Preliminary Assessment of Cline's New Elk Mine Project

/THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN./

TORONTO, March 16 /CNW/ - Cline Mining Corporation (TSX: CMK) ("Cline" or the "Company") announces that Agapito Associates, Inc. ("Agapito") has delivered a Preliminary Assessment providing an economic analysis of potential investment return and economics of the proposed development and production of metallurgical coking coal from its New Elk Coal Mine located in Las Animas County, Colorado, U.S.A. supported by a National Instrument 43-101 ("NI 43-101") compliant Technical Report also prepared by Agapito. The Preliminary Assessment is based on the production and sale of steel-making metallurgical coal into world markets over an initial 20-year period. First production from the New Elk coal mine is scheduled to commence in the fourth quarter of this year with coal production increasing to 3.0 million tons of coal annually by 2013 and continuing for the remainder of the first 20 year production phase. Wood MacKenzie, an independent consultant with respect to coal and other commodity prices, provided the New Elk metallurgical coal price evaluation and projections utilized by Agapito in its Preliminary Assessment.

The Agapito Preliminary Assessment estimates the capital cost required to bring the New Elk coal mine into full production at 3.0 million tons of saleable coal a year at U.S.$65 million. Mine operating costs are industry competitive, with first class road and rail infrastructures proximate to the mine.

The Agapito Preliminary Assessment estimates an internal rate of return ("IRR") on the total U.S.$65 million capital investment to be 98.65% (p.a.). The net present value ("NPV") of the investment is calculated to be U.S.$1.041 Billion (at a 10% p.a. discount rate). Payback of the invested capital is projected to occur within 1.58 years.

Agapito reports that, "A preliminary assessment analysis concludes that the New Elk Mine Project would be economic". The Agapito NI 43-101 Technical Report in support of the Preliminary Assessment has been filed on SEDAR and posted on the Company's website at clinemining.com.

Cline's New Elk Coal Mine in Colorado has a long and successful history of producing and delivering high quality metallurgical (coking) coal from its underground mine in southern Colorado to the steel making industry. The mine has a measured and indicated coal resource of 315,000,000 tons of in-place coal, which was documented in the 2008 Dolbear NI 43-101 Technical Report referenced and relied upon by Agapito in its NI 43-101 compliant Technical Report of March 13, 2010. In addition to its coal resource, the coal mine assets include a coal preparation plant, product coal silos and rail load-out, buildings, railway right of way, surface real estate, conveyor systems, electrics, underground workings with mine portal access from the plant site, mine permit and a permitted coal refuse disposal site. The mine is accessed directly by paved highway from the town of Trinidad, southern Colorado.

Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability.

The mine is connected by established road and rail networks throughout North America with unit train service to both west coast U.S. and Canada and east coast U.S. bulk coal terminals and access to the international seaborne coal trade. Cline is continuing with the reactivation and upgrading of service infrastructure concurrently with the mine rehabilitation program.

The Company is actively seeking financing to meet its ongoing capital investment targets. The Company has connected with several industry and investment institutions that are interested in exploiting the coal resource potential of the New Elk Coal Mine.

About Cline Mining: Cline has significant metallurgical coal property interests in British Columbia, Canada and in Colorado, U.S.A. with resources identified by NI 43-101 compliant independent Technical Reports. Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coals in Canada and the U.S., iron ore in Madagascar and the Cline Lake Gold Mine Property in northern Ontario, Canada.

    
    CLINE MINING CORPORATION
    Ken Bates, President and Chief Executive Officer
    

Forward-Looking Information

This news release may contain forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities laws), including information relating to the magnitude or quality of mineral deposits, the economic assessment and estimates regarding the mine life of the New Elk coal mine, and the timing and completion of financings. The timing of drilling and work recommended by the NI 43-101 Technical Report is based on current internal expectations, which may prove to be incorrect. Other risk factors are discussed under "Risk Factors" in Cline's Annual Information Form for its 2009 financial year end, and include management's ability to anticipate and manage risk factors. Such forward-looking statements necessarily involve known and unknown risks and uncertainties that are common to junior mineral exploration companies. These risks and uncertainties include, among other things, the Company's need for additional funding to continue its exploration efforts, changes in general economic, market and business conditions, and competition for, among other things, capital and skilled personnel. These statements are not a guarantee of future performance and undue reliance should not be placed on them. The Company undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws. Copies of the Company's public filings under applicable Canadian securities laws are available at www.sedar.com. The Company further cautions that information contained on, or accessible through, this website is current only as of the date of filing such information and may be superseded by subsequent events or filings. The technical information contained in this press release has been prepared and reviewed by Dennis Mraz, P.Eng., Executive Vice President and Chief Operating Officer of the Company, a qualified person within the meaning of NI 43-101. This Press Release is not for distribution to U.S. news services or for dissemination in the United States, and does not constitute an offer of the securities described herein. The securities referenced herein have not been registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.

    
    Head Offices:

    Toronto Office: TD Canada Trust Tower, 161 Bay Street, 27th Floor,
    Toronto, ON M5J 2S1
    Vancouver Office: Suite 2950 - 650 West Georgia Street, Vancouver, BC
    V6B 4N8
    

For further information: Ken Bates, President and CEO, Ernest Cleave, Vice-President and CFO, Office: [phone], Email: [email protected], Website: www.clinemining.com