EastCoal Inc.
TSX VENTURE : ECX

EastCoal Inc.

August 19, 2011 12:01 ET

EastCoal Inc.: Wash Plant 90% Complete

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 19, 2011) - EastCoal Inc. (TSX VENTURE:ECX) -

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EastCoal Inc. (the "Company" or "EastCoal") is pleased to report that construction of the wash-plant for the Verticalnaya mine in Ukraine is 90% complete. It is expected that the plant will be shipped from the manufacturer in the United Kingdom in the coming month. On site, foundations are being prepared. The plant is expected to be operational on schedule before the end of the year.

The plant will initially process coal from the upper, H11 seam, augmented by coal from developments in the lower, H8 seam of the former main mine which is currently being dewatered. In addition, there are a number of dumps close by and it is intended to test these and other potentially profitable sources of raw coal following installation of the plant. A priority will be to commence marketing of washed coal from the various available sources.

Development of the first H11 longwall is now expected to be approximately 4 months behind schedule due to initially poor ground conditions in the two inclined drifts being driven to the seam. For safety reasons, it has been decided to provide the two drifts with full concrete support into solid strata.

The delay in accessing H11 is not expected to significantly alter the production schedule. The Company has now identified additional coal within the H8 seam that is planned to be mined in early 2012.

Samples of H8 coal have been taken and sent for analysis. Samples of H11 coal are expected to be taken in a few weeks, as the drifts advance into the seam.

As dewatering proceeds at the main mine, the condition of roadways in the formerly flooded sections has been found to be good. Rehabilitation work is proceeding well. A conveyor route to surface from the deeper H8 seam is being established, largely through rehabilitation of former roadways.

From the outset, the Company's Board has required the introduction of safety procedures in line with best global industry practice. International safety consultants have visited the Ukraine operations and their recommendations are being implemented. Safety standards are being received favourably by the workforce. The Verticalnaya anthracite mine is non-gassy, with low explosive risk.

The Company continues its discussions on a possible addition to its mining assets in Ukraine and also continues to investigate a greenfield prospect. If completed, either or both these would add mainly metallurgical coal to the Company's present holdings.

The Company's Chairman and CEO, Mr. John Byrne, commented: "Development of the Verticalnaya mine is now fully under way and proceeding well. The potential of the Donbass coal basin is large with many opportunities available to the Company. The construction of the wash plant is proceeding on schedule and we are on track to produce first coal early next year. With the wash plant in place we will be in a position to test a number of potential supply situations that can augment planned underground production. We will also be able to provide bulk samples to potential customers that will form the basis of contractual negotiations. The Company has also commenced negotiations with international financial institutions for long term debt to continue the build out of the business. These talks are of a preliminary nature but are expected to progress over the next few months."

By Order of the Board,

John Byrne, Chairman and CEO

About EastCoal Inc.

The Company changed its name to EastCoal Inc. in early 2011, to reflect its new strategy of developing coal operations. It is focused on the Donbass coal basin of Ukraine which has large coal reserves and excellent prospects.

EastCoal Inc. is currently developing its 100% owned Verticalnaya anthracite mine.

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

  • EastCoal Inc.
    John Byrne
    Chairman and CEO
    604-681-8069
    604-685-4675 (FAX)
    www.eastcoal.ca