Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining 27 May 2010 Atlantic Coal plc (Atlantic or the Company) Preliminary results
Atlantic Coal plc, the AIM listed open cast coal production and processing company with activities in Pennsylvania, USA, announces its preliminary results for the year ended 31 December 2009.
Overview � Revenues of $9,048,214 (2008: $2,229,746) following first full year of operations at Stockton � Gross profit for the period of $1,692,860 (2008: gross loss of $5,290,986) � Loss for the year of $2,571,672 (2008: loss of $3,927,465) � Production at the Stockton Colliery increased to 232,499 tons of run-of-mine coal produced (2008: 49,992 tons) � New mine plan introduced with significant investment in new equipment � Supply and partnership agreement signed post period end with Xcoal Energy & Resources Inc.

(Xcoal), extending the Companys sales reach into the Asian market � Termination of onerous supply agreement with Pagnotti Enterprises, Inc.

(Pagnotti), providing a write-back of $360,000 during the period � Continuing to examine opportunities to act as a regional consolidator in the Pennsylvanian Coal Field � Subsequent to year end �500,000 raised by the placing of new shares with investors.
Atlantic Coal Managing Director Stephen Best said, "Throughout 2009 we have made sustained progress at our primary asset, the Stockton Colliery, and we remain committed to the continued increase of our coal production.

In addition, we have focussed our attention on maximising our sales potential with deals such as the supply agreement with Xcoal and we believe that we are now ideally placed to make sales in wider geographic markets. "The Board remains committed to our long term strategy of acting as a consolidator in the Pennsylvanian Coal Field and we continue to assess a number of opportunities in this regard." For further information on the Company, visit: www.atlanticcoal.com or contact: Steve Best Atlantic Coal plc Tel: 020 3328 5670 Greg Kuenzel Atlantic Coal plc Tel: 020 3328 5670 Nick Naylor Allenby Capital Limited Tel: 020 3328 5656 Alex Price Allenby Capital Limited Tel: 020 3328 5656 Daniel Fox Davies Fox Davies Capital Ltd Tel: 020 7936 5230 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177 Paul Youens St Brides Media & Finance Ltd Tel: 020 7236 1177
Chairmans statement Over the year Atlantic Coal has successfully increased production, sales and investment at our primary asset, the Stockton Colliery (Stockton), an opencast anthracite mining and processing operation in the United States Pennsylvanian Coal Field.

Despite the fact that this is proving more expensive and taking longer to achieve profitability than was previously hoped, we have made progress and continue to advance towards our goals, albeit later than originally envisaged. Stockton has a reserve of four million tons of anthracitic coal and the Board estimate a mine life at current rates of production of circa 13 years.

Over the past year we have continued to focus our attention on implementing a new mine plan and improving productivity at Stockton and in 2010 have also installed a new crusher, invested $3.5 million into a new Liebherr R9250 19.6-yard bucket hydraulic excavator and improved our coal washing facilities.

These procedures and investments will help to improve the efficiency of the mine and the quality of our product. Additionally, we terminated a supply agreement with Pagnotti Enterprises, Inc.

(Pagnotti) that had been entered into by previous management and which was no longer commercially beneficial to us.

As a result the Board believes that for the duration of the mines life, around $1 million will be saved each year, with up to an additional 100,000 tons of run of mine coal available for processing. The agreement with Xcoal provides the opportunity to achieve international sales of our high quality anthracitic coal, particularly in Asia where Xcoal has a large presence.

Furthermore, as per our objective to become a significant mid-tier coal company, we have agreed to not only assess the development of Stockton with Xcoal, but to evaluate further mining opportunities with them.

The Board retains its belief that the possibilities for regional consolidation within the Pennsylvanian Coal Field remain and we are committed to identifying potential value adding activities. Financial review Revenues for the year ended 31 December 2009 were $9,048,214, up from 2008 revenues of $2,229,746 as sales of coal from Stockton increased dramatically.

As a result of the significantly higher sales and improved mine efficiency, Atlantic is able to report a gross profit for the year of $1,692,860 compared to a gross loss of $5,290,986 for the 2008 financial year.

Total loss for the year was $2,571,672 compared to a total loss of $3,927,465 for 2008. The Board expects to see a continued increase in demand from the North American steel industry in addition to sales to new customers in Asia as a consequence of the recent agreement with Xcoal. A profit of $131,342 was realised from the sale of shares in Strategic Natural Resources PLC following termination of acquisition discussions in October 2009.

Additionally the termination of the Maple Carpenter Creek (MCC) deal should see the return of $300,000 advanced to MCC as part of the loan agreement ahead of any corporate transaction.

