CALGARY, April 22 /CNW/ - Cobalt Coal Corp. ("Cobalt" or the "Corporation") is pleased to issue this operational update regarding its Westchester Metallurgical Coal Mine in McDowell County, West Virginia USA. The Corporation also announces that it has closed its previously announced CDN $1,000,000 bridge loan and that funds have been released pursuant to the terms of the commitment letter.
Cobalt has completed the physical preparation of the mine site and the acquisition of the mining equipment necessary to re-start its Westchester Metallurgical Coal Mine. At present, the Corporation has completed the installation of the power system (generator and single phase power) and has successfully tested the main mine fan ventilation system. Cobalt is now moving the major pieces of underground mining equipment on to the mine site, including the continuous mining machine (cuts the coal from the earth), the roof bolter (used to secure the roof underground) and shuttle cars (used to transport coal underground). The Corporation expects that it will now be in a position to begin coal production during mid-May, 2010.
Cobalt President and CEO David M. Lewis was quoted as saying "The preparations for the resumption of production at the Westchester Metallurgical Coal Mine are now complete. The Corporation is extremely pleased with the work of our operations staff in readying Westchester for coal production in a safe and timely manner. Becoming an active producer of metallurgical coal represents a major step for our company."
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Cobalt 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 Metallurgical 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 intends to 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 mining operations, the timing and ability of the Corporation to re-start the Westchester Metallurgical Coal Mine. 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