UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
    ACT OF 1934

                 For the quarterly period ended March 31, 2011
                                       or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

          For the transition period from ____________ to ____________

                        Commission File Number 000-54073


                            LIBERTY COAL ENERGY CORP.
             (Exact name of registrant as specified in its charter)

            Nevada                                               75-3252264
  (State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                            Identification No.)

99 - 18th Street, Suite 3000, Denver, Colorado                     80202
  (Address of principal executive offices)                       (Zip Code)

                                 (303) 997-3161
              (Registrant's telephone number, including area code)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] NO

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). [ ] YES [ ] NO

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a small reporting  company.  See
the definitions of "large accelerated  filer",  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]                        Accelerated filer [ ]

Non-accelerated filer [ ]                          Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act [ ] YES [X] NO

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

58,666,667 common shares issued and outstanding as of May 13, 2011
<PAGE>
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                                 3

   Item 1. Financial Statements                                                3

   Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                              13

   Item 3. Quantitative and Qualitative Disclosures About Market Risk         19

   Item 4. Controls and Procedures                                            19

PART II - OTHER INFORMATION                                                   19

   Item 1. Legal Proceedings                                                  19

   Item 1A. Risk Factors                                                      19

   Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds        26

   Item 3. Defaults Upon Senior Securities                                    26

   Item 4. [Removed and Reserved]                                             26

   Item 5. Other Information                                                  26

   Item 6. Exhibits                                                           27

SIGNATURES                                                                    28

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our unaudited interim  financial  statements for the three and six month periods
ended  March 31,  2011 form part of this  quarterly  report.  They are stated in
United States  Dollars  (US$) and are prepared in accordance  with United States
generally accepted accounting principles.

                                       3
<PAGE>
                            Liberty Coal Energy Corp.
                         (An Exploration Stage Company)
                                 BALANCE SHEETS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                            As of                As of
                                                                           March 31,          September 30,
                                                                             2010                 2010
                                                                          ----------           ----------
<S>                                                                       <C>                  <C>
                                     ASSETS

ASSETS
  Cash                                                                    $   54,027           $   59,190
  Prepaid                                                                      9,837                5,291
                                                                          ----------           ----------
TOTAL CURRENT ASSETS                                                          63,864               64,481
                                                                          ----------           ----------

Website, net of amortization                                                   2,536                3,378
Mineral properties                                                           377,585              350,000
                                                                          ----------           ----------
TOTAL OTHER ASSETS                                                           380,121              353,378
                                                                          ----------           ----------

      TOTAL ASSETS                                                        $  443,985           $  417,859
                                                                          ==========           ==========

                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                                $    8,135           $   18,590
  Loans payable                                                              101,389                   --
                                                                          ----------           ----------
TOTAL LIABILITIES                                                            109,524               18,590
                                                                          ----------           ----------
STOCKHOLDERS' EQUITY
  Common stock, $0.001 par value, (1,500,000) shares authorized;
   57,900,000 and 57,900,000 shares issued and outstanding as
   of March 31, 2011 and September 30, 2010, respectively)                    57,900               57,900
  Additional paid-in capital                                                 346,786              346,786
  Additional paid-in capital - warrants                                      183,314              183,314
  Accumulated deficit during the exploration sage                           (253,539)            (188,731)
                                                                          ----------           ----------
TOTAL STOCKHOLDERS' EQUITY                                                   334,461              399,269
                                                                          ----------           ----------

      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                            $  443,985           $  417,859
                                                                          ==========           ==========
</TABLE>


                 See Notes to Consolidated Financial Statements

                                       4
<PAGE>
                            LIBERTY COAL ENERGY CORP
                         (An Exploration Stage Company)
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                        Cumulative Amounts
                                                                                                           From Date of
                                          For Three Months Ending             For Six Months Ending      Incorporation on
                                       -----------------------------     -----------------------------    August 31, 2007 -
                                         March 31,        March 31,        March 31,        March 31,        March, 31,
                                           2011             2010             2011             2010             2011
                                       ------------     ------------     ------------     ------------     ------------
<S>                                    <C>              <C>              <C>              <C>              <C>
REVENUES
  Revenues                             $         --     $         --     $         --     $         --     $         --
                                       ------------     ------------     ------------     ------------     ------------

NET SALES                                        --               --               --               --               --

COSTS AND EXPENSES
  General & administrative                   12,137              187           12,981            1,201           31,382
  Consulting services                        15,000           13,138           30,000           13,638           90,000
  Amortization                                  422               --              844               --            1,265
  Investor relations                          4,910               --           13,196               --           35,312
  Transfer agent                                382            1,300              382            2,895           14,691
  Legal & accounting                          1,754            1,300            6,016            2,895           79,500
                                       ------------     ------------     ------------     ------------     ------------

Loss before income taxes                     34,605           15,925           63,419           20,629          252,150

Provision for income taxes                       --               --               --               --               --
                                       ------------     ------------     ------------     ------------     ------------

LOSS FROM OPERATIONS                        (34,605)         (15,925)         (63,419)         (20,629)        (252,150)

OTHER INCOME & (EXPENSES)
  Interest expense                           (1,389)              --           (1,389)              --           (1,389)
                                       ------------     ------------     ------------     ------------     ------------
TOTAL OTHER INCOME & (EXPENSES)              (1,389)              --           (1,389)              --           (1,389)
                                       ------------     ------------     ------------     ------------     ------------

NET LOSS FROM CONTINUING OPERATIONS         (35,994)         (15,925)         (64,808)         (20,629)        (253,539)
                                       ------------     ------------     ------------     ------------     ------------

NET LOSS                               $    (35,994)    $    (15,925)    $    (64,808)    $    (20,629)    $   (253,539)
                                       ============     ============     ============     ============     ============
BASIC  AND DILUTED LOSS PER COMMON
 SHARE                                 $         (1)    $         (1)    $         (1)    $         (1)
                                       ------------     ------------     ------------     ------------
WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                      57,900,000       75,054,444       57,900,000       74,420,330
                                       ============     ============     ============     ============
</TABLE>


                 See Notes to Consolidated Financial Statements

                                       5
<PAGE>
                            Liberty Coal Energy Corp.
                      Statements of Cash Flows (Unaudited)
                            (an Exploration Company)

<TABLE>
<CAPTION>
                                                                                                       Cumulative Amounts
                                                                                                          From Date of
                                                                    Six Months         Six Months       Incorporation on
                                                                      Ended              Ended          August 31, 2007 -
                                                                     March 31,          March 31,          March 31,
                                                                       2011               2010               2011
                                                                    ----------         ----------         ----------
<S>                                                                 <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                 $  (64,808)        $  (17,734)        $ (253,540)
  Amortization                                                             844                 --              1,266
  Accrued interest expense                                               1,389                 --              1,389
  (Increase) decrease in prepaid expenses                               (4,548)               445             (9,838)
  Increase (decrease) in accounts payable and accrued liabilities       (9,551)            (3,100)             3,131
  Increase (decrease) in related party payables                           (904)                --              5,004
  Increase (decrease) in due to stockholder                                 --             (5,000)                --
                                                                    ----------         ----------         ----------
      NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES              (77,578)           (25,389)          (252,588)

CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in website                                                 (3,800)
  Acquisition of mineral properties                                    (27,585)          (325,000)          (352,585)
                                                                    ----------         ----------         ----------
      NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES              (27,585)          (325,000)          (356,385)

CASH FLOWS FROM FINANCING ACTIVITIES
  Stock issued for cash                                                     --            500,000            563,000
  Payments made on loans payable                                            --                 --                 --
  Proceeds from loans payable                                          100,000                 --            100,000
                                                                    ----------         ----------         ----------
      NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              100,000            500,000            663,000
                                                                    ----------         ----------         ----------

NET INCREASE (DECREASE) IN CASH                                         (5,163)           149,611             54,027

CASH AT BEGINNING OF PERIOD                                             59,190             17,430                 --
                                                                    ----------         ----------         ----------

CASH AT END OF PERIOD                                               $   54,027         $  167,041         $   54,027
                                                                    ==========         ==========         ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Income taxes paid                                                 $       --         $       --         $       --
                                                                    ==========         ----------         ==========
  Interest paid                                                     $       --         $       --         $       --
                                                                    ==========         ==========         ==========
NON-CASH ACTIVITIES
  Notes issued to officers                                          $       --         $       --         $       --
  Retirement of debt                                                        --                 --                 --
  Reclassified long-term loan to short-term loan                            --            219,754            219,754
  Stock issued from conversion of convertible notes                         --                 --                 --
  Notes payable for settlement of notes                                     --          2,183,000          2,183,000
  Stock issued for services                                                 --                 --                 --
  Preferred stock issuance for settlement of notes payable                  --          3,104,139          3,104,139
                                                                    ----------         ----------         ----------
      Total non-cash activities                                     $       --         $5,506,893         $5,506,893
                                                                    ==========         ==========         ==========
</TABLE>

         See Notes to Consolidated Financial Statements

                                       6
<PAGE>
                            LIBERTY COAL ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - NATURE OF OPERATIONS

Liberty Coal Energy Corp. (the  "Company"),  incorporated in the state of Nevada
on  August  31,  2007,  and  was  developing   business  activities  in  teacher
recruiting.  The  Company  changed  its  business  focus in March,  2010 and now
intends to enter the business of precious mineral exploration,  development, and
production.  The Company has not yet commenced  significant  business operations
and is considered to be in the  exploration  stage  (formerly in the development
stage).

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

MANAGEMENT CERTIFICATION

The financial  statements herein are certified by the officers of the Company to
present fairly, in all material  respects,  the financial  position,  results of
operations  and  cash  flows  for  the  periods  presented  in  conformity  with
accounting  principles  generally  accepted  in the  United  States of  America,
consistently applied.

