Coalcorp provides shareholders with key reasons to support proposed
transaction and updates and supplements information from information circular

TORONTO, Feb. 3 /CNW/ - Coalcorp Mining Inc. ("Coalcorp" or the "Company") (TSX-CCJ) announces key reasons to support the Proposed Transaction (as defined below) and updates and supplements the Company's management information circular dated January 19, 2010 (the "Circular"), in connection with Coalcorp's special meeting to be held on February 11, 2010 (the "Special Meeting") to consider the Proposed Transaction (as defined below). The Circular was filed and is available on SEDAR at www.sedar.com.

As announced on January 7, 2010, certain subsidiaries of Coalcorp have entered into agreements to sell the La Francia mine and related infrastructure assets, including Concession 5160, and all of the issued and outstanding shares of Adromi Capital Corp., the holder of the La Francia II concession, to a subsidiary of The Goldman Sachs Group, Inc. (the "Proposed Transaction").

    
           SHAREHOLDERS SHOULD VOTE "FOR" THE PROPOSED TRANSACTION
           -------------------------------------------------------
    

Management and the Board encourage shareholders to carefully consider the facts in evaluating the Proposed Transaction.

    
    The facts are as follows:

        -  The difference between the value of the Proposed Transaction (in
           excess of US$200 million) and the valuation in Coalcorp's most
           recent 43-101 technical report is as a result of a significant
           increase in transportation costs (from US$14/tonne to US
           $21.50/tonne from 2011 onwards and $28.00/tonne in 2010),
           substantially lower 2010 coal production and lower realized coal
           prices (see below for further explanation).

        -  Without access to a sea port, there is no future for Coalcorp's
           business in Colombia.

        -  If the Proposed Transaction is not completed, the funds to be
           received under the previously announced Settlement Agreement (as
           defined below) will not be sufficient to meet the Company's
           financial needs in the short or long term. The lack of port
           access, future capital expenditures and ongoing expenses with the
           mining contractor means the Company will run out of cash in the
           near future even with the funds from the Settlement Agreement.

        -  The Company conducted an extensive six-month strategic sale
           process which yielded no offers for greater value. Since the
           Proposed Transaction was announced almost one month ago, no
           alternative proposals or even expressions of interest have
           materialized.

        -  The Board has no basis to believe that Goldman Sachs will increase
           its offer under any circumstances. Shareholders should not expect
           any increase in the value of the Proposed Transaction whatsoever.

        -  If the Proposed Transaction is not approved, the Company will
           likely have no alternative but to file for bankruptcy or seek
           creditor protection. The Company believes that after satisfaction
           of creditors' claims there would likely be no proceeds remaining
           for shareholders.

        -  Two independent and respected advisory services, RiskMetrics Group
           and Glass Lewis & Co., have recommended that all shareholders vote
           in favour of the Proposed Transaction.

    These facts are discussed in more detail below.

    The Proposed Transaction reflects FAIR VALUE for Coalcorp:

        -  The difference between the value of the Proposed Transaction (in
           excess of US$200 million) and Coalcorp's most recent 43-101
           technical report (US$374 million under a contractor mining
           scenario based on an 8% discount rate and long-term net coal
           prices of US$66.00 per tonne) presented in August 2009 is
           principally attributable to:

           -  A different logistics chain resulting in a significant increase
              in transportation costs (from US$14/tonne to US$28/tonne in
              2010 and US$21.50/tonne from 2011 onwards), substantially lower
              2010 coal production and realized coal prices (from US$71/tonne
              to US$58/tonne) and the addition of corporate overhead costs.

           -  The 43-101 technical report was based on a logistics chain that
              involved transporting coal by train from the mine site directly
              to a port in Santa Marta. Coalcorp could not secure direct
              train loading access to one of the ports in the Santa Marta
              region, so Goldman Sachs will have to utilize an alternative
              transportation plan. The alternative transportation plan
              involves trucking coal to a port for 2010 costing approximately
              $28/mt and a strategy that includes railing and trucking coal
              to a port for 2011 onwards costing approximately $21.50/mt.

