Cobalt Coal Ltd.

Cobalt Coal Ltd.

April 17, 2012 17:39 ET

Cobalt Coal Provides Reserves Retraction Clarification

CALGARY, ALBERTA--(Marketwire - April 17, 2012) - Cobalt Coal Ltd. (formerly Cobalt Coal Corp.) (TSX VENTURE:CCF) ("Cobalt" or the "Corporation") wishes to clarify the resources and reserves retraction that was the subject of its April 4, 2012 news release.

As a result of a recent and routine Continuous Disclosure Review of Cobalt by the Alberta Securities Commission ("ASC"), management has determined that there was a material revision to Cobalt's reserves or resources resulting from the acquisition of the Westchester Limited Partnership and acquisition of the Westchester Expansion Lease. The reserves or resources so acquired have not been evaluated in the Norwest Corporation Technical Report on the Westchester Mine dated June 8, 2009 (the "Westchester Technical Report") that was previously filed on SEDAR.

The Westchester Limited Partnership ("WLP") was originally formed to fund the acquisition of the lease and equipment necessary to bring the Westchester Mine into production. Initially, the WLP owned a 90 percent working interest until payout of the funds advanced to start up the mine (approx $2,850,000). WLP's working interest reverted to a 65% working interest after payout and then to a 35% working interest after two times payout of the advanced funds (ie: approx $5,700,000). Therefore, Cobalt owned only a minority interest until payout to the WLP of approx $5,700,000 and the Westchester Technical Report only evaluated Cobalt's interest and not that of the WLP. The acquisition of the WLP by Cobalt in August 2011 resulted in an addition of coal deposits owned by Cobalt.

In addition, as a result of signing the Westchester Expansion Lease as reported in Cobalt's news release of January 19, 2011, additional coal deposits were again added to the project. Readers will be reminded that the Expansion Lease involves the addition of an additional 121 acres of coal bearing lands that are contiguous to the original Westchester Lease that can only be accessed through Cobalt's portals in the Westchester Mine. National Instrument 43-101 ("NI 43-101") compliant resource and reserve estimates are not yet available for the additional deposits and this required the retraction, by the April 4th, 2012 news release, of the additional quantities and extended mine life information previously announced on January 19, 2011. Although taken in isolation, these additions might not be a material event, the additions announced on January 19, 2010 (subsequently retracted) triggered the requirements under NI 43-101 to file a current NI 43-101 compliant technical report.

Cobalt is in the process of commissioning a current Technical Report which will be approved by a Qualified Person within the meaning of NI 43-101. The report will evaluate all of Cobalt's interests both in the original Westchester Lease and the Westchester Expansion Lease in which Cobalt now holds a 100% interest. Upon completion of the report, a further press release will be issued advising changes to Cobalt's resource and reserves estimates at the Westchester Project and the new report will be posted to SEDAR and onto Cobalt's web site.

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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