CLINE - NEW ELK COAL MINE UPDATE

TORONTO, May 16 /CNW/ - Cline Mining Corporation (TSX: CMK) ("Cline" or the "Company") announces that an updated independent Canadian National Instrument 43-101 Technical Report (the "2011 Technical Report") has been prepared for the Company by Leo Gilbride P.E. and Tim Ross P.E. of Agapito Associates Inc on its New Elk Coal Mine project in southern Colorado, U.S.A. The 2011 Technical Report will be filed within 45 days of the date of this news release. The 2011 Technical Report includes an updated coal resource and quality estimate and Preliminary Economic Assessment (PEA) based on an initial 20 year mine plan.  The previous Technical Report on the New Elk Coal Mine, prepared by Gary Skaggs, P.E., P.Eng, and Tim Ross, P.E., (the "2010 Technical Report") was issued on March 13, 2010, as amended November 1, 2010.

The 2011 Technical Report details the establishment of an additional coal resource in the New Elk Coal Mine, which has increased the total in-place New Elk Measured and Indicated resource from 315.0 million tons of coal (87.6m Measured, 227.4m Indicated) to 388.5 million tons of coal (191.2m Measured, 197.3m Indicated) with an effective date of April 1, 2011. The additional 73.5 million tons partly results from the exploration and addition of the new Blue seam into the coal resource and mine plan. The mine plan includes mining from four seams:  Maxwell, Apache, Allen, and Blue. The Blue seam is closest to the surface of all four seams, lying above the Maxwell seam and just 50 feet below the elevation of the New Elk coal processing plant. The seams are low-sulphur, medium- to high-fluidity, high-volatile B bituminous metallurgical coking coals. Seam qualities are generally consistent and are not expected to require mine site blending for the coking market.

New Elk coal production commenced in December 2010 from one continuous mining machine in the Apache seam. This unit has continued to produce coal from the Apache seam.  Development in the Apache seam, combined with a planned portal and slope to the Blue seam, is expected to enable the additional nine continuous mining machines to follow into the mine and begin operation in their designated mining areas. The mined coal is loaded directly onto the recently installed high-capacity conveyor system and transported to the surface coal stockpile, from where it is fed into the newly upgraded metallurgical coal processing plant. New Elk saleable metallurgical coal production will continue to ramp up in 2011 and is projected to reach a production level of 2.75 million tons in 2012 and 3.00 million tons in 2013 through 2030. The production and sales rate in 2011 is estimated at 350,000 tons.

The 2011 Technical Report shows a pre-tax Net Present Value (NPV) of US$1.4 billion at a 10% p.a. discount rate, a payback period of 1.7 years and an Internal Rate of Return (IRR) greater than 100% calculated on the first 20 years of coal production and sale in accordance with the PEA. These projections compare with those in the 2010 Technical Report which showed an NPV of US$1.0 billion at a 10% p.a. discount rate, a payback period of 1.6 years and an IRR of 99%, based on the same 20 year coal production and sale scenario. The revised PEA includes updated marketing and coal price projections from Wood Mackenzie, Inc. and capital to expand the processing plant based on estimates provided by Taggart Global.

All ten continuous mining machines are projected to be producing coal from the mine by the end of 2011. The continuous mining machines are organized into five Super Sections to maximise productivity. Each Super Section will be comprised of two mining machines working in tandem with their supporting equipment to feed the coal to surface. The rated capacity of each Super Section is 1.0 million tons of raw coal annually. The ten continuous mining machines are projected to produce 3.0 million saleable tons of high-quality metallurgical coal annually.

Cline owns several properties in Canada and abroad at the exploration stage of development. The Company continues to explore and assess various opportunities to sell its non-core assets as appropriate.

Leo Gilbride, P.E., and Tim Ross, P.E., are qualified persons under NI 43-101 and have reviewed and approved the technical information in this news release relating to the NI 43-101 Technical Reports.

About Cline: Cline has significant metallurgical coal property interests in British Columbia, Canada and in Colorado, U.S.A. with NI 43-101 compliant independent Technical Reports. Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coals in Canada and the U.S., iron ore in Madagascar and the Cline Lake Gold Mine Property in northern Ontario, Canada.

CLINE MINING CORPORATION
Ken Bates, President and Chief Executive Officer

Forward-Looking Information

This news release may contain forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities laws), including the magnitude or quality of mineral deposits, the economic assessment and estimates regarding the mine life of the New Elk coal mine, and the timing and completion of financings. The timing of drilling and work recommended by the NI 43-101 Technical Report is based on current internal expectations, which may prove to be incorrect. Other risk factors are discussed under "Risk Factors" in Cline's Annual Information Form for its 2010 financial year-end, and include management's ability to anticipate and manage risk factors. Such forward-looking statements necessarily involve known and unknown risks and uncertainties that are common to junior mineral exploration companies. These risks and uncertainties include, among other things, the Company's need for additional funding to continue its exploration efforts, changes in general economic, market and business conditions, and competition for, among other things, capital and skilled personnel. These statements are not a guarantee of future performance and undue reliance should not be placed on them. The Company undertakes no obligation to update or revise any forward-looking statements except as required by applicable laws. Copies of the Company's public filings under applicable Canadian securities laws are available at www.sedar.com. The Company further cautions that information contained on, or accessible through, this website is current only as of the date of filing such information and may be superseded by subsequent events or filings.

SOURCE Cline Mining Corporation

For further information:

Head office: Brookfield Place, 181 Bay Street, 3rd Floor, Clarkson Gordon Heritage Building, Toronto, ON, M5J 2T3

Contacts: Ken Bates, President and CEO
Ernest Cleave, Vice-President and CFO
Office: (416) 504-7600
Email: info@clinemining.com
Website: www.clinemining.com

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Cline Mining Corporation

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