        -  The Proposed Transaction follows a six-month extensive strategic
           process involving contact with all logical potential strategic
           buyers. The value of the Proposed Transaction is in excess of US
           $200 million (taking into account the US$50 million in liabilities
           being assumed by the Purchaser).

        -  The Proposed Transaction was negotiated completely at arms-length,
           unanimously supported and recommended by a Special Committee of
           independent directors and supported by a 44% shareholder who is
           receiving no other benefits from the Proposed Transaction than
           those received by shareholders and note holders of Coalcorp. This
           shareholder is also a holder of Senior Notes and may tender its
           Senior Notes pursuant to the Offers for Notes (as described in the
           Circular).

        -  As a result of the Settlement Agreement (as defined below) and
           upon satisfaction of all the conditions under the Settlement
           Agreement by February 8, 2010, all of the approximately US$20
           million in proceeds from the Proposed Transaction (including the
           US$10 million which previously was to be restricted and placed
           into a trust to fund certain indemnity obligations of Coalcorp in
           favour of Joseph Belan as described in the Circular) will be
           immediately available for use by the Company, subject to the
           Company's obligations under the Purchase Agreements, including its
           obligation to maintain certain funds in an indemnification escrow
           account under the terms of the Proposed Transaction until November
           30, 2010.

        -  Paradigm Capital Inc. has delivered a fairness opinion dated as of
           January 5, 2010, addressed to the Special Committee of independent
           directors, concluding that, based upon and subject to the
           assumptions, limitations and other considerations set forth in
           such fairness opinion, the consideration to be received by
           Coalcorp's subsidiaries, Compania Carbones del Cesar S.A. for the
           La Francia I assets and the consideration to be received by Pianta
           Ltd. for the shares in Adromi Capital Corp., are fair, from a
           financial point of view.

    The Proposed Transaction is SUPERIOR TO ANY OTHER ALTERNATIVE:

        -  Without access to a sea port, there is no future for Coalcorp's
           business in Colombia.

        -  If the Proposed Transaction is not completed, the funds to be
           received under the Settlement Agreement will not be sufficient to
           meet the Company's financial needs in the short or long term. The
           lack of port access, required capital expenditures and ongoing
           expenses with the mining contractor means the Company will run out
           of cash in the near future even with the funds from the Settlement
           Agreement.

        -  The Company received two other non-binding offers from strategic
           buyers, but such offers represented significantly less value and
           certainty than the Proposed Transaction. One of the offers was for
           cash consideration of US$150 million, but was highly conditional
           and subject to an unacceptably long due diligence period, as well
           as other unacceptable conditions. The other offer was for US$160
           million, but unlike the Proposed Transaction, did not include a
           commitment from the participant to assume the substantial
           liabilities under certain existing coal contracts and liabilities
           under other obligations of Coalcorp. Although the second offer had
           a higher notional value attached to the La Francia I and II mining
           assets, it represented a materially lower total transaction value
           compared to the minimum US$201 million represented by the Proposed
           Transaction (factoring in certain liabilities that would not have
           been assumed and would have remained with the Company under the
           terms of those offers).

        -  Coalcorp received another indication of interest from an
           unidentified third party offering to purchase the Company for US
           $0.50 per share. Coalcorp pursued this indication of interest with
           the intermediary that presented it to the Company, but this never
           led to any further discussion or any contact by the interested
           party whose identity was never disclosed to the Company. The
           Company believes that this indication of interest was not
           credible, and it has not resurfaced since early December.

        -  Even though the Proposed Transaction allows for superior proposals
           to acquire the La Francia assets, and the transaction was
           announced on January 7th (almost a month ago), there have been no
           expressions of interest from any other parties.

