Prophecy Coal Corporate Update

Vancouver, British Columbia, December 30, 2013 – Prophecy Coal Corp. (“Prophecy”or the “Company”) (TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2) Further to its News Releases of April 16, 2013, May 31, 2013, and June 6, 2013, the Company announced the issuance of an aggregate of 4,460,857 common shares upon the exercise of an aggregate of 12,525,429(the “Adjustment Warrants”), including 1,460,857 common shares issued on the exercise of 4,382,572 Adjustment Warrants (the “First Tranch Adjustment Warrants”) issued to subscribers under the Company’s first tranch closing of its unit private placement announced on April 16, 2013, and 2,714,286 common shares issued on the exercise of 8,142,857 Adjustment Warrants issued to subscribers under the Company’s second closing of its unit private placement announced on June 6, 2013. The terms of the Adjustment Warrants are disclosed in the Company’s May 31, 2013 News Release. The Company also announced that it has amended the terms of 18,358,000 previously issued stock options (the “Amended Options”) held by officers directors, employees and consultants to reduce the option exercise price to $.28 per common share.

Further, the Company has cancelled a total of 5,435,000 incentive stock options held by officers directors, employees and consultants (the “Option Holders”) and re-issued a further 5,435,000 options (the “Reissued Options”) exercisable at $0.28 per common share and expiring June 18, 2017 to the Option Holders.

In addition, the Company announced that it had received shareholder approval for the issuance of 2,027,500 bonus shares (the “Bonus Shares”) to certain directors, officers, employees and service providers of the Company, of which 1,013,750 have been issued and a further 1,013,750 are anticipated to be issued in January 2014. The issuance of the Bonus Shares was initially approved by the Company’s board of directors in January 2013.

Issuance of the First Tranch Adjustment Warrants, Bonus Shares, Re-issued Options and the amendments to the Amended Options were approved by the shareholders of the Company at its annual and special general meeting held on July 30, 2013 (the “Meeting”). A copy of the Company’s Management Information Circular dated effective June 26, 2013 providing details of the resolutions passed at the Meeting is available under the Company’s profile at www.sedar.com.

About Prophecy Coal

Prophecy Coal Corp. is a Canadian company listed on the Toronto Stock Exchange
engaged in developing energy projects in Mongolia. Further information on Prophecy Coal can be found at www.prophecycoal.com.

PROPHECY COAL CORP
ON BEHALF OF THE BOARD
“JOHN LEE”
Executive Chairman

For more information about Prophecy, please contact
Bekzod Kasimov
Manager, Business Development
+976 – 99012672
+1.888.513.6286
bekzod@prophecycoal.com
www.prophecycoal.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.

Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this news release, including statements which may contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, and statements related to matters which are not historical facts, are forward-looking information within the meaning of applicable securities laws. Such forward-looking statements, which reflect management’s expectations regarding Prophecy’s future growth, results of operations, performance, business prospects and opportunities, are based on certain factors and assumptions and involve known and unknown risks and uncertainties which may cause the actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These estimates and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies, many of which, with respect to future events, are subject to change and could cause actual results to differ materially from those expressed or implied in any forwardlooking statements made by Prophecy. In making forward-looking statements as may be included in this news release, Prophecy has made several assumptions that it believes are appropriate, including, but not limited to assumptions that:; there being no significant disruptions affecting operations, such as due to 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 remain consistent with current levels; production forecasts meeting expectations;the accuracy of Prophecy’s current mineral resource estimates; labour and materials costs increasing on a basis consistent with Prophecy’s current expectations; and that any additional required financing will be available on reasonable terms. Prophecy cannot assure you that any of these assumptions will prove to be correct.

Numerous factors could cause Prophecy’s actual results to differ materially from those expressed or implied in the forward looking statements, including the following risks and uncertainties, which are discussed in greater detail under the heading “Risk Factors” in Prophecy’s most recent Management Discussion and Analysis and Annual Information Form as filed on SEDAR and posted on Prophecy’s website: Prophecy’s history of net losses and lack of foreseeable cash flow; exploration, development and production risks, including risks related to the development of Prophecy’s Ulaan Ovoo coal property; Prophecy not having a history of profitable mineral production; the uncertainty of mineral resource and mineral reserve estimates; the capital and operating costs required to bring Prophecy’s projects into production and the resulting economic returns from its projects; foreign operations and political conditions, including the legal and political risks of operating in Mongolia, which is a developing jurisdiction; title to Prophecy’s mineral properties; environmental risks; the competitive nature of the mining business; lack of infrastructure; Prophecy’s reliance on key personnel; uninsured risks; commodity price fluctuations; reliance on contractors; Prophecy’s minority interest in Prophecy Platinum Ltd.; Prophecy’s need for substantial additional funding and the risk of not securing such funding on reasonable terms or at all; foreign exchange risks; anti-corruption legislation; recent global financial conditions; the payment of dividends; and conflicts of interest.

These factors should be considered carefully, and readers should not place undue reliance on the Prophecy’s forward-looking statements. Prophecy believes that the expectations reflected in the forward-looking statements contained in this news release and the documents incorporated by reference herein are reasonable, but no assurance can be given that these expectations will prove to be correct. In addition, although Prophecy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Prophecy undertakes no obligation to release publicly any future revisions to forward-looking statements to reflect events or circumstances after the date of this news or to reflect the occurrence of unanticipated events, except as expressly required by law.