Coalcorp Provides Updated Default Status Report and Update on Status of Claims



    TORONTO, April 30 /CNW/ - Coalcorp Mining Inc. ("Coalcorp" or the
"Company") (TSX-CCJ) is providing its fifth Default Status Report in
accordance with National Policy 12-203: Cease Trade Orders for Continuous
Disclosure Defaults ("NP 12-203"). On February 6, 2009 Coalcorp announced that
it would delay the filing of its second quarter interim financial statements,
CEO and CFO certifications and related management discussion and analysis
(MD&A) for the three and six-month periods ended December 31, 2008 beyond the
filing deadline of February 16, 2009.
    On February 18, 2009 the Ontario Securities Commission (the "OSC") issued
a temporary management cease trade order related to the Company's securities
against the Chief Executive Officer and the then Chief Financial Officer
(Liliana Aleman has since stepped down from that role as announced on March
30, 2009) of the Company for so long as the interim financial statements,
certifications and related MD&A are not filed. The issuance of such management
cease trade order does not affect the ability of persons to trade in their
securities of Coalcorp, other than the Chief Executive Officer and Liliana
Aleman, the former Chief Financial Officer. However, 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.

    
    Update on Status of Second Quarter Interim Financials
    ------------------------------------------------------
    

    Due to the recent stepping down of the Chief Financial Officer of the
Company and the transitions occurring related to this role, the Company was
further delayed in filing its interim results by April 16, 2009 as indicated
in the initial default announcement. As of the date hereof, the interim
financials have been prepared and are currently under final review by the
Company's auditor, Deloitte & Touche LLP ("Deloitte"). However certain
information Deloitte has requested in order to complete its quarterly review
is currently unavailable.
    Prior to the closure of the Company's head office in Toronto on March 2,
2009, the Company shared that head office and its electronic server located at
that office, with three other companies. Since the closure of its head office
in March 2, 2009, the Company has made several attempts and proposed various
protocols by which it could gain complete access to its electronic files, data
and information secured on that shared server. These attempts have all been
unsuccessful to date. As a result, the Company will be commencing legal
proceedings against these companies in order to compel access to Coalcorp's
proprietary information. Although the Company is pursuing every legal means to
secure access to its complete proprietary information, it cannot be determined
when that information will be obtained.
    Deloitte has requested to view that information in order to complete its
review of the interim financials. However, as a result of the current
situation, it is now uncertain when that information will be available.
Accordingly, there is no projected timeline for the completion of the review
of the interim results by Deloitte.
    In addition, the Company has formed a special committee of directors to
investigate certain conduct and prior transactions entered into by the Company
(the "Investigative Special Committee"). As part of this investigation, the
Investigative Special Committee has engaged forensic experts and independent
legal counsel to assist in its investigation. Deloitte has advised the Company
that it is unable to release its review of the financial statements until the
forensic experts have substantially completed their investigation. The
forensic experts are continuing their investigation but require access to the
electronic data noted above before they can complete their investigation.
    Based on the foregoing, a target date or anticipated timeframe for the
filing of the Company's interim results is presently undetermined.
    The Company will continue to provide bi-weekly updates, as required by NP
12-203, until the required filings have been made and the Company is no longer
in default.

    
    Announcement of Operational Restructuring Plan
    ----------------------------------------------
    

    On April 24, 2009, Coalcorp announced that it is undertaking a plan to
restructure its operations with the objective to stabilize its current mining
operations, preserve liquidity, reduce costs and establish a foundation for a
sustainable business (the "Operational Restructuring Plan"). The Operational
Restructuring Plan is a 5-part plan which has been developed to immediately
address a number of structural issues at Coalcorp. The 5 parts of the
Operational Restructuring Plan involve a revised strategic approach in each of
the following areas of the organization, (i) Contracts and Sales, (ii) Mining
Operations, (iii) Port and Rail Access, (iv) Overhead Cost Reductions, and (v)
Controls, Compliance and Risk Management. For a more complete description of
the Operational Restructuring Plan please refer to Coalcorp's press dated
April 24, 2009 announcing the Operational Restructuring Plan, which was filed
under the Company's profile at www.sedar.com on that date and is available a
the Company's website at www.coalcorp.ca.