        -  The Proposed Transaction provides Coalcorp with necessary bridge
           financing. Goldman Sachs has committed up to US$5 million in
           bridge financing to fund operations of the Company during the
           months of January and February, 2010, of which US$2 million
           already has been disbursed to the Company. In addition, the
           remaining US$3 million available to the Company through this
           bridge financing is conditioned upon a vote of the shareholders in
           favour of the Proposed Transaction at the Special Meeting. Without
           this bridge financing from Goldman Sachs, Coalcorp could not
           operate during the interim period until closing.

        -  Two independent and respected advisory services, RiskMetrics Group
           and Glass Lewis & Co., have recommended that all shareholders vote
           in favour of the Proposed Transaction.

    If the Proposed Transaction is not completed, Coalcorp has NO
    ALTERNATIVES:

        -  There is currently an Event of Default under the Senior Notes
           which Coalcorp was unable to cure.

        -  The bridge financing will become due and payable and Coalcorp will
           not have sufficient funds to repay it.

        -  Coalcorp will not have sufficient funds to continue its current
           operations (even with the funds from the Settlement Agreement),
           including satisfying the required payments under its existing
           Mining Contractor Agreement.

        -  Coalcorp will have no port access to deliver coal and generate
           revenue.

        -  Coalcorp will likely have no alternative but to seek bankruptcy or
           creditors protection.

    If Coalcorp enters Bankruptcy or Insolvency Proceedings, SHAREHOLDERS
    WILL LOSE:

        -  Coalcorp has undertaken an extensive auction process and there
           have been no other offers since the announcement of the Proposed
           Transaction. If a bankruptcy or insolvency process is undertaken,
           Coalcorp believes the assets will be sold at a significantly lower
           value than the Proposed Transaction.

        -  Coalcorp assets are located in various jurisdictions including
           Colombia and Panama. A bankruptcy or insolvency proceeding will be
           extremely costly, complicated and difficult to coordinate, which
           will result in a lower value for Coalcorp's assets.

        -  Under Colombian laws there is a risk that the Colombian Mining
           Ministry may terminate Coalcorp's La Francia I and II concessions
           if a bankruptcy or insolvency proceedings are initiated, which
           would eliminate all value for Coalcorp.

        -  Other stakeholders will continue to have priority over
           shareholders in bankruptcy or insolvency proceedings. Given the
           potential liabilities under the existing coal contracts, the
           Contractor agreement and the Senior Notes, the Company believes
           there will be no value for shareholders in a bankruptcy or
           insolvency proceeding.

    Updates to Circular - Coalcorp Following Proposed Transaction
    -------------------------------------------------------------

    The following are certain updates to the information and descriptions
contained in the Circular based on developments to date.

    Settlement of Outstanding Litigation
    ------------------------------------
    

As an update to the Circular and as announced by Coalcorp on February 1, 2010, Coalcorp, Xira Investment Inc. ("Xira") and Former Coalcorp Management and other parties to various claims amongst them announced that they have entered into a settlement agreement (the "Settlement Agreement") to settle all matters in dispute. The Settlement Agreement requires the parties to deliver certain releases, consents and agreements by February 8, 2010.

As part of the Settlement Agreement, Xira has agreed to pay US$34 million payable as follows: (i) US$7 million on February 8, 2010, (ii) US$17 million on March 15, 2010, (iii) US$8 million on September 15, 2010 and (iv) US$2 million on January 31, 2011.

Under the Settlement Agreement, the parties agreed to the following: (i) on March 15th, upon payment of the $17 million, Coalcorp's subsidiaries will consent to the completion of the previously announced transaction with Xira regarding Carbones Colombianos del Cerrejon S.A. ("CCC") (the owner of the Caypa mine), (ii) Coalcorp's subsidiary has agreed to waive its sales commission on production from the Caypa mine and cancel any payments currently outstanding, (ii) Blue Pacific Assets Corp. has agreed to terminate its royalty on production from the La Francia mine and cancel any royalty payments currently outstanding, (iii) all litigation and regulatory proceedings among the parties will be terminated, (iv) all parties will be releasing each other as part of the settlement, (v) releases in favour of Xira and the former management will be held in escrow until final payment by Xira.

