CanAm Coal Corp. (TSX VENTURE:COE) (OTCQX:COECF) ("CanAm" or the "Company") is
pleased to announce that CanAm is exercising its option to acquire an additional
30% ownership interest in its principal U.S. mining operations (the
"Transaction") for a purchase price of US$11,505,682. The Transaction will be
completed through the purchase of additional equity interests in the capital of
Birmingham Coal & Coke Co., Inc and Cahaba Contracting & Reclamation LLC
(collectively referred to as "BCC") under an existing option and will be
effective as of July 1, 2012.


The Company will fund the acquisition through a non-brokered private placement
offering (the "Offering") of a minimum of 12,000 and a maximum of 16,000 units
("Units") at a price of CDN$1,000 (and/or its US dollar equivalent) per Unit for
total proceeds of a minimum of CDN$12,000,000 and a maximum of CDN$16,000,000.
Each Unit will be comprised of a $1,000 principal amount of 9.5% non-convertible
and unsecured debentures ("Debentures"), 1,250 2012 series A common share
purchase warrants ("Series A Warrants") and 1,000 2012 series B common share
purchase warrants ("Series B Warrants"). The Series A Warrants have an exercise
price of CDN$0.20 and a term of four years, and the Series B Warrants have an
exercise price of CDN$0.25 and a term of four years.


"The exercise of our 30% option is another significant step for CanAm and brings
our goal of 1 million tons of annual production one step closer. With completion
of the Transaction, we expect 2012 production to be in the range of 450,000 to
500,000 tons with 2013 production in the range of 750,000 tons with
substantially all production contracted to existing customers. The fact that we
were able to finance the transaction on reasonable terms in a difficult credit
environment speaks to the underlying quality of the BCC asset and the strength
of our long term business plan." said Jos De Smedt, President and COO of CanAm.
"Increasing our ownership in BCC and further investing in a management team that
has a proven track record of safe, reliable and profitable operations makes
perfect sense at this time," added Tim Bergen, CEO of CanAm. 


Radar USA, a wholly owned subsidiary of the Company, acquired 50% of the
outstanding equity interest in BCC in May 2011 (the "Original Transaction").
Pursuant to the Original Transaction, Radar USA was granted an option to acquire
the additional 30% interest being acquired in the Transaction and the remaining
20% interest until May 9, 2016. The Vendors of the Transaction, Robert A. Lewis,
Thomas A. Lewis and R. Wayne Bass (the "Vendors"), will be paid an aggregate
purchase price of US$11,505,682. Upon completion of the Transaction, the Company
will own 80% of BCC and the Vendors will own 20%. 


The aggregate purchase price will be paid by US$5,505,682 in cash and the
issuance of Debentures in the Offering, in an aggregate principal amount of
US$6,000,000 together with 7,500,000 Series A Warrants and 6,000,000 Series B
Warrants. The exercise of the Series A Warrants and Series B Warrants issued to
the Vendors is subject to disinterested shareholder approval which the Company
intends to seek at its next annual general meeting.


Each of Robert A. Lewis and Thomas A. Lewis is a director and senior officer of
BCC and therefore may be considered to be a non-arm's length party within the
meaning of the policies of the TSX Venture Exchange (the "TSXV"). R. Wayne Bass
is neither a director nor an officer of BCC and would not be considered to be a
non-arm's length party.


Certain directors and officers of the Company are expected to subscribe under
the Offering for approximately CDN$2.2 million aggregate principal amount
Debentures, an aggregate of 2.8 million Series A Warrants and an aggregate of
2.2 million Series B Warrants.


OTHER INFORMATION

The completion of the Transaction and the Offering is subject to certain
conditions including acceptance of the Transaction and the Offering by the TSXV
and other conditions customary for transactions similar in nature to the
Transaction. There can be no assurance that the Transaction or the Offering will
be completed as proposed or at all.


Provided that the conditions to completion of the Transaction and the Offering
are completed to CanAm's satisfaction, the Company anticipates that the closing
of the Offering and the Transaction will be on or about July 30, 2012. 


About CanAm Coal Corp.

CanAm is a coal producer and development company focused on growth through the
acquisition, exploration and development of coal resources and resource-related
technologies. CanAm's main activities and assets include its four operating coal
mines in Alabama and the Buick Coal Project which holds significant coal
resources, 188 million indicated and 103 million inferred resources, in
Colorado, USA (see the technical report entitled "Limon Lignite Project, Elbert
County, Colorado, USA," dated October 26, 2007 and filed on SEDAR on November 2,
2007). Other coal and related opportunities continue to be evaluated on an
ongoing basis. 


