Prophecy Platinum Announces Results of Wellgreen Preliminary Economic Assessment - 38% Pre-tax IRR, $3.0 Billion NPV, 37 Year Mine Life

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Vancouver, B.C., June 18, 2012 - Prophecy Platinum Corp. (“Prophecy” or the “Company”) (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) is pleased to announce the results of an independent NI 43-101 compliant Preliminary Economic Assessment (“PEA”), for its 100% owned Wellgreen Ni-Cu-PGM project, located in the Yukon. The independent PEA, prepared by Tetra Tech, evaluated a base case of an open-pit mine (111,500 tonne/day mining rate), an onsite concentrator (32,000 tonne/day milling rate) and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper and 7.119 million ounces of platinum+palladium+gold over 37 year mine life with an average strip ratio of 2.57.

The financial highlights are shown.
(All amounts are in US dollars unless otherwise stated).

Table 1. Financial Highlights:

Commodity pricing used in this technical report was obtained from the Q2, 2012 Energy and Metals Consensus Forecast (EMCF), a long-term forward consensus among 20 leading international financial institutions published by Consensus Economics, a macroeconomic survey firm: Copper $3.11/lb, Nickel $10.82/lb, Cobalt $16.70/lb, Platinum $2043.50/oz. Palladium $932.00/oz, Gold US$1347.40/oz.

A PEA should not be considered to be a pre-feasibility or feasibility study, as the economics and technical viability of the project has not been demonstrated at this time. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserve do not have demonstrated economic viability.

John Lee, Chairman of Prophecy states: “We are pleased with the PEA results. The numbers indicate Wellgreen as one of most exciting mineral projects in Yukon. The Company is currently drilling to both upgrade and expand the resource base. The infrastructure is excellent as the project is merely 1,400 meters in altitude and 14 km from the paved Alaska Highway that leads to Haines deep seaport. Discussions are underway with support from local stakeholders regarding permitting and logistics.”

FINANCIAL EVALUATION

The independent PEA study reports that development of the Wellgreen deposit will produce a pre-tax Internal Rate of Return (“IRR”) of 38% and an Net Present Value (“NPV”) of $3.0 billion, based on 8% discount rate and 100% equity.

This base case financial evaluation uses the Energy & Metals Consensus Forecast (EMCF) in effect Q2, 2012. The EMCF is a consensus forecast of long term energy and metals pricing among 20 leading international financial institutions and is considered to be an industry standard.

Table 2. Key Financial Data Sensitivity to Metal Prices:

Further sensitivity analyses may be found in the PEA executive summary.

CAPITAL and OPERATING COSTS

The initial capital cost for the Wellgreen project is estimated at $863 million, including 25% contingency and is summarized below:

Table 3. Initial Capital Costs:

Total operating costs are estimated to be $29.74 per tonne of mill feed over the life of mine. These operating costs are based on an estimated diesel power rate of $0.28 per kWh. Liquid natural gas power option will be examined in the prefeasibility study.

Table 4. Operating Costs:

DEVELOPMENT PLAN

The PEA study recommends development of the Wellgreen deposit as a conventional, diesel truck-shovel open pit mine. The deposit will be processed using a conventional concentrator to produce bulk Ni-Cu-PGE concentrate.

The mill will have a nominal production rate of 32,000 tonnes of mill feed per day (averaged over the life of mine) with average annual stripping ratio estimated at 2.57 over the life of mine.

Over a projected mine life of 37 years, the mill will produce 1.959 billion pounds of nickel, 2.058 billion pounds of copper and 7.119 million ounces of platinum+palladium+gold in concentrate.

The average feed is graded at Ni 0.32%, Cu 0.26%, Pt 0.411 g/t, Pd 0.347 g/t, Au 0.177 g/t, & Co 0.02%.

The following flotation concentrate recoveries from May 2012 SGS Studies are adopted in the PEA:

Ni 67.60%, Cu 87.80%, Pt 46.00%, Pd 72.90%, Au 58.90%, & Co 64.40%

Once metals in concentrate are determined, the following smelting/refining recoveries are applied, together with a 25% cost factor against gross metals recovered to account for smelting, refining, transportation, and marketing cost:

Ni 90.00%, Cu 98.00%, Pt 96.00%, Pd 96.00%, Au 96.00%, & Co 90.00%

Table 5. Production Highlights:

Permits to support commencement of construction are assumed to be obtained in 2016. Based on this assumption the production of concentrate is estimated to commence in 2019.

RESOURCE ESTIMATE

At a 0.22% NiEq cut-off, the Wellgreen Project is estimated to contain an Indicated Resource of 14.4 Mt at 0.68% Ni, 0.62% Cu, and 2.23 g/t Pt+Pd+Au grade. In additional, the Wellgreen Project is estimated to contain an Inferred Resource of 446.6 Mt at 0.31% Ni, 0.25% Cu, and 0.87 g/t Pt+Pd+Au grade. The table below summarizes the results of the resource estimate constrained by an optimized open pit.

Table 6. Wellgreen Mineral Resource Summary:

OPPORTUNITIES

This PEA does not take into account opportunities for improvement based on:

• Inclusion of revenue from the recoveries of Rhodium, Ruthenium, Iridium, & Osmium
• Increasing the overall resource
• Liquid natural gas option to lower power cost
• Split stream Cu concentrate and Ni concentrate to reduce smelting charges
• Further improvement on metal recoveries

INDEPENDENT CONSULTANT

Tetra Tech (NASDAQ:TTEK) is a leading provider of consulting, engineering, program management, construction management and technical services worldwide and provides innovative solutions for global natural resource management, energy, and infrastructure markets. Tetra Tech has more than 13,000 employees worldwide and capabilities that span the entire project lifecycle.

The full Technical Report (PEA) report will be filed on Sedar within 45 days.

QUALIFIED PERSONS

Danniel Oosterman, P.Geo., is the Qualified Person as defined in NI 43-101 who has reviewed and approved the scientific, technical and financial information in this news release.

Todd McCracken, P.Geo., Andrew Carter, C.Eng., Pacifico Corpuz, P.Eng., Philip Bridson, P.Eng and Wayne Stoyko, P.Eng are the Qualified Persons, as defined under National Instrument 43-101, who supervised and are responsible for the Preliminary Economic Assessment for the Wellgreen Project and have reviewed the scientific, technical and financial content of this release.

About Prophecy Platinum

Prophecy Platinum Corp. is a mineral exploration company focused on developing platinum group metals (PGM) and nickel sulphide projects. Defining and driving the company is its flagship Wellgreen PGM Nickel Copper property in Canada’s Yukon Territory. Prophecy’s further holdings include the Lynn Lake Nickel Copper project in Manitoba, the Las Aguilas Nickel PGM deposit in Argentina, as well as five prospective claims in Uruguay.

ON BEHALF OF THE BOARD OF DIRECTORS of

Prophecy Platinum Corp. “John Lee”
John Lee
Chairman

For further information: David Brook
Manager, Investor Relations
1-800-358-5865
[email protected]

www.prophecyplat.com

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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 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 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 failure to obtain necessary approvals in respect of the Transaction, 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 companies with securities regulators. 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. For more information on Prophecy and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.com.

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

This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (“the U.S. Securities Act”) or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.