Prophecy Coal Corp. is pleased to provide the following
update on its open pit coal operation at its Ulaan Ovoo mine in Mongolia.

Since 2010, the Company has invested over $30 million at Ulaan Ovoo,
including road and bridge building, mining fleet, mining camp, pre-stripping,
and other infrastructure and community improvement. Since September 2011,
Prophecy has sold and delivered some 188,915 tonnes of thermal coal, including
8,055 tonnes to Russia, 23,543 tonnes to private Mongolian companies, and
157,317 tonnes to Mongolian government owned power plants.

The Company has contracts to deliver an additional 228,388 tonnes in 2012,
the majority of which is to be delivered to the Darhan and Erdenet power plants
in Mongolia. In just over a year, Prophecy”s Ulaan Ovoo mine has become the
largest independent supplier of coal to Mongolian power plants, for the benefit
of Mongolians.

There are currently approximately 130,000 tonnes of coal stockpiled at Ulaan
Ovoo. Total sales target for 2012 is 300,000 tonnes of coal. For the rest of
2012, the Company expects a stabilized production cost and minimal capital
expenditures at Ulaan Ovoo.

In the past months, the Company has experienced a steady increase in both
demand and realized sale price for its coal. In 2012, the Company has received
commitment and interest for a substantial quantity of Ulaan Ovoo coal from
Russian buyers, however Prophecy is postponing sales to Russia pending the
opening of the Zeltura border crossing and a revised export royalty scheme from
the General Department of Taxation of Mongolia. Prophecy is currently paying
export royalties based on a government-set benchmark coal price which is nearly
3 times higher than the Company”s actual sale price. Prophecy is optimistic
that progress will be made on both royalty and border opening fronts to improve
the margin on sales.

John Lee, Chairman and CEO of Prophecy states: “Ulaan Ovoo produces
highly desirable thermal coal of NAR 5,100 kcal/kg quality to fulfill the
regional demand of the thermal coal market. The coal inventory levels at
Mongolian power plants this past winter were down to only a few days, which
created a national emergency. We are committed to delivering our quota to
Mongolian power plants in 2012, while continuing to work with the Mongolian
government on the 600 MW Chandgana Power Purchase Agreement to address the
long-term energy needs of this rapidly developing country and at the same time,
provide a stable return to our shareholders.”

Prophecy Coal Corp. is a Canadian listed company aiming to build the first
independent thermal power plant in Mongolia. The Company”s Ulaan Ovoo deposit
hosts a measured resource of 174 million tonnes and an indicated resource of 34
million tonnes, while its Chandgana deposit hosts a measured resource of 650
million tonnes and an indicated resource of 539 million tonnes. The proposed
600 MW Chandgana mine-mouth power plant has been permitted and the Company is
currently in discussion with the Government on a Power Purchase Agreement.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.

Source: Market Wire