COMPLIANCE ENERGY CORPORATION – POSITIVE FEASIBILITY RESULTS RECEIVED FOR THE RAVEN COAL PROJECT

TSX-V TRADING SYMBOL:  CEC

VANCOUVER, May 9 /PRNewswire/ - Compliance Energy Corporation (“Compliance” or the “Company) is pleased to announce a positive, NI
43-101 compliant, independent Feasibility Study(1) (“Feasibility Study”) for the Company’s 60% owned Raven Underground
Coal Project (the “Project”) in the Comox Coal Basin on Vancouver
Island, British Columbia, Canada.  Pincock, Allen, and Holt (“PAH”), of
Denver, Colorado, a qualified independent mining consulting firm,
prepared the Feasibility Study on behalf of Compliance and its joint
venture partners. This Feasibility Study updates a Preliminary
Feasibility Study, also prepared by PAH, that was filed on SEDAR on
October 15, 2010.

Project Description

The Project is 80 kilometres (50 miles) northwest of Nanaimo, British
Columbia, and approximately 60 kilometres (37 miles) southeast of the
currently producing Quinsam Coal Mine and is approximately 2 to 20 km
(1 ½ – 13 miles) away from numerous previous producing coal mines near
and south of Cumberland, British Columbia.  The Project is attractively
situated adjacent to a modern infrastructure corridor that includes a
four-lane divided freeway, natural gas pipeline, high-voltage
electricity transmission lines, and a railway that connects to an
available port facility.

The Project will be included within an area of approximately 3,100
hectares (7,600 acres), 2,958 hectares of freehold coal rights and 142
hectares of government coal licenses. The coal is classified as high
volatile A Bituminous semi-soft metallurgical coal but could also be
sold as a high energy content thermal coal product.

Summary of Financial Results

The Project involves underground mining utilizing room and pillar mining
methods with conveyor transportation to surface. An annual average of
1.93 million tonnes of raw coal will be processed on site, resulting in
total average annual production of 0.85 million tonnes of saleable semi
soft metallurgical and thermal middlings coal per year over a 15.5 year
mining term. Processed coal production will range from 0.65 million
tonnes to 1.1 million tonnes per year after the initial start up period
and excluding the final year of mining. Processed coal will be
transported to Port Alberni on the west coast of Vancouver Island and
marketed into Asian coal markets, likely Japan and Korea.
Infrastructure construction is anticipated to commence in 2012
subsequent to the receipt of all necessary permits. Mine construction
and development would take approximately one year to complete and the
first shipment of coal is projected to commence in late 2013.

John Tapics, President and CEO of Compliance Energy, stated that “this
Feasibility Study is a significant step forward for the Company. It
confirms the long term financial viability of the Raven project which
is achievable with responsible environmental and social
considerations.  We are pleased with the plan developed in the
Feasibility Study by PAH and other contributors and look forward to our
next phase of progressing forward through the coordinated
Provincial-Federal environmental approval processes.”

The Feasibility Study concludes that the Project (100% basis) is
financially attractive with an estimated pre-tax NPV (8% discount rate)
of CDN$378 million at an average realized coal price of CDN$174 per
tonne (prices are FOB Port Alberni). The Project returns a non-levered,
pre-tax discounted cash flow-internal rate of return of 28.7%.

_______________________________________

(1) The Company and its consultants are continuing to advance the study
work in order to advance the Feasibility Study.  Two areas remain to be
fully addressed, which include the quantity and quality of water
inflows to the mine workings; and there are also ongoing studies to
determine if there is any potential for the rock reject material to be
acid generating.

    Table A                                                               

    Summary Results(1)(2)                                                 

    Project Pre-Tax Net Present Value (CDN$ Millions)
    (3)

        5%  Discount rate                                            $ 539

        8%  Discount rate                                            $ 378

       10% Discount rate                                             $ 297

    Project Pre-Tax Internal Rate of Return                          28.7%

    Undiscounted cash flow payback period                           Year 5

    Average annual Project EBITA(4)(CDN$ Millions)                    $ 83

Notes:

    (1)      The Feasibility Study was completed on a 100% Project basis
             and thus all results presented in this news release are shown
             on a 100% Project basis. The Company holds a 60% interest in
             the Project.