CASH AND CASH EQUIVALENTS

The Company  considers all highly liquid  investments  with  maturities of three
months or less to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's  financial  instruments consist of cash and amounts due to Company
stockholder.

The carrying amount of these financial  instruments  approximates fair value due
either to length of  maturity  or  interest  rates that  approximate  prevailing
market rates unless  otherwise  disclosed in these financial  statements.  It is
management's  opinion that the Company is not exposed to  significant  interest,
currency or credit risks arising from its other  financial  instruments and that
their fair values  approximate  their  carrying  values except where  separately
disclosed.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles of the United States requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the reported  amounts of revenues and expenses  during the year.
The  more  significant  areas  requiring  the  use of  estimates  include  asset
impairment,  stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable  under the  circumstances.  However,  actual results may differ
from the estimates.

MINERAL PROPERTIES

Costs of exploration,  carrying and retaining  unproven mineral lease properties
are expensed as incurred.  Mineral  property  acquisition  costs are capitalized
including  licenses and lease payments.  Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Company's  title.  Such  properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.

Impairment  losses are recorded on mineral  properties  used in operations  when
indicators of impairment are present and the  undiscounted  cash flows estimated
to be generated by those assets are less than the assets' carrying amount.

                                       7
<PAGE>
LOSS PER SHARE

Basic loss per share is calculated  using the weighted  average number of common
shares  outstanding  and the treasury stock method is used to calculate  diluted
earnings  per share.  For the years  presented,  this  calculation  proved to be
anti-dilutive.

DIVIDENDS

The  Company  has not  adopted any policy  regarding  payment of  dividends.  No
dividends have been paid during the period shown.

INCOME TAXES

The Company provides for income taxes using an asset and liability approach.

Deferred tax assets are reduced by a valuation allowance if, based on the weight
of  available  evidence,  it is more  likely  than not  that  some or all of the
deferred  tax assets will not be  realized.  No  provision  for income  taxes is
included in the statement  due to its  immaterial  amount,  net of the allowance
account,   based  on  the   likelihood  of  the  Company  to  utilize  the  loss
carry-forward. See Note 5.

NET LOSS PER COMMON SHARE

Net loss per common share is computed  based on the weighted  average  number of
common shares  outstanding and common stock  equivalents,  if not anti-dilutive.
The Company has not issued any potentially dilutive common shares.

RECENTLY ADOPTED PRONOUNCEMENTS

VARIABLE INTEREST ENTITIES

In June 2009,  the FASB issued  changes to require an  enterprise  to perform an
analysis to determine  whether the enterprise's  variable  interest or interests
give it a  controlling  financial  interest in a variable  interest  entity;  to
require  ongoing   reassessments   of  whether  an  enterprise  is  the  primary
beneficiary  of a  variable  interest  entity;  to  eliminate  the  quantitative
approach  previously  required  for  determining  the primary  beneficiary  of a
variable  interest  entity;  to  add an  additional  reconsideration  event  for
determining  whether an entity is a variable interest entity when any changes in
facts and  circumstances  occur such that  holders of the equity  investment  at
risk, as a group,  lose the power from voting rights or similar  rights of those
investments  to direct  the  activities  of the entity  that most  significantly
impact the entity's economic  performance;  and to require enhanced  disclosures
that  will  provide  users  of  financial   statements  with  more   transparent
information about an enterprise's involvement in a variable interest entity. The
guidance  became  effective for the Company on February 1, 2010. The adoption of
the  guidance  did not have an impact on the  Company's  consolidated  financial
statements. CODIFICATION OF GAAP

In June 2009,  the FASB issued  guidance to establish the  Accounting  Standards
Codification  TM  ("Codification")  as the  source of  authoritative  accounting
principles  recognized by the FASB to be applied by nongovernmental  entities in
the  preparation  of financial  statements  in conformity  with GAAP.  Rules and
interpretive  releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants.  The FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts;  instead,  the FASB will issue Accounting Standards
Updates ("ASU").  ASUs will not be authoritative in their own right as they will
only  serve  to  update  the  Codification.  The  issuance  of SFAS  168 and the
Codification does not change GAAP. The guidance became effective for the Company
for the period  ending  October 31,  2009.  The adoption of the guidance did not
have an impact on the Company's consolidated financial statements.

                                       8
<PAGE>
SUBSEQUENT EVENTS

On  July  31,  2009,  the  Company  adopted  changes  issued  by the  FASB  that
establishes  general  standards of accounting  for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are  available to be issued.  Specifically,  the guidance  sets forth the period
after the  balance  sheet date during  which  management  of a reporting  entity
should evaluate events or transactions that may occur for potential  recognition
or disclosure  in the financial  statements,  the  circumstances  under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, and the disclosures that an entity should make
about events or  transactions  that occurred  after the balance sheet date.  The
Company  has  evaluated   subsequent  events  through  the  date  the  financial
statements were issued.

BUSINESS COMBINATIONS

The Company  adopted the changes  issued by the FASB that requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities  assumed in the  transaction;  establishes the  acquisition-date
fair value as the measurement  objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose additional  information needed to
evaluate  and  understand  the  nature  and  financial  effect  of the  business
combination.

The Company also adopted the changes  issued by the FASB which  requires  assets
and liabilities assumed in a business  combination that arise from contingencies
be  recognized on the  acquisition  date at fair value if it is more likely than
not that they meet the  definition of an asset or  liability;  and requires that
contingent  consideration  arrangements of the target assumed by the acquirer be
initially measured at fair value.

HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")

In May 2008,  the FASB  issued  changes to identify  the  sources of  accounting
principles  and  the  framework  for  selecting  the  principles   used  in  the
preparation  of  financial  statements  of  nongovernmental  entities  that  are
presented  in  conformity  with GAAP  (the  GAAP  hierarchy).  The  guidance  is
effective 60 days following the SEC's approval of the Public Company  Accounting
Oversight  Board  amendments to AU section 411, THE MEANING OF PRESENT FAIRLY IN
CONFORMITY  WITH  GENERALLY  ACCEPTED  ACCOUNTING   PRINCIPLES.   Management  is
currently  evaluating  the guidance  and  assessing  the impact,  if any, on the
Company's consolidated financial statements.

REVENUE RECOGNITION

In September 2009, the FASB issued new revenue recognition  guidance on multiple
deliverable  arrangements.  It updates  the  existing  multiple-element  revenue
arrangements   guidance  currently  included  under  the  Accounting   Standards
Codification  ("ASC")  605-25.  The  revised  guidance  primarily  provides  two
significant  changes: 1) eliminates the need for objective and reliable evidence
of the fair value for the  undelivered  element in order for a delivered item to
be treated as a separate  unit of  accounting,  and 2)  requires  the use of the
relative selling price method to allocate the entire arrangement  consideration.
In addition,  the guidance also expands the disclosure  requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after fiscal 2011, with early adoption  permitted  provided that
the revised  guidance is  retroactively  applied to the beginning of the year of
adoption.  Management  is  currently  evaluating  the  impact of  adopting  this
guidance on the Company's consolidated financial statements.

RECLASSIFICATIONS

Certain  balances  in the prior years have been  reclassified  to conform to the
current year presentation.

                                       9
<PAGE>
NOTE 3 - MINERAL PROPERTIES

CAMPBELL PROPERTY

On February 1, 2010 the Company  entered into, and closed,  a Mineral and Mining
Lease with Miller and Associates,  LLC. Pursuant to this agreement,  the Company
issued 100,000 (post split) shares of its common stock to Miller and Associates,
LLC and  acquired  a 5 year  lease on  certain  mining  claims  in the  state of
Wyoming.  In addition to the 100,000  (post split)  shares  issued,  the Company
agreed to pay an annual fee of US $20,000,  adjusted for inflation, as well as a
production  royalty of 4% on the gross sales of product  produced by the mineral
claims considered by this agreement.

SHERIDAN PROPERTY

The Company  acquired a mineral  property  leasehold  interest  in exchange  for
$55,000  (paid),  $25,000 within 90 days of the each of the next three following
anniversaries  of the date of the Agreement.  The first of the $25,000  payments
has been paid. Additionally, the Company must spend $2,750,000 on development of
the property within three years of the date of the Agreement.  Additionally, the
lessor would  receive a royalty of $1 per ton of coal produced from the property
and sold with a maximum of  $5,000,000.  The maximum  amount of royalty  must be
paid within 15 years of the date of the Agreement.

NOTE 4 - LOANS PAYABLE

Loans  payable  as of March 31,  2011 and  September  30,  2010  consist  of the
following:

                                          March 31,       September 30,
                                            2011              2010
                                          --------          --------
      Loan at 10% interest                $101,389          $     --
                                          --------          --------

          Net deferred tax asset          $101,389          $     --
                                          ========          ========

Loans payable consists of a note totaling  $101,389,  including interest thereon
of $1,389 which accrues interest at the rate of 10% per annum. The note requires
no minimum payments and may be repaid at anytime.

NOTE 5 - CAPITAL STOCK

The company has 1,500,000,000  common shares authorized at a par value of $0.001
per share.

On August 31, 2007, the company issued  1,500,000  common shares to founders for
total proceeds of $15,000.

On May 31, 2008,  the company  completed a private  placement  whereby it issued
960,000 common shares at $0.05 per share for total proceeds of $48,000.

On February 1, 2010, the company completed a private placement whereby it issued
1,000,000  units for $0.25 per unit.  Each unit consists of one common share and
common share purchase  warrant allowing the holder to purchase a common share at
$0.25 per share expiring February 1, 2012.

On  February  1, 2010,  the  company  issued  100,000  common  shares as partial
consideration to acquire the Campbell Property.

