Prophecy Coal Closes $10 Million Private Placement

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/08/12 -- Prophecy Coal Corp. ('Prophecy' or the 'Company') (TSX: PCY)(OTCQX: PRPCF)(FRANKFURT: 1P2) is pleased to announce the closing of the private placement previously announced on March 1, 2012. Due to investor demand, the Company has increased the size of the non-brokered private placement of common shares to 22,363,866 shares at a price of $0.45 per share for gross proceeds of $10,063,740 (the 'Placement').

Company insiders invested $508,500 and together with existing shareholders have subscribed for a majority of this financing. Finder's fees of 6% of the proceeds placed, payable in cash, were paid on certain arms-length portions of the placement.

All shares issued are subject to a hold period expiring on July 9, 2012. Proceeds of the Placement will be applied to technical work at the Chandgana Thermal Coal Power Project, operations at the Ulaan Ovoo mine and general corporate purposes.

The Company also wishes to announce that it has granted options to acquire an aggregate of 3 million common shares at a price of $0.485 per share for a period of five years to directors, officers, consultants and employees of the Company. The above grant is subject to regulatory approval, including the approval of the TSX Exchange.

About Prophecy Coal

Prophecy Coal Corp. is a Canadian listed company engaged in developing energy projects in Mongolia. The Company has approximately 1.4 billion tonnes(i) of near surface thermal coal resources on two coal properties in Mongolia. Prophecy Coal's Chandgana 600 MW mine mouth power plant, for which technical studies are underway, has been permitted. The Company's Ulaan Ovoo coal mine is now in production. Prophecy Coal is the controlling shareholder of Prophecy Platinum Corp. (TSX VENTURE: NKL). Mineral resources that are not mineral reserves do not have demonstrated economic viability. Further information on Prophecy Coal can be found at www.prophecycoal.com.

ON BEHALF OF THE BOARD OF DIRECTORS Prophecy Coal Corp.

John Lee, CEO/Chairman

(i) Consist of 200 million tonnes at the Ulaan Ovoo coal mine based on NI 43-101 technical report completed in 2007 and 1.2 billion tonnes at the Chandgana coal project based on NI 43-101 technical reports completed in September, 2007 and September, 2010.

Forward-Looking Statements: This news release includes certain statements that may be deemed 'forward-looking statements'. All statements in this release, other than statements of historical facts, including, without limitation, statements regarding future plans and objectives of the companies are forward-looking statements that involve various risks and uncertainties. Although Prophecy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include general economic, regulatory, market or business conditions, and other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Mineral exploration and development of mines is an inherently risky business and large infrastructure projects such as power plants require huge amounts of capital which may not be available to Prophecy on terms which will allow its shareholders to realize a reasonable return or on any terms at all. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Prophecy and the risks and challenges of its business, investors should review filings that are available at www.sedar.com.

'Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.'

Contacts:

Prophecy Coal Corp.

David Brook

Manager, Investor Relations

1-800-358-5865
dbrook@prophecycoal.com
www.prophecycoal.com