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CORRESP
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SEC Response to Comments

Suite 2800  1100 Peachtree St.

Atlanta GA 30309-4530

t 404 815 6500  f 404 815 6555

www.KilpatrickStockton.com

November 9, 2004

direct dial
404
815 6444

direct fax 404 541 3402

DStockton@KilpatrickStockton.com

VIA EDGAR

H. Roger Schwall

Associate Director

Division of Corporation Finance

U.S. Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549-0405

RE:     James River Coal Company

Form S-1 filed August 13, 2004

File No. 333-118190

Dear Mr. Schwall:

            At the request and on
behalf of our client, James River Coal Company (the “Company”), we hereby file this letter, via EDGAR, in response to
the comment letter dated November 4, 2004 from the Staff, concerning the above-referenced registration statement.

            We provide below
responses to the Staff’s comments on behalf of the Company.  As requested, these responses are keyed to correspond to the Staff’s comment
letter, which we do by setting out below each of the Staff’s comments (in bold face type) followed by our response.  A
copy of this letter is being sent to the Staff by courier delivery.

            Unless the context
requires otherwise, references to we, our, us, James River or the Company in this letter refer to James River Coal
Company.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 2

 General

    1.

    We note your response to our prior comment number 2.  It remains
    unclear to us how your financial statements are not materially different as
    of May 6, 2004 compared to April 30, 2004.  Our position on the
    presentation of financial information as of a date other than the effective
    date of your emergence from bankruptcy is predicated upon a lack of material
    financial statement differences.  It appears your senior secured credit
    facility represents an amount that is material to your financial statements.
    As you have not demonstrated to us a lack of material financial statement
    differences, it appears you should amend your filing to present financial
    information as of May 6, 2004.
Response:

The senior
secured credit facility is a loan from an unrelated financial institution.  The financial institution did not have a claim in
our bankruptcy, and was only involved in providing a working capital loan to us after we emerged from bankruptcy.  The loan
was entered into to refinance the DIP facility and to provide working capital.  Our closing of this loan with the third party
financial institution did not have an impact on our fresh start accounting entries.

For these reasons, we believe that
the impact of entering into the senior secured credit facility does not affect
our analysis of whether it is appropriate to use a convenience date in applying
fresh start accounting as allowed by Paragraph 48 of SFAS
141.

We believe that the materiality of the results
of operations for the first six days of May (the “Convenience Period”) should be
considered in making a determination as to whether our financial statements at
April 30, 2004 are materially different from our financial statements at May 6,
2004.  In making our determination that April 30, 2004 was appropriate for
use as a convenience date, we first considered that, during the Convenience
Period, our operations were conducted only in the normal course.  There
were no unusual transactions during the Convenience Period that affected our
results of operations or our balance sheet.  Based on our estimated results
for 2004, and assuming the results of operations for the Convenience Period were
equal to a pro rata portion of the two months ended June 30, 2004 (which we have
no reason to believe otherwise), the impact of
excluding the Convenience Period is approximately 2.5% of projected annualized
revenue, 2.2% of projected annualized operating costs and 4.6% of projected
annualized operating profit.  The results of our operations for the
Convenience Period would also affect our balance sheet, which was used in
applying fresh start accounting.  The effect of the results of operations
for this period on our working capital (after consideration of capital
expenditures for the period) would be less than 1% of our total assets
post-fresh start, and less than 1% of our reorganization value.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 3

Accordingly, we believe
that the impact of the Convenience Period is not material to our results, and
that the use of April 30, 2004 for convenience purposes is appropriate.  We
also note that we have disclosed in several places in the Prospectus that we have used April 30, 2004 as the
convenience date, and that the use of this date did not have a material effect
on our financial statements.

However, we believe that
the impact of the $20.0 million in proceeds from the senior secured credit
facility is not material to the financial statements at the date we implemented
fresh start accounting.  It is important to note that we used  $10.1
million of the proceeds to repay current liabilities, and retained the remaining
$9.9 million as cash.  The following table illustrates the impact of the
senior secured credit facility on the opening balance sheet of the Successor
Company.

