National Coal Corp. Reports Second Quarter 2007 Results.

* Revenues for second quarter 2007 totaled approximately $18.9 million, down 21.6% from $24.1 million earned in the second quarter 2006 and down 1.0% from $19.0 million earned in the first quarter 2007.

* Coal tons sold total approximately 372,341 tons, down 18.3% from 455,548 tons sold in the second quarter 2006 and up 1.1% from 368,332 tons sold in the first quarter 2007.

* Cost of sales declined 14.8% in total, but increased $2.01 on a per ton basis during the three months ended June 30, 2007 as compared to the same period in 2006. Cost of sales increased 3.9% in total and $1.41 per ton during the three months ended June 30, 2007 when compared to the first quarter 2007.

KNOXVILLE, Tenn. -- National Coal Corp. (Nasdaq:NCOC), a Central Appalachian coal producer, reports that during the three months ended June 30, 2007, it generated total revenues of $18.9 million primarily through the sale of 372,341 tons of coal. During the three months ended June 30, 2007, the Company produced 243,703 tons and purchased 109,466 tons of coal. In the second quarter of 2006, the Company reported total revenues of $24.1 million primarily through the sale of 455,548 tons of coal. That same quarter, National Coal produced 364,362 tons and purchased 89,856 tons of coal.

National Coal reports increased net and operating losses as compared to the second quarter 2006 and the first quarter 2007. The operating loss for the three months ended June 30, 2007, increased to $4.7 million as compared to the loss of $3.5 million reported in the same prior-year period. As compared to the first quarter 2007, the operating loss increased $0.4 million from the then $4.3 million operating loss reported. Net loss for the three months ended June 30, 2007, increased 32.7% to $6.5 million as compared to the $4.9 million loss reported in the same prior-year period, and by 8.3% relative to the $6.0 million loss reported in the first quarter of 2007.

At June 30, 2007, we had cash and cash equivalents of approximately $5.5 million and negative working capital of approximately $1.2 million. Net cash flows used in operations for the six months then ended highlighted improvement in operating efficiency and sales effectiveness during the period, totaling approximately $7.1 million, of which $5.4 million and $1.7 million related to the first and second quarters, respectively. However, the Company's operations do not generate positive cash flow and the ability to do so during the remainder of 2007 is dependent upon generating spot sales at reasonable prices and additional improvements to operating efficiency.

Daniel A. Roling, President and CEO of National Coal, said, "Recent market conditions have not been conducive to selling coal at a profit, therefore, we have chosen to reduce production and sales in order to conserve our coal reserves. Unfortunately, this has negatively impacted our year-to-date 2007 financial results. Looking forward, there are signs that the coal market may strengthen, including increased electricity generation, normal summer weather, strong international demand, and declining Central Appalachian coal production."

The decrease in revenue from coal sales for the three months ended June 30, 2007, as compared to the same period in 2006, was the result of a decline in sales volume coupled with a $2.11 per ton decline in the average sales price. Other revenues, consisting primarily of fees charged to another coal producer for use of the Company's train loading facilities, represented approximately 0.8% of total revenues, slightly lower than the prior-year period at 1.0%.

Adjusted EBITDA for the three months ended June 30, 2007 totaled a loss of approximately $0.8 million compared to a positive $0.9 million in the year-ago quarter and a positive $0.03 million during the first quarter of 2007.

Cost of sales declined $3.2 million or 14.8% during the three months ended June 30, 2007, as compared to the same three month period in 2006. The primary reason for the decrease in total cost of sales was an 18.3% reduction in volume of coal sold during the period. Coal produced during the quarter totaled 243,703 tons, a decline of 33.1% from the prior year period and 19.0% from the preceding quarter. This was a direct result of a decision by management to reduce production during a weak market. Cost of sales per ton increased by $2.01 per ton versus the same three month period in 2006. Increases in cost of sales per ton include a 265.8% increase in costs associated with idle facilities. These included a mine, a railroad, a highwall miner, and a newly renovated preparation facility. Additionally, a major portion of the quarter was spent retrieving the cutter head and support beams for our highwall miner in Tennessee. The cutter head was trapped in the coal seam two hundred and eighty feet from the point of entry. The cutter head and five beams have been retrieved; however, the cost of retrieval and related repair expensed during the second quarter totaled $308,750.

The Company experienced a 25.1% decrease in general and administrative expenses for the three months ended June 30, 2007, as compared to the same period in 2006. This is primarily attributable to a reduction in corporate positions resulting in a 17.5%, or approximately $135,000, reduction in salaries and related expenses, a 35.2%, or approximately $115,000, reduction in stock-based compensation expense, and an approximate $100,000 reduction in security expense.

During the quarter, two preferred shareholders converted 198.7 shares of Series A Cumulative Convertible Preferred Stock to shares of the Company's common stock. The Company provided an inducement of 74,169 shares of common stock to one preferred shareholder and cash of $47,485 to the other preferred shareholder. The combined value of these inducements, totaling approximately $424,309, has been reflected in the Company's financial statements as an increase in net loss attributable to common shareholders.

National Coal will be opening a new highwall mine in Kentucky during the third quarter which is expected to produce approximately 20,000 tons per month. The Company has recently obtained two permits from the State of Kentucky which will make it possible to keep the miner employed for at least the next three years. The production from this mine will absorb the approximately $545,000 of quarterly lease and insurance costs associated with the currently idle high wall mining equipment and other fixed costs and is expected to provide a positive contribution for the remainder of the year.

National Coal is progressing with due diligence and the financing process for the Mann Steel Products, Inc. transaction. The conditions required to consummate the transaction, as delineated in our June 22, 2007 press release, are still open.

About National Coal Corp.

Headquartered in Knoxville, Tenn., National Coal Corp., through its wholly-owned subsidiary, National Coal Corporation, is engaged in coal mining in East Tennessee and Southeastern Kentucky. Currently, National Coal employs about 230 people and produces coal from mines in Tennessee and in Kentucky. National Coal sells steam coal to electric utilities and industrial companies in the Southeastern United States. For more information visit www.nationalcoal.com.

Information about Forward Looking Statements

This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. Examples of forward looking-statements include anticipated benefits of capital improvements and new mines and an anticipated strengthening coal market in the future. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: (i) the worldwide demand for coal; (ii) the price of coal; (iii) the price of alternative fuel sources; (iv) the supply of coal and other competitive factors; (v) the costs to mine and transport coal; (vi) the ability to obtain new mining permits; (vii) the costs of reclamation of previously mined properties; (viii) the risks of expanding coal production; (ix) the ability to bring new mining properties on-line on schedule; (x) industry competition; (xi) our ability to continue to execute our growth strategies; and (xii) general economic conditions. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission including the Company's most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

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