Pending delivery of the agreements, releases and payment on February 8, 2010, the parties have agreed to bring to a standstill outstanding litigation, arbitrations and proceedings involving the parties and the Former Management Group has agreed to discontinue its opposition to Coalcorp's proposed transaction involving the sale of the La Francia I mine and La Francia II concession and vote the shares they own or control and any proxies in favour of the Proposed Transaction.

    
    Summary of Position of Coalcorp Following the Proposed Transaction
    ------------------------------------------------------------------
    

As described in the Circular, following consummation of the Proposed Transaction (assuming a mid-February consummation), the Offers for Notes (as described in the Circular and assuming all Senior Notes tender to the Offers for Notes) and the transactions contemplated by the Settlement Agreement, Coalcorp will have approximately US$55.5 million constituted as follows:

    
        -  accounts receivable net of accounts payable of approximately US
           $1.5 million;

        -  cash proceeds of approximately US$20 million (including the US$10
           million which previously was to be restricted and placed into a
           trust to fund certain indemnity obligations of Coalcorp in favour
           of Joseph Belan), all of which will be immediately available for
           use by the Company, subject to the Company's obligations under the
           Purchase Agreements, including its obligation to maintain certain
           funds in an indemnification escrow account for the benefit of
           Goldman Sachs until November 30, 2010; and

        -  entitlement to the settlement payments under the Settlement
           Agreement in the aggregate amount of US$34 million payable as
           follows: (i) US$7 million on February 8, 2010, (ii) US$17 million
           on March 15, 2010, (iii) US$8 million on September 15, 2010 and
           (iv) US$2 million on January 31, 2011.
    

As a result of the Settlement Agreement, and upon satisfaction of all the conditions under the Settlement Agreement by February 8, 2010, Coalcorp will no longer possess the Entitlement to Proceeds from Caypa Mine (as defined in the Circular) and Claims Against Former Management (as defined in the Circular) as described in the Circular under the heading 'Description of Assets'.

If Xira makes the payments on February 8, 2010 and March 15, 2010 as required pursuant to the Settlement Agreement, Coalcorp will be required to complete the transfer of 100% of its interest in the Caypa mine.

If the Proposed Transaction is completed, Coalcorp will have three exploration properties being: a concession in Otanche, Boyaca (total 1,972 hectares); a concession in Codassi, Cesar (4,460 hectares); and a concession in La Loma, Cesar (5,915 hectares) which was just recently awarded to Coalcorp. No exploration work has been undertaken by Coalcorp on these properties and, at this time, there is no plan to undertake any work on these properties. Coalcorp believes there is little value to these properties at this time. Other than those concessions, Coalcorp will have no other mining rights or exploration properties. Further, Coalcorp has previously withdrawn from the Puerto Nuevo Project as a result of its significant expense and the fact that the company considers that it will have more flexibility and protection as a potential user than it would as a minority shareholder.

    
    Contingent Liabilities
    ----------------------

    As result of the Settlement Agreement and upon satisfaction of all the
conditions under the Settlement Agreement by February 8, 2010, Coalcorp will
thereafter no longer be subject to the following claims, actions, threatened
actions, arbitrations and proceedings as set out below:

        -  Notice of Derivative Legal Action;

        -  Statements of Claim from Terminated Employees;

        -  Counterclaim by Xira;

        -  Claim under Libel and Slander Act;

        -  Application under the BCBCA;

        -  Blue Pacific Royalty; and

        -  Directors' and Officers' Indemnities.

    Following completion of the Proposed Transaction, the Company will
continue to be subject to the AES Dispute (as defined in the Circular) and its
potential exposure and liability under the Missed First Quarter 2009 Shipment
under Coal Sale Contract (as defined in the Circular).