On February  11,  2010,  the company  completed a private  placement  whereby it
issued  1,000,000  units for $0.25 per unit.  Each unit  consists  of one common
share and common share purchase warrant allowing the holder to purchase a common
share at $0.25 per share expiring February 1, 2012.

                                       10
<PAGE>
On March 15, 2010,  the Company  increased  its  authorized  common  shares from
50,000,000 shares to 1,500,000,000  shares and effected a 30 for 1 forward stock
split.  All  share  amounts  reflected  in the  financial  statements  have been
adjusted to reflect the results of the stock split.

On March  20,  2010,  the  Company  cancelled  18,000,000  of its  common  stock
outstanding.

WARRANTS

                                                                Outstanding at
Issue Date            Number      Price       Expiry Date       March 31, 2011
----------            ------      -----       -----------       --------------
February 1, 2010     1,000,000    $0.25    February 1, 2012        1,000,000
February 11, 2010    1,000,000    $0.25    February 11, 2012       1,000,000

NOTE 6 - INCOME TAXES

The Company  provides  for income taxes using an asset and  liability  approach.
Deferred  tax assets  and  liabilities  are  recorded  based on the  differences
between the financial  statement and tax bases of assets and liabilities and the
tax rates in effect currently.

Deferred tax assets are reduced by a valuation allowance if, based on the weight
of  available  evidence,  it is more  likely  than not  that  some or all of the
deferred  tax assets  will not be  realized.  In the  Company's  opinion,  it is
uncertain whether they will generate  sufficient taxable income in the future to
fully  utilize the net deferred tax asset.  Accordingly,  a valuation  allowance
equal to the deferred tax asset has been recorded.

The cumulative net operating loss  carry-forward  is  approximately  $253,539 at
March 31, 2011, and will expire beginning in the year 2028.

The  cumulative  tax effect at the  expected  rate of 22% of  significant  items
comprising our net deferred tax amount is as follows:

                                                March 31,        September 30,
                                                  2011               2010
                                                --------           --------
   Deferred tax asset attributable to:
     Net operating loss carryover               $ 55,569           $ 41,388
     Valuation allowance                         (55,569)           (41,388)
                                                --------           --------

         Net deferred tax asset                 $     --           $     --
                                                ========           ========

NOTE 7 - RELATED PARTY TRANSACTION

As of March 31, 2011,  there is a balance  owing to an officer of the Company in
the amount of $5,000  (September 30, 2010 - $5,908).  This amount is included in
accounts payable.

The  officers  and  directors  of the  Company are  involved  in other  business
activities  and  may,  in  the  future,   become   involved  in  other  business
opportunities  that  become  available.  They may face a conflict  in  selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.

                                       11
<PAGE>
NOTE 8 - GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
company  will  continue as a going  concern.  As  discussed  in the notes to the
financial  statements,  the Company has no established  source of revenue.  This
raises  substantial  doubt  about the  Company's  ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern.  The financial statements do not include
any adjustments that might result from this uncertainty.

The Company's activities to date have been supported by equity financing. It has
sustained  losses in all  previous  reporting  periods with an inception to date
loss of $253,539 as of March 31, 2011. Management continues to seek funding from
its shareholders  and other qualified  investors to pursue its business plan. In
the  alternative,  the  Company  may be  amenable  to a sale,  merger  or  other
acquisition  in the event such  transaction is deemed by management to be in the
best interests of the shareholders.

NOTE 9 - SUBSEQUENT EVENTS

On May 11, 2011, Liberty Coal Energy Corp. ("Registrant") sold 666,667 shares of
its common stock to one investor in exchange for $500,000, or $0.75 per share as
specified in the subscription agreement  ("Subscription  Agreement").  A copy of
the form of  Subscription  Agreement is attached  hereto as Exhibit  10.1.  This
brief  description of the Subscription  Agreement is not intended to be complete
and  is  qualified  in  its  entirety  by  reference  to the  full  text  of the
Subscription Agreement as attached.

In connection  with the sale of shares,  the investor also received  warrants to
purchase six hundred sixty-six thousand six hundred sixty-seven (666,667) shares
of the  Registrant's  common stock at a purchase  price of $0.82 per share.  The
warrant agreement ("Warrant Agreement") provides for an expiration period of two
years from the date of the investment.  A copy of the form of Warrant  Agreement
is included in the Subscription Agreement.

The shares and warrants were issued in reliance upon exemption from registration
under the Securities  Act of 1933, as amended  ("Securities  Act"),  pursuant to
Rule 506 of  Regulation D  promulgated  thereunder.  The share and warrants were
issued to an investor who is an  "accredited  investor," as such term is defined
in Rule 501(a) under the Securities Act, based upon  representation made by such
investor.

                                       12
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This quarterly  report contains  forward-looking  statements.  These  statements
relate to future events or our future financial performance.  In some cases, you
can identify forward-looking  statements by terminology such as "may", "should,"
"expects,"  "plans,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential"  or  "continue"  or the negative of these terms or other  comparable
terminology. These statements are only predictions and involve known and unknown
risks,  uncertainties and other factors, including the risks noted herein in the
section  entitled "Risk  Factors,"  that may cause our or our industry's  actual
results,  levels of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements expressed or implied by these forward-looking statements.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance or  achievements.  Except as required by applicable  law,
including the securities  laws of the United States,  we do not intend to update
any of the  forward-looking  statements  to conform  these  statements to actual
results.

Our  financial  statements  are stated in United  States  Dollars  (US$) and are
prepared  in  accordance  with  United  States  Generally  Accepted   Accounting
Principles.

In this quarterly  report,  unless otherwise  specified,  all dollar amounts are
expressed in United States Dollars and all  references to "common  shares" refer
to the common shares in our capital stock.

As used in this  quarterly  report,  the terms "we," "us," "our  company,"  mean
Liberty Coal Energy Corp., a Nevada corporation, unless otherwise indicated.

CORPORATE HISTORY

The address of our  principal  executive  office is 99 18th Street,  Suite 3000,
Denver, Colorado 80202. Our telephone number is 303.997.3161.

Our common stock is quoted on the OTC Bulletin Board under the symbol "LBTG."

We were incorporated on August 31, 2007 as "ESL Teachers Inc." under the laws of
the State of Nevada.  Our original  business plan was to develop and sell online
employment  services  specifically  for both  ESL  Teachers  and ESL  operations
seeking to hire  teachers  worldwide.  On March 15, 2010, we changed our name to
Liberty  Coal Energy Corp.  by way of a merger with our wholly owned  subsidiary
"Liberty  Coal  Energy  Corp."  which was formed  solely for the  purpose of the
change of name.  The  change of name was to better  represent  the new  business
direction  of our  company  to  that  of a coal  exploration,  development,  and
production company.

In addition,  on March 15, 2010,  we effected a 30 for 1 forward  stock split of
our authorized and issued and  outstanding  shares of common stock such that our
authorized capital increased from 50,000,000 shares of common stock,  $0.001 par
value per share to  1,500,000,000  shares of common stock,  par value $0.001 per
share.

OUR CURRENT BUSINESS

Our primary business focus is to acquire, explore and develop coal properties in
North America. We are currently  developing two properties,  the Sheridan County
Project in Sheridan County, Wyoming and the Campbell Project in Campbell County,
Wyoming.

Our first project is the Sheridan County Project. In May 2010, we entered into a
letter of agreement for the acquisition of private mineral  leasehold  rights to
certain coal mining  properties  in Sheridan  County,  Wyoming with Rocking Hard
Investment,  LLC and Synfuel  Technology,  Inc. Effective May 2, 2011 we entered
into that certain Second Amended Agreement with Rocking Hard Investment,  LLC to
revise  certain terms of the  agreements  related to the Sheridan,  Wyoming coal

                                       13
<PAGE>
property.  In consideration for the mineral  leasehold,  we were required to pay
$25,000 by February 13, 2011 and an additional $25,000 on or before February 13,
2012. Additionally, we must spend $500,000 on development of the property within
three years of the date of the agreement. As part of the agreement, Rocking Hard
is to receive  certain  royalties  including  a royalty of $1.00 per ton of coal
produced from the property and sold with a maximum  royalty of  $5,000,000.  The
minimum  royalty  shall be paid  beginning  February  13,  2013 in the amount of
$35,000, $45,000 in 2014, and $55,000 in 2015. Minimum royalties shall remain at
$55,000  annually  until  production   royalties  becomes  due  or  the  Company
surrenders  the  property to Synfuel  Technology,  Inc.  The  maximum  amount of
royalty must be paid within 15 years of the date of the agreement.

The second project is the Campbell Project. On February 1, 2010, we entered into
a lease agreement with Miller and Associates,  LLC to acquire a 100% interest in
the project by issuing  100,000  shares of common  stock,  an annual  payment of
$20,000  adjusted  annually by the CPI (consumer price index as published by the
US  Government) - according to this formula each year's payment is calculated by
multiplying $20,000 by [1+ fractional CPI index]. For example, if the CPI is 3%,
the payment will be $20,000 x 1.03 or $20,600. In addition,  we agreed to pay on
the  25th  day of each  calendar  month,  for the  right to mine all coal on the
project,  a production  royalty of 4% of the gross sales price of all coal mined
and sold from the project.

We are an exploration stage company with limited operations and no revenues from
our business activities.

The  following  is a discussion  and  analysis of our plan of operation  for the
quarter  ended  March 31,  2011,  and the factors  that could  affect our future
financial condition and plan of operation.

GOING CONCERN CONSIDERATION

Our registered  independent auditors included an explanatory  paragraph in their
report on our financial  statements as of and for the years ended  September 30,
2010 and 2009,  regarding  concerns  about our  ability to  continue  as a going
concern.