At the year end, MCC had drawn down $200,000 of this loan. Further, following the successful termination of the supply arrangement with Pagnotti, Atlantic will benefit from the write-back of the provision for the year ended 31 December 2009 of circa $360,000. Directorate changes In June 2009, two Non-executive Directors, Max Crossland and Ken Ford, stepped down from the Board.

Ray Petrilla also resigned from the Board in order to focus on his role as Chief Operations Officer of the Companys operating subsidiary, Coal Contractors (1991) Inc. Operational review Production for the 12 month period to 31 December 2009 was 232,499 tons of run-of-mine coal, an increase on 2008s production of 49,992 tons.

Of the 232,499 tons, 81,766 tons were prepared into clean washed coal, an increase in excess of 400% on the same period for 2008.

2009 saw the full impact of the economic recession, with many of the USAs and Canadas steel plants closed, heavily impacting the demand for anthracite.

Atlantic sold 74,567 tons of clean washed coal during the year ended 31 December 2009 (2008: 17,654) and was able to maintain an average selling price of $125 per ton, just one dollar below that of the previous year. As we have previously reported, the Stockton Colliery has benefited from the improved Parnaby preparation plant which is now capable of producing in excess of 450 tons of washed and sized coal per day on a single shift; this is up from 400 tons in June 2009.

In addition, the new Gator jaw crusher gives a great deal more control over the sizing of coal for sale to a variety of markets and is extremely efficient.

Most recently, following an investment of $3.5 million, we have taken delivery of a Liebherr R9250 19.6-yard bucket hydraulic excavator.

The excavator has already begun work and will continue to increase production, improve mining efficiency and reduce the amount of down-time that the Stockton Colliery experiences as per our mine plan. During 2009, we began continuous production from the Mammoth seam, resulting in higher coal yields as we developed lower elevations towards the basin of the coal seam.

Atlantic also benefitted from an anomaly in the Mammoth seam that is estimated to contain up to 80,000 tons of extremely high yield anthracite.

The work on the relocation of the Norfolk and Southern Railway was halted to conserve working capital and retain focus on production.

The new mine plan was instrumental in allowing development of Stockton without the immediate need to move the railway.

A significant amount of the relocation work has already been undertaken and work is expected to recommence on the relocation of the railway in the summer. Between 1 January 2010 and 30 April 2010, production at Stockton was 32,511 tons of run of mine coal and 24,076 tons of clean washed coal.

Sales during the period to 30 April 2010 total 30,921 tons of clean coal resulting in revenues of approximately $3.4 million. Finally, Atlantic was able to stock pile both processed and unprocessed coal over the year.

Our deal with Xcoal provides us with the capacity to distribute this stockpile to extended geographic markets due to their large customer base across Asia.

Demand for anthracitic coal from the steel industry in China and India is returning and the stockpiles of processed and unprocessed coal will be a commercial strength for the Company as we can immediately satisfy new orders. Working capital and outlook As a result of the termination of the Pagnotti supply agreement (which has had the effect of significantly reducing the risk to our ongoing operations) as well the continued softness in demand from the domestic US steel market for anthracite, our cash reserves have been somewhat depleted during the first quarter of 2010.

The summer months historically see a drop off in demand for anthracite as the home heating market falls away and these months are typically used to prepare forward development work and build up stocks for the coming winter. The Company will continue to be reliant on the working capital facility it has in place with a Director and major shareholder and also plans to raise additional funds to continue development of the Stockton operations.

As a consequence, the accounts for the Company for the year ended 31 December 2009 will include an emphasis of matter in relation to going concern. With the arrival of the new excavator we expect production to increase during the coming year whilst also achieving greater efficiency.

Our agreement with Xcoal is the first step in taking advantage of this higher level of production at Stockton.