    Business of Coalcorp Following the Proposed Transaction
    -------------------------------------------------------
    

As described in the Circular, following the completion of the Proposed Transaction, the Board will meet to carefully consider the going-forward business plans for the Company and its future as a publicly listed mining company. The Board has currently not made any decisions in these regards. The Board may decide, using the proceeds from the Proposed Transaction and the Settlement Agreement, to redeploy its assets to pursue other investment or other potential opportunities in the mining or materials sector and continue on with a business for Coalcorp to realize value for Coalcorp shareholders. However, whether Coalcorp will proceed with this or any other option has not been determined. Any final determinations will be made by the Board following completion of the Proposed Transaction.

    
    Other Supplementary Information to Circular
    -------------------------------------------

    TSX Listing
    -----------
    

It is Coalcorp's intention to remain a publicly listed company whether or not the Proposed Transaction is completed. As a result of the Company's current weakened financial position, the TSX has advised the Company that it may be subject to a delisting review to determine if the Company meets the minimum listing requirements.

If the Proposed Transaction is completed, the Company will be subject to a formal delisting review by the TSX and will be provided with up to 120 days from the closing of the Proposed Transaction in order to meet TSX's original listing requirements in order to remain listed on the TSX, failing which, within the timeframes permitted by the TSX, the shares of the Company may be delisted from the TSX. As described in the Circular and above, following the completion of the Proposed Transaction, the Board will meet to consider the business plans for Coalcorp and its future as a publicly listed mining company. The Board has currently not made any decisions in this regard. If the Company determines not to continue as an operating mining company and is unable to demonstrate that it meets TSX's original listing requirements under any other listing category, there is a risk that the Company will be found not to meet the TSX's original listing requirements and may be delisted from the TSX.

If the Proposed Transaction is not completed, the Company may be delisted for failure to meet the minimum listing requirements.

If the Company is delisted, there will be no public market through which the Company's shares may be sold and traded and shareholders may not be able to dispose of their shares. This can be expected to affect the liquidity of the shares, the pricing of the shares, the transparency and availability of trading prices, and the extent of the Company's regulation. If the TSX delists the Company, there can be no assurance that the Company will obtain the listing of its shares on any other Canadian or other stock exchange.

    
    Dissent Rights and Risk of Non-Payment in Event of Insolvency
    -------------------------------------------------------------
    

As described in the Circular, registered shareholders as of January 15, 2010 (the record date for the Special Meeting) will have the right to dissent with respect to the Proposed Transaction, and, if the Proposed Transaction is completed, shareholders who comply with Sections 237 to 247 of Division 2 of Part 8 of the Business Corporations Act (British Columbia) ("BCBCA") will have the right to be paid the fair value of their shares in accordance with the provisions of the BCBCA. These rights to dissent are more particularly described in Appendix "D" to the Circular and the applicable provisions of the BCBCA are set out in their entirety in Appendix "E" to the Circular.

Following the exercise of such rights to dissent under the BCBCA, and upon either (i) agreement between the Company and a dissenting shareholder of the payout value of the dissenter's shares, or (ii) the determination by a court of the payout value of the dissenter's shares, the Company must either promptly pay the amount to the dissenter or send a notice to the dissenter stating that the Company is unable to lawfully pay the dissenter for its shares as the Company is insolvent or that the payment would render the Company insolvent.

The Company does not expect to be 'insolvent' following the Proposed Transaction as that term is defined under the BCBCA.

    
    Risk of Full Cease Trade Order
    ------------------------------
    

On October 19, 2009, the Ontario Securities Commission (the "OSC") issued a management cease trade order related to the Company's securities against the Chief Executive Officer of the Company with respect to the delayed filing of the Company's financial statements and MD&A for the year ended June 30, 2009 (the "2009 Annual Financials") and its 2009 Annual Information Form. Although the 2009 Annual Financials were filed by the Company, the management cease trade order will remain in effect for so long as the 2009 Annual Information Form and any financial statements and MD&A for subsequent periods are not filed within the required timeframes.