RESULTS OF OPERATIONS

The following summary of our results of operations should be read in conjunction
with our  financial  statements  for the quarter  ended March 31, 2011 which are
included herein.

THREE MONTHS  ENDED MARCH 31, 2011  COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2010

The following  table  summarizes  key items of  comparison  for the three months
ended March 31, 2011, and 2010:

                                                  Three Months Ended
                                                       March 31,
                                                2011             2010
                                              --------         --------
          Amortization                        $    422         $     --
          General and administrative            12,137              187
          Legal and accounting                   1,754            1,300
          Investor Relations                     4,910               --
          Consulting                            15,000           13,138
          Transfer agent                           382            1,300
          Interest Expense                       1,389               --
                                              --------         --------

          Net Loss                            $ 35,994         $ 15,925
                                              ========         ========

We had a net loss of $34,605 for the quarter  ended  March 31,  2011,  which was
$20,069  greater  than the net loss of $15,925 for the  quarter  ended March 31,
2010.  The  significant  change in our results over the two periods is primarily
the result of management's activities around the companies projects.

                                       14
<PAGE>
SIX MONTHS ENDED MARCH 31, 2011 COMPARED TO THE SIX MONTHS ENDED MARCH 31, 2010

The following table  summarizes key items of comparison for the six months ended
March 31, 2011, and 2010:

                                                    Six Months Ended
                                                        March 31,
                                                 2011              2010
                                               --------          --------
           Amortization                        $    844          $     --
           General and administrative            12,981             1,201
           Legal and accounting                   6,016             2,895
           Investor Relations                    13,196                --
           Consulting                            30,000            13,638
           Transfer agent                         2,895             2,895
           Interest Expense                       1,389                --
                                               --------          --------

           Net Loss                            $ 64,808          $ 20,629
                                               ========          ========

We had a net loss of $64,808 for the six months ended March 31, 2011,  which was
$44,179  greater than the net loss of $20,629 for the six months ended March 31,
2010.  The  significant  change in our results over the two periods is primarily
the result of management's activities around the companies projects.

PERIOD FROM INCEPTION, AUGUST 31, 2007 TO MARCH 31, 2011

Since  inception,  we have an  accumulated  deficit  of  $253,539.  We expect to
continue to incur losses as a result of continued exploration and development of
our coal mining interests.

LIQUIDITY AND CAPITAL RESOURCES

Our balance sheet as of March 31, 2011, reflects assets of $443,985. We had cash
in the amount of $54,027 and negative working capital in the amount of $(45,660)
as of March 31, 2011. We do not have sufficient  working capital to enable us to
carry out our stated plan of operation for the next twelve months as of the date
of these financials. We did however secure the necessary capital subsequently.

                                               Six Months        Six Months
                                                  Ended             Ended
                                                March 31,         March 31,
                                                  2011              2010
                                               ----------        ----------
Net Cash (Used in) Operating Activities        $  (77,578)       $  (25,389)
Net Cash (Used in) Investing Activities           (27,585)         (325,000)
Net Cash Provided by Financing Activities         100,000           500,000
                                               ----------        ----------

Increase (Decrease) in Cash                    $   (5,163)       $  149,611
                                               ==========        ==========

Our current cash  requirements  are significant  due to planned  exploration and
development  of our current coal mining  property  interests,  and we anticipate
generating losses. In order to execute on our business  strategy,  including the
exploration  and  development  of our current  coal  interest,  we will  require
additional  working  capital,  commensurate  with the  operational  needs of our
planned projects and obligations. Our management believes that we should be able
to raise sufficient amounts of working capital through debt or equity offerings,
as may be required to meet our short-term obligations.  However,  changes in our
operating plans, increased expenses, acquisitions, or other events, may cause us
to seek  additional  equity  or debt  financing  in the  future.  We  anticipate
continued and additional operations on our properties. Accordingly, we expect to
continue to use debt and equity financing to fund operations for the next twelve
months, as we look to expand our asset base and fund exploration and development
of our properties.

There  are no  assurances  that we will be able to raise  the  required  working
capital on terms  favorable,  or that such working  capital will be available on
any terms when needed.  Any failure to secure additional  financing may force us
to modify our business plan. In addition,  we cannot be assured of profitability
or continued operations in the future.

                                       15
<PAGE>
OPERATING ACTIVITIES

Net cash flow used in operating activities during the six months ended March 31,
2011 was  $(77,578),  an increase of $52,189 from the $(25,389) net cash used in
operating activities during the six months ended March 31, 2010.

INVESTING ACTIVITIES

The primary driver of cash used in investing  activities in previous periods was
capital spending in the acquisition of coal properties.

Cash used in investing activities during the six months ended March 31, 2011 was
$27,585,  which  resulted in a decrease from the $325,000 cash used in investing
activities during the six months ended March 31, 2010.

FINANCING ACTIVITIES

Financing  activities  during  the six months  ended  March 31,  2011,  provided
$100,000,  which  resulted  in a decrease  from the  $500,000  cash  proceeds in
financing activities during the six months ended March 31, 2010.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

MANAGEMENT CERTIFICATION

The financial  statements herein are certified by the officers of the Company to
present fairly, in all material  respects,  the financial  position,  results of
operations  and  cash  flows  for  the  periods  presented  in  conformity  with
accounting  principles  generally  accepted  in the  United  States of  America,
consistently applied.

CASH AND CASH EQUIVALENTS

The Company  considers all highly liquid  investments  with  maturities of three
months or less to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's  financial  instruments consist of cash and amounts due to Company
stockholder.

The carrying amount of these financial  instruments  approximates fair value due
either to length of  maturity  or  interest  rates that  approximate  prevailing
market rates unless  otherwise  disclosed in these financial  statements.  It is
management's  opinion that the Company is not exposed to  significant  interest,
currency or credit risks arising from its other  financial  instruments and that
their fair values  approximate  their  carrying  values except where  separately
disclosed.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles of the United States requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the reported  amounts of revenues and expenses  during the year.
The  more  significant  areas  requiring  the  use of  estimates  include  asset
impairment,  stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable  under the  circumstances.  However,  actual results may differ
from the estimates.

MINERAL PROPERTIES

Costs of exploration,  carrying and retaining  unproven mineral lease properties
are expensed as incurred.  Mineral  property  acquisition  costs are capitalized
including  licenses and lease payments.  Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Company's  title.  Such  properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.

                                       16
<PAGE>
Impairment  losses are recorded on mineral  properties  used in operations  when
indicators of impairment are present and the  undiscounted  cash flows estimated
to be generated by those assets are less than the assets' carrying amount.

LOSS PER SHARE

Basic loss per share is calculated  using the weighted  average number of common
shares  outstanding  and the treasury stock method is used to calculate  diluted
earnings  per share.  For the years  presented,  this  calculation  proved to be
anti-dilutive.

DIVIDENDS

The  Company  has not  adopted any policy  regarding  payment of  dividends.  No
dividends have been paid during the period shown.

INCOME TAXES

The Company provides for income taxes using an asset and liability approach.

Deferred tax assets are reduced by a valuation allowance if, based on the weight
of  available  evidence,  it is more  likely  than not  that  some or all of the
deferred  tax assets will not be  realized.  No  provision  for income  taxes is
included in the statement  due to its  immaterial  amount,  net of the allowance
account,   based  on  the   likelihood  of  the  Company  to  utilize  the  loss
carry-forward. NET LOSS PER COMMON SHARE

Net loss per common share is computed  based on the weighted  average  number of
common shares  outstanding and common stock  equivalents,  if not anti-dilutive.
The Company has not issued any potentially dilutive common shares.

RECENT ACCOUNTING PRONOUNCEMENTS

VARIABLE INTEREST ENTITIES

In June 2009,  the FASB issued  changes to require an  enterprise  to perform an
analysis to determine  whether the enterprise's  variable  interest or interests
give it a  controlling  financial  interest in a variable  interest  entity;  to
require  ongoing   reassessments   of  whether  an  enterprise  is  the  primary
beneficiary  of a  variable  interest  entity;  to  eliminate  the  quantitative
approach  previously  required  for  determining  the primary  beneficiary  of a
variable  interest  entity;  to  add an  additional  reconsideration  event  for
determining  whether an entity is a variable interest entity when any changes in
facts and  circumstances  occur such that  holders of the equity  investment  at
risk, as a group,  lose the power from voting rights or similar  rights of those
investments  to direct  the  activities  of the entity  that most  significantly
impact the entity's economic  performance;  and to require enhanced  disclosures
that  will  provide  users  of  financial   statements  with  more   transparent
information about an enterprise's involvement in a variable interest entity. The
guidance  became  effective for the Company on February 1, 2010. The adoption of
the  guidance  did not have an impact on the  Company's  consolidated  financial
statements.

CODIFICATION OF GAAP

In June 2009,  the FASB issued  guidance to establish the  Accounting  Standards
Codification  TM  ("Codification")  as the  source of  authoritative  accounting
principles  recognized by the FASB to be applied by nongovernmental  entities in
the  preparation  of financial  statements  in conformity  with GAAP.  Rules and
interpretive  releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants.  The FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts;  instead,  the FASB will issue Accounting Standards
Updates ("ASU").  ASUs will not be authoritative in their own right as they will
only  serve  to  update  the  Codification.  The  issuance  of SFAS  168 and the
Codification does not change GAAP. The guidance became effective for the Company
for the period  ending  October 31,  2009.  The adoption of the guidance did not
have an impact on the Company's consolidated financial statements.

                                       17
<PAGE>
SUBSEQUENT EVENTS

On  July  31,  2009,  the  Company  adopted  changes  issued  by the  FASB  that
establishes  general  standards of accounting  for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are  available to be issued.  Specifically,  the guidance  sets forth the period
after the  balance  sheet date during  which  management  of a reporting  entity
should evaluate events or transactions that may occur for potential  recognition
or disclosure  in the financial  statements,  the  circumstances  under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, and the disclosures that an entity should make
about events or  transactions  that occurred  after the balance sheet date.  The
Company  has  evaluated   subsequent  events  through  the  date  the  financial
statements were issued.

