Source: Prophecy Resource Corp.                      Date: 27 August, 2010

Prophecy Resources has announced that Leighton Asia, with which it has a mine services agreement, has established on schedule the required infrastructure and deployed all necessary equipment and manpower  to execute long term mining operations at Prophecy's 100% owned Ulaan Ovoo Coal Project, Northern Mongolia. Ulaan Ovoo site establishment commenced on July 13, 2010 to ensure that the commissioning of the 250,000-ton starter pit will take place in September 2010, as planned, with 57,500 tons in the first month ramping up to 100,000 tons per month by December 2010. Altogether 49 Mongolians were employed in the work.

Prophecy has been informed that the Russian and Mongolian governments have agreed to open the Zeltura border crossing on a permanent basis. Zeltura port is 15 km by road from Ulaan Ovoo mine site and could bring down transportation costs significantly. The exact timing of the border opening is not known at this time.

Off-take discussions are on-going with parties who have expressed written interests to procure coal directly at the mine site. Prophecy has also formally invited government site inspection, which is required prior to mine-starting.