Prophecy Proposes Issuance of Units for Debt and Share Consolidation

Vancouver, British Columbia (FSCwire) - Prophecy Development Corp. (“Prophecy” or the “Company”) (TSX:PCY, Frankfurt:1P2) announces that it has entered into a Debt Settlement Agreement with Linx Partners Ltd. (“Linx”), a company controlled by Mr. John Lee,  Executive Chairman of Prophecy, and Mr. Lee pursuant to which, the Company has agreed, subject to the approval of shareholders at the Company’s upcoming 2016 Annual General Meeting to be held at 9:00 a.m. (PST) on June 2, 2016 (the “2016 AGM”) and acceptance by the Toronto Stock Exchange (“TSX”), to issue 75,000,000 units (the “Units”) at a deemed price of $0.02 per Unit to Mr. Lee, in satisfaction of $1,500,000 of indebtedness currently owed by the Company to Linx under the revolving Credit Facility Agreement dated March 12, 2015, as amended.  Each Unit consists of one Common share in the capital of the Company (a “Share”) and one Share purchase warrant (a “Warrant”). Each Warrant entitles the holder to acquire an additional Share at a price of $0.04 per Share for a period of five years from the date of issuance. 

In addition to providing cash loans to the Company through Linx, Mr. Lee has also personally participated in both of the Company's equity financings in 2015. The proposed debt settlement significantly reduces the Company's debt leverage and further aligns management’s interests with the Company’s.

The Company also announces that it proposes to consolidate its issued and outstanding Shares on the basis of one (1) new Share for every one hundred (100) old Shares outstanding (the “Consolidation”) subject to the approval of shareholders at the Company’s 2016 AGM and acceptance by the TSX. The effective date of the Consolidation, if approved, will occur immediately after TSX approval.

The Company further announces that it has entered into a subsequent consulting agreement with Cor Capital Inc., who has agreed to provide certain investor relations and shareholder communication services to the Company in exchange for the issuance of 300,000 Common shares through the Company’s Share-Based Compensation Plan which was approved by shareholders at the Company’s annual general meeting of shareholders held on June 19, 2014. There are no further fee commitments (in cash or shares) to Cor Capital Inc. for its service to the Company.

About Prophecy

Prophecy Development Corp. is a Canadian public company listed on the Toronto Stock Exchange that is engaged in developing mining and energy projects in Mongolia, Bolivia and Canada.  Further information on Prophecy can be found at www.prophecydev.com.

Prophecy Development Corp.
ON BEHALF OF THE BOARD

“JOHN LEE”

Executive Chairman

For more information about Prophecy, please contact Investor Relations:

+1.888.513.6286

ir@prophecydev.com

www.prophecydev.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 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.

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