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EastCoal Provides Operational and Corporate Update

EastCoal Inc. (ECX.V) reports that, at the end of February, it restarted its wash plant at the Menzhinsky mine following the completion of engineering improvements and that it expects wash plant production to ramp up over the next few weeks.

The geological challenges experienced at the Menzhinsky underground mine, announced early February, continued into March and, as a result, the Board has ordered the immediate discontinuation of the current longwall, two months earlier than originally planned. The Company will continue with the development of the Central longwall, which should be ready for production on 1 May 2013, in line with the expected timing set out in the Company's recent AIM Admission document. The Directors believe that the Central longwall should have the capacity to produce 7,000 tonnes of coal per month.

The Company will also reduce headcount at its Ukrainian operations by approximately 400 people, principally to improve operational efficiency. The Company currently employs approximately 1,200 employees across its Menzhinsky and Verticalnaya operations.

The Company is pleased to announce that on March 12, 2013 it reached an agreement with Aponet Enterprises Limited to amend the C$0.65 conversion price of its US$4 million debenture issued as part of the acquisition of Inter Invest, the owner of the Menzhinsky mine, to C$0.23, and to convert the debenture into 17,391,305 common shares of EastCoal Inc. The debenture had an interest rate of 2% over the 3-month LIBOR rate per annum compound quarterly and a maturity date of May 31, 2016.

EastCoal is near a yr low.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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