quarterly market
adjustment. As total consideration for its services, JUST will receive
a 3% commission of the final coal sales price. Both Prophecy
and JUST will also cooperate to rail Ulaan
Ovoo coal to Russian east seaports in the
soonest time frame possible, where coal of Ulaan
Ovoo�s quality is trading at a 2 year high of
$84/tonne.
Pursuant to the MOU, Prophecy has also agreed to purchase JUST Oil LLC
Diesel Products at prevailing market prices. Both parties have agreed to
finalize all details in a binding Co-operation Agreement within 30 days
of the MOU.
John Lee, CEO of Prophecy states: "Since Ulaan
Ovoo's commissioning in October, Prophecy
has received numerous expressions of coal off take interest
from both local Russian power plants and far east
clients at Russian east seaports. Our alliance with
JUST ensures seamless coal delivery to end customers.
Again I'd also like to thank the Mineral Resources Authority of Mongolia
and the Ministry of Mineral Resources and Energy for expediting
Ulaan Ovoo
permitting, which allows Prophecy to serve local and
regional thermal plants in this harsh winter in times of
need."
Baktuu, Chairman of JUST states: "Prophecy
is a trustworthy, energetic company. The Ulaan
Ovoo and Chandgana
projects have a lot of potential and the JUST group looks forward to a
solid partnership with Prophecy to develop those projects to
serve and power Mongolia as well as other parts of Asia."
This news release has been reviewed and approved by Danniel
J. Oosterman, PGeo,
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.
About JUST Group
JUST Group is a private Mongolian company
incorporated in 1999 that is, through subsidiary companies, active in the
trading, distribution and bulk transportation of energy products,
logistics, and mining in Mongolia. The company has
extensive experience in rail transportation between Mongolia and Russia
and currently carry by rail bulk energy products such as oil and
coal.
JUST Group currently employs 3,300 people and
currently ranks as the 5th largest company in Mongolia, in a survey
completed by the Government of Mongolia, Mongolian Chamber of Industry
and Commerce, and is one of the top 3 Mongolian oil products retail and
wholesale companies. Thanks to Just Group's experience in the trading and
distribution of energy products (such as oil, coal, and electricity) the
company has established preferred business relationships with all the
major Mongolian businesses active in heavy industry, power and mining.
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 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: john@prophecyresource.com
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.
Prophecy Resource Corp.
John Lee - Chairman and CEO
For further information:
John Lee
Telephone 1.800.851.1528
Email: john@prophecyresource.com
www.prophecyresource.com
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"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."