BUSINESS COMBINATIONS

The Company  adopted the changes  issued by the FASB that requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities  assumed in the  transaction;  establishes the  acquisition-date
fair value as the measurement  objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose additional  information needed to
evaluate  and  understand  the  nature  and  financial  effect  of the  business
combination.

The Company also adopted the changes  issued by the FASB which  requires  assets
and liabilities assumed in a business  combination that arise from contingencies
be  recognized on the  acquisition  date at fair value if it is more likely than
not that they meet the  definition of an asset or  liability;  and requires that
contingent  consideration  arrangements of the target assumed by the acquirer be
initially measured at fair value.

HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")

In May 2008,  the FASB  issued  changes to identify  the  sources of  accounting
principles  and  the  framework  for  selecting  the  principles   used  in  the
preparation  of  financial  statements  of  nongovernmental  entities  that  are
presented  in  conformity  with GAAP  (the  GAAP  hierarchy).  The  guidance  is
effective 60 days following the SEC's approval of the Public Company  Accounting
Oversight  Board  amendments to AU section 411, THE MEANING OF PRESENT FAIRLY IN
CONFORMITY  WITH  GENERALLY  ACCEPTED  ACCOUNTING   PRINCIPLES.   Management  is
currently  evaluating  the guidance  and  assessing  the impact,  if any, on the
Company's consolidated financial statements.

REVENUE RECOGNITION

In September 2009, the FASB issued new revenue recognition  guidance on multiple
deliverable  arrangements.  It updates  the  existing  multiple-element  revenue
arrangements   guidance  currently  included  under  the  Accounting   Standards
Codification  ("ASC")  605-25.  The  revised  guidance  primarily  provides  two
significant  changes: 1) eliminates the need for objective and reliable evidence
of the fair value for the  undelivered  element in order for a delivered item to
be treated as a separate  unit of  accounting,  and 2)  requires  the use of the
relative selling price method to allocate the entire arrangement  consideration.
In addition,  the guidance also expands the disclosure  requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after fiscal 2011, with early adoption  permitted  provided that
the revised  guidance is  retroactively  applied to the beginning of the year of
adoption.  Management  is  currently  evaluating  the  impact of  adopting  this
guidance on the Company's consolidated financial statements.

RECLASSIFICATIONS

Certain  balances  in the prior years have been  reclassified  to conform to the
current year presentation.

REVENUES

We have not generated revenues since inception.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

                                       18
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller  reporting issuer," we are not required to provide the information
required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES

Our management evaluated,  with the participation of our chief executive officer
and  chief  financial  officer  (our  principal  executive  officer,   principal
financial officer and principal  accounting  officer),  the effectiveness of the
design and operation of our disclosure  controls and procedures as of the end of
the period covered by this quarterly report. Based on this evaluation, our chief
executive  officer and our chief  financial  officer  (our  principal  executive
officer, principal financial officer and principal accounting officer) concluded
that our  disclosure  controls and procedures are effective as of March 31, 2011
to ensure that  information  we are required to disclose in reports that we file
or submit under the Securities Exchange Act of 1934 (i) is recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's rules and forms, and (ii) is accumulated and communicated
to our management, including our chief executive officer and our chief financial
officer  (our  principal  executive  officer,  principal  financial  officer and
principal  accounting  officer),  as  appropriate,  to  allow  timely  decisions
regarding  required  disclosure.  Our  disclosure  controls and  procedures  are
designed to provide  reasonable  assurance that such  information is accumulated
and  communicated  to our  management.  Our  disclosure  controls and procedures
include   components  of  our  internal   control  over   financial   reporting.
Management's  assessment  of the  effectiveness  of our  internal  control  over
financial  reporting is expressed at the level of reasonable  assurance that the
control  system,  no matter how well  designed  and  operated,  can provide only
reasonable,  but not absolute,  assurance that the control  system's  objectives
will be met.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There have been no changes in our internal  controls  over  financial  reporting
that occurred  during the period  covered by this  quarterly  report,  that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no  material,  existing  or pending  legal  proceedings  against  our
company,  nor are we involved  as a  plaintiff  in any  material  proceeding  or
pending  litigation.  There are no  proceedings  in which any of our  directors,
officers or affiliates, or any registered beneficial shareholder,  is an adverse
party or has any material interest adverse to our interest.

ITEM 1A. RISK FACTORS

Much of the information  included in this quarterly  report includes or is based
upon  estimates,   projections  or  other  "forward-looking   statements."  Such
forward-looking  statements include any projections and estimates made by us and
our  management  in  connection  with  our  business  operations.   While  these
forward-looking  statements,  and any assumptions upon which they are based, are
made in good faith and reflect our current  judgment  regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such  estimates,  projections  or  other  "forward-looking  statements"  involve
various risks and  uncertainties  as outlined  below. We caution the reader that
important  factors  in some  cases  have  affected  and,  in the  future,  could
materially  affect actual results and cause actual results to differ  materially
from  the  results  expressed  in  any  such  estimates,  projections  or  other
"forward-looking statements".

                                       19
<PAGE>
                          RISKS RELATED TO OUR BUSINESS

WE ARE IN THE EXPLORATION STAGE AND HAVE YET TO ESTABLISH OUR MINING OPERATIONS,
WHICH MAKES IT  DIFFICULT TO EVALUATE  OUR  BUSINESS.  THERE CAN BE NO ASSURANCE
THAT WE WILL EVER GENERATE REVENUES FROM OPERATIONS OR EVER OPERATE PROFITABLY.

We are currently in the  exploration  stage and have yet to establish our mining
operations.  Our limited  history makes it difficult for potential  investors to
evaluate  our  business.  We need to  complete  a  drilling  program  and obtain
feasibility  studies on the  properties in which we have an interest in order to
establish  the  existence of  commercially  viable coal  deposits and proven and
probable  reserves on such properties.  Therefore,  our proposed  operations are
subject  to all of the risks  inherent  in the  unforeseen  costs and  expenses,
challenges,  complications and delays frequently  encountered in connection with
the formation of any new  business,  as well as those risks that are specific to
the coal industry in general.  Despite our best efforts,  we may never  overcome
these obstacles to financial success. There can be no assurance that our efforts
will be successful or result in revenue or profit,  or that  investors  will not
lose their entire investment.

WE FACE  NUMEROUS  UNCERTAINTIES  IN CONFIRMING  THE  EXISTENCE OF  ECONOMICALLY
RECOVERABLE  COAL  RESERVES AND IN  ESTIMATING  THE SIZE OF SUCH  RESERVES,  AND
INACCURACIES  IN OUR  ESTIMATES  COULD RESULT IN LOWER THAN  EXPECTED  REVENUES,
HIGHER THAN EXPECTED COSTS OR FAILURE TO ACHIEVE PROFITABILITY.

We have not established  the existence of a commercially  viable coal deposit on
the  properties  in  which  we have an  interest.  Further  exploration  will be
required in order to establish the existence of  economically  recoverable  coal
reserves and in estimating the size of those reserves. However, estimates of the
economically recoverable quantities and qualities attributable to any particular
group of properties,  classifications  of reserves based on risk of recovery and
estimates  of net cash flows  expected  from  particular  reserves  prepared  by
different  engineers  or by the  same  engineers  at  different  times  may vary
substantially.  Actual coal tonnage  recovered from identified  reserve areas or
properties and revenues and expenditures  with respect to such reserves may vary
materially from estimates. Inaccuracies in any estimates related to our reserves
could materially affect our ability to successfully  commence  profitable mining
operations.

OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO ACQUIRE AND DEVELOP COAL RESERVES
THAT ARE  ECONOMICALLY  RECOVERABLE  AND TO RAISE THE CAPITAL  NECESSARY TO FUND
MINING OPERATIONS.

Our future  success  depends  upon our  conducting  successful  exploration  and
development   activities  and  acquiring  properties   containing   economically
recoverable  coal deposits.  In addition,  we must also generate enough capital,
either  through  our  operations  or through  outside  financing,  to mine these
reserves.  Our current strategy includes completion of exploration activities on
our current  properties and, in the event we are able to establish the existence
of commercially  viable coal deposits on such properties,  continuing to develop
our existing  properties.  Our ability to develop our existing properties and to
commence  mining  operations  will  depend on our  ability to obtain  sufficient
working capital through financing activities.

DUE TO VARIABILITY IN COAL PRICES AND IN OUR COST OF PRODUCING  COAL, AS WELL AS
CERTAIN CONTRACTUAL COMMITMENTS, WE MAY BE UNABLE TO SELL COAL AT A PROFIT.

In the event we are able to commence coal  production  from our  properties,  we
will plan to sell any coal we produce  for a specified  tonnage  amount and at a
negotiated  price  pursuant  to  short-term  and  long-term   contracts.   Price
adjustment,  "price  reopener" and other similar  provisions in long-term supply
agreements  may reduce the  protection  from  short-term  coal price  volatility
traditionally  provided  by such  contracts.  Any  adjustment  or  renegotiation
leading to a  significantly  lower  contract  price  would  result in  decreased
revenues and lower our gross  margins.  Coal supply  agreements  also  typically
contain force majeure provisions allowing temporary suspension of performance by
us or our customers  during the duration of specified  events beyond the control
of the affected party. Most coal supply agreements contain provisions  requiring
us to deliver coal meeting quality thresholds for certain  characteristics  such
as Btu,  sulfur  content,  ash  content,  hardness  and ash fusion  temperature.
Failure  to meet  these  specifications  could  result  in  economic  penalties,
including  price  adjustments,  the rejection of deliveries  or, in the extreme,
termination of the contracts.  Consequently,  due to the risks  mentioned  above
with respect to long-term supply  agreements,  we may not achieve the revenue or

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profit we expect to achieve from any such future sales commitments. In addition,
we may not be able to successfully  convert these future sales  commitments into
long-term supply agreements.

