Liberty Coal Energy Corp. - FORM 10-K

Attached files

file	filename
EX-32.1 - SECTION 906 CERTIFICATION - Liberty Coal Energy Corp.	ex32.txt
EX-10.3 - CONSULTING AGREEMENT - Liberty Coal Energy Corp.	ex10-3.txt
EX-14.1 - CODE OF ETHICS - Liberty Coal Energy Corp.	ex14-1.txt
EX-31.1 - SECTION 302 CERTIFICATION - Liberty Coal Energy Corp.	ex31-1.txt

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended September 30, 2010

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

For the transition period from ____________ to _____________

Commission file number 000-51973

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

Nevada N/A
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

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

303.997.3161
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

N/A N/A
Title of Each Class Name of Each Exchange On Which Registered

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value of $0.001
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act Yes [ ] No [X]

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 last 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-K (ss.229.405 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition 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]

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

State the aggregate market value of voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and ask price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
quarter.

The aggregate market value of Common Stock held by non-affiliates of the
Registrant on March 31, 2010, was $2,781,000 based on the average bid/ask price
for the Common Stock on March 31, 2010. For purposes of this computation, all
executive officers and directors have been deemed to be affiliates. Such
determination should not be deemed to be an admission that such executive
officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date. 57,900,000 shares of common
stock issued & outstanding as of January 10, 2011

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

Item 1. Business..........................................................3

Item 1A. Risk Factors......................................................5

Item 1B. Unresolved Staff Comments........................................10

Item 2. Properties.......................................................10

Item 3. Legal Proceedings................................................12

Item 4. [Removed and Reserved]...........................................12

Item 5. Market for Common Equity and Related Stockholder Matters and
Issuer Purchases of Equity Securities ...........................12

Item 6. Selected Financial Data..........................................13

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................13

Item 8. Financial Statements and Supplementary Data......................19

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.............................................31

Item 9A. Controls and Procedures..........................................31

Item 9B. Other Information................................................32

Item 10. Directors, Executive Officers and Corporate Governance...........32

Item 11. Executive Compensation...........................................35

Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters..................................37

Item 13. Certain Relationships and Related Transactions, and Director
Independence.....................................................38

Item 14. Principal Accountants Fees and Services..........................38

Item 15. Exhibits, Financial Statement Schedules..........................39

PART I

ITEM 1. BUSINESS

This annual 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 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 annual 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 annual 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 ESEL 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
director of our company to that of a precious metal mineral 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.

Other than as set out herein, we have not been involved in any bankruptcy,
receivership or similar proceedings, nor have we been a party to any material
reclassification, merger, consolidation or purchase or sale of a significant
amount of assets not in the ordinary course of our business.

OUR CURRENT BUSINESS

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

COMPETITION

The mining industry is intensely competitive. We compete with numerous
individuals and companies, including many major mining companies, which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for access to funds. There
are other competitors that have operations in the area and the presence of these
competitors could adversely affect our ability to compete for financing and
obtain the service providers, staff or equipment necessary for the exploration
and exploitation of our properties.

COMPLIANCE WITH GOVERNMENT REGULATION

Mining operations and exploration activities are subject to various national,
state, provincial and local laws and regulations, as well as other
jurisdictions, which govern prospecting, development, mining, production,
exports, taxes, labor standards, occupational health, waste disposal, protection
of the environment, mine safety, hazardous substances and other matters.

We are committed to complying with and are, to our knowledge, in compliance
with, all governmental and environmental regulations applicable to our company
and our properties. Permits from a variety of regulatory authorities are
required for many aspects of mine operation and reclamation. We cannot predict
the extent to which these requirements will affect our company or our properties
if we identify the existence of minerals in commercially exploitable quantities.
In addition, future legislation and regulation could cause additional expense,
capital expenditure, restrictions and delays in the exploration of our
properties.

EMPLOYEES

Our directors and officers currently act as employees of our company. We do not
expect any material changes in the number of employees over the next 12 month
period.

We engage contractors from time to time to consult with us on specific corporate
affairs or to perform specific tasks in connection with our exploration
programs. We will continue to outsource contract employment as needed.

RESEARCH AND DEVELOPMENT

We have not spent any amounts on which has been classified as research and
development activities in our financial statements since our inception.

GOING CONCERN

We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. At this time, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock or through a loan from our directors to meet
our obligations over the next twelve months. We do not have any arrangements in
place for any future equity financing.

SUBSIDIARIES

We have do not have any subsidiaries.

INTELLECTUAL PROPERTY

We do not own, either legally or beneficially, any patent or trademark.

REPORTS TO SECURITY HOLDERS

We are not required to deliver an annual report to our stockholders but will
voluntarily send an annual report, together with our annual audited financial
statements upon request. We are required to file annual, quarterly and current

reports, proxy statements, and other information with the Securities and
Exchange Commission. Our Securities and Exchange Commission filings are
available to the public over the Internet at the SEC's website at
http://www.sec.gov.

The public may read and copy any materials filed by us with the SEC at the SEC's
Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. We are an electronic filer. The SEC maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. The
Internet address of the site is http://www.sec.gov.

ITEM 1A. RISK FACTORS

Much of the information included in this annual 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".

RISKS ASSOCIATED WITH MINING

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.

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

As of September 30, 2010, we had approximately $59,190 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 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
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;
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.

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.

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.

RISKS RELATED TO 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
been dependent on sales of our equity securities and debt financing to meet our
cash requirements and have incurred net losses from inception to September 30,
2010 of $188,731. Our net cash used in operations for the year ended September
30, 2010 was $129,440. As of September 30, 2010, we had a working capital of
$45,891. 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 services, the
size of customers' purchases, the demand for our services, 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.

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.

RISKS ASSOCIATED WITH OUR COMMON STOCK

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 Amex. Accordingly, shareholders may have
difficulty reselling any of their shares.

OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT
A STOCKHOLDER'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.

In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the Financial Industry Regulatory Authority 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, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority ' 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.

OTHER RISKS

TRENDS, RISKS AND UNCERTAINTIES

We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

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

ITEM 2. PROPERTIES

We do not own any real property. Our principal business offices are located at
is 99 18th Street, Suite 3000, Denver Co. 80202. We currently lease our space at
an annual cost of $828. We believe that our current lease arrangements provide
adequate space for our foreseeable future needs.

NORTH RANCHESTER COAL PROPERTY

On March 2, 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.