    
    Update on Status of Claims
    --------------------------
    

    AES Arbitration

    In connection with the acquisition of La Francia in February, 2006, the
Company assumed a contract dated as of August 30, 2004, as amended on June 16,
2005, for the sale of coal to AES Gener, S.A. ("AES"), a Chilean company for a
total of 600,000 tonnes at $31.50 per tonne (the "AES Contract"). On March 15,
2006, the Company notified AES that it was ceasing further shipments to AES
under the AES Contract, and on May 26, 2006 AES sent notice to the Company
that it considered the Company to be in breach of the AES Contract. The
Company and AES attempted to amicably resolve their dispute through
negotiations under the AES Contract over the course of the following two
years. On December 1, 2008, AES filed a Petition for an Order to Compel
Arbitration in the State of New York. Arbitration proceedings have not
commenced as of the date hereof and the Company and AES are continuing
negotiations with respect to the AES Contract.

    ENEL Arbitration

    Arbitration proceedings were commenced at the ICC International Court of
Arbitration on August 9, 2007 with respect to the Company's acquisition of
Andean Coal Corporation from ENEL, SpA ("ENEL") pursuant to a purchase and
sale agreement dated as of September 29, 2005 between the Company and a
subsidiary of ENEL (the "PSA"). The dispute relates to the determination of
the amount of the working capital adjustment under the PSA in the amount of
approximately $2.2 million. A final decision from the arbitration panel is
expected to be rendered on or about April 30, 2009.

    Glencore Arbitration

    On January 26, 2009 Coalcorp announced the commencement of arbitration
proceedings by Coalcorp against Glencore International AG ("Glencore"), with
the London Court of International Arbitration (the "Arbitration") with respect
to a coal sales agreement entered into between Glencore and Coalcorp's sales
agent GC Coal in February, 2007 (the "February, 2007 Agreement"). Coalcorp has
since received notice from Glencore dated as of March 19, 2009 (the "Notice"),
that it is terminating the February, 2007 Agreement effective as of the date
of the Notice and pursuing a counterclaim seeking unspecified damages against
Coalcorp under the Arbitration. In addition, the Notice also provides that
Glencore is terminating, effective March 19, 2009, its coal sales agreement
with Carbones del Cesar S.A., a wholly-owned subsidiary of Coalcorp, entered
into on August 18, 2008 and will be seeking unspecified damages.
    It is the Company's position that the terminations by Glencore are
unlawful and the Company reserves any and all of its rights and remedies under
the contracts. As Coalcorp is now discharged from its obligations under the
terminated contracts with Glencore, Coalcorp is currently in discussions with
other customers for coal sales on a spot basis.

    Notice of Derivative Legal Action

    On March 3, 2009, the Company received notice from a group of former
officers and directors of the Company, including three previously terminated
executive officers and its former Chief Executive Officer, Serafino Iacono, of
their intention to commence a court application for leave to file a derivative
legal proceeding in the Company's name under the Business Corporations Act
(British Columbia) (the "Notice of Derivative Legal Action"). The Notice of
Derivative Legal Action asks the Company to commence a legal proceeding to
seek unspecified damages against certain of the directors and certain of the
recently appointed officers of the Company and shareholders in respect of
alleged negligence, default, oppressive conduct and omissions, breach of duty
or breach of trust.
    The Notice of Derivative Legal Action followed the terminations for cause
effective February 27, 2009, of three former executive officers of the
Company, being Jose Francisco Arata, Executive Director and Head of
Exploration, Efrain Carrera, President of Carbones del Cesar (a subsidiary of
the Company), and Juan Manuel Pelaez, Vice-President, Business Development.
Each of these individuals are among the parties delivering the Notice of
Derivative Legal Action.
    As of the date hereof, the Company is not aware of the commencement of
the court application for leave to file a derivative legal proceeding in the
Company's name under the Business Corporations Act (British Columbia) as
stated in the Notice of Derivative Legal Action.