THE COAL INDUSTRY IS HIGHLY  COMPETITIVE  AND INCLUDES  MANY LARGE  NATIONAL AND
INTERNATIONAL RESOURCE COMPANIES.  THERE IS NO ASSURANCE THAT WE WILL BE ABLE TO
EFFECTIVELY  COMPETE IN THIS  INDUSTRY  AND OUR  FAILURE TO COMPETE  EFFECTIVELY
COULD  CAUSE OUR  BUSINESS  TO FAIL OR COULD  REDUCE OUR REVENUE AND MARGINS AND
PREVENT US FROM ACHIEVING PROFITABILITY.

In the event we are able to produce coal, we will be in competition  for sale of
our coal with  numerous  large  producers  and hundreds of small  producers  who
operate  globally.  The markets in which we may seek to sell our coal are highly
competitive  and are  affected  by  factors  beyond  our  control.  There  is no
assurance of demand for any coal we are able to produce,  and the prices that we
may be able to obtain will depend primarily on global coal consumption patterns,
which in turn are affected by the demand for  electricity,  coal  transportation
costs,   environmental   and  other   governmental   regulations   and   orders,
technological   developments   and  the  availability  and  price  of  competing
alternative  energy  sources  such as  oil,  natural  gas,  nuclear  energy  and
hydroelectric  energy.  In addition,  during the  mid-1970s  and early 1980s,  a
growing coal market and increased demand for coal attracted new investors to the
coal  industry  and spurred the  development  of new mines and added  production
capacity  throughout the industry.  Although  demand for coal has grown over the
recent past, the industry has since been faced with overcapacity,  which in turn
has increased competition and lowered prevailing coal prices. Moreover,  because
of greater competition for electricity and increased pressure from customers and
regulators to lower electricity prices, public utilities are lowering fuel costs
and requiring competitive prices on their purchases of coal. Accordingly,  there
is no assurance  that we will be able to produce coal at  competitive  prices or
that we will be able to sell any coal we produce for a profit.  Our inability to
compete  effectively  in the global  market for coal would cause our business to
fail.

OUR  INABILITY  TO  DIVERSIFY  OUR   OPERATIONS   MAY  SUBJECT  US  TO  ECONOMIC
FLUCTUATIONS WITHIN OUR INDUSTRY.

Our limited  financial  resources  reduce the likelihood that we will be able to
diversify our  operations.  Our probable  inability to diversify our  activities
into more than one business area will subject us to economic fluctuations within
the  coal  industry  and  therefore  increase  the  risks  associated  with  our
operations.

THE  INTERNATIONAL  COAL INDUSTRY IS HIGHLY  CYCLICAL,  WHICH WILL SUBJECT US TO
FLUCTUATIONS IN PRICES FOR ANY COAL WE PRODUCE.

In the event we are able to  produce  coal,  we will be exposed to swings in the
demand  for coal,  which  will have an impact on the  prices  for our coal.  The
demand for coal  products  and,  thus,  the  financial  condition and results of
operations  of  companies  in the coal  industry,  including  us, are  generally
affected by macroeconomic fluctuations in the world economy and the domestic and
international  demand for energy. In recent years, the price of coal has been at
historically high levels, but these price levels may not continue.  Any material
decrease  in  demand  for coal  could  have a  material  adverse  effect  on our
operations and profitability.

THE PRICE OF COAL IS DRIVEN BY THE GLOBAL  MARKET.  IT IS  AFFECTED  BY CHANGING
REQUIREMENTS  OF  CUSTOMERS  BASED ON THEIR  NEEDS AND THE PRICE OF  ALTERNATIVE
SOURCES OF ENERGY SUCH AS NATURAL GAS AND OIL.

In the event that we are able to begin  producing  coal, our success will depend
upon  maintaining  a  consistent  margin  on our coal  sales to pay our costs of
mining  and  capital  expenditures.  We intend to seek to  control  our costs of
operations,  but pressures by government  policies and the price of  substitutes
could drive the price of coal down to make it unprofitable  for us. The price of
coal is  controlled  by the  global  market  and we will  be  dependent  on both
economic  and  government  policies to maintain  the price above our future cost
structure.

OPERATING A MINE HAS  HAZARDOUS  RISKS THAT CAN DELAY AND  INCREASE THE COSTS OF
PRODUCTION.

Our mining operations, if any, will be subject to conditions that can impact the
safety of the workforce, or delay production and deliveries or increase the full
cost of mining.  These conditions  include fires and explosions from methane gas
or coal dust; accidental  discharges;  weather,  flooding and natural disasters;
unexpected maintenance problems; key equipment failures; variations in coal seam
thickness; variations in the amount of rock and soil overlying the coal deposit;

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<PAGE>
variations  in rock and other  natural  materials  and  variations  in  geologic
conditions.  Despite our efforts,  once operational,  significant mine accidents
could occur and have a substantial impact.

OUR PLANNED MINING  OPERATIONS ARE INHERENTLY  SUBJECT TO CONDITIONS  THAT COULD
AFFECT LEVELS OF PRODUCTION AND PRODUCTION COSTS AT PARTICULAR MINES FOR VARYING
LENGTHS OF TIME AND COULD REDUCE OUR PROFITABILITY.

Our planned coal mining  operations  are subject to  conditions or events beyond
our control that could disrupt  operations,  affect  production and increase the
cost  of  mining  for  varying  lengths  of  time  and  negatively   affect  our
profitability.  These  conditions or events  include,  (i)  unplanned  equipment
failures,  which could interrupt production and require us to expend significant
sums to repair our capital  equipment  that we would use to remove the soil that
overlies coal deposits;  (ii) geological  conditions,  such as variations in the
quality of the coal produced from a particular seam, variations in the thickness
of coal seams and variations in the amounts of rock and other natural  materials
that  overlie  the  coal  that  we  are  mining;  (iii)  unexpected  delays  and
difficulties in acquiring,  maintaining or renewing  necessary permits or mining
or surface  rights;  (iv)  unavailability  of mining  equipment and supplies and
increases  in the  price of mining  equipment  and  supplies;  (v)  shortage  of
qualified labor and a significant rise in labor costs;  (vi) fluctuations in the
cost of industrial supplies, including steel-based supplies, natural gas, diesel
fuel and oil; (vii) unexpected or accidental surface subsidence from underground
mining;  (viii) accidental mine water discharges,  fires,  explosions or similar
mining  accidents;  (ix) regulatory  issues involving the plugging of and mining
through oil and gas wells that penetrate the coal seams we mine; and (x) adverse
weather conditions and natural disasters,  such as heavy rains and flooding.  If
any of these  conditions  or events  occur in the  future  at any of our  mining
properties,  our  cost of  mining  and any  delay or halt of  production  either
permanently or for varying lengths of time could adversely  affect our operating
results.

WE MAY HAVE RECLAMATION  OBLIGATIONS AND IF WE ARE REQUIRED TO HONOR RECLAMATION
OBLIGATIONS  THAT HAVE BEEN  ASSUMED BY  PREVIOUS  MINE  OPERATORS,  WE COULD BE
REQUIRED TO EXPEND  GREATER  AMOUNTS THAN WE CURRENTLY  ANTICIPATE,  WHICH COULD
AFFECT OUR PROFITABILITY IN FUTURE PERIODS.

We are  responsible  under  federal  and  state  regulations  for  the  ultimate
reclamation of the mines we operate.  In some cases, the previous mine operators
have assumed these  liabilities by contract and have posted bonds or have funded
escrows to secure  their  obligations.  We estimate our future  liabilities  for
reclamation and other mine-closing costs from time to time based on a variety of
assumptions.  If our assumptions  are incorrect,  we could be required in future
periods  to  spend  more on  reclamation  and  mine-closing  activities  than we
currently estimate,  which could harm our profitability.  Likewise,  if previous
mine operators default on the unfunded portion of their contractual  obligations
to pay for reclamation,  we could be forced to make these expenditures ourselves
and the  cost of  reclamation  could  exceed  any  amount  we might  recover  in
litigation, which would also increase our costs and reduce our profitability.

DEFECTS IN TITLE OR LOSS OF ANY  LEASEHOLD  INTERESTS  IN OUR  PROPERTIES  COULD
LIMIT  OUR  ABILITY  TO  MINE  THESE   PROPERTIES   OR  RESULT  IN   SIGNIFICANT
UNANTICIPATED COSTS.

We plan to conduct some of our mining  operations on properties that we lease. A
title defect or the loss of any lease could adversely affect our ability to mine
any  associated  reserves.  Because title to most of our leased  properties  and
mineral  rights is not usually  verified until we make a commitment to develop a
property, which may not occur until after we have obtained necessary permits and
completed  exploration  of the property,  our right to mine some of our reserves
may,  in the future,  be  adversely  affected if defects in title or  boundaries
exist.  In order to obtain  leases or mining  contracts  to  conduct  our mining
operations on property where these defects  exist,  we may in the future have to
incur  unanticipated  costs.  In  addition,  we may not be able to  successfully
negotiate new leases or mining  contracts for properties  containing  additional
reserves or maintain our  leasehold  interests in  properties  where we have not
commenced mining operations during the term of the lease.

THE COAL INDUSTRY COULD HAVE  OVERCAPACITY  WHICH WOULD AFFECT THE PRICE OF COAL
AND IN TURN,  WOULD  IMPACT OUR  ABILITY TO REALIZE A PROFIT  FROM  FUTURE  COAL
SALES.

