Cobalt Coal Ltd.- Unit Offering

Cobalt Coal Ltd. ("Cobalt" or the "Corporation") (TSX VENTURE:CCF) is pleased to
announce that it intends to complete a private placement of up to $7,000,000 of
units (the "Units") at a price of $1,000 per Unit (the "Offering"). Each Unit
will be comprised of $1,000 principal amount of secured redeemable debentures
(the "Debentures"), which will mature thirty-six months from the date of
issuance and 4,000 common shares in the capital of the Corporation. The
Debentures will bear interest at a rate of 10% per annum payable quarterly from
the date of closing.  


The Debentures will be secured by a charge to be registered on all of the mining
equipment to be acquired from time to time with the proceeds of the Offering.  


Cobalt may engage finders or agents to act as agents of Cobalt in connection
with the Offering, and in connection therewith may pay the finders and agents a
cash commission of up to 8% of the proceeds of the Offering that result from
such parties efforts, subject to compliance with applicable securities laws. The
agents may also be granted broker warrants to purchase up to 8% of the number of
Units sold under the Offering, with each Broker Warrant entitling the holder to
purchase one Unit at $1,000 per Unit for a period of 18 months from the closing
of the Offering. 


The net proceeds made available through the sale of the Units will be used: 



--  to complete mine face up work on the Mill Creek tract; and 
    
--  to acquire mining equipment



to commence production from the first of the 5 tracts that comprise the newly
acquired Virginia properties ("Virginia Properties"), that being the Mill Creek
tract which is already permitted for production and the construction of a wash
plant; and 




--  to drill 5 evaluation holes on the Virginia Properties; and 
    
--  for general working capital purposes.



The Offering is subject to the approval of the TSX Venture Exchange. Pursuant to
applicable securities laws, all securities issued pursuant to the Offering will
be subject to a hold period of four months following the closing of the
Offering.


In addition to the Offering described herein, management of Cobalt is engaged in
discussions with various parties with a view to negotiating a joint venture
arrangement for the recently acquired Virginia properties. In the event that
such discussions are successful, additional capital may be made available to
Cobalt to accelerate development on the Virginia properties in exchange for a
participating interest in a joint venture to be established regarding the
Virginia properties.


About Cobalt 

Cobalt is a publicly traded coal acquisition and production company
headquartered in Calgary, Alberta, Canada with a regional office Virginia, USA.
Cobalt was created to capitalize on opportunities in the metallurgical coal
mining industry.


The securities of Cobalt being offered have not been, nor will be, registered
under the United States Securities Act of 1933, as amended, and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons absent U.S. registration or an applicable exemption from U.S.
registration requirements. This release does not constitute an offer for sale of
securities in the United States.


READER ADVISORY

Statements in this news release may contain forward-looking information
including the use of proceeds from the Offering, the closing of the Offering and
ongoing joint venture discussions. 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 these forward-looking information.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Cobalt Coal Ltd.
Al Kroontje
Director
Office: [phone]
[e-mail]


Cobalt Coal Ltd.
Robert Gillies
CFO
Office: [phone]
[e-mail]


Cobalt Coal Ltd.
Mike Crowder
President & CEO
Office: [phone]
[e-mail]