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National Coal Corp. Purchases 42-Mile Rail Line From Norfolk-Southern

Posted on: Wednesday, 1 March 2006, 09:00 CST

National Coal Corp. (Nasdaq:NCOC), a Central Appalachian coal producer, announces the purchase, by its wholly-owned subsidiary, NC Railroad, Inc., of 42 miles of railroad track between Oneida and Devonia, Tenn., from Norfolk-Southern Railroad for $1.96 million.

The rail line gives National Coal unprecedented access to its largest reserve location, the New River Tract, located between its Smoky Junction preparation plant in Oneida and the Baldwin Facility, a 750 ton per-hour heavy media cyclone preparation plant and load-out facility in Devonia, Tenn.

National Coal COO, Ken Hodak, explains why greater access to this area is a key step in the Company's expansion plans this year. "The addition of this railroad provides rail access to proven reserves that were previously uneconomical to mine due to high trucking costs and road limitations. We currently own the mineral rights on approximately 65,000 acres of the Tract including four permitted and five soon-to-be permitted mining sites. Increased access to this area by rail will eliminate present obstacles resulting in production improvements. We are already seeing strong interest by new and existing customers from the Southeast who can count on us to provide a steady source of energy for many years."

The Company will invest approximately $2 million dollars restoring the rail line making it available by third quarter 2006, and, at the same time, will spend approximately $3 million dollars updating the Baldwin preparation plant to prepare its load-out facility for a significant increase in production. National Coal established a subsidiary, NC Rail, Inc., to manage the operation and maintenance of the rail line.

Jon Nix, President, CEO and Chairman of the Board at National Coal, adds: "This last piece of the puzzle solidifies the strategy that we have envisioned from day one, that we needed to be able to develop and nurture these New River reserves. This rail addition, as well as the Baldwin reopening, will allow us to start opening planned mines in this area starting as early as third quarter 2006. Streamlining and growing production from this resource is going to solidify our position as one of the leading suppliers in the Southeast."

About National Coal Corp.

Headquartered in Knoxville, Tenn., National Coal Corp., through its wholly-owned subsidiary, National Coal Corporation, is engaged in coal mining in Eastern Tennessee and Southeastern Kentucky. Currently, National Coal employs more than 250 people and produces coal from two mines in Tennessee and four in Kentucky.

NC Railroad, Inc., a wholly-owned subsidiary of National Coal Corp., was established in 2006 to oversee the management and maintenance of the Company's rail lines. For more information, visit www.nationalcoal.com.

Forward-Looking Statements

This release contains statements that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current estimates and projections about National Coal's business, which are derived in part on assumptions of its management, and are not guarantees of future performance, as such performance is difficult to predict. Examples of forward looking-statements include the number of newly permitted mines, anticipated production improvements, the anticipated amount of expenditures to improve the rail line and Baldwin facility, and the anticipated increase in new mines due to the acquisition of the rail line and reopening of the Baldwin facility. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements due to numerous factors. Such factors include, but are not limited to, National Coal's ability to complete improvements to the rail line and Baldwin facility on time and on budget, rapidly and efficiently integrating operation of the rail line and Baldwin facility into its existing operations, the demand for coal, the price of coal, the supply of coal and other competitive factors, the costs to mine and transport coal, including the cost of operating the rail line, the ability to obtain new mining permits, the costs of reclamation of previously mined properties, and the risks of expanding coal production. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission including the Company's most recently filed Annual Report on Form 10-KSB and Quarterly Reports on Form 10-QSB, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements.

Source: Business Wire

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