Current  prices of  alternative  fuels such as oil are at high levels,  spurring
demand  and  investment  in  coal.  This can  lead to over  investment  and over
capacity in the sector,  dropping the price of coal to unprofitable levels. Such
an occurrence would adversely  affect our ability to commence mining  operations
or to realize a profit from any future coal sales we may seek to make.

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<PAGE>
ENVIRONMENTAL  PRESSURES COULD INCREASE AND ACCELERATE  REQUIREMENTS FOR CLEANER
COAL OR COAL PROCESSING.

Environmental  pressures could drive potential purchasers of coal to either push
the  price of coal  down in order to  compete  in the  energy  market or move to
alternative energy supplies therefore reducing demand for coal.  Requirements to
have  cleaner  mining  operations  could lead to higher costs for us which could
hamper our ability to make future sales at a profitable  level. Coal plants emit
carbon dioxide,  sulfur and nitrate particles to the air. Various countries have
imposed  cleaner air  legislations  in order to minimize those  emissions.  Some
technologies  are  available  to do so,  but also  increase  the price of energy
derived  by coal.  Such an  increase  will drive  customers  to make a choice on
whether or not to use coal as their driver for energy production.

EXPLORATION AND EXPLOITATION ACTIVITIES ARE SUBJECT TO COMPREHENSIVE  REGULATION
WHICH MAY CAUSE SUBSTANTIAL DELAYS OR REQUIRE CAPITAL OUTLAYS IN EXCESS OF THOSE
ANTICIPATED CAUSING AN ADVERSE EFFECT ON OUR COMPANY.

Exploration and exploitation activities are subject to federal, state, and local
laws,  regulations,  and  policies,  including  laws  regulating  the removal of
natural  resources  from the  ground and the  discharge  of  materials  into the
environment.  Exploration  and  exploitation  activities  are  also  subject  to
federal, state, and local laws and regulations which seek to maintain health and
safety  standards  by  regulating  the design and use of  drilling  methods  and
equipment.

Various permits from government  bodies are required for drilling  operations to
be conducted,  and no assurance can be given that such permits will be received.
Environmental  and other legal  standards  imposed by federal,  state,  or local
authorities  may be changed and any such changes may prevent us from  conducting
planned  activities or increase our costs of doing so, which would have material
adverse effects on our business.  Moreover,  compliance with such laws may cause
substantial  delays or require capital  outlays in excess of those  anticipated,
thus  causing  an  adverse  effect on us.  Additionally,  we may be  subject  to
liability for pollution or other environmental  damages which we may not be able
to or elect not to insure  against due to  prohibitive  premium  costs and other
reasons. Any laws, regulations, or policies of any government body or regulatory
agency may be changed,  applied, or interpreted in a manner which will alter and
negatively affect our ability to carry on our business.

SEVERE WEATHER OR VIOLENT STORMS COULD  MATERIALLY  AFFECT OUR OPERATIONS DUE TO
DAMAGE OR DELAYS CAUSED BY SUCH WEATHER. Our exploration  activities are subject
to normal  seasonal  weather  conditions  that often hamper and may  temporarily
prevent exploration activities.  There is a risk that unexpectedly harsh weather
or violent  storms could affect areas where we conduct  exploration  activities.
Delays or damage caused by severe weather could materially affect our operations
or our financial position.

                        RISKS ASSOCIATED WITH OUR COMPANY

BECAUSE WE MAY NEVER EARN  REVENUES FROM OUR  OPERATIONS,  OUR BUSINESS MAY FAIL
AND THEN INVESTORS MAY LOSE ALL OF THEIR INVESTMENT IN OUR COMPANY.

We have no history of revenues from  operations.  We have never had  significant
operations  and have no  significant  assets.  We have yet to generate  positive
earnings and there can be no assurance that we will ever operate profitably. Our
company has a limited operating history.  If our business plan is not successful
and we are not able to operate  profitably,  then our stock may become worthless
and investors may lose all of their investment in our company.

We expect to incur significant losses into the foreseeable  future. We recognize
that if we are unable to generate significant  revenues from our properties,  we
will not be able to earn  profits or  continue  operations.  There is no history
upon  which to base  any  assumption  as to the  likelihood  that we will  prove
successful,  and we can provide no assurance  that we will generate any revenues
or ever achieve profitability. If we are unsuccessful in addressing these risks,
our business  will fail and  investors  may lose all of their  investment in our
company.

WE HAVE A HISTORY OF LOSSES AND HAVE NEGATIVE CASH FLOWS FROM OPERATIONS,  WHICH
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

We have not generated any revenues since our  incorporation and we will continue
to  incur  operating  expenses  without  revenues  until  we are  in  commercial
deployment.  To date we have had negative cash flows from operations and we have

                                       23
<PAGE>
been dependent on sales of our equity  securities and debt financing to meet our
cash  requirements and have incurred net losses from inception to March 31, 2011
of $(253,540).  Our net cash used in operations for the three months ended March
31,  2011 was  $(77,578).  As of March 31,  2011,  we had a working  capital  of
$(45,660). We do not expect positive cash flow from operations in the near term.
There  is no  assurance  that  actual  cash  requirements  will not  exceed  our
estimates.  In particular,  additional capital may be required in the event that
drilling and completion costs increase beyond our expectations;  or we encounter
greater costs  associated with general and  administrative  expenses or offering
costs. The occurrence of any of the aforementioned events could adversely affect
our ability to meet our business  plans.  We cannot provide  assurances  that we
will be able to  successfully  execute our business  plan.  These  circumstances
raise substantial doubt about our ability to continue as a going concern.  If we
are unable to continue  as a going  concern,  investors  will likely lose all of
their investments in our company.

There is no assurance that we will operate  profitably or will generate positive
cash flow in the future. In addition, our operating results in the future may be
subject to significant  fluctuations due to many factors not within our control,
such as the  unpredictability of when customers will purchase our coal, the size
of customers'  purchases,  the demand for our coal, and the level of competition
and general economic  conditions.  If we cannot generate  positive cash flows in
the future,  or raise  sufficient  financing to continue our normal  operations,
then we may be forced to scale down or even close our operations.

IF WE DO NOT OBTAIN FINANCING WHEN NEEDED, OUR BUSINESS WILL FAIL.

As of March  31,  2011,  we had  $54,027  in cash and  cash  equivalents  in our
accounts.  We estimate that we will need  approximately  US$1,200,000 in working
capital  to fund  capital  and  operational  costs with  respect to our  planned
exploration phase. We do not have any arrangements for additional  financing and
we may not be able to  obtain  financing  when  required.  Obtaining  additional
financing  would be subject to a number of factors,  including the market prices
for our products,  production  costs,  the  availability  of credit,  prevailing
interest rates and the market price for our common stock.

We will depend almost  exclusively  on outside  capital to pay for the continued
exploration and development of our properties.  Such outside capital may include
the sale of additional stock and/or commercial borrowing.  There is no guarantee
that sufficient  capital will continue to be available to meet these  continuing
development  costs or that it will be on terms acceptable to us. The issuance of
additional equity securities by us would result in a significant dilution in the
equity  interests  of our  current  stockholders.  Obtaining  commercial  loans,
assuming  those loans would be  available,  will  increase our  liabilities  and
future cash commitments.

If we are  unable  to  obtain  financing  in the  amounts  and on  terms  deemed
acceptable  to us, we may be unable to continue our business and as a result may
be required to scale back or cease  operations  for our business,  the result of
which would be that our stockholders would lose some or all of their investment.

AS WE FACE INTENSE COMPETITION IN THE COAL EXPLORATION INDUSTRY, WE WILL HAVE TO
COMPETE WITH OUR  COMPETITORS  FOR FINANCING AND FOR  QUALIFIED  MANAGERIAL  AND
TECHNICAL EMPLOYEES.

Our  properties  are in  Wyoming  and  our  competition  there  includes  large,
established  coal  companies  with  substantial  capabilities  and with  greater
financial and technical resources than we have. As a result of this competition,
we may have to compete for financing and be unable to acquire financing on terms
we  consider  acceptable.  We may also have to  compete  with the  other  energy
companies in the recruitment and retention of qualified managerial and technical
employees.  If we are unable to successfully  compete for financing or qualified
employees,  our exploration programs may be slowed down or suspended,  which may
cause us to cease operations as a company.

WE MAY BE REQUIRED TO INCUR SIGNIFICANT COSTS AND REQUIRE SIGNIFICANT MANAGEMENT
RESOURCES TO EVALUATE OUR INTERNAL CONTROL OVER FINANCIAL  REPORTING AS REQUIRED
UNDER  SECTION 404 OF THE  SARBANES-OXLEY  ACT, AND ANY FAILURE TO COMPLY OR ANY
ADVERSE  RESULT  FROM SUCH  EVALUATION  MAY HAVE AN ADVERSE  EFFECT ON OUR STOCK
PRICE.

As a smaller  reporting  company as defined in Rule 12b-2  under the  Securities
Exchange  Act of 1934,  as amended,  we are  required to evaluate  our  internal
control over financial  reporting under Section 404 of the Sarbanes-Oxley Act of
2002  ("Section  404").  Section 404 requires us to include an internal  control
report  with  our  Annual  Report  on  Form  10-K.   This  report  must  include

                                       24
<PAGE>
management's  assessment  of the  effectiveness  of our  internal  control  over
financial  reporting  as of the end of the fiscal  year.  This  report must also
include disclosure of any material weaknesses in internal control over financial
reporting that we have  identified.  Failure to comply,  or any adverse  results
from such  evaluation  could  result  in a loss of  investor  confidence  in our
financial  reports and have an adverse effect on the trading price of our equity
securities.

