Cobalt Coal Ltd. ("Cobalt" or the "Company") (TSX VENTURE:CCF), is pleased to
announce the completion of its restructuring transaction which includes the
acquisition of 96% of the Class A Limited Partnership Units and 92% of the Class
C Limited Partnership Units of Westchester Coal Limited Partnership, the
entering into agreements for the conversion of certain outstanding debentures of
Cobalt into Cobalt common shares, the issuance of Cobalt common shares to the
Corporation's secured lender (the "Secured Lender") to repay $282,000 of the
outstanding debt and the completion of a non-brokered private placement of
Cobalt common shares for gross proceeds of approximately $2,078,500. 


Westchester Coal Limited Partnership Purchase 

Pursuant to the offer made by Cobalt to purchase the Class A and Class C Limited
Partnership Units not already owned by Cobalt, Cobalt has acquired 96% of the
Class A Limited Partnership Units and 92% of the Class C Limited Partnership
Units of the Westchester Coal Limited Partnership. 


As consideration for the acquisition of the Class A and Class C Limited
Partnership Units, Cobalt issued 1,657,880 Cobalt common shares to the holders
of the Class A and Class C Limited Partnership Units who tendered their units to
Cobalt's offer.


Cobalt intends to serve notice to the remaining Class A and Class C unitholders
who did not tender to the offer whereby Cobalt will acquire the remaining units
pursuant to the provisions of the Limited Partnership Agreement. 


Cobalt Debentures 

Holders of $425,000 in face value of the outstanding debentures of Cobalt (the
"Debentures") have agreed to the conversion proposal made to them by Cobalt,
pursuant to which they receive repayment of 50% of the face value of their
Debentures through the issuance of Cobalt common shares at a deemed price of
$0.12 per share with the balance being payable in cash on or before December 15,
2011 (the "Debenture Conversion").


Pursuant to the Debenture Conversion, Cobalt has issued or will issue an
aggregate of 3,541,667 Cobalt common shares to the holders of the Debentures who
have agreed to participate in the Debenture Conversion. All securities issued
pursuant to the Debenture Conversion are subject to a four month hold period
expiring on December 20, 2011.


Senior Indebtedness

A formal agreement has been entered into between Cobalt's chairman, Al Kroontje,
and the Secured Lender, pursuant to which Mr. Kroontje has agreed to purchase
the outstanding debt and security held by the Secured Lender. Cobalt has issued
2,350,000 common shares to the Secured Lender at a deemed price of $0.12 per
share to repay $282,000 of the outstanding debt. All securities issued to the
Secured Lender pursuant to the agreement are subject to a four month hold period
expiring on December 20, 2011. 


The Secured Lender also received a $100,000 deposit from Mr. Kroontje and will
receive a cash payment of $400,000 on or before September 7, 2011. A final
payment of $500,000 is required on or before November 30, 2011. Through the
completion of the non-brokered private placement described below, and prior to
issuing the common shares to the Secured Lender, Cobalt fulfilled the Secured
Lender's condition that a minimum of $2,000,000 in new equity be raised by
Cobalt. 


Non - Brokered Private Placement

Cobalt is pleased to announce that it has closed its previously announced
non-brokered private placement (the "Offering"). Cobalt issued 17,320,831 common
shares of the Corporation at a price of $0.12 per common share for gross
proceeds of $2,078,500. All securities issued pursuant to the Offering are
subject to a four month hold period expiring on December 20, 2011.


About Cobalt

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 to capitalize on the growth opportunities that
exist 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 timing of closing of the Private Placement. 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
Company. 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.