As Stated

Results

Adjusted for

Facility

Percentage

Impact

Current Assets

$  63,834

$  73,746

13.4%

Current Liabilities (excludes DIP Loan)

50,896

47,208

7.2%

DIP Loan

6,400

0

N/A

Senior Secured Credit Facility

0

20,000

N/A

Total Assets

323,118

333,030

3.0%

Total Liabilities

259,827

269,739

3.7%

Net Assets (Equity)

63,291

63,291

0%

The impact of
this transaction represents approximately 3.0% and 3.7% of total assets and total liabilities, respectively, which we believe is
immaterial to our financial statements.  We have also considered SAB 99, which states that while the Staff would not object to
using a “rule of thumb” such as 5% in determining materiality,  it cannot be substituted for a full analysis of all
relevant considerations.  We note further from SAB 99 that a matter is considered material if there is a substantial
likelihood that a reasonable person would consider it important.  Thus, in making our assessment, we also considered the
following:

The senior secured credit facility only impacts the balance sheet, and does not have an impact on income or any earning
trends.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 4

While the senior secured credit facility has a greater than 5% impact on current assets and current liabilities, we believe
that, from a financial user standpoint, it is more appropriate to consider the impact on our capitalization.  We note that the
senior secured credit facility’s only impact on capitalization is the impact of the repayment of $3.7 million in current
payables, and we believe that the conversion of a short-term liability to a long-term liability does not materially impact the
financial statements.  The remaining portion of the senior secured credit facility does not impact our capitalization, as it
either replaced existing debt ($6.4 million DIP loan) or was retained as cash ($9.9 million).

The $20 million borrowing of the senior secured credit facility is
fully and fairly disclosed.  We believe that this disclosure provides the
user of the financial information with adequate information with respect to the facility.

Therefore, based
on the above, we believe that using April 30, 2004 for convenience purposes, as allowed by Paragraph 48 of SFAS 141, is
appropriate.

Financial statements

Note – 1(h) Impairment of Long-Lived Assets, page F-12

    2.

    In our prior comment number 9, we requested an understanding of the timing
    of your determination to no longer mine the area you had referenced.
    It appears from your response that you may have overlooked this aspect of
    our prior comment.  Please provide a clear timetable of events relative
    to your Bledsoe and McCoy Elkhorn operations and any other operations that
    contributed significantly to your abandonment charges, including the date
    operations were suspended, the periods of assets being idle, the timing of
    reserve determination as being either depleted or uneconomic, and the date
    of the abandonment decision.
    Response:

It is important
to understand in reviewing the timing of the write-offs that coal prices spiked in the summer
of 2001, prior to returning to
historically low levels in late 2001 and into 2002.  In 2002, we believed that the pricing environment for coal would not
improve in the near future, and, as a result, our management made a number of decisions to abandon mines, properties and facilities
that were previously considered economical to mine and/or operate.  The following is a timetable of abandonments at locations
that made up a significant portion of the fixed asset disposals, write-off of mine development costs and write-off of prepaid
royalties.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 5

Location

Costs

Last Month

Used

Discussion

Blue Diamond – Mine #71

$135,000 (fixed assets)
and $1.1 million (development costs)

January 2002

This mine was an operational mine into 2002.  During 2002, a determination was made
to close the mine and access the remaining reserves through a different mine (Mine #75), resulting in the write-off of the
previously capitalized costs.

Blue Diamond – Royalties

$4 million (prepaid royalty)

January 2002

An advance payment was made for prepaid royalties in 1997 (as part of acquiring a mineral
lease).  The related lease provided the right to mine the coal.  In 2002, the reserves were deemed exhausted and the
unamortized costs were written off.

Blue Diamond – Mine #77

$2.5 million (development costs)

April 2002

This mine was an operational mine into 2002.  During 2002, an underground mine fire
occurred in a primary route to one area of the mine.  We determined that the damaged route was no longer useable and that an
alternate route would need to be developed (and in fact was developed).  The write-off relates to the costs associated with
the closed route.