In consideration of for the mineral leasehold, we paid $50,000 and are required
to pay $25,000 within 90 days of the next three anniversary dates of the
agreement. Additionally, we must spend $2,750,000 on development of the property
within three years of the date of the agreement.

As part of the agreement, we have also agreed to enter into a royalty agreement
with Rocking Hard pursuant to which Rocking Hard would receive a royalty of
$1.00 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.

PROJECT SUMMARY

Located in the Sheridan coalfield north of Sheridan Wyoming, this property is
approximately 1200 acres. The entitlement is currently composed of Wyoming State
coal leases. The North Ranchester property is about 5 miles south west of the
Decker Mine in Montana, which has been producing coal since the early 1960s. The
North Ranchester area has hosted a variety of underground and surface coal
operations from the early 1900s through the late 1970s. The replacement of coal
with the low costs and convenience of natural gas and petroleum for home heating
and to power electric generating plants in the 1960s and beyond caused the
Sheridan coal fields to be largely shut down by the early 1980s. However, as we
know, the oil supply crises of the early 1970s and 1980s, along with the
continuing rise in the price of oil, has made coal a preferred and economic fuel
for electricity generation, and also a source for liquid fuels derived from
coal. The United States has hundreds of years of coal resources within its
borders, and the cleanest, most environmentally compliant coal in the world
comes from the central Rocky Mountain and Powder River basin areas, where
Liberty Coal Energy has focused its activities.

Located geologically near the base of the Paleocene Fort Union Formation, North
Ranchester contains two coal beds, the Carney and Slater Creek beds. These have
been mined extensively in the area. Much data on the coal comes from older mines
adjacent or in the same coal beds. There are also a number of drill holes from
coal, oil and gas exploration and production that have provided location and
measurement for the North Ranchester coal beds. Based on surrounding outcrop and
drill hole data of various types, approximately 50 million tons of coal have
been estimated to exist on the property. Approx half of this coal, based on
current data, is believed to be open pit mineable.

Liberty Coal Energy is currently in the process of designing and permitting a
multi-phase drilling program to establish the specific quality, thickness and
attitudes of the Carney and Slater Creek coal beds within the property. This
information will be included in reports and the data base, which will be used in
the mine feasibility study. The feasibility study will provide the initial
design of a mining plan, determine the capital cost of the operating project and
determine the requirements necessary for submission of permit applications to
the regulatory agencies responsible for overseeing coal mining in the State of
Wyoming. These requirements include an inventory of plant and wildlife occurring
on the site, The studies will guide the reclamation and return of the area to
its current surface use, which is grazing lands.

The estimated cost of the drill evaluation and related activity is $250,000.

SOUTH POWDER RIVER PROJECT CAMPBELL COUNTY WY

On February 1, 2010, we entered into a mineral and mining lease with Miller and
Associates, LLC. Pursuant to this agreement, we issued 100,000 shares of common
stock to Miller and Associates and acquired a 5 year lease on certain mining
claims in Campbell County, Wyoming. In addition to the 100,000 shares of common
stock issued to Miller and Associates, we agreed to pay an annual fee of
$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 the
agreement.

For the period beginning the date of this lease and continuing to the third
anniversary date, Miller and Associates grants our company an option to buy out
3% of the 4% production royalty in increments of 1% at a purchase price of
$600,000 per increment.

PROJECT SUMMARY

Located in the southern end of the Powder River Basin in Campbell County
Wyoming, the property is currently held as a 640 acre Wyoming State lease. Eight
previous drill holes on the lease have established a gross reserve of
approximately 73 million tons of sub-bituminous coal underlying the entire
property. The massive coal thickness obviously extends into surrounding lands.
Named the BIG GEORGE SEAM, it lies at a depth of about 1100 feet below surface,
and averages 66 feet in thickness. The area has been a producer of coal bed
methane, drawn through wells drilled into the coal strata. Coal Bed methane
production has been responsible for the discovery and characterization of huge
coal resources in the Powder River Basin and adjacent areas in the American
midwest

The Big George Coal bed is an underground mining target. Initial pre-feasibility
work has identified a proposed mining scenario that, due to the thickness, is a
good candidate for underground production. Using inclined ramps for ingress,
egress, ventilation and conveyor haulage is proposed as the entry and mining
access. The project , will lend itself to modified longwall techniques used in
most existing underground coal mines for decades

With the resource essentially proven by methane gas production, Liberty is in
the beginning phase of continuing the prefeasibility work already completed.
After completion a phase 2 estimate of the timing and capital costs to install
and operate an underground mine, and leasing additional adjacent resources,
drilling to confirm ground conditions and detailed information on coal quality
will be the next step toward feasibility and mine planning.

A good question and one often asked is how underground mining will compare with
the more usual open pit mines currently responsible for the bulk of Wyoming mine
production. The existing surface mines are going continually deeper as the
shallower coals are mined. Several previous open cut mines in the Central US
coal fields have converted to underground operations as their costs for
overburden removal increased, eventually threatening the economics of the mine.

Liberty Coal's South Powder River project has the advantages of a thick coal
bed, rivaling or exceeding many produced in surface mines. An underground mine
disturbs a small fraction of the land area even a small open cut mine does. This
immediately relieves the company of many of the high costs and risks of
reclamation, along with the lengthy studies which accompany permitting the huge
surface disturbance associated with open cut mines. The earth required to be
removed for a shaft, or inclined tunnel construction for coal access is
fractional compared to the earth that must be removed annually to exposed coal
removed from surface mines.

The next, detailed phase of feasibility will involve working out the economics
of the capital and operating costs for a Powder River Basin underground
producer. Liberty is confident the economics will be prove to be favorable.
Although the existing property is about one square mile, coal bed methane
exploration and production has established the existence of large adjacent
resources that will be easily produced from the same project by expanding the
leased lands.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against us, 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 or beneficial shareholder, is an adverse party or has a
material interest adverse to our company.

ITEM 4. [REMOVED AND RESERVED]

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

The high and low bid prices of our common stock for the periods indicated below
are as follows:

National Association of Securities Dealers OTC Bulletin Board(1)

Quarter Ended High Low
------------- ---- ---
September 30, 2010 $0.75 $0.75
June 30, 2010 $0.85 $0.65
March 31, 2010(2) $0.09 $0.09

----------
(1) Over-the-counter market quotations reflect inter-dealer prices without
retail mark-up, mark-down or commission, and may not represent actual
transactions.
(2) Our first trade occurred on March 19, 2010.