In line with our continued efforts to increase our reserves, we will continue to seek new investment opportunities to expand our operations and acquire additional assets. The Board view the future with confidence and I look forward to updating shareholders on our progress in 2010. Adam Wilson Non-Executive Chairman 27 May 2010 BALANCE SHEETS As at 31 December 2009
Group
Company
As at 31 December 2009 $ As at 31 December 2008 $
As at 31 December 2009 $ As at 31 December 2008 $ Non-Current Assets
Property, plant and equipment 4,320,491 5,097,627
4,197 212 Land, coal rights and restoration 7,335,637 7,656,260
- - Investment in subsidiaries - -
15,659,779 14,235,180 Trade and other receivables 201,823 -
12,427,969 9,872,350
11,857,951 12,753,887
28,091,945 24,107,742 Current Assets
Inventories 1,761,047 480,191
- - Trade and other receivables 1,093,695 672,216
75,332 67,866 Available-for-sale financial assets - -
- - Other assets 236,486 736,944
- - Cash and cash equivalents 843,807 327,090
726,015 210,986
3,935,035 2,216,441
801,347 278,852 Total Assets 15,792,986 14,970,328
28,893,292 24,386,594 Current Liabilities
Trade and other payables 3,517,161 3,556,904
564,212 457,474 Provisions - 2,160,000
- - Borrowings 5,222,749 1,098,993
1,592,800 281,496 Accrued restoration costs 3,732,189 2,100,000
- -
12,472,099 8,915,897
2,157,012 738,970 Non-Current Liabilities
Borrowings 2,864,936 3,186,327
637,184 - Accrued restoration costs 2,953,327 5,080,927
- -
5,818,263 8,267,254
637,184 - Total Liabilities 18,290,362 17,183,151
2,794,196 738,970 Net (Liabilities) / Assets (2,497,376) (2,212,823)
26,099,096 23,647,624 Capital and Reserves Attributable to Equity Holders of the Company
Called up share capital 1,804,719 1,640,945
1,804,719 1,640,945 Share premium account 16,616,252 15,604,095
16,616,252 15,604,095 Merger reserve 15,326,850 15,326,850
17,112,462 17,112,462 Reverse acquisition reserve (12,999,288) (12,999,288)
- - Other reserves 263,426 121,786
263,426 121,786 Foreign currency translation reserve (2,352,466) (3,322,014)
(6,201,159) (8,595,686) Retained earnings / (losses) (21,156,869) (18,585,197)
(3,496,604) (2,235,978) Total Equity (2,497,376) (2,212,823)
26,099,096 23,647,624
GROUP INCOME STATEMENT For the year ended 31 December 2009
Group
For the year ended 31 December 2009 $ For the year ended 31 December 2008 $
Revenue
9,048,214 2,229,746
Cost of sales
(7,355,354) (7,520,732)
Gross profit/(loss)
1,692,860 (5,290,986)
Administration expenses
(2,298,161) (1,661,768)
Other (losses)/gains - net
(1,124,539) 3,444,188
Other income
141,848 -
Operating Loss
(1,587,992) (3,508,566)
Finance income
21,246 54,469
Finance costs
(1,004,926) (473,368)
Loss Before Taxation
(2,571,672) (3,927,465)
Corporation tax expense
- -
Loss for the Year
(2,571,672) (3,927,465)
Attributable to Equity Holders
(2,571,672) (3,927,465)
Basic and diluted
0.19 cents 0.44 cents
GROUP CASH FLOW STATEMENT For the year ended 31 December 2009
Group
For the year ended 31 December 2009 $ For the year ended 31 December 2008 $ Cash flows from operating activities
Operating loss
(1,587,992) (3,508,566) Adjustments for:
Depreciation
1,001,142 1,096,054 Amortisation
348,852 77,199 Share options expensed
81,071 43,405 Accretion, accrued restoration costs
806,106 195,621 Reclamation work performed
(1,300,649) - Profit on sale of assets
(131,342) - Foreign exchange losses/ (gains)
1,099,216 (3,444,188) Decrease / (increase) in trade and other receivables
(409,964) 566,766 Decrease in prepaid expenses
(4,712) - (Increase) / decrease in inventories
(1,280,857) 271,398 Increase / (decrease) in trade and other payables
(273,296) 222,658 (decrease) / increase in provisions
(388,377) 1,080,000 Net cash used in operations
(2,040,802) (3,399,653)
Cash flows from investing activities
Purchase of property, plant and equipment
(221,049) (1,390,094) (Increase) / decrease in deposits & escrow
(6,164) (83,728) Loans to third parties
(200,000) - Purchase of available for sale financial assets
(441,827) - Proceeds from the sale of available for sale financial assets
1,014,995 - Interest paid
(77,245) (441,218) Interest received
19,451 54,469 Net cash from (used in) investing activities
88,161 (1,860,571)
Cash flows from financing activities
Proceeds from equity contribution
- 750,000 Proceeds from issue of share capital
813,087 2,998,159 Transaction costs of share issue
(33,116) (67,937) Proceeds from borrowings
1,840,376 666,687 Repayments of borrowings
(156,612) (1,035,677) Finance lease payments
(65,169) - Net cash from Financing Activities
2,398,566 3,311,232
Net (decrease) / increase in cash and cash equivalents
445,925 (1,948,992) Effect of foreign exchange rate changes
70,792 684,782 Cash and cash equivalents at beginning of period
327,090 1,591,300 Cash and cash equivalents at end of period
843,807 327,090
Significant Non-Cash Transactions A total of 42,750,000 shares issued on 10th August 2009 related to the purchase of shares in Strategic Natural Resources. COMPANY CASH FLOW STATEMENT For the year ended 31 December 2009
Company
For the year ended 31 December 2009 $ For the year ended 31 December 2008 $ Cash flows from operating activities
Operating loss (1,144,866) (1,015,940) Adjustments for:
Depreciation 1,241 2,594 - Profit on sale of assets (131,342) Share options expensed 81,071 43,405 Foreign exchange losses 3,352 - Decrease in deposits paid - 72,305 Decrease / (increase) in VAT due 20,926 109,594 Decrease / (increase) in prepayments (22,875) 51,648 Decrease in trade and other receivables 1,287 93,869 Increase / (decrease) in operating payables (105,664) 141,851 Increase in accruals 36,590 2,750 Net cash used in operations (1,260,280) (497,924)
Cash flows from investing activities
Loans to subsidiary (1,283,782) (3,876,092) Costs relating to acquisition of subsidiary - (318,538) Interest received 9 11,767 Purchase of property, plant & equipment (5,225) - Purchase of available for sale financial assets (441,827) - Proceeds from sale of assets 1,014,995 - Loan to third parties (200,000) - Net cash used in investing activities (915,830) (4,182,863)
Cash flows from financing activities
Proceeds from issue of share capital 813,087 2,998,159 Transaction costs of share issue (33,116) (67,937) Loans received 1,840,376 666,687 Net cash from Financing Activities 2,620,347 3,596,909
Net Increase/(Decrease) in cash and cash equivalents 444,237 (1,083,878) Cash and cash equivalents at beginning of period 210,986 1,469,689 Effect of foreign exchange rate changes 70,792 (174,825) Cash and cash equivalents at end of period 726,015 210,986
Segmental Information Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions.

