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Interim Report for the period ending 31st May 2005

31 August 2005

Chairman’s Statement

I am pleased to report the Company's first set of results since its admission to AIM on 28th April 2005. During the period from incorporation on 23rd November 2004 to 31st May 2005, the Company achieved a profit of £33,240 with overheads of £21,061 and interest received of £62,301 with the balance sheet maintaining £18,482,773 net cash. The Company had not made any investments under its stated strategy by the end of the period.

The Directors have, collectively, over 90 years’ experience in the mining industry, during which time they have worked with a wide range of quoted and unquoted mining-related businesses in the United States, Australia, Canada, Europe and Asia. In the Company’s admission document it was stated that the Directors’ strategy for Coal International was to identify, evaluate and invest in or acquire projects which they believed were well positioned to exploit current coal production opportunities and that the Directors’ focus would be coal projects which are capable of rapid growth and exploitation.

Following the end of the period and in accordance with this strategy the Company has made a number of initial investments. The first was the acquisition of 17 per cent. of the issued share capital of King-Coal in June 2005 which was followed by an increase in the Company’s holding in King-Coal to 29 per cent. in July 2005 for an aggregate consideration of £5,316,646. In July 2005, the Company purchased 58 per cent. of Maple Coal for an aggregate consideration of £2,235,000. Over the course of June and July 2005, the Company acquired approximately 9.8 per cent. of the issued share capital of Northern Energy and Mining Inc (trading on the TSX.V) through the market for an aggregate consideration of £2,895,787.

King-Coal owns approximately 35 million tons of metallurgical and thermal coal reserves contained in two surface and two underground operations capable of producing over 2 million tons per annum of clean coal over a mine life in excess of ten years. The company owns, and is in the process of refurbishing and upgrading, a coal preparation plant with a capacity of processing in excess of 6 million tons per annum allowing for additional coal processing from other sources. These assets were previously owned and operated by Island Creek Coal Corporation, which ceased operation in the late 1980’s. Limited operations were conducted on the properties by Gauley Eagle Coal Company in the interim. Coal International anticipates that following completion of the refurbishment of the plant, estimated to take a further three months, it will commence production from the King-Coal properties at a rate of approximately 80,000 tons per month of premium high-volatile coking coal. It is expected that within three years these operations will produce in excess of 2 million tons of clean coal per annum. Based on mine planning and utilisation of contract miners and engineering studies now being finalised, the capital cost required to achieve these production levels is anticipated to be funded from current cash reserves.

Subject to transfer of existing permits (in process), Maple Coal will own approximately 87 million tons of low-sulphur, high-quality thermal and mid-volatile coking-coals (approximately 48 million clean tons), formerly operated by Cyprus Minerals under the name of Kanawha River Mining. Cyprus ceased operations in the late 1990’s and sold the operations to Horizon Mining. Following completion of engineering studies (currently underway) and permitting, Maple Coal anticipates it will commence production of low-sulphur thermal coal at a rate of approximately 1 million tons per annum (normalising at a rate of approximately 850,000 tons per annum after year two) over an estimated mine life of 17 years. Capital required to establish the surface mining operation, again utilising contract miners, is anticipated to be less than $9million, intended to be funded from cash reserves. Following receipt of new mining permits for underground operations (estimated to require two years) the company expects to establish underground production at an annual rate of an additional 1 million tons of high quality, mid-volatile coking coal with an estimated mine life of 8½ years.

The Company has also appointed W. Durand Eppler as the Chief Executive Officer of Coal International with responsibility for executing and completing the Company’s growth strategy. Mr Eppler was for nine years a Vice President of Newmont Mining Corporation, responsible for Corporate Development activities following a twenty-year career in investment banking and corporate finance focused on the natural resource industries.

Further to establishing the Company’s plan for future growth the Company has identified a management team to lead the development of the West Virginian operations. Dan Stickel will become the President of the Company’s U.S. operations with responsibility for executing the King-Coal and Maple Coal business plans and establishing these operations as a core element within Coal International. Mr Stickel is an experienced coal executive with a distinguished 28 year career in coal mine engineering, operations and mine administration, having worked with Drummond Company, US Steel Mining and Arch Coal Company amongst others. Mr Stickel is a graduate of West Virginia University with a degree in Mining Engineering.

In accordance with the Company's stated dividend policy, the payment of a dividend is not yet recommended.