    (2)      These results are presented on a 100% equity financing basis
             for the capital requirements for the Project.

    (3)      Net present values are discounted to 2012, the first year of
             the Project cash flows.

    (4)      Earnings before interest, taxes, and amortization.

Coal Resources and Coal Reserves

The coal resources and coal reserves are reported in accordance with
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition
Standards for Mineral Resources Mineral Reserves and their Guidelines,
and are compliant with National Instrument 43-101 (“NI 43-101″).  The
resource and reserve estimate was prepared by A. Lorraine Livingston,
and Lynn A. Sessions under the supervision of Peter Christensen, of
independent mining consultant Pincock, Allen, and Holt, an independent
Qualified Person (QP), as this term is defined in NI 43-101.

Based on the resource models developed, PAH has completed the
Feasibility Study on the project. Based on the economic analysis
conducted as part of the Feasibility study, reserve estimates are
summarized in Table B and were derived from a base case in which two
products; a semi-soft coking coal (“SSCC”) and a thermal coal middling
(“Middling”) product are produced. The reserves summary includes the
ROM tonnes mined (includes dilution), and the product coal produced
(includes factors for coal processing yield, and process efficiency).
Proven and Probable reserves are estimated at 29.9 million ROM tonnes
which after processing is estimated to yield 13.1 million product
tonnes:

    Table B                                                                        

    Summary of Underground Coal Reserves(kilotonnes)    

                                                          Middling
                                         SSCC               (2)               Total
                       ROM(1)           Product           Product            Product

    Proven             14,669            5,531               826              6,357

    Probable           15,234            5,985               746              6,731

    Total(3)           29,903           11,515              1,572            13,088

Notes:

    (1)      Run of Mine raw coal prior to processing

    (2)      Although metallurgically a SSCC product, the ash content is in
             excess of 10% and thus this portion of production is
             classified as a Middling product.

    (3)      Totals may not add due to rounding.

Production Summary

The Feasibility Study selects an underground room-and-pillar mining
method to provide the maximum flexibility to adapt to the variable
conditions present at the Project. The room and pillar method centres
on the use of continuous miners, shuttle cars and dual boom roof
bolters used for roof support.  Shuttle cars haul coal from continuous
miners to the belt-conveyor feeder breakers.  The belt-conveyors feed
the raw coal to the surface preparation and process plant.

Raven coal can be processed to a final product specification of 10
percent ash (dry basis) and approximately 1.2 percent sulphur and is
suitable for the metallurgical coal market. Alternatively, all of the
Raven washed product could be marketed as a high-quality thermal coal
with average product specifications of 7,000 kcal/kg and 15 percent ash
on a dry basis. Given this, the process plant has been designed with
the flexibility to produce metallurgical coal, with a thermal middlings
coal by-product or alternatively a high-quality thermal coal. There are
markets for metallurgical coal, thermal (or “steam”) coal, and
industrial coal (higher than 15 per cent ash on a dry basis) available
for the Raven Project.  Rock rejects will be directed to a surface
storage pile to the north and west of the access portals and processing
facilities.

The total project life is approximately 17 years, comprising a 12 month
construction phase (2012 to 2013) followed by an 15.5-year mining
period with site reclamation in the final year. The initial
construction phase involves site preparation, infrastructure
construction, and decline development. Major infrastructure to be
constructed on site includes a coal processing plant, coal stockpiles
and handling equipment, mine offices, equipment workshops and power
sub-station.

Coal processing will be conducted on site. Average wash plant yield has
been estimated at 44%. The final coal products will average 88%
semi-soft metallurgical coal and 12% thermal middlings product over the
mine life.