Achieving  continued  compliance  with  Section  404  may  require  us to  incur
significant  costs and expend  significant  time and  management  resources.  We
cannot assure you that we will be able to fully comply with Section 404 or that,
we and our  independent  registered  public  accounting  firm  would  be able to
conclude  that our  internal  control over  financial  reporting is effective at
fiscal year end. As a result,  investors  could lose  confidence in our reported
financial  information,  which could have an adverse effect on the trading price
of our securities, as well as subject us to civil or criminal investigations and
penalties.  In addition,  our independent  registered public accounting firm may
not agree with our management's assessment or conclude that our internal control
over financial reporting is operating effectively.

                 RISK RELATED TO AN INVESTMENT IN OUR SECURITIES

TRADING ON THE OTC  BULLETIN  BOARD MAY BE VOLATILE  AND  SPORADIC,  WHICH COULD
DEPRESS  THE MARKET  PRICE OF OUR  COMMON  STOCK AND MAKE IT  DIFFICULT  FOR OUR
STOCKHOLDERS TO RESELL THEIR SHARES.

Our common stock is quoted on the OTC Bulletin  Board  service of the  Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
is often thin and characterized by wide  fluctuations in trading prices,  due to
many  factors  that  may  have  little  to do with our  operations  or  business
prospects.  This  volatility  could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange,  and trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities  listed on a quotation system
like NASDAQ or a stock  exchange like the NYSE.  Accordingly,  shareholders  may
have difficulty reselling any of their shares.

OUR  STOCK  IS  CATEGORIZED  AS A  PENNY  STOCK.  TRADING  OF OUR  STOCK  MAY BE
RESTRICTED BY THE SEC'S PENNY STOCK  REGULATIONS WHICH MAY LIMIT A SHAREHOLDER'S
ABILITY TO BUY AND SELL OUR STOCK.

Our stock is a penny stock.  The Securities and Exchange  Commission has adopted
Rule 15g-9 which generally  defines "penny stock" to be any equity security that
has a market price (as defined)  less than $5.00 per share or an exercise  price
of less than $5.00 per share, subject to certain exceptions.  Our securities are
covered  by the penny  stock  rules,  which  impose  additional  sales  practice
requirements  on  broker-dealers  who sell to  persons  other  than  established
customers and "accredited  investors".  The term  "accredited  investor"  refers
generally to  institutions  with assets in excess of $5,000,000  or  individuals
with a net worth in excess of $1,000,000 or annual income exceeding  $200,000 or
$300,000   jointly  with  their   spouse.   The  penny  stock  rules  require  a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which  provides  information  about  penny  stocks and the nature and
level of risks in the penny stock market.  The  broker-dealer  also must provide
the customer  with  current bid and offer  quotations  for the penny stock,  the
compensation  of the  broker-dealer  and its  salesperson in the transaction and
monthly account  statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations,  and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the  transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise  exempt
from these rules, the  broker-dealer  must make a special written  determination
that the penny stock is a suitable  investment for the purchaser and receive the
purchaser's written agreement to the transaction.  These disclosure requirements
may have the effect of reducing the level of trading  activity in the  secondary
market for the stock that is subject to these penny stock  rules.  Consequently,
these penny stock  rules may affect the ability of  broker-dealers  to trade our
securities.  We believe that the penny stock rules discourage  investor interest
in, and limit the marketability of, our common stock.

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<PAGE>
FINRA SALES PRACTICE  REQUIREMENTS MAY ALSO LIMIT A SHAREHOLDER'S ABILITY TO BUY
AND SELL OUR STOCK.

In addition to the "penny stock" rules described above,  the Financial  Industry
Regulatory   Authority   ("FINRA")  has  adopted  rules  that  require  that  in
recommending an investment to a customer,  a broker-dealer  must have reasonable
grounds for believing that the  investment is suitable for that customer.  Prior
to  recommending  speculative low priced  securities to their  non-institutional
customers,  broker-dealers  must make reasonable  efforts to obtain  information
about the customer's  financial status,  tax status,  investment  objectives and
other  information.  Under  interpretations  of these rules, FINRA believes that
there is a high probability  that speculative low priced  securities will not be
suitable  for at least  some  customers.  The  FINRA  requirements  make it more
difficult for  broker-dealers  to recommend that their  customers buy our common
stock,  which  may  limit  your  ability  to buy and sell our  stock and have an
adverse effect on the market for our shares.

TO DATE, WE HAVE NOT PAID ANY CASH  DIVIDENDS AND NO CASH DIVIDENDS WILL BE PAID
IN THE FORESEEABLE FUTURE.

We do  not  anticipate  paying  cash  dividends  on  our  common  stock  in  the
foreseeable future and we may not have sufficient funds legally available to pay
dividends.  Even if the funds are legally  available  for  distribution,  we may
nevertheless decide not to pay any dividends.  We presently intend to retain all
earnings for our operations.

THE  ELIMINATION  OF MONETARY  LIABILITY  AGAINST OUR  DIRECTORS,  OFFICERS  AND
EMPLOYEES  UNDER NEVADA LAW AND THE EXISTENCE OF  INDEMNIFICATION  RIGHTS TO OUR
DIRECTORS,  OFFICERS AND EMPLOYEES MAY RESULT IN SUBSTANTIAL EXPENDITURES BY OUR
COMPANY  AND  MAY  DISCOURAGE  LAWSUITS  AGAINST  OUR  DIRECTORS,  OFFICERS  AND
EMPLOYEES.

Our Articles of Incorporation contain a provision permitting us to eliminate the
personal  liability of our directors to our company and shareholders for damages
for breach of fiduciary duty as a director or officer to the extent  provided by
Nevada  law.  The  foregoing  indemnification  obligations  could  result in the
Company  incurring  substantial  expenditures to cover the cost of settlement or
damage awards against directors and officers,  which we may be unable to recoup.
These  provisions  and  resultant  costs may also  discourage  our company  from
bringing  a  lawsuit  against  directors  and  officers  for  breaches  of their
fiduciary  duties,  and  may  similarly  discourage  the  filing  of  derivative
litigation  by our  shareholders  against our directors and officers even though
such  actions,   if  successful,   might  otherwise   benefit  our  company  and
shareholders.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 11, 2011, the Company sold 666,667 shares of its common stock  ("Shares")
to one investor in exchange for $500,000, or $0.75 per share as specified in the
subscription agreement ("Subscription  Agreement").  In connection with the sale
of the Shares,  the  investor  also  received  warrants to purchase  six hundred
sixty-six  thousand six hundred  sixty-seven  (666,667)  shares of the Company's
common stock at a purchase price of $0.82 per share  ("Warrants").  The Warrants
provide for an expiration  period of two years from the date of the  investment.
The foregoing description of the Subscription Agreement,  Shares and Warrants is
not intended to be complete and is qualified in its entirety by reference to the
full text of the Subscription Agreement as attached hereto as Exhibit 10.1.

The Shares and Warrants were issued in reliance upon exemption from registration
under the  Securities  Act pursuant to Rule 506 of  Regulation  D. The Share and
Warrants  were issued to an investor who is an  "accredited  investor,"  as such
term  is  defined  in  Rule  501(a)  under  the   Securities   Act,  based  upon
representation made by such investor.

ITEM 3. DEFAULTS

UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

Effective  May 2, 2011,  the Company  entered into that certain  Second  Amended
Agreement by and between the Company and Rocking Hard  Investments,  LLC, a Utah
limited  liability company ("RHI") regarding the Company's coal project north of

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<PAGE>
Sheridan,  Wyoming.  The Second Amended  Agreement  combines and replaces in its
entirety that certain  Amended  Agreement by and between the Company and RHI and
that certain  Royalty  Agreement by and between the Company and RHI,  both dated
May 20, 2010. The Second Amended Agreement revises exploration,  development and
feasibility  requirements  to better fit with the projected  timing of the State
permitting  process.  Minimum royalties were also more accurately defined in the
Second Amended  Agreement.  A copy of the Second  Amended  Agreement is attached
hereto as Exhibit 10.2.

ITEM 6. EXHIBITS

Exhibit No.                        Description
-----------                        -----------

(3)           (I) ARTICLES OF INCORPORATION; AND (II) BY-LAWS

3.1           Articles  of  Incorporation  (Incorporated  by  reference  to  our
              Registration  Statement on Form SB-2  originally  filed on January
              23, 2008).

3.2           By-laws  (Incorporated by reference to our Registration  Statement
              on Form S1/A filed on February 27, 2008).

3.3           Articles  of Merger  (Incorporated  by  reference  to our  Current
              Report on Form 8-K filed on March 29, 2010).

3.4           Certificate  of Change  (Incorporated  by reference to our Current
              Report on Form 8-K filed on March 29, 2010).

10.1*         Form of Subscription Agreement

10.2*         Second Amended  Agreement by and between Liberty Coal Energy Corp.
              and Rocking Hard Investments, LLC, dated May 2, 2010

(31)          RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

31.1*         Certification  of Chief Executive  Officer pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.

31.2*         Certification  of Chief Financial  Officer pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.

(32)          SECTION 1350 CERTIFICATIONS

32.1*         Certification  of Chief Executive  Officer pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

32.2*         Certification  of Chief Financial  Officer pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

----------
*    Filed herewith

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<PAGE>
                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                         LIBERTY COAL ENERGY CORP.


Date: May 16, 2011                       /s/ Edwin G. Morrow
                                         ---------------------------------------
                                         EDWIN G. MORROW
                                         President, Chief Executive Officer
                                         and Director


Date: May 16, 2011                       /s/ Robert T. Malasek
                                         ---------------------------------------
                                         ROBERT T. MALASEK
                                         Chief Financial Officer, Secretary
                                         and Director

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