Blue Diamond – Refuse Impoundment

$654,000 (fixed
assets)

1999

In 1999, this facility began to leak and could not be used without government approved
plans for repair.  We subsequently submitted a plan to remediate the facility so that it could continue to be used.  In
2002, we determined it would not be cost effective to pursue the plan to remediate the facility, and therefore decided to
abandon the facility.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 6

Location

Costs

Last Month

Used

Discussion

Bell County – BC#1 Tunnel and Garmeada

$1.2 million (development costs)

June 2001

This mine was
temporarily idled during 2001 after geologic conditions deteriorated in the
mine.  At the time of the closure, there remained significant reserves to
be mined.  In 2002, after further evaluation of the costs to reopen the
mine, it was determined that the reserves would need to be accessed from a
different mine location, resulting in write-off of these development costs (the
closing of the mine also resulted in the tunnel being of no use).

Bell County – Coal Silo

$756,000 (fixed
assets)

July 2001 – inspection

August 2002 – Management
determines to write-off silo

We inspected
and found that these clean coal silos were structurally deficient in 2001, and
determined that the silos could only be used at a reduced capacity.  In
August 2002, we decided to correct the deficiencies in the silo, and the costs
associated with the damaged silo were written off.

Bledsoe –

Shell Branch Mine and Preparation Plant

$211,000 (development
costs) and $2.4 million (fixed assets – preparation
plants).

Shell Branch –

March 2002

Preparation

Plant –

May
2002

This mine (Shell Branch) was a productive mine until a drop in the market caused
us to close the mine in 2002.  As a result of the closure of this mine, the preparation plant was also abandoned due to
the lack of economical reserves in this area.  The costs associated to relocate this plant made moving it uneconomical, and it
had no salvage value.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 7

Location

Costs

Last Month

Used

Discussion

Bledsoe –

Seam #7

$618,000

(development costs)

September

2002

In 2002, we determined that the quality of coal was lower than anticipated, and
that geologic conditions were worse than anticipated.  As a result of these factors, we decided to abandon the mine in
2002.

McCoy Elkhorn

– Tipple and

related facilities

$758,000 (fixed
assets)

1999

During 1999, this preparation plant was used until it was replaced by a preparation plant
facility closer to the mines.  In 2002, we determined that these facilities would not be reactivated, and, as a result of the
abandonment, the costs were written off.

Leeco –

Mine #78

$492,000 (assets)

February 2002

Mine #78 was acquired in January 2001.  The mine was activated and produced coal into
2002.  The opening to the mine also provided access to Mine #68.  This mine was not successfully operated as a
stand-alone mine, and the production-related facilities were shut down in 2002.  The remaining reserves associated with this
mine were accessed from a different mine (Mine #68).

We performed an
impairment test of our long lived assets as of December 31, 2002 under the provisions of SFAS No. 141.  Our impairment
analysis for 2002 did not contemplate any cash flows generated from the above assets.  No impairment charges were recognized
because the undiscounted cash flows provided from the use of the long-lived assets exceeded their recorded book values.

    H. Roger
    Schwall

    Novenber 9, 2004

    Page 8

Note – 1(u) Adoption of New Accounting Pronouncements, page
F-15

    3.

    We note your reconciliation of your 2003 asset retirement obligations.
    Tell us the reasons you indicate that no liabilities were incurred in 2003.
    It appears from your disclosures that mining activities were ongoing during
    the year, thus it is unclear how no amount of asset retirement obligations
    were incurred.
    Response:

In general, our
mines are deep mines and, once they are faced up (i.e., disturb the outside), there is no need to accrue any additional
liability because, even though mining operations are ongoing, there is no further surface disturbance.  The deep mines
represent substantially all of our asset retirement obligation.  During 2003, no mines were opened due to our financial
position.  We did have two surface mines in operation during 2003, both of which were operated by independent
contractors.  These surface mines were on property that we leased, and the independent contractors have the obligation to
remediate the property upon completion of the mining operations.  As a result, we incurred no
asset retirement liabilities in 2003.

______________________________________

            The Staff is requested
to direct any questions regarding this amendment and the responses made in this letter to the undersigned at (404) 815-6444 or to
Neil Falis at (404) 815‑6609.

            Thank you for your
assistance and prompt attention to this matter.

    Sincerely,/s/ David A. Stockton

David A. Stockton

Cc:       Peter T. Socha

            Michael
McCoy

            Kevin
Stertzel