Our common shares are issued in registered form. Routh Stock Transfer, 6860 N
Dallas Parkway, Suite 200, Plano, TX 75024 (Telephone: (972) 381-2782;
Facsimile: (972) 381-2783) is the registrar and transfer agent for our common
shares

On December 15, 2010, the list of stockholders for our shares of common stock
showed 8 registered stockholders and 55,800,000 shares of common stock
outstanding.

DIVIDENDS

We have not declared any dividends on our common stock since the inception of
our company on August 31, 2007. There is no restriction in our Articles of
Incorporation and Bylaws that will limit our ability to pay dividends on our
common stock. However, we do not anticipate declaring and paying dividends to
our shareholders in the near future.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides a summary of the securities authorized for issuance
under Equity Compensation Plans, the weighted average price and number of
securities remaining available for issuance, all as at September 30, 2010.

Number of securities
remaining available for
Number of securities to Weighted average future issuance under
be issued upon exercise exercise price of equity compensation plans
of outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
------------- ------------------- ------------------- ------------------------
(A) (B) (C)

Equity compensation plans approved
by security holders N/A N/A N/A

Equity compensation plans not
approved by security holders N/A N/A N/A
============================ === === ===

TOTAL N/A N/A N/A

PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

We did not purchase any of our shares of common stock or other securities during
the year ended September 30, 2010.

RECENT SALES OF UNREGISTERED SECURITIES

None.

ITEM 6. SELECTED FINANCIAL DATA

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

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with our audited
financial statements and the related notes for the years ended September 30,
2010 and September 30, 2009 that appear elsewhere in this annual report. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to those discussed
below and elsewhere in this registration statement, particularly in the section
entitled "Risk Factors" beginning on page 6 of this annual report.

Our audited financial statements are stated in United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.

PLAN OF OPERATION

During the next twelve month period, we intend to focus our efforts on our North
Ranchester and South Powder River Properties. Our company does and will continue
to seek other viable coal opportunities in the geographic area of interest.

Not accounting for our working capital of $45,891 and $90,000 monthly operating
budget, we require additional funds of approximately $1,050,000 at a minimum to
proceed with our plan of operation over the next twelve months, exclusive of any
acquisition or exploration costs. As we do not have the funds necessary to cover
our projected operating expenses for the next twelve month period, we will be
required to raise additional funds through the issuance of equity securities,
through loans or through debt financing. There can be no assurance that we will

be successful in raising the required capital or that actual cash requirements
will not exceed our estimates. We intend to fulfill any additional cash
requirement through the sale of our equity securities.

If we are not able to obtain the additional financing on a timely basis, if and
when it is needed, we will be forced to scale down or perhaps even cease the
operation of our business.

CAPITAL EXPENDITURES

We do not intend to invest in capital expenditures during the twelve-month
period ending September 30, 2011.

GENERAL AND ADMINISTRATIVE EXPENSES

We expect to spend approximately $150,000 during the twelve-month period ending
September 30, 2011 on general and administrative expenses including legal and
auditing fees, rent, office equipment and other administrative related expenses.

PRODUCT RESEARCH AND DEVELOPMENT

We do not anticipate expending any funds on research and development,
manufacturing and engineering over the twelve months ending September 30, 2011.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment over the twelve months
ending September 30, 2011.

PERSONNEL PLAN

We do not expect any material changes in the number of employees over the next
12 month period (although we may enter into employment or consulting agreements
with our officers or directors). We do and will continue to outsource contract
employment as needed.

RESULTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

The following summary of our results of operations should be read in conjunction
with our audited financial statements for the years ended September 30, 2010 and
2009.

Our operating results for the years ended September 30, 2010 and 2009 are
summarized as follows:

Year Ended
September 30,
2010 2009
---------- ----------
Revenue $ Nil $ Nil
General and Administrative $ 8,692 $ 2,187
Consulting $ 60,000 $ Nil
Investor Relations $ 22,116 $ Nil
Transfer Agent $ 3,554 $ Nil
Legal and Accounting $ 35,564 $ 9,610
Incorporation Costs $ -- $ 10,755
Net Loss $ (130,348) $ (22,552)

REVENUES

We have not earned any revenues since our inception.

GENERAL ADMINISTRATIVE EXPENSES

Our general administrative expenses for the year ended September 30, 2010 and
September 30, 2009 are outlined in the table below:

Year Ended
September 30,
2010 2009
---------- ----------
General and Administrative $ 8,692 $ 2,187
Consulting $ 60,000 $ Nil
Investor Relations $ 22,116 $ Nil
Transfer Agent $ 3,554 $ Nil
Legal and Accounting $ 35,564 $ 9,610

The increase in operating expenses across all categories for the year ended
September 30, 2010, compared to the same period in fiscal 2009, was mainly due
to overall increase in activity related to the acquisition and maintenance of
our mineral property interests.

LIQUIDITY AND FINANCIAL CONDITION

As of September 30, 2010, our total current assets were $64,481 and our total
current liabilities were $18,590 and we had a working capital of $45,891. Our
financial statements report a net loss of $130,348 for the year ended September
30, 2010, and a net loss of $188,731 for the period from August 31, 2007 (date
of inception) to September 30, 2010.

We have suffered recurring losses from operations. The continuation of our
company is dependent upon our company attaining and maintaining profitable
operations and raising additional capital as needed. In this regard we have
raised additional capital through equity offerings and loan transactions.

CASH FLOWS
At At
September 30, September 30,
2010 2009
---------- ----------
Net Cash (Used in) Operating Activities $ (129,440) $ (23,174)
Net Cash (Used In) Investing Activities $ (328,800) $ Nil
Net Cash Provided by Financing Activities $ 500,000 $ Nil
CASH (DECREASE) INCREASE DURING THE YEAR $ 41,760 $ (23,174)

We had cash in the amount of $59,190 as of September 30, 2010 as compared to
cash in the amount of $17,430 as of September 30, 2009. We had working capital
of $45,891 as of September 30, 2010 compared to working capital of $4,617 as of
September 30, 2009.

Our principal sources of funds have been from sales of our common stock.

CONTRACTUAL OBLIGATIONS

As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.

