Prophecy Coal Corp. has arranged a
$10 million secured debt facility (the “Loan”) with Waterton Global
Value, L.P. (“Waterton Global”). The funds will be used to complete
the purchase of the Tugalgatai, Mongolia coal licenses on which a large coal
resource is known to exist as described in the Company”s news release of June
18, 2012. The Loan has a one year term and bears interest at 14% per annum. A
structuring fee of 2.5% plus a bonus of $600,000 are payable through the
issuance of 2,735,617 of the Company”s common shares on closing of the Loan
which occurred today. These shares are subject to a four month hold period.

John Lee, CEO of Prophecy, stated
today that, “We appreciate Waterton Global”s continuing support. The
proceeds will fully fund completion of the acquisition of Tugalgatai coal
licenses which are expected to significantly increase our coal resources.”

Cheryl Brandon, Portfolio Manager at
Waterton Global, stated, “We look forward to working with Prophecy Coal to
finance the Company as they continue to expand in the Chandgana Coal Basin. The
Waterton Global facility provides the required capital to complete the recently
announced $10 million coal license acquisition and implement the company”s
production growth strategy in the region.”

Prophecy Coal Corp. is a Canadian
listed company engaged in developing energy projects in Mongolia. Prophecy”s
Ulaan Ovoo mine has achieved production status. Prophecy”s proposed 600 MW
mine-mouth power-plant adjacent to the Chandgana coal deposit has been
permitted by the Mongolian government. Negotiations on financing, power
purchase agreement and construction management are being pursued.

Source: MARKETWIRE