About Birmingham Coal & Coke, Inc.

Incorporated in 1975 by H. Kent Lewis, BCC started as marketer of coal produced
from mines located in Alabama to industrial, utility and export markets. Since
then, BCC has grown to become a significant Alabama coal producer. Based on a
foundation of prudent financial stewardship, safety and strong ethical values,
BCC is one of only three coal mining companies operating in Alabama in 1975 that
still exists today; the others being Drummond Coal Company and Jim Walter
Resources. In May 2011, pursuant to the Original Transaction, CanAm acquired a
50% ownership interest in BCC.


Forward-Looking Information and Statements

This press release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as "forward-looking
statements") within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often, but not
always, identified by the use of words such as "could", "should", "would",
"can", "anticipate", "estimate", "expect", "believe", "will", "may", "project",
"budget", "plan", "sustain", "continues", "strategy", "forecast", "potential",
"projects", "grow", "take advantage", "well positioned", "intends" or similar
words suggesting future outcomes. In particular, this press release contains
forward-looking statements relating to: the future production of the Powhatan
mine and BCC's mines; the Company's goals relating to production; the
Transaction and the expected timing for completion thereof; the Offering and the
expected timing for completion thereof; and the Company's intentions with
respect to seeking disinterested approval for the exercise of the Series A
Warrants and the Series B Warrants issued to the Vendors at its next annual
general meeting. This forward looking information is based on management's
estimates considering typical strip mining operations, equipment requirements
and availability and typical permitting timelines. 


In addition, forward-looking statements regarding the Company are based on
certain key expectations and assumptions of the Company concerning anticipated
financial performance, production, business prospects, strategies, the
sufficiency of budgeted capital expenditures in carrying out planned activities,
the availability and cost of services, the ability to obtain financing on
acceptable terms, the actual results of exploration projects being equivalent to
or better than estimated results in technical reports or prior exploration
results, that counterparties to contracts will be creditworthy and will perform
their obligations under such contracts, the Offering and the Transaction and
whether they will be completed on the terms and in the time period contemplated,
the absence of material changes in the regulatory environment, the absence of
material disruptions in operations and future costs and expenses being based on
historical costs and expenses, adjusted for inflation, all of which are subject
to change based on market conditions and potential timing delays. Although
management of the Company consider these assumptions to be reasonable based on
information currently available to them, these assumptions may prove to be
incorrect.


By their very nature, forward-looking statements involve inherent risks and
uncertainties (both general and specific) and risks that forward-looking
statements will not be achieved. Undue reliance should not be placed on
forward-looking statements, as a number of important factors could cause the
actual results to differ materially from the Company's beliefs, plans,
objectives and expectations, including, among other things: general economic and
market factors, including business competition, changes in government
regulations or in tax laws; the early stage development of the Company and its
projects; general political and social uncertainties; commodity prices; the
actual results of current exploration and development or operational activities;
changes in project parameters as plans continue to be refined; accidents and
other risks inherent in the mining industry; lack of insurance; delay or failure
to receive board or regulatory approvals; changes in legislation, including
environmental legislation, affecting the Company; timing and availability of
external financing on acceptable terms; conclusions of economic evaluations; the
creditworthiness of counterparties to contracts and their performance thereof;
the risk that production from the Company's mines will differ from that
anticipated; the Offering or the Transaction will not be completed on terms
favourable to the Company or at all; the risk of a material disruption in
operations and lack of qualified, skilled labour or loss of key individuals.
These factors should not be considered exhaustive. Many of these risk factors
are beyond the Company's control and each contributes to the possibility that
the forward-looking statements will not occur or that actual results,
performance or achievements may differ materially from those expressed or
implied by such statements. The impact of any one risk, uncertainty or factor on
a particular forward-looking statement is not determinable with certainty as
these risks, uncertainties and factors are interdependent and management's
future course of action depends upon the Company's assessment of all information
available at that time.


The forward-looking statements contained herein are expressly qualified in their
entirety by this cautionary statement. The forward-looking statements included
in this press release are made as of the date of this press release and the
Company does not undertake and is not obligated to publicly update such
forward-looking statements to reflect new information, subsequent events or
otherwise unless so required by applicable securities laws.