Prophecy Coal Announces Executive Chairman Appointment and Director Resignation

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/25/13 -- Prophecy Coal Corp. ("Prophecy Coal" or the "Company") (TSX: PCY)(OTCQX: PRPCF)(FRANKFURT: 1P2) is pleased to announce that Mr. John Lee has transitioned from his role as Chief Executive Officer ("CEO") of the Company to Executive Chairman of the Board of Directors (the "Board") of the Company.

The Board has determined that the Company has reached a critical stage and now requires Mr. Lee to focus his time and attention on negotiating the major government and joint venture agreements for the development of the Company's Chandgana power plant project in Mongolia.

To complement Mr. Lee in his role as Executive Chairman of the Board, the Company has initiated a search for a new CEO to carry out day-to-day management responsibilities as the Company transitions into a true developer of coal powered electrical generation. Mr. Lee will serve as Interim CEO until a new candidate has been identified and appointed.

Prophecy Coal also announces the resignation of Mr. Jivko Savov as a director of the Company. In light of recent increases to his responsibilities as Director of Global Business Development, M&A and Retail for Gazprom in London, Mr. Savov has decided to focus his attention on his position with Gazprom. As such, Mr. Savov considered that it would be best for him to step down from the Board. However, Mr. Savov will continue to assist Prophecy in its business development as an advisor. The Board wishes to thank Mr. Savov for his contribution to the Company to date and looks forward to Mr. Savov working with the Company in the future in an advisory capacity.

About Prophecy Coal

Prophecy Coal Corp. is a Canadian listed company engaged in developing energy projects in Mongolia. The Company's wholly-owned subsidiary, Prophecy Power Generation LLC ("Prophecy Power"), is advancing plans for a proposed 600 MW coal mine-mouth power plant, which has been permitted by the Mongolian government, adjacent to its Chandgana coal deposit. Chandgana Coal LLC, another wholly-owned Mongolian subsidiary of Prophecy Coal, is expected to supply 3.5 million tonnes of coal per year to Prophecy Power for 25 years. Chandgana Coal LLC controls over 1.2 billion tonnes of thermal coal in the measured and indicated categories, including two mining licenses containing 141 million tonnes of measured resource with a strip ratio of 0.7:1. Substantially all of the Company's resources are not mineral reserves, hence they do not have demonstrated economic viability. The Company cautions that the Chandgana project is in Mongolia and requires substantial capital to develop.

Further information on the Company can be found at www.prophecycoal.com.

The technical contents of this news release have been reviewed and approved by Christopher M. Kravits, P.Geo., who is a Qualified Person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Kravits has 34 years of US and international relevant coal geology experience. He has been active in Mongolia since 2007.

ON BEHALF OF THE BOARD OF PROPHECY COAL CORP.

JOHN LEE, Interim CEO/Executive Chairman of the Board

(i)Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Forward Looking Statements: This news release includes certain "forward-looking statements" and "forward looking information" as defined under applicable securities regulatory authorities in Canada (collectively, the "forward-looking statements"). All statements in this release, other than statements of historical fact, including, without limitation, statements of potential mineralization, the estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. Although Prophecy Coal 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 unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with operating in foreign jurisdictions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators.

Assumptions underlying the Company's expectations regarding forward-looking statements contained in this news release include, among others, that all required third party contractual, regulatory and governmental approvals will ultimately be obtained for the development, construction and production of the Company's properties, there being no significant disruptions affecting operations, including labour disruptions, currency exchange rates being approximately consistent with current levels, certain price assumptions for coal, prices for and availability of fuel, parts and equipment and other key supplies remaining consistent with current levels, production forecasts meeting expectations, the accuracy of the Company's current mineral resource and reserve estimates, labour and material costs increasing on a basis consistent with the Company's current expectations and that any additional required financing will be available on reasonable terms. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly, the actual events may differ materially from those projected in the forward-looking statements. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect changes in assumptions or the occurrence of anticipated or unanticipated events, except as required by law. For more information on Prophecy Coal and its wholly-owned subsidiaries and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.com.

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

Contacts:

Prophecy Coal Corp.

Chris Ackerman

Manager, Investor Relations

1-800-459-5583
cackerman@prophecycoal.com
www.prophecycoal.com