CALGARY, ALBERTA -- (Marketwire) -- 04/17/12 -- Cobalt Coal Ltd. (formerly Cobalt Coal Corp.) (TSX VENTURE:CCF) ("Cobalt" or the "Corporation") wishes to clarify the resources and reserves retraction that was the subject of its April 4, 2012 news release.
As a result of a recent and routine Continuous Disclosure Review of Cobalt by the Alberta Securities Commission ("ASC"), management has determined that there was a material revision to Cobalt's reserves or resources resulting from the acquisition of the Westchester Limited Partnership and acquisition of the Westchester Expansion Lease. The reserves or resources so acquired have not been evaluated in the Norwest Corporation Technical Report on the Westchester Mine dated June 8, 2009 (the "Westchester Technical Report") that was previously filed on SEDAR.
The Westchester Limited Partnership ("WLP") was originally formed to fund the acquisition of the lease and equipment necessary to bring the Westchester Mine into production. Initially, the WLP owned a 90 percent working interest until payout of the funds advanced to start up the mine (approx $2,850,000). WLP's working interest reverted to a 65% working interest after payout and then to a 35% working interest after two times payout of the advanced funds (ie: approx $5,700,000). Therefore, Cobalt owned only a minority interest until payout to the WLP of approx $5,700,000 and the Westchester Technical Report only evaluated Cobalt's interest and not that of the WLP. The acquisition of the WLP by Cobalt in August 2011 resulted in an addition of coal deposits owned by Cobalt.
In addition, as a result of signing the Westchester Expansion Lease as reported in Cobalt's news release of January 19, 2011, additional coal deposits were again added to the project. Readers will be reminded that the Expansion Lease involves the addition of an additional 121 acres of coal bearing lands that are contiguous to the original Westchester Lease that can only be accessed through Cobalt's portals in the Westchester Mine.