Cobalt Coal Ltd.

Cobalt Coal Ltd.

February 24, 2012 17:42 ET

Cobalt Coal Ltd. Announces the Closing of Private Placement of Convertible Debentures

CALGARY, ALBERTA--(Marketwire - Feb. 24, 2012) - Cobalt Coal Ltd. (formerly Cobalt Coal Corp.) (TSX VENTURE:CCF) ("Cobalt" or the "Corporation") is pleased to announce that it has closed its previously announced non-brokered private placement (the "Offering"). Cobalt issued $1,000,000 principal amount of unsecured, convertible, redeemable debentures which bear interest at a rate of 12% per annum payable upon maturity (the "Debentures") at a price of $1.00 per $1.00 principal amount of Debenture for gross proceeds of $1,000,000.

The Debentures will mature 24 months from the date of issuance and are convertible, by either the holder or the Corporation, into units (the "Units") of the Corporation at a conversion rate of $0.15 principal amount of Debenture per Unit. Each Unit will be comprised of one common share in the capital of Cobalt and one common share purchase warrant (a "Warrant"). Each Warrant is subject to vesting conditions and will entitle the holder to acquire one common share at $0.20 per share of Cobalt for a period of two (2) years from the closing of the Offering.

Cobalt paid a cash finders' fee to Macquarie Private Wealth Inc. ("Macquarie"), being 6% of the gross proceeds from subscriptions for $70,000 principal amount of Debentures received from subscribers introduced to the Corporation by Macquarie.

As previously stated, the Corporation intends to use the proceeds from the Offering to pursue acquisition opportunities for Cobalt including the payment of non-refundable deposits and for general working capital purposes and for the payment of expenses related to the Offering.

Pursuant to applicable securities laws, all securities issued pursuant to the Offering will be subject to four month hold period expiring on June 25, 2012.

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.

The securities of Cobalt being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.


Statements in this news release may contain forward-looking information including the use of proceeds from 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 Corporation. 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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