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Resource Capital Fund V LP acquires additional shares of Buffalo Coal Corp.

Published by
World Coal,

Resource Capital Fund V LP reported that on 7 October 2015, in connection with a previously announced secured convertible loan facility in the aggregate principal amount of US$25 million, and in satisfaction of interest and principal payment obligations under the Facility, RCF acquired ownership of 11 083 086 additional common shares in the capital of Buffalo Coal Corp.

At a meeting of Buffalo's shareholders held on 19 June 2015, shareholders approved amendments to the facility to, among other things, increase the principal amount from US$25 million to US$29 million, increase the interest rate from 12% to 15%, decrease the conversion price from CAN$0.1446 to CAN$0.0469 and issue the Facility Shares to RCF.

The facility shares collectively represent 8.6% of the issued and outstanding common shares in the capital of Buffalo. At a conversion price of C$0.0469 for the principal debt, the facility shares were valued at a 25% discount to the 5-day volume-weighted average trading price (VWAP) of the common shares on the Toronto Stock Exchange on 30 January 2015 (the last trading day prior to the announcement of the Facility amendments). The conversion price for the interest is calculated based on the 20-day VWAP of the common shares on the TSX.

As of the close of business on 8 October, RCF owned in the aggregate, a total of 97 956 668 common shares of Buffalo, representing approximately 75.6% of the issued and outstanding common shares in the capital of Buffalo. Prior to acquiring the Facility Shares, RCF owned 86 873 582 Buffalo common shares, or approximately 73.3% of the issued and outstanding Buffalo common shares.

RCF acquired the facility shares for investment purposes. Depending on market conditions and other factors, including additional future conversions of interest payments under the Facility or the exercise of previously issued convertible securities, RCF may from time to time acquire additional securities of Buffalo or dispose of securities of Buffalo in the open market, by private agreement, or otherwise.

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