BEECH CREEK COAL MINE

Phoneic coal announced that it has entered into a definitive agreement to sell the company’s ongoing surface mining business and reserves primarily in Muhlenberg County, Kentucky, to a significant privately-owned, Ohio-based coal producer.

Announced that has resumed production at its mining operations after experiencing a temporary shutdown due to a severe ice storm last week that impacted most of the State of Kentucky.

Phoenix Coal reported that as at the beginning of June 2008, the company had mined through its Back in Black mine permit area, and production at Back in Black was idled until the company received the requisite permits for the adjacent property, some of which had been issued as at March 2009 for the Wynn North area. The equipment and manpower had been moved to Beech Creek to maintain similar company-wide production levels. Fourth quarter production was negatively affected by depletion at Graham #5, which depleted in December, and Beech Creek which experienced declining production as it neared the end of its reserve life. During the fourth quarter of 2008, the company produced approximately 527,000 tons of saleable coal and purchased nearly 18,000 tons of clean coal. For the full 2008 year, the company produced approximately 1,932,000 tons of saleable coal and purchased approximately 323,000 tons of saleable coal.