GOING CONCERN

The audited financial statements included with this annual report have been
prepared on the going concern basis which assumes that adequate sources of
financing will be obtained as required and that our assets will be realized and
liabilities settled in the ordinary course of business. Accordingly, the
consolidated audited financial statements do not include any adjustments related
to the recoverability of assets and classification of assets and liabilities
that might be necessary should we be unable to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.

INFLATION

The effect of inflation on our revenue and operating results has not been
significant.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our audited financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles used in the United
States. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our consolidated financial statements is critical to an understanding of our
financials. 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.

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 usng 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.

NEW 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.

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.

The guidance is effective for the Company's acquisitions occurring on or after
February 1, 2009. The Company applied these new provisions to two acquisitions
that occurred during the year, Rock Coast Media, Inc. and Pixel Bridge, Inc.
These acquisitions are more fully disclosed in Note 5 in our Consolidated
Financial Statements.

NON-CONTROLLING INTERESTS
In December 2007, the FASB issued changes to establish accounting and reporting
standards for all entities that prepare consolidated financial statements that
have outstanding non-controlling interests, sometimes called minority interest.
These standards require that ownership interests in subsidiaries held by outside
parties be clearly identified, labeled and presented in equity separate from the
parent's equity; the amount of net income attributable to the parent and the
non-controlling interest be separately presented on the consolidated statement
of income; accounting standards applied to changes in a parent's interest be
consistently applied; fair value measurement upon deconsolidation of a
non-controlling interest be used; and the interests of the non-controlling
owners be already identified and distinguished. The adoption of this guidance
had no impact on the Company's consolidated financial statements.

INTANGIBLE ASSETS
In April 2008, the FASB adopted changes to require companies estimating the
useful life of a recognized intangible asset to consider their historical
experience in renewing or extending similar arrangements or, in the absence of
historical experience, to consider assumptions that market participants would
use about renewal or extension as adjusted for entity-specific factors. The
guidance is effective for fiscal years beginning after December 15, 2008 and is
to be applied prospectively to intangible assets whether acquired before or
after the effective date. The Company adopted the guidance on February 1, 2009.
The adoption had no impact 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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

The following audited financial statements are filed as part of this annual
report:

Independent Auditor's Report, dated January 7, 2011.

Audited Balance Sheet as at September 30, 2010.

Audited Statements of Operations for the year ended September 30, 2010
and for the year ended September 30, 2009.

Audited Statements of Changes in Stockholders' Equity for the year
ended September 30, 2010 and for the year ended September 30, 2009.

Audited Statements of Cash Flows for the year ended September 30, 2010
and for the year ended September 30, 2009.

Notes to the Financial Statements.

Silberstein Ungar, PLLC CPAs and Business Advisors
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Liberty Coal Energy Corp.
Reno, Nevada

We have audited the accompanying balance sheets of Liberty Coal Energy Corp. as
of September 30, 2010 and 2009, and the related statements of operations,
stockholders' equity, and cash flows for the years then ended and the period
from August 31, 2007 (date of inception) to September 30, 2010. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Liberty Coal Energy Corp. as of
September 30, 2010 and 2009, and the results of its operations and cash flows
for the periods then ended and the period from August 31, 2007 (date of
inception) to September 30, 2010, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has limited working capital, has not yet
received revenue from sales of its products, and has incurred losses from
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with regard to these matters are
described in Note 8. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Silberstein Ungar, PLLC
-----------------------------------
Silberstein Ungar, PLLC
Bingham Farms, Michigan
January 7, 2011

Liberty Coal Energy Corp.
(formerly ESL Teachers, Inc.)
(An Exploration Stage Company)
BALANCE SHEETS
AS OF SEPTEMBER 30, 2010 AND 2009

September 30, September 30,
2010 2009
---------- ----------

ASSETS

Current Assets
Cash and cash equivalents $ 59,190 $ 17,430
Prepaid expenses 5,291 445
---------- ----------
Total Current Assets 64,481 17,875
---------- ----------
Other Assets
Website, net of amortization 3,378 --
Mineral Properties 350,000 --
---------- ----------
Total Other Assets 353,378
---------- ----------

TOTAL ASSETS $ 417,859 $ 17,875
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities

Current Liabilities
Accounts payable and accrued liabilities $ 12,682 $ 7,200
Accounts payable - related party 5,908 --
Due to stockholder -- 6,058
---------- ----------
Total Liabilities 18,590 13,258
---------- ----------
Stockholders' Equity
Common stock authorized -
1,500,000,000 common shares with a par value of $0.001
Common stock issued and outstanding
57,900,000 and 73,800,000 common shares 57,900 73,800
Additional paid-in capital 346,786 (10,800)
Additional paid-in capital - warrants 183,314 --
Deficit accumulated during the exploration stage (188,731) (58,383)
---------- ----------
Total Stockholders' Equity 399,269 4,617
---------- ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 417,859 $ 17,875
========== ==========

The accompanying notes are an integral part of these financial statements.

Liberty Coal Energy Corp.
(formerly ESL Teachers, Inc.)
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009
FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO SEPTEMBER 30, 2010

Period from
August 31, 2007
Year Ended Year Ended (Inception) to
September 30, September 30, September 30,
2010 2009 2010
------------ ------------ ------------

REVENUE $ -- $ -- $ --
------------ ------------ ------------
OPERATING EXPENSES
General & Administrative 8,692 2,187 18,400
Consulting 60,000 -- 60,000
Amortization 422 422
Investor Relations 22,116 -- 22,116
Transfer Agent 3,554 10,755 14,309
Legal and Accounting 35,564 9,610 73,484
------------ ------------ ------------
TOTAL OPERATING EXPENSES

LOSS BEFORE PROVISION FOR INCOME TAXES (130,348) (22,552) (188,731)

PROVISION FOR INCOME TAXES -- --
------------ ------------ ------------

NET LOSS $ (130,348) $ (22,552) $ (188,731)
============ ============ ============

LOSS PER SHARE: BASIC AND DILUTED (1) (1)
============ ============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 64,611,507 73,800,000
============ ============

----------
(1) LESS THAN $(0.01)

The accompanying notes are an integral part of these financial statements.

