Source: Prophecy Coal Corp.                        Date: 27 July, 2011

Prophecy Coal Corp. has adopted a shareholder rights plan designed to encourage the fair treatment of its shareholders in the event of an unsolicited take-over bid for shares of the company. The Rights Plan is designed to give the company's shareholders sufficient time to properly assess a take-over bid without undue pressure and to give the Board of Directors time to consider alternatives that allow the shareholders to receive full and fair value for their common shares. Mr. John Lee, Chairman of Prophecy Coal, has said the “management believes the company is very undervalued, thus vulnerable given the rise in value of its equity holding in Prophecy Platinum".

Although the Rights Plan is effective immediately, it is subject to TSX Venture Exchange approval and must be ratified by the shareholders. It is similar to shareholder rights plans adopted by numerous other Canadian corporations. Neither the Board nor senior management of the company is aware of any current, pending or threatened take-over bid for the company.