American Power Corp. (OTCBB: AMPW) ("American Power" or "the Company") is pleased to announce that drilling operations have begun on its Pace Coal Project, located in Judith Basin County, Montana.

Drilling operations for Phase I of the Company's coal exploration program began at 12:30 MDT on August 16, 2011 on drill hole PH1-3. A second drilling rig started operations at 15:00 MDT on August 17, 2011 on drill hole PH1-2.

"This is a very exciting time for the Company. We are delighted to inform our shareholders that drilling operations have started this week, amid excellent weather conditions in Central Montana," commented Mr. Al Valencia, President and CEO of American Power. "We are working with an experienced technical team onsite capable of successfully conducting the planned exploration program over the following weeks. All steps to maximize our chances of success have been taken and given the scope of this ambitious program, we have decided to work with two drilling rigs onsite at all times," added Mr. Valencia.

Photographs of the drilling operations at the Pace Coal Project will be uploaded shortly to American Power's website: www.americanpowerco.com.

Exploration Drilling Program American Power's planned exploration drilling program consists of 61 drilling sites and will involve a total of 53,875 feet of drilling in three different phases. The first phase of the program consists of a total of 13 drilling locations, while the second and third phases consist of a total of 9 and 39 drilling locations, respectively. American Power's exploration program will provide information relative to coal seam thickness, depth of cover, expected top and bottom conditions and coal quality.

The program's aim is to place a significant portion of the coal holdings of the Pace Coal Project in the proven and probable reserve classification, with an ultimate goal of establishing sufficient resources to support a greater than 20 year operational mine life.

About American Power Corp. American Power Corp. is a publicly traded, dynamic energy company based in Denver, Colorado. The Company was established with the focus of acquiring near-term, large-scale coal projects in close proximity to national transportation links. In 2010, American Power agreed to acquire the Pace Coal Project, which consists of on roughly 29,000 acres in Judith Basin County, Montana. The estimated resources in place, based on exploration work conducted by Mobil Oil Co. (now ExxonMobil Corp.), in several independent studies, range from 172 million up to 410+ million tons of high volatility bituminous B coal.

American Power is a member of the Montana Mining Association and its stock trades on the NASD OTC BB under ticker symbol AMPW. Shareholders are invited to contact investor relations toll free at (800) 537-1110 for further information or visit the Company's website at www.americanpowerco.com.

Forward-Looking Statements Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements in this news release include that American Power Corp.'s 29,000-acre leases in Judith Basin County, Montana, have high volatile bituminous B coal in the range of 172 and 410+ million tons. Readers should also refer to the risk disclosures outlined in the Company's quarterly reports on Form 10-QSB, annual reports on Form 10-KSB, and the Company's other disclosure documents filed from time-to-time with the Securities and Exchange Commission available at www.sec.gov

Cautionary Note to U.S. Investors The United States Securities and Exchange Commission ("SEC") permits mining companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document that SEC's guidelines may prohibit us from including in filings with the SEC.

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Investor Relations Information: American Power Corp. Toll Free: 1-800-537-1110 E-mail: Email Contact