    Table C                                                               

    Projected Production                                                  

    Total Raw Coal mined (millions of ROM Mt)                         29.9

    Total Saleable Coal (millions of Mt)                              13.1

    Mine Life (Production Years)                                      15.5

    ROM Average Mining Rate (millions of Mt per year)                 1.93

    ROM Average Saleable Coal (millions of Mt per                     0.85
    year)

Notes:

(1)     ROM = Run of Mine

(2)     Mt = Metric Tonnes

A number of options were considered for the transportation of coal from
the mine to port. The base case assumes contracted highway trucks are
used transport the coal to Port Alberni, British Columbia for loading
onto Panamax-class ships for export to Asian Coal markets.  Compared
with coal ports in Australia, Port Alberni has an absolute distance
advantage to markets in Japan and Korea.

The quantity of recoverable run of mine coal including dilution is
estimated at 29.9 million tonnes. The saleable product in the base case
is estimated at 11.5 million tonnes of semi-soft metallurgical coal and
1.6 million tonnes of thermal middlings coal. 97.5 million tonnes of
Measured and Indicated resources were included to calculate the
potential mineable coal reserve. No consideration has been given in the
mine plan for the 34.5 million tonnes of inferred resources. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.

The Company engaged an independent third-party coal market research firm
to produce a coal price forecast for Raven Coal.  The Raven
metallurgical coal product has been characterized as essentially
similar to Australian New South Wales semi soft coking coal,
notwithstanding the fact that some characteristics of Raven coal are
more typical of premium Australian hard coking coal. Raven thermal
product is forecast to track the price of Australian coal shipped from
the port of Newcastle, Australia.

Capital Expenditures

The mine development plan assumes that capital spending begins in 2012,
with the majority of capital spending (equipment and facilities)
occurring in 2012 and 2013. Thereafter there will be on-going capital
expenditures to add additional underground conveyors and sustaining
capital has been budgeted to replace worn equipment over the life of
the Project.

    Table D                                                                

    Capital Expenditures (CDN$ Millions)(1)                                

    Initial Capital Costs:                                                 

       Engineering , tendering,  site development,                 $   17.7
    electrical  switchgear and substation

       General surface infrastructure (2)                              21.6

       Coal preparation plant                                          10.1

       Raw and product coal handling/rejects                           18.3

       Underground mining equipment                                    34.6

       Underground conveyors                                           31.9

       Ancillary Underground Equipment and power                        6.9

       Underground Development and access                              12.7

       Mine facilities                                                153.9

       Port facilities (3)                                             59.2

                                                                      213.1

       Contingency                                                     28.4

       Sub-total Capital (including contingency)                      241.4
    (4)

    Sustaining Capital (Life of Mine)                                  50.4

    Total Capital Outlay(5)                                        $  291.9

Notes:

    (1)      Capital expenditures include contingency and are shown in 2011
             dollars.

    (2)      Includes an estimate for a water treatment of $16.3 million,
             which will be the subject of further study.

    (3)      Includes an estimate for a travelling ship loader. A fixed
             ship loader at Port Alberni would reduce total capital by
             approximately $20 million, but this remains subject of further
             study.

    (4)      Approximately $208 million of this amount is for initial
             capital to steady state production with the balance in later
             years.

    (5)      Totals may not add due to rounding.

Mine operating Costs

The mine operating costs reflect a typical room-and-pillar operation
with conveyor transport to surface and coal processing at surface. 
On-site costs consist primarily of workforce costs and also include
operating supplies, maintenance parts and supplies, electric power,
water treatment, roof bolts and all other mining and processing
materials. On-site costs are estimated to average CDN$61.02 per Mt of
saleable coal. Offsite costs include coal loading and transportation,
port costs, corporate general and administration, sales commissions and
royalties.  Off-site costs are estimated to average CDN$15.48 per Mt of
saleable coal, resulting in a total average operating cost of CDN$76.50
per Mt of saleable coal, FOB Port Alberni.

Job Creation in the Comox Valley

In production, the Project is projected to create approximately 350 well
paying local jobs during its 15.5 year life, and at the peak of
construction, over 200 jobs, providing a large economic opportunity for
communities’ residents and Aboriginal Groups.

