NATIONAL COAL CORP.
COMPLETES SALE OF KENTUCKY OPERATIONS
COMPANY RETIRES $10
MILLION SENIOR SECURED TERM LOAN
Knoxville, Tenn.
– (April 1, 2008) – National Coal Corp. (Nasdaq: NCOC), a producer of high-quality
steam coal in Central and Southern Appalachia, announces it has
completed the sale of the balance of its Kentucky assets, also
known as Straight Creek, for $11.0 million to Xinergy
Corp. The proposed sale was first announced February 12, 2008.
The Company has used $10 million of the
proceeds to repay its 12%, $10 million senior secured term loan
scheduled to mature in December 2008. Daniel Roling,
President and CEO of National Coal Corp. said “With the
sale of Straight Creek, the Company continues to focus on
strengthening its balance sheet with the early repayment of
debt.” In addition to the $11 million received from the
sale of Straight Creek, this transaction returns to the Company
approximately $7.4 million in cash pledged to secure reclamation
bonds and other liabilities, relieves the Company of $3.6 million
in reclamation liabilities, and $3.2 million of equipment related
debt.
“This transaction improves our
liquidity and allows us to narrow our focus to our other
properties in order to meet the growing demand for coal,”
said Daniel Roling, President and CEO
of National Coal Corp.
Looking forward, the Company has
committed under contract approximately 2.0 million tons of coal
for production from Alabama and Tennessee for 2008, 1.5 million
tons for 2009, and 630 thousand tons for 2010. In addition,
the Company has the capacity to produce above those commitments
should market conditions warrant.
Xinergy Corp. was founded and is controlled by Jon Nix, who is a
founder, significant stockholder, and former officer and director
of National Coal.
About National Coal Corp.
Headquartered in Knoxville, Tenn., National Coal Corp., through its
wholly-owned subsidiary, National Coal Corporation, is engaged in
coal mining in East Tennessee and through its wholly-owned
subsidiary, National Coal of Alabama, is engaged in coal mining
in Alabama. Currently, National Coal employs about 335
people. National Coal sells steam coal to electric utilities and
industrial companies in the Southeastern United States. For
more information visit www.nationalcoal.com.
Information about Forward Looking
Statements
This release contains
“forward-looking statements” that include information
relating to future events and future financial and operating
performance. These statements are based on certain assumptions
and reflect our current expectations. Statements including
words such as “anticipate,” “propose,”
“estimate,” “believe” or “expect”
and statements in the future tense are forward-looking
statements. These forward-looking statements involve known and
unknown risks, uncertainties and other important factors that
could cause the actual results, performance or achievements to
differ materially from any future results, performance, or
achievements discussed or implied by such forward-looking
statements. Some of the factors that could cause results to
differ materially from the expectations expressed in these
forward-looking statements include the following: (i) the
worldwide demand for coal; (ii) the price of coal; (iii) the
price of alternative fuel sources; (iv) the supply of coal and
other competitive factors; (v) the costs to mine and transport
coal; (vi) the ability to obtain new mining permits; (vii) the
costs of reclamation of previously mined properties; (viii) the
risks of expanding coal production; (ix) the ability to bring new
mining properties on-line on schedule; (x) industry competition;
(xi) our ability to continue to execute our growth strategies;
(xii) general economic conditions; and (xiii) the risk that the
proposed transaction may not be completed in a timely manner, if
at all. These and other risks are more fully described in
the Company’s filings with the Securities and Exchange
Commission including the Company’s most recently filed
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
which should be read in conjunction herewith for a further
discussion of important factors that could cause actual results
to differ materially from those in the forward-looking
statements. Forward-looking statements speak only as of the
date they are made. You should not put undue reliance on
any forward-looking statements. We assume no obligation to
update forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting
forward-looking information, except to the extent required by
applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
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Press Contact:
Christine Pietryla
865-690-6900 x 150
investorrelations@nationalcoal.com