Cobalt Coal Corp.

July 01, 2011 14:04 ET

Cobalt Coal Corp. Announces Q1 Results and Debt Defaults

CALGARY, ALBERTA--(Marketwire - July 1, 2011) - Cobalt Coal Corp. ("Cobalt" or the "Company") (TSX VENTURE:CBT), announces its Q1 2011 financial results and debt defaults.

Q1 Results

The Company announces it has filed its financial statements and Management Discussion & Analysis for the quarter ended March 31, 2011 on SEDAR (

The Company has incurred a net loss for Q1 2011 of $631,574 and has a working capital deficiency of $2,181,966 at March 31, 2011. Note 2 to the 2010 financial statements entitled "Forbearance and Going Concern" further describe issues impacting the Company.

Debt Defaults

The Company was required to repay the Lender of the bridge loan the principal amount owing of $1,198,909 plus any accrued interest by June 30, 2011. The Company was unable to repay the Lender thus will be in default under the terms the Forbearance Agreement. The Company continues discussions with the Lender, however, there is no guarantee that the Lender will extend the Forbearance Agreement or if it is extended, on what terms.

In addition, a quarterly interest payment was due June 30, 2011 in regards to the debentures. The Company was unable to pay this amount on June 30th due to a lack of cash resources. As such the Company will be in default under the terms of the debentures.

As announced previously, the Company continues to seek additional equity to resolve these debt defaults, for future expansion and for working capital purposes.

Annual and Special Meeting

All motions considered at the Annual and Special Meeting of the Shareholders of the Company, held on June 29, 2011, were adopted with over 97% of the votes cast in favour of the motions.

About Cobalt

Cobalt is a publicly traded coal exploration and production company headquartered in Calgary, Alberta, Canada with a regional office in Welch, West Virginia USA. Cobalt was created to capitalize on the growth opportunities that exist in the metallurgical coal mining industry.


Statements in this news release may contain forward-looking information including the timing of closing of the Offering and the intended use of proceeds of the Offering. 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 Company. These risks include, but are not limited to, the risks associated with the coal mining industry, 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.

Neither TSX Venture Exchange nor its regulation/service provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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