Liberty Coal Energy Corp.
(formerly ESL Teachers, Inc.)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO SEPTEMBER 30, 2010

Deficit
Additional Accumulated
Common Stock Additional Paid-in During the Total
------------ Paid in Capital - Exploration Stockholders'
Shares Amount Capital Warrants Stage Equity
------ ------ ------- -------- ----- ------

Inception, August 31, 2007 -- $ -- $ -- $ -- $ -- $ --

Initial sale of common stock 45,000,000 45,000 (30,000) -- -- 15,000

Net loss for the year -- -- -- -- (4,158) (4,158)
=========== ========= ========= ======== ========= =========
Balance September 30, 2007 45,000,000 45,000 (30,000) -- (4,158) 10,842

Private placement on May 31, 2008
at $0.05 per share 28,800,000 28,800 19,200 -- -- 48,000

Net loss for the period -- -- -- -- (31,673) (31,673)
=========== ========= ========= ======== ========= =========
September 30, 2008 73,800,000 73,800 (10,800) -- (35,831) 27,169

Net loss for the period -- -- -- -- (22,552) (22,552)
=========== ========= ========= ======== ========= =========
September 30, 2009 73,800,000 73,800 (10,800) -- (58,383) 4,617

Private placement on February 1, 2010
at $0.25 per unit 1,000,000 1,000 157,343 91,657 -- 250,000
Stock issued with respect to property
acquisition 100,000 100 24,900 -- -- 25,000
Private placement on February 11, 2010
at $0.25 per unit 1,000,000 1,000 157,343 91,657 -- 250,000
Cancellation of stock (18,000,000) (18,000) 18,000 -- -- --

Net loss for the period -- -- -- (130,348) (130,348)
=========== ========= ========= ======== ========= =========

September 30, 2010 57,900,000 $ 57,900 $ 346,786 $183,314 $(188,731) $ 399,269
=========== ========= ========= ======== ========= =========

The accompanying notes are an integral part of these financial statements.

Liberty Coal Energy Corp.
(formerly ESL Teachers, Inc.)
(An Exploration Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009
FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO SEPTEMBER 30, 2010

Period from
August 31, 2007
Year Ended Year Ended (Inception) to
September 30, September 30, September 30,
2010 2009 2010
---------- ---------- ----------

CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss for the period $ (130,348) $ (22,522) $ (188,731)
Adjustment for non-cash items:
Amortization 422 -- 422
Changes in assets and liabilities:
(Increase) Decrease in prepaid expenses (4,846) (445) (5,291)
Increase (Decrease) in accounts payable and accrued liabilities 5,482 (177) 12,682
Increase in accounts payable - related party 5,908 -- 5,908
Increase (Decrease) in due to stockholder (6,058) -- --
---------- ---------- ----------
Net Cash Used in Operating Activities (129,440) (23,174) (175,010)
---------- ---------- ----------

CASH FLOWS USED IN INVESTING ACTIVITY
Investment in website (3,800) -- (3,800)
Acquisition of mineral properties (325,000) -- (325,000)
---------- ---------- ----------
Net Cash Used in Investing Activities (328,800) -- (328,800)
---------- ---------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 500,000 -- 563,000
---------- ---------- ----------
Net Cash Provided by Financing Activities 500,000 -- 563,000
---------- ---------- ----------

Change in cash during the period 41,760 (23,174) 59,190

Cash, beginning of the period 17,430 40,604 --
---------- ---------- ----------

Cash, end of the period $ 59,190 $ 17,430 $ 59,190
========== ========== ==========
Supplemental Cash Flow Information
Cash paid for income taxes $ -- $ -- $ --
========== ========== ==========

Cash paid for interest $ -- $ -- $ --
========== ========== ==========
Supplemental Non-Cash Investing and Financing Activities
Shares issued for mineral properties $ 25,000 $ -- $ 25,000
========== ========== ==========

The accompanying notes are an integral part of these financial statements.

Liberty Coal Energy Corp.
(formerly ESL Teachers, Inc.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010

NOTE 1 - NATURE OF OPERATIONS

Liberty Coal Energy Corp. (the "Company") was incorporated in the state of
Nevada on August 31, 2007 as "ESL Teachers, Inc.", 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, prepaid expenses, and
accounts payable and accrued liabilities..

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.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

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.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.

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

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. Management has tested the property for
impairment and determined that no impairment allowance is necessary.

Sheridan Property
The Company acquired a mineral property leasehold in exchange for $55,000 within
10 days of the date of the Agreement (paid), $25,000 within 90 days of the each
of the next three following anniversaries of the date of the Agreement.
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. Management has tested the property for
impairment and determined that no impairment allowance is necessary.

NOTE 4 - CAPITAL STOCK

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

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.

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
Warrants were granted in 2010 in connection with a private placement. The
Company has accounted for these warrants as equity instruments in accordance
with EITF 00-19 (ASC 815-40), Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock, and as such, were
classified in stockholders' equity. The Company has estimated the fair value of
the warrants issued in connection with the private placements at $183,314 as of
the grant date using the Black-Scholes option pricing model.

The estimated grant date fair value of the warrants granted during the year
ended September 30, 2010 was $183,314; this was estimated using the
Black-Scholes option pricing model with the following assumptions: expected
dividend yield of 0%, expected volatility of 100%, risk-free interest rate of
2.59%, an expected life of 2 years. The stock price used in the Black-Scholes
option pricing model was based on a recent unrelated third party private
placement. Volatility was computed based on an average beta of similar companies
in the same industry. The risk-free interest rate is based on the US Treasury
constant maturity interest rate whose term is consistent with the expected life
of the warrant. The expected life of the warrant is based on the contractual
term of the warrant.

A summary of changes in share purchase warrants during the years ended December
31, 2010 and 2009 is as follows:

Weighted Average
Warrants Exercise Price
-------- --------------
Outstanding, September 30, 2009 -- $ N/A
Granted 2,000,000 $ 0.25
---------- ----------

Outstanding, September 30, 2010 2,000,000 $ 0.25
========== ==========

As of September 30, 2010, the Company had warrants issued as follows:

Outstanding at
September 30,
Issue Date Number Price Expiry Date 2010
---------- ------ ----- ----------- ----
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 5 - 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 $189,000 at September 30, 2010, 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:

2010 2009
-------- --------
Deferred tax asset attributable to:
Net operating loss carryover $ 41,388 $ 12,888
Valuation allowance (41,388) (12,888)
-------- --------

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

NOTE 6 - RELATED PARTY TRANSACTION

As of September 30, 2010 and 2009, there was a balance owing to a stockholder of
the Company in the amount of $0 and $1,058, respectively.

The company has a consulting agreement with a company controlled by an officer
of the Company. The agreement calls for monthly payments of $5,000. There was an
outstanding payable of $5,908 to this related party as of September 30, 2010 for
September services and reimbursement of expenses.

