EastCoal Inc. Announces Letter Of Intent for Acquisition of US-Based Coal Assets

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, January 27, 2020 - EastCoal Inc. (TSXV:ECX-H) ("EastCoal" or the "Company") is pleased to announce that it has entered into a letter of intent dated January 27, 2020 (the "LOI") with American Mining Group, LLC ("AMG") and Bluff Mountain Development LLC ("Bluff Mountain"). Pursuant to the LOI, the Company will, subject to certain conditions, complete a transaction to purchase 100% of the LLC membership interests of AMG and certain land from Bluff Mountain (together, the "Sellers") (collectively, the "Transaction").

Upon completion of the Transaction, the Company will own all of the assets and liabilities of AMG, including, but not limited to certain coal leases in Fayette County, West Virginia as well as land adjacent to the coal leases.

The Transaction

Pursuant to the terms of the LOI:

(a) EastCoal will acquire all of the issued and outstanding share capital of AMG, a company that owns the coal leases of the Spring Dale coal property (the "Spring Dale Property") located in Fayette County, West Virginia for a purchase price of US$957,500 to be paid as common shares in the capital of EastCoal (the "Shares");

(b) EastCoal will acquire land adjacent to the Spring Dale Property from Bluff Mountain for a cash payment of US$42,500; and

(c) EastCoal will enter into a definitive agreement (the "Definitive Agreement") with the Sellers.

Closing of the Transaction will be subject to, among other things, the following conditions:

(a) entry into the Definitive Agreement;

(b) the Company completing a financing (the "Financing") to raise funds for the resumption of mining activity on the Spring Dale Property;

(c) entry into certain agreements by the Company with creditors of either AMG or Bluff Mountain, as applicable;

(d) the Company being satisfied as to the results of its due diligence investigations of the Sellers; and

(e) receipt of all required regulatory approvals, including approval from the TSX Venture Exchange (the "TSXV").

If completed, the Transaction will constitute a "Fundamental Acquisition" of the Company, for the purposes of the policies of the TSXV, and will require the Company to, among other things, prepare and submit a technical report in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

The Spring Dale Property

The Spring Dale Property is covered by a long-term lease owned by AMG on approximately 21,000 acres located in Fayette and Greenbrier counties in West Virginia. The Spring Dale Property is production-ready and following completion of the Transaction, EastCoal plans to restart production of metallurgical coal from the desirable Pocahontas seams.

John Conlon, Chairman of EastCoal commented, "This unique opportunity, if completed successfully, will allow the Company to re-enter the metallurgical coal industry in an area that is very well known to EastCoal. The Spring Dale Property is production ready and we expect to generate cash flows within 8 to 10 weeks of production. Our team will comprise of a team of executives with extensive coal experience, a proven success record in the Appalachian region and in building start-up ventures into successful companies."

Trading Halted

At the Company's request, trading in the Shares of the Company has been halted. Trading in the Shares will remain halted throughout the completion of the Transaction until such time as the TSXV may determine.

Further Disclosure

The Company will issue further news releases regarding the Transaction and the Definitive Agreement as information becomes available.

About EastCoal Inc.

EastCoal Inc. is publicly trading mining issuer currently listed on the NEX Board of the TSXV.

For further information, please contact:

EastCoal Inc.

Attention: Damien Forer
Phone: 778-960-8517

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information

This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and the Transaction. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: (i) expectations regarding whether the Transaction will be consummated, including whether conditions to the consummation of the Transaction will be satisfied including, but not limited to, the necessary board, shareholder and regulatory approvals and the timing associated with obtaining such approvals, if at all; and (ii) anticipated commencement of production on the Spring Dale Property.

Such forward-looking information and statements are based on numerous assumptions, including among others, the following: that the conditions for the completion for the Transaction will be met, including the receipt of all required approvals in connection with the Transaction; completion of the applicable geological reports or studies; that general business and economic conditions will not change in a material adverse manner; and that third party contractors, equipment and supplies and governmental and other approvals required to conduct the Company's planned production activities, upon completion of the Transaction, will be available on reasonable terms and in a timely manner.

Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of the Company's management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: (i) the ability to consummate the Transaction, if at all; (ii) the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Transaction on the proposed terms; (iii) the potential for delays in production activities or the completion of geologic reports or studies in connection with the Spring Dale Property; (iv) the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; (v) the business plans and expectations of the Company; (vi) Company's ability to secure the Financing in connection with the Transaction; (vii) trading in the Shares and when such trading will resume, if at all; (viii) the completion of and the issuance of Shares pursuant to the Transaction; (ix) the issuance of and timing associated with issuing a further comprehensive news release or news releases; (x) changes in general economic, business and political conditions, including changes in the financial markets; and (xi) expectations for other economic, business, and/or competitive factors. This forward-looking information may be affected by risks and uncertainties in the business of the Company and market conditions.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

SOURCE: EastCoal Inc.