John J. Byrne
Chairman
31st August 2005

Independent Review Report to Coal International Plc

Introduction

We have been instructed by the Company to review the financial information set out herein and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

This report, including the conclusion, has been prepared for and only for the Company for the purpose of their interim report and for no other purpose. We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Directors’ responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board as if that Bulletin applied. A review consists principally of making enquiries of the Directors and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the period ended 31st May 2005.

CHAPMAN DAVIS LLP
Chartered Accountants
2 Chapel Court
London SE1 1HH

Profit and Loss Account (Unaudited)

For the period from 23rd November 2004 to 31st May 2005

	Notes	£
TURNOVER		-
COST OF SALES		-
GROSS PROFIT		-
Administrative expenses		(21,061)
OPERATING LOSS		(21,061)
Interest receivable		62,301
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION		41,240
Taxation	2	(8,000)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION		33,240
Earnings per share :	4
- Basic		0.69p

Balance Sheet (Unaudited)

At 31st May 2005

	Notes	£
CURRENT ASSETS
Debtors	5	2,412,564
Cash at bank and in hand		18,482,773
		20,895,337
CREDITORS: Amounts falling due within one year		(38,581)
NET ASSETS		20,856,756
CAPITAL AND RESERVES
Called up share capital		14,716,667
Share premium account		6,106,849
Profit and loss account		33,240
SHAREHOLDERS’ FUNDS	7	20,856,756

Cash Flow Statement (Unaudited)

For the period ended 31st May 2005

	Notes	£
CASH (OUTFLOW) FROM OPERATING ACTIVITIES		(2,403,044)
Returns on investments and servicing of finance		62,301
Capital expenditure and financial investment		-
CASH (OUTFLOW) BEFORE ACQUISITIONS AND FINANCING		(2,340,743)
Acquisitions
CASH (OUTFLOW) BEFORE FINANCING		(2,340,743)
Financing		20,823,516
INCREASE IN CASH IN THE PERIOD	6	18,482,773

Notes to the Interim Report

For the period ending 31st May 2005

1. Presentation of interim results

This interim report was approved by the Directors on 31st August 2005. The results for the half year have not been audited, but were the subject of an independent review carried out by the Company’s auditors, Chapman Davis LLP. Their review confirmed that the figures were prepared using applicable accounting policies and practices consistent with those to be adopted in the annual report. The financial information contained in this interim report does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. A copy of the Interim Report can be obtained from the Company’s registered office at 2 Chapel Court, London SE1 1HH, free of charge, for a period of one month.

2. Taxation

The charge to U.K. corporation tax of £8,000 represents a provision of 19% on the adjusted profit for the period.

3. Dividends

The Directors do not recommend the payment of a dividend.

4. Earnings per share

	Profit £	Weighted Average Number of Shares	Per Share pence
Basic Profit for the period	33,240	4,814,915	0.69

The total number of shares in issue at 31st May 2005 amounted to 29,433,333. The number of options held over the shares at 31st May 2005 were 535,333. These options are exercisable at 75p per share for a period of 2 years from AIM Admission and have no dilutory effect on earnings per share for the period to 31st May 2005.

5. Debtors

The debtors of £2,412,564 relate to advances to solicitors in respect of the investments acquired in June 2005.

6. Reconciliation of net cashflow to movement in net funds

	Profit £
Increase in cash in the period	18,482,773
Net funds at beginning of period	18,482,773
Increase in cash in the period	-
Net funds at end of period	18,482,773

7. Reconciliation of net cashflow to movement in Shareholders' funds

	Share capital £	Share premium account £	Profit and loss account £	Total £
At 23rd November 2004	-	-	-	-
Profit for the period	-	-	33,240	33,240
Issue of shares	14,716,667	-	-	14,716,667
Premium on allotment during period	-	7,358,333	-	7,358,333
Expenses of share issues	-	(1,251,484)	-	(1,251,484)
At 31st May 2005	14,716,667	6,106,849	33,240	20,856,756

COMPANY INFORMATION

Directors

• John J. Byrne
• John J. Conlon
• W. Durand Eppler

Secretary

Alwyn Davey
4th Floor Windsor House
55 St James’s Street
London SW1A 1LA

Registered Office

2 Chapel Court,
London SE1 1HH

Auditors

Chapman Davis LLPv 2 Chapel Courtv London SE1 1HH

Solicitors

Trowers & Hamlins
Sceptre Court
40 Tower Hill
London EC3N 4DX

Registrars

Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

Nominated Adviser

Cenkos Securities Limited
6, 7 & 8 Tokenhouse Yard
London EC2R 7AS

Broker:

Cenkos Securities Limited
6, 7 & 8 Tokenhouse Yard
London EC2R 7AS

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