    Statements of Claims from Terminated Employees

    Further to the Company's press release on March 5, 2009 relating to an
internal review and investigation being conducted by the Company, and the
terminations for cause of five employees resulting from that review, the
Company has been served with statements of claims issued in Ontario from each
of those individuals claiming, among other things wrongful dismissal and
seeking damages. The former employees are, Jose Francisco Arata, Efrain
Carrera, Yaneth Mantilla, Vincente Mendoza and Juan Manual Pelaez, and the
aggregate of damages being claimed are approximately $2.64 million and special
damages. It is the Company's position that these claims are without merit and
it intends to vigorously defend itself against these actions and will be
responding to each of these actions shortly. Further, the Company continues to
reserve its rights to pursue any additional actions and remedies against these
individuals.

    Special Committees Update

    In addition to the above mentioned Investigative Special Committee, and
further to the Company's press release announcement on March 5, 2009, the
Company established a special committee of directors to consider the Notice of
Derivative Legal Action (the "Litigation Special Committee") and will be
responding after the Litigation Special Committee has examined the substance
of the allegations set out therein. The Litigation Special Committee is also
examining the above mentioned terminations for cause. Both the Investigative
Special Committee and the Litigation Special Committee (collectively, the
"Special Committees") are currently composed of Richard Lister and Bruce
Barraclough. As mentioned above and previously announced, the Special
Committees have engaged forensic experts and their own independent legal
counsel to assist them in their investigations and examinations, which are
continuing as of the date hereof.

    Claim under Libel and Slander Act

    On April 8, 2009, the Company's counsel received a letter notifying the
Company of a possible claim under the Libel and Slander Act. The allegation is
that that the Company made defamatory statements in certain of its prior press
releases that referred to the conduct of prior management of the Company. The
claim is made by terminated employees of the Company, including Jose Francisco
Arata, Efrain Carrera and Juan Manuel Pelaez, as well as former members of
management of the Company including Serafino Iacono and Miguel de la Campa.
The notice has been served on the Company and seeks among other things, an
apology, a donation of $1,000,000 to a yet to be selected charity, payment of
unspecified damages and costs. It is the Company's view that these claims are
frivolous and vexatious and without merit.

    Notice of Claim by Bondholders

    On April 15, 2009, the Company received a letter from Equity Transfer &
Trust Company, as trustee of the Company's outstanding 12% Series A Notes due
August 31, 2011 (the "Notes") issued pursuant to an indenture dated as of
August 17, 2006 as amended and supplemented (the "Indenture"), enclosing a
notice signed by certain holders of the aggregate principal amount of
$34,362,000 of the Notes representing greater than 27% of the issued and
outstanding principal amount of the Notes, claiming that the Company failed to
issue a Change of Control Notice and Purchase Notice pursuant to Sections 4.2
and 4.3 of the Indenture, and if such failure is not remedied within 60 days,
the holders will exercise all their rights under the Indenture, including
declaring the principal amount of, and any Premium (as defined in the
Indenture) if any, and any accrued and unpaid interest on, the Notes to be due
and payable (the "Notice"). It is the Company's position that it is not in
default of these provisions of the Indenture. The Company will be responding
to the Notice in due course.
    The Company confirms that, except as described herein and in its initial
default announcement and first default status report dated March 3, 2009,
second default status report dated March 17, 2009, third default status report
dated April 1, 2009 and fourth default status report dated April 15, 2009: (i)
there has been no material change to the information set out in its initial
default announcement filed pursuant to NP 12-203; (ii) there has been no
failure by the Company in fulfilling its stated intention with respect to
satisfying the provisions of the alternative information guidelines set out in
NP 12-203; (iii) there is no actual or anticipated specified default
subsequent to that disclosed in the initial default announcement; and (iv)
there is no other additional material information concerning the affairs of
the Company that has not been generally disclosed.

    Coalcorp is 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.





For further information:

For further information: Joseph Belan, Interim Chief Executive Officer,
+57-1-658-5050 Ext: 9990

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Coalcorp Mining Inc.

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