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.

NOTE 7 - COMMITMENTS

With respect to the Campbell Property, the Company has 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.

With respect to the Sheridan Property, the Company has agreed to pay $25,000
within 90 days of the each of the next three following anniversaries of the date
of the Agreement being March 2, 2011, 2012 and 2013. Additionally, the Company
must spend $2,750,000 on development of the property within three years of the
date of the Agreement. In addition, , the Company has also agreed to enter into
a royalty agreement with Rocking Hard Investment, LLC pursuant to which Rocking
Hard would receive a royalty of $1.00 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.

The company has committed to pay 150,000 stock options to a consultant at a
minimum price allowable under the Company's stock option plan. No expense has
been recorded for these options as of September 30, 2010.

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 $188,731 as of September 30, 2010. 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 October 6, 2010, a shareholder agreed to cancel 2,000,000 shares of common
stock.

Management has evaluated subsequent events through January 7, 2011 and has
determined it does not have any material subsequent events to disclose other
than those mentioned above.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

We have not changed our auditors since our last year end and we have not had any
disagreements with our auditors.

ITEM 9A. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the SECURITIES
EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our president (who is acting as our
principal executive officer and our principal financial officer and principle
accounting officer) to allow for timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, our
management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and our management is required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and procedures.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

As of September 30, 2010, the end of our fiscal year covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president (who is acting as our principal executive officer and our
principal financial officer and principle accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president (who is acting as our
principal executive officer and our principal financial officer and principle
accounting officer) concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this annual report.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
control procedures. The objectives of internal control include providing
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of September 30, 2010. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in INTERNAL CONTROL-INTEGRATED
FRAMEWORK. Our management has concluded that, as of September 30, 2010, our
internal control over financial reporting is effective in providing reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our Board of Directors.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

Internal control over financial reporting has inherent limitations which include
but is not limited to the use of independent professionals for advice and
guidance, interpretation of existing and/or changing rules and principles,
segregation of management duties, scale of organization, and personnel factors.

Internal control over financial reporting is a process which involves human
diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting also
can be circumvented by collusion or improper management override. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements on a timely basis, however these inherent limitations
are known features of the financial reporting process and it is possible to
design into the process safeguards to reduce, though not eliminate, this risk.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal controls over financial reporting
that occurred during the three month period ended September 30, 2010 that have
materially or are reasonably likely to materially affect, our internal controls
over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

All of the directors of our company hold office until the next annual meeting of
the stockholders or until their successors have been elected and qualified. Our
officers are appointed by our board of directors and hold office until their
death, resignation or removal from office. Our directors and executive officers,
their ages, positions held, and duration as such, are as follows:

Date First Elected
Name Position Held with the Company Age or Appointed
---- ------------------------------ --- ------------
Edwin G. Morrow President Chief Executive 65 April 30, 2010
Officer and Director

Mauricio Beltran Director 43 August 31, 2007

BUSINESS EXPERIENCE

The following is a brief account of the education and business experience of
each director and executive officer during at least the past five years,
indicating each person's principal occupation during the period, and the name
and principal business of the organization by which he was employed.

EDWIN G. MORROW - PRESIDENT, CEO AND DIRECTOR

Mr. Morrow was appointed a director, president and chief executive officer on
April 30, 2010.

Mr. Morrow holds a Bachelor of Science in Geology from Mackay School of Mines,
University of Nevada, Reno, with post graduate study in finance and mineral
economics.

A registered Professional Geologist, Mr. Morrow is a member of the Society for
Mineral Exploration , has served on the Boards of Directors of several
Associations and mining companies and as a Council Member of the Mineral
Industry Advisory Board, University of Nevada, Mackay School of Mines.

Mr. Morrow has worked as an employee or consultant for over 35 years in
exploration, development and production in the natural resources area, in
multiple commodities. He has held line and executive positions within the mining
and minerals industry with Sonoma Quicksilver, Utah International Inc, InterPace
Corporation, Federal Bentonite Corporation, Homestake Mining company, Laminco
Resources Inc, and Zaruma Resources Inc. Mr. Morrow also has over 10 years
experience in real estate management, including planning, entitlement,
permitting, engineering and construction management.

MAURICIO BELTRAN - DIRECTOR

Mr. Beltran was appointed a director on August 31, 2007.

Mr. Beltran was our president, chief executive officer, principal executive
officer, chief financial officer from August 31, 2007 to April 30, 2010 was
elected and director on August 31, 2007. Mr. Beltran works in the Customs
Department of the Secretaria de Hacienda y Credito Publico in Tijuana,
Baja-California. In this position he is in charge of notifying companies and
individuals regarding non-compliance with the Mexican Importer's Registry code.
This position is in the legal department of the Secretaria de Hacienda y Credito
Publico, a position he has held since 2004.

Prior to that Mr. Beltran worked as a Purchasing Manager for Promociones El
Floro, S.A., a show and entertainment company also in Tijuana, Baja-California.
In this role he was responsible for sourcing of material, packaging, printing
and promotional material; he developed and maintained the international vendor
network; he was responsible for budget management and cost control practices;
coordinated all day-to-day office functions; supervised and evaluated support
staff in the Purchasing Department; solicited bids, quotes and negotiated terms
of contracts with vendors as well as making the purchasing decisions; and
trained other staff members to be able to make the same type of decisions.

From 1998 to 2003 Mr. Beltran worked as an Assistant Purchasing Manager at
Belmont, S.A. de C.V. in Tijuana, Baja-California. In his role there Mr. Beltran
worked with suppliers, the distribution team and the merchant team to ensure the
timely delivery of merchandise. He also managed the markdown process and
communicated with buyers; analyzed the advertising performance and made
recommendations for future ads; and assisted in the preparation of pre-market
analysis. Mr. Beltran managed the performance of purchasing clerical functions,
including routine correspondence, vendor list preparations, vendor applications
and updates, bid and specification preparation, compilation of surplus equipment
lists, and contract and records files maintenance. He was responsible for
communication from the purchasing department both orally and in writing with
vendors, other employees and the public in order to maintain effective business
relationships.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

Our directors, executive officers and control persons have not been involved in
any of the following events during the past five years:

1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);

3. being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities; or

4. being found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or vacated.

SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Securities Exchange Act requires our executive officers and
directors, and persons who own more than 10% of our common stock, to file
reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of the copies of such forms received by us,
or written representations from certain reporting persons, we believe that
during the year ended September 30, 2010, all filing requirements applicable to
its officers, directors and greater than 10% percent beneficial owners were
complied with.

AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that it does not have a member of its
audit committee that qualifies as an "audit committee financial expert" as
defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.

We believe that the members of our board of directors are collectively capable
of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. We believe that retaining an
independent director who would qualify as an "audit committee financial expert"
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not
generated any material revenues to date. In addition, we currently do not have
nominating, compensation or audit committees or committees performing similar
functions nor do we have a written nominating, compensation or audit committee
charter. Our board of directors does not believe that it is necessary to have
such committees because it believes the functions of such committees can be
adequately performed by our board of directors.

CODE OF ETHICS

We have adopted a Code of Ethics that apples to, among other persons, our
company's principal executive officers and senior financial executives, as well
as persons performing similar functions. As adopted, our Code of Ethics sets
forth written standards that are designed to deter wrongdoing and to:

1. Act with honesty and integrity and in an ethical manner, avoiding actual or
apparent conflicts of interest in personal and professional relationships.

2. Promptly disclose to the Company, through the General Counsel, Chief
Accounting Officer, or Audit Committee, any material transaction or
relationship that reasonably could be expected to give rise to a conflict
of interest between personal and professional relationships.

3. Provide full, fair, accurate, timely, and understandable disclosure in
reports and documents that the Company files with, or submits to, the SEC
and in other public communications made by the Company.

4. Provide constituents with information that is accurate, complete,
objective, relevant, timely, and understandable.

5. Comply with applicable rules and regulations of federal, state, and local
governments and other appropriate private and public regulatory agencies.

6. Act in good faith, responsibly, with due care, competence and diligence,
without misrepresenting material facts or allowing his or her independent
judgment to be subordinated.

7. Use good business judgment in the processing and recording of all financial
transactions.

8. Respect the confidentiality of information acquired in the course of the
Company's business, except when authorized or otherwise legally obligated
to disclose such information, and not use confidential information acquired
in the course of work for personal advantage.

9. Share knowledge and maintain skills important and relevant to his or her
constituents' needs.

10. Promote ethical behavior among constituents in the work environment.

11. Achieve responsible use of and control over all assets and resources
employed or entrusted to him or her.

12. Comply with generally accepted accounting standards and practices, rules,
regulations and controls.

13. Ensure that accounting entries are promptly and accurately recorded and
properly documented and that no accounting entry intentionally distorts or
disguises the true nature of any business transaction.

14. Maintain books and records that fairly and accurately reflect the Company's
business transactions.

15. Sign only those documents that he or she believes to be accurate and
truthful.

16. Devise, implement, and maintain sufficient internal controls to assure that
financial record keeping objectives are met.

17. Prohibit the establishment of any undisclosed or unrecorded funds or assets
for any purpose and provide for the proper and prompt recording of all
disbursements of funds and all receipts.

18. Not knowingly be a party to any illegal activity or engage in acts that are
discreditable to his or her profession or the Company.

19. Respect and contribute to the legitimate and ethical objects of the
Company.

20. Engage in only those services for which he or she has the necessary
knowledge, skill, and expertise.

21. Not make, or tolerate to be made, false or artificial statements or entries
for any purpose in the books and records of the Company or in any internal
or external correspondence, memoranda, or communication of any type,
including telephone or wire communications.

22. Report to the Company, through the General Counsel, Chief Accounting
Officer, or Audit Committee any situation where the Code of Ethics, the
Company's standards, or the laws are being violated.

Our Code of Ethics and Business Conduct is being filed with the Securities and
Exchange Commission as Exhibit 14.1 to this annual report on Form 10-K. We will
provide a copy of the Code of Ethics and Business Conduct to any person without
charge, upon request. Requests can be sent to: Liberty Coal Energy Inc., 99 18th
Street, Suite 3000, Denver, CO 80202.

ITEM 11. EXECUTIVE COMPENSATION

The particulars of the compensation paid to the following persons:

* our principal executive officer;
* each of our two most highly compensated executive officers who were
serving as executive officers at the end of the years ended September
30, 2010 and 2009; and

* up to two additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not
serving as our executive officer at the end of the years ended
September 30, 2010 and 2009,

who we will collectively refer to as the named executive officers of our
company, are set out in the following summary compensation table, except that no
disclosure is provided for any named executive officer, other than our principal
executive officers, whose total compensation did not exceed $100,000 for the
respective fiscal year:

SUMMARY COMPENSATION TABLE

Change in
Pension
Value and
Nonqualified
Name Non-Equity Deferred All
and Principal Salary or Stock Option Incentive Plan Compensation Other
Position Year Fees Bonus Awards Awards Compensation Earnings Compensation Total
-------- ---- ---- ----- ------ ------ ------------ -------- ------------ -----
($) ($) ($) ($) ($) ($) ($) ($)

Edwin G. Morrow(1) 2010 25,000(2) Nil Nil Nil Nil Nil Nil 25,000
President and 2009 N/A N/A N/A N/A N/A N/A N/A N/A
Chief Financial
Officer

Mauricio Beltran(3) 2010 Nil Nil Nil Nil Nil Nil Nil Nil
Former President, 2009 Nil Nil Nil Nil Nil Nil Nil Nil
Chief Financial
Officer and Chief
Executive Officer

----------
(1) Mr. Morrow was appointed president and chief executive officer of our
company on April 30, 2010.
(2) Fees are paid to Hay Creek Consultants Inc. a company wholly owned by Mr.
Morrow, pursuant to a consulting agreement dated May 1, 2010.
(3) Mr. Beltran was appointed president, chief financial officer and chief
executive officer on August 31, 2007 and resigned as an officer on April
30, 2010.

STOCK OPTIONS/SAR GRANTS

During the period from inception (August 31, 2007) to September 30, 2010, we did
not grant any stock options to our executive officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES

There were no options exercised during our fiscal year ended September 30, 2010
or September 30, 2009 by any officer or director of our company.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

No equity awards were outstanding as of the year ended September 30, 2010.

COMPENSATION OF DIRECTORS

We reimburse our directors for expenses incurred in connection with attending
board meetings. We have not paid any director's fees or other cash compensation
for services rendered as a director since our inception to September 30, 2010.