As announced in the Company's bi-weekly Default Status Reports issued pursuant to National Policy 12-203: Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"), the OSC, in its discretion, may determine at a later time that it would be appropriate to issue a general issuer cease trade order affecting all of the Company's securities. If the Company does not file its first and second quarter financials in a timely manner and continues to be delayed in the filing of its financial statements and MD&A for subsequent financial periods, there is the risk that the Company will no longer be eligible for management cease trade orders in lieu of full cease trade orders under NP 12-203, and, at a certain point, the Company will be subject to a full cease trade order as a result of its defaults under securities legislation.

    
    Update on Filing of Financial Statements
    ----------------------------------------

    Status of Q1 and Q2 Financials
    ------------------------------
    

As announced on December 16, 2009, the Company is delayed in the filing of its Q1 Financials beyond the filing deadline of November 16, 2009. The Q1 Financials are near completion and the Company expects to release such statements in the first week of February, 2010.

The Company announces that it will be delayed in the filing of its Q2 Financials beyond the filing deadline of February 15, 2010. The Company is in the process of preparing the Q2 Financials and expects to release such statements in March.

    
    Reasons for Delay in Release of Q1 and Q2 Financials
    ----------------------------------------------------
    

As described in the Circular, during the period from November, 2008 through to March, 2009, the Company was subject to a complete transition in the senior management and constitution of the board as a result of various resignations, departures and terminations that occurred during this period. By December, 2008, the Company was under new senior management, which included the appointment of an Interim Chief Executive Officer, Joseph Belan, and a new Chief Financial Officer, Liliana Aleman (Ms. Aleman has since resigned from that role and departed from the Company).

As a result of the foregoing transition in management, the subsequent resignation of the Chief Financial Officer of the Company (the Company continues without a Chief Financial Officer) and further difficulties experienced in gaining access to its server to obtain required data and information, the Company became significantly delayed in the filing its second quarter interim financial statements and related MD&A for the three and six-month periods ended December 31, 2008. This initial protracted delay resulted in further subsequent delays in the filing of the Company's financial statements and MD&A for the following financial periods. Although the Company filed those initially delayed financials and has filed the required financials for following financial periods, as stated above, it remains delayed in filing its Q1 Financials and Q2 Financials.

    
    About Coalcorp
    --------------
    

Coalcorp is currently a coal mining, exploration and development company with interests in the La Francia coal mine and related infrastructure projects and a number of coal exploration properties, all located in Colombia. Coalcorp also holds a 60% equity interest in Carbones Colombianos del Cerrejon which owns the La Caypa coal mine in Colombia. Further information can be obtained by visiting our website at www.coalcorp.ca or under the Company's profile at www.sedar.com.

    
    Forward Looking Statements Disclaimer
    -------------------------------------
    

There can be no assurance that the Proposed Transaction will be completed, or completed on the same terms and conditions as described in this press release. Further, there can be no assurance that the terms of the Settlement Agreement will be satisfied, payments made and the releases of the litigation provided by any of the parties. Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. These include, but are not limited to, statements with respect the completion of the Proposed Transaction and description of the business of Coalcorp following the Proposed Transaction. Some of the forward-looking statements may be identified by words such as "expects" "will", "may", "pursuing", "intends", "plans", and similar expressions. These statements are not guarantees of future performance or actions and undue reliance should not be placed on them. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Coalcorp undertakes no obligation to update forward-looking statements if circumstances or management's plans should change except as required by applicable securities laws. Such statements speak only as of the date made.

SOURCE Coalcorp Mining Inc.

For further information: For further information: Juan Carlos Gomez, Interim Chief Executive Officer, +57 - 1 - 658 - 5050 Ext: 9990; SHAREHOLDER INFORMATION, Laurel Hill Advisory Group, 1-800-503-9439

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