Cobalt Coal Corp.
TSX VENTURE : CBT

October 27, 2009 18:08 ET

Cobalt Coal Corp. Announces Exercise of Option to Acquire Additional Coal Assets in Kentucky

CALGARY, ALBERTA--(Marketwire - Oct. 27, 2009) - Cobalt Coal Corp. (TSX VENTURE:CBT) ("Cobalt" or the "Corporation") announced today that it has exercised its option to acquire metallurgical coal mineral rights on properties owned by Fox Development Corporation ("Fox"), a Kentucky mining corporation. In exchange for a cash payment of $40,000 and a 7.5% Over Riding Royalty ("ORR") reserved for Fox, Cobalt will be granted a 100% working interest in certain coal properties in Pike County, Kentucky, near Cobalt's regional headquarters in neighbouring West Virginia. Additionally, Cobalt will have an eighteen month option period to buy out the ORR for US $650,000.

Cobalt intends to submit applications immediately to the applicable state and federal mining authorities to obtain the necessary permits that may be required to commence commercial coal production.

In discussing the Fox acquisition, David M. Lewis, President and CEO of Cobalt, commented, "The purchase of the Fox asset represents a significant step forward in Cobalt's regional coal production business. Once regulatory requirements have been satisfied with respect to the Fox acquisition, we expect to proceed immediately with the commencement of commercial production at this property."

About Cobalt:

Cobalt is a metallurgical coal acquisition and production company whose common shares are publicly traded on the TSX Venture Exchange. Cobalt is focused on the acquisition and development of known metallurgical coal deposits in the Appalachian coal producing region of the United States. The Corporation has its head office in Calgary, Alberta and has an operating office in Welch, West Virginia.

READER ADVISORY

Statements in this press release, including statements that address events or developments that Cobalt expects to occur, may contain forward-looking information which include expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. These risks include, but are not limited to, the risks associated with the coal mining industry, regulatory approval, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward- looking information. Actual results may differ materially. Cobalt will not update these forward-looking statements to reflect events or circumstances after the date hereof, except as required pursuant to applicable laws.

Neither 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.

Contact Information

  • Cobalt Coal Corp.
    David M. Lewis
    President and CEO
    (403) 262-5510