During the year Group has interests in two geographical segments, the United Kingdom and the United States of America.

The parent Company operates a head office based in the United Kingdom which incurred certain administration and corporate costs.
For the year ended 31 December 2009
For the year ended 31 December 2008
USA
UK Intra-segment balances
Total
USA
UK Intra-segment balances Total
$ $ $ $
$ $ $ $ Revenue from external customers
9,048,214
-
-
9,048,214
2,229,746
-
-
2,229,746 Gross profit/(loss) 1,692,860 - - 1,692,860
(5,290,986) - - (5,290,986) Operating loss (443,126) (1,144,866) - (1,587,992)
(2,492,626) (1,015,940) - (3,508,566)
Depreciation 999,901 1,240 - 1001,142
1,093,460 2,594 - 1,096,054 Amortisation 348,852 - - 348,852
77,199 - - 77,199 Capital expenditure 247,876 5,225 - 253,101
1,456,997 - - 1,456,997 Total assets 14,785,619 28,893,292 (27,885,925) 15,792,986
14,691,264 24,386,594 (24,107,530) 14,970,328 Total liabilities 27,721,931 2,794,196 (12,225,765) 18,290,362
26,316,531 738,970 (9,872,350) 17,183,151
A reconciliation of operating loss to loss before taxation is provided as follows:
Year ended 31 December 2009 Year ended 31 December 2008
$ $
Operating loss for reportable segments (1,587,992) (3,508,566)
Finance income 21,246 54,469 Finance costs (1,004,926) (473,368)
Loss before tax (2,571,672) (3,927,465)
Information about major customers Revenues of approximately $1.738 million are derived from a single external customer.

These revenues were all generated in the USA.

In 2008 no single customer exceeded 10% of the Groups total external revenue. Cash and Cash Equivalents
Group
Company
As at 31 December 2009 $ As at 31 December 2008 $
As at 31 December 2009 $ As at 31 December 2008 $ Cash at bank and in hand 843,807 327,090
726,015 210,986
Loss per Share The calculation of the basic loss per share of 0.19 cents (31 December 2008 loss per share: 0.44 cents) is based on the loss attributable to ordinary shareholders of $2,571,672 (31 December 2008 loss: $3,927,465) and on the weighted average number of ordinary shares of 1,321,934,438 (31 December 2008: 891,603,541) in issue during the period. In accordance with IAS 33, no diluted earnings per share is presented as the effect on the exercise of share options would be to decrease the loss per share. STATEMENT This statement was approved by the directors on 26 May 2010.

This statement does not constitute the Groups statutory accounts for the year ended 31 December 2009.

Statutory accounts for the year ended 31 December 2008 have been delivered to the Registrar of companies.

The auditors report on those accounts was unqualified and did not contain any statement under section 495 of the Companies Act 2006.

The auditors report for the accounts to 31 December 2009 is unqualified. The Annual report for 2009 will be available to the shareholders and the public on the Companys web site (www.atlanticcoal.com) during the first week of June and the Company will make a further announcement in this regard as appropriate.
Elisabeth Cowell St Brides Media & Finance Ltd Chaucer House 38 Bow Lane London EC4M 9AY T: +44 (0) 207 236 1177 | M: +44 (0) 7769 658 654 | F: +44 (0) 207 236 1188 | www.sbmf.co.uk