CALGARY, Jan. 27 /CNW/ - Cobalt Coal Corp. (TSX-V: CBT) ("Cobalt" or the "Corporation") is pleased to issue this operational update on the progress being made on its Westchester Metallurgical Coal Mine ("Westchester") in McDowell County, West Virginia.
The Westchester Coal Mine was in production from Q4 2008 until the end of March, 2009 when Cobalt lost its coal sales contract due to the world recession and the related drop in demand for metallurgical (steel making) coal. The Mine was placed on care and maintenance at that time. The Corporation re obtained a coal sales contract from Alpha Natural Resources (NYSE: ANR) on January 19th, 2010. Cobalt is now readying Westchester to re commence commercial production of low volatile, high grade metallurgical coal.
Specifically, contractors began to move onto the site late last week, and are currently upgrading the loadout area and coal tipple to bring these aspects of the Mine back into operational condition. Work on re connecting the power supply and telecommunications continues.
Cobalt President and CEO David M. Lewis commented "As the mine was recently in production, the Corporation does not expect to have to do extensive repairs or upgrades to the underground infrastructure and remains confident that it will be able to re start mining operations in March, 2010."
Additionally, the Corporation has engaged Mr. Mike Tymo as a Project Acquisitions Consultant. Mr. Tymo will advise Cobalt with respect to future coal acquisitions in the Appalachian region and elsewhere.
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."
Cobalt Coal Corp 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 in August 2007 to capitalize on the growth opportunities that exist in the modern metallurgical coal mining industry. Cobalt owns a 60% after payout interest in the Westchester Coal Mine, and operates this mine through its wholly owned subsidiary Westchester Coal GP Inc.
Initially, Cobalt is concentrating its efforts on developing an asset base in the Appalachian coal producing region of the United States, and will then expand internationally as opportunities allow. The Appalachian area includes parts of West Virginia, Virginia, Kentucky, Ohio, Pennsylvania, the Carolinas, and Tennessee. Appalachia's history of producing large volumes of metallurgical coal, along with the under-utilized coal infrastructure already in place, make the area ideal for the implementation of Cobalt's business model. Coal assets in the area can be acquired and brought into production relatively quickly. The resulting cash flows are generated in the short term without the need to invest large amounts of time and capital.
All of these factors align with Cobalt's strategy to provide near term cash flow and high growth to shareholders.
Statements in this press release may contain forward-looking information including expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. 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.
SOURCE COBALT COAL CORP.
For further information: For further information: regarding Cobalt Coal Corp please contact: David M. Lewis, President and CEO, Cobalt Coal Corp, (403) 262-5510; Investor Relations: The Howard Group, Dave Burwell, (403) 221-0915