Economic Enhancement Opportunities

Several opportunities remain at the Raven Project for generating
additional revenues and improving economics, as well as for lowering
capital and operating costs. These opportunities were considered
outside the scope of the work, but may be addressed in subsequent
studies. These opportunities include the evaluation of different port
options, increasing the quantity of saleable coal through additional
in-fill drilling to move inferred resources to measured and or
indicated resources and therefore into the mine plan; additional
resource drilling, if successful, could either expand the mine size or
extend mine life; and revising water treatment capital expenditures
with the completion of further scientific study. The Company and its
consultants are continuing to evaluate these project opportunities.

Qualified Person

Peter Christensen, A. Lorraine Livingston, and Lynn A. Sessions of
independent mining consultant Pincock, Allen, and Holt, are the
Qualified Persons as defined by NI 43-101. They have reviewed and
approved the results presented in this press release. A copy of the
updated NI 43-101 compliant technical report on the Raven Underground
Coal Project will be available within 45 days of the issue of this
press release at www.sedar.com.

About Compliance Energy Corporation

Compliance Energy Corporation is a mining exploration and development
company. Our primary holding is our interest in over 31,000 hectares of
coal rights on Vancouver Island, British Columbia, where we are focused
on developing the Raven Underground Coal Project of which we hold a 60%
interest. The remaining 40% is owned by I-Comox Coal Inc. (a subsidiary
of Itochu Corporation of Japan) and by LG International Investments
(Canada) Limited (a subsidiary of LG International Corp. of Korea).

The Company also holds a number of mineral exploration properties
totaling over 24,000 hectares on Vancouver Island, BC which are 100%
owned by the Company, some subject to certain royalty requirements. Our
shares trade on the TSX Venture Exchange under the symbol CEC and
investor information is available on our web site at www.complianceenergy.com.

On behalf of the Board of

COMPLIANCE ENERGY CORPORATION

John Tapics

Chief Executive Officer

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 STATEMENTS

This release contains “forward-looking statements” within the meaning of
applicable Canadian securities legislation.  Forward-looking statements
include, but are not limited to, statements that address activities,
events or developments that the Company expects or anticipates will or
may occur in the future, future mineral exploration activities, future
business strategy, competitive strengths, goals, expansion, growth of
the Company’s businesses, operations, plans and with respect to
exploration results, the timing and success of exploration activities
generally, permitting time lines, government regulation of exploration
and mining operations, environmental risks, title disputes or claims,
limitations on insurance coverage, timing and possible outcome of any
pending litigation and timing and results of future resource estimates
or future economic studies.  Often, but not always, forward-looking
statements can be identified by the use of words such as “plans”,
“planning”, “planned”, “expects” or “looking forward”, “does not
expect”, “continues”, “scheduled”, “estimates”, “forecasts”, “intends”,
“potential”, “anticipates”, “does not anticipate”, or “belief”, or
describes a “goal”, or variation of such words and phrases or state
that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved.

Forward-looking statements are based on a number of material factors and
assumptions, including the receipt of necessary regulatory approvals,
that counterparties to material agreements will duly perform their
obligations there under, the results of drilling and exploration
activities, that contracted parties provide goods and/or services on
the agreed timeframes, that equipment necessary for exploration is
available as scheduled and does not incur unforeseen break downs, that
no labour shortages or delays are incurred, that plant and equipment
function as specified, that no unusual geological or technical problems
occur, and that laboratory and other related services are available and
perform as contracted.  Forward-looking statements involve known and
unknown risks, future events, conditions, uncertainties and other
factors which may cause the actual results, performance or achievements
to be materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or implied
by the forward-looking statements. Such factors include, among others,
the interpretation and actual results of current exploration
activities; changes in project parameters as plans continue to be
refined; future prices of minerals; possible variations in grade or
recovery rates; failure of equipment or processes to operate as
anticipated; the failure of contracted parties to perform; labour
disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
exploration, as well as those factors disclosed in the company’s
publicly filed documents. Although the Company has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results not to be as anticipated, estimated or intended. There can be
no assurance that forward-looking statements will prove to be accurate,
as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements.

SOURCE Compliance Energy Corporation