We have no formal plan for compensating our directors for their service in their
capacity as directors, although such directors are expected in the future to
receive stock options to purchase common shares as awarded by our board of
directors or (as to future stock options) a compensation committee which may be

established. Directors are entitled to reimbursement for reasonable travel and
other out-of-pocket expenses incurred in connection with attendance at meetings
of our board of directors. Our board of directors may award special remuneration
to any director undertaking any special services on our behalf other than
services ordinarily required of a director. No director received and/or accrued
any compensation for their services as a director, including committee
participation and/or special assignments.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

Other than as set forth below, we have not entered into any employment agreement
or consulting agreement with our directors and executive officers.

On May 1, 2010, we entered into an agreement with Hay Creek Consultants Inc., a
company wholly owned by Edwin G. Morrow, under which Mr. Morrow will act as an
officer of our company. The consulting agreement provides for monthly
compensation in the amount of $5,000 for 50% of Mr. Morrow's time commitment and
$10,000 per month starting upon our determination that the full time engagement
of Mr. Morrow is warranted. The consulting agreement shall be for a term of
three years.

There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. Our directors and
executive officers may receive stock options at the discretion of our board of
directors in the future. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors.

We have no plans or arrangements with respect to remuneration received or that
may be received by our executive officers to compensate such officers in the
event of termination of employment (as a result of resignation, retirement,
change of control) or a change of responsibilities following a change of
control, where the value of such compensation exceeds $60,000 per executive
officer.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table sets forth, as of January 10, 2011, certain information with
respect to the beneficial ownership of our common stock by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of common stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of common stock, except as otherwise indicated.

Amount and Nature of Percentage of
Name and Address of Beneficial Owner Beneficial Owner(1) Class
------------------------------------ ------------------- -----
Edwin Morrow 2,000,000 3.58%

Mauricio Beltran 2,500,000 4.48%

All Officers and Directors 4,500,000 8.06%
As a Group (2 individuals)

----------
(1) Under Rule 13d-3, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes
the power to vote, or to direct the voting of shares; and (ii) investment
power, which includes the power to dispose or direct the disposition of
shares. Certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the power
to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the date
as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed to
include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does
not necessarily reflect the person's actual ownership or voting power with
respect to the number of shares of common stock actually outstanding on
December 15, 2010. As of December 15, 2010, there were 55,800,000 shares of
our company's common stock issued and outstanding.

CHANGES IN CONTROL

We are unaware of any contract or other arrangement or provisions of our
Articles or Bylaws the operation of which may at a subsequent date result in a
change of control of our company. There are not any provisions in our Articles
or Bylaws, the operation of which would delay, defer, or prevent a change in
control of our company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

Except as disclosed herein, there have been no transactions or proposed
transactions in which the amount involved exceeds the lesser of $120,000 or one
percent of the average of our total assets at year-end for the last three
completed fiscal years in which any of our directors, executive officers or
beneficial holders of more than 5% of the outstanding shares of our common
stock, or any of their respective relatives, spouses, associates or affiliates,
has had or will have any direct or material indirect interest.

The promoters of our company are our directors and officers.

DIRECTOR INDEPENDENCE

We currently act with two directors, consisting of Edwin G. Morrow and Mauricio
Beltran. We have determined that we do not have an "independent director" as
defined in NASDAQ Marketplace Rule 4200(a)(15).

We do not have a standing audit, compensation or nominating committee, but our
entire board of directors act in such capacity. We believe that our directors
are capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. Our
directors do not believe that it is necessary to have an audit committee because
we believe that the functions of an audit committee can be adequately performed
by the board of directors. In addition, we believe that retaining additional
independent directors who would qualify as an "audit committee financial expert"
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development.

ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

The aggregate fees billed for the most recently completed fiscal year ended
September 30, 2010 and for fiscal year ended September 30, 2010 for professional
services rendered by the principal accountant for the audit of our annual
financial statements and review of the financial statements included in our
quarterly reports on Form 10-Q and services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:

Year Ended
September 30,
2010 2009
------ ------
($) ($)
Audit Fees 6,000 4,300
Audit Related Fees 3,000 3,000
Tax Fees Nil Nil
All Other Fees Nil Nil
Total 9,000 7,300

Our board of directors pre-approves all services provided by our independent
auditors. All of the above services and fees were reviewed and approved by the
board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by
our independent auditors and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining our independent
auditors' independence.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K

Exhibit
Number Description
------ -----------

(3) (I) ARTICLES OF INCORPORATION; AND (II) BYLAWS

3.1 Articles of Incorporation (Attached as a exhibit to our Registration
Statement on Form SB-2 originally filed with the SEC on January 23,
2008 and incorporated herein by reference).

3.2 Bylaws (Attached as a exhibit to our Registration Statement on Form
S1/A originally filed with the SEC on February 27, 2008 and
incorporated herein by reference).

3.3 Articles of Merger (previously filed as Exhibit 3.01 to our Current
Report on Form 8-K filed on March 29, 2010.)

3.4 Certificate of Change (previously filed as Exhibit 10.1 to our Current
Report on Form 8-K filed on March 29, 2010.)

(10) MATERIAL CONTRACTS

10.1 Mineral and Mining Lease with Miller and Associates LLC dated February
1, 2010. (previously filed as Exhibit 10.1 to our Current Report on
Form 8-K filed on February 10, 2010.)

10.2 Letter of Agreement with Rocking Hard Investment, LLC and Synfuel
Technology, Inc., dated March 2, 2010 (previously filed as Exhibit 10.1
to our Current Report on Form 8-K filed on March 4, 2010.)

10.3* Consulting Agreement between our company and Hay Creek Consultants Inc.
dated May 1, 2010.

(14) CODE OF ETHICS

14.1* Code of Ethics

(31) SECTION 302 CERTIFICATION

31.1* Certification of Principal Executive Officer and Principal Financial
Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(32) SECTION 906 CERTIFICATION

32.1* Certification of Principal Executive Officer and Principal Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

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

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

LIBERTY COAL ENERGY CORP.

/s/ Edwin G. Morrow
------------------------------------------
Edwin G. Morrow
President, Chief Executive Officer, and
Director (Principal Executive Officer,
Principal Financial Officer, and Principal
Accounting Officer)
Date: January 11, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ Edwin G. Morrow President, Chief Executive Officer, January 11, 2011
---------------------------------- and Director
Edwin G. Morrow

/s/ Mauricio Beltran Director January 11, 2011
----------------------------------
Mauricio Beltran

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