Leer South is currently mining the Lower Kittanning seam and the Clarion seam.

The Lower Kittanning seam has been heavily mined to the east and south of current mining in the Kitt mine. The Leer South Lower Kittanning reserve is situated from Mansfield, West Virginia, in the south and extends north to Rosemont, West Virginia. The reserve extends from US Route 119 on the east side to Glade Run on the west side of the reserve. The reserve is approximately 9.5 miles in length (northwest to southeast) and approximately 5.9 miles wide, (northeast to southwest).

The Lower Kittanning seam consists primarily of a dual-bench horizon (tagged as 4600) with a thin boney coal or carbonaceous shale parting between the two benches, (typically less than 1 foot in thickness). An overlying Rider seam (tagged as 4650) is present primarily within the southern portion of the mine plan that can add an additional 2.7 feet of coal to the Lower Kittanning seam. Drill holes show the seam thickness within the reserve boundary ranging from 0.0 to 6.6 feet, (10.9 feet including the rider). The Lower Kittanning seam thins to less than 3.0 feet to the west of the Leer South Lower Kittanning mine plan.

The coal produced at Leer South is typically High Volatile (>31% volatile matter) bituminous coal. Due to the historical value of the Lower Kittanning and Clarion seams as high-volatile bituminous coals, both seams have been extensively mined in the region. Multiple coal benches are found within both the Lower Kittanning and Clarion horizons within the projections for the Property. Due to relatively high sulfur and high ash middling material, neighboring producers (including Arch’s Leer property) produce two products, including a low-ash coking coal and high-ash, high-sulfur thermal blend product.

Lower Kittanning Seam
The 4650 (Rider) and 4600 (Main seam) benches are splits of the Lower Kittanning horizon present on the Property and within the projected mining areas. Due to variations in the splitting and merging characteristics of these coal beds, two mining configurations are present within the Lower Kittanning horizon.

1. Main seam only (4600 bench), ranging from 0.00 feet to a maximum of 9.00 feet, typically from 4.50 to 5.00 feet within the longwall panel areas. The Lower Kittanning seam consists primarily of a dual-bench horizon (tagged as 4600) with a thin boney coal or carbonaceous shale parting between the two benches, (typically less than 1 foot in thickness). Main seam only mining occurs
where the Rider is either not present or is located above the assumed 7.00-foot average cutting height of the longwall shearer.

2. Main seam with overlying Rider seam (4600 + 4650), or Full seam. Mining of the two benches occurs where the Rider is located within the 7.00-foot average cutting height of the longwall shearer. Under this scenario, the parting between the two benches ranges typically from 1.00 to 2.00 feet, and the resulting maximum mining height (assuming that the full extent of the Rider seam is excavated) approaches 10.90 feet.

The Lower Kittanning seam is situated below drainage throughout the Property and is accessible by existing slopes and shafts. Composition of the mine floor varies across the projected mine area, consisting primarily of shale, sandy shale, and occasionally shaley fireclay. The lithologic composition of the immediate roof strata exhibits greater variability due to the presence (or absence) of the Rider seam but consists primarily of dark gray to black shale which coarsens upward to sandy shale. As noted above, the Rider seam can occur within 1-foot of the top of the Main seam where it is included within the mineable section but may occur more than 15 feet above the Main bench.

Clarion Seam
The Clarion seam is present as multiple benches across the Property and within the projected mining areas, identified as follows in descending stratigraphic order: 4000 (uppermost and thickest benches with lowest sulfur content), 3800 (middle bench with intermediate sulfur content, also referred to as the upper leader), and 3400 (lowermost bench typically with highest sulfur content, also referred to as the lower leader or “rash”).

The 3800 and 3400 benches exhibit significantly greater variability in thickness than the 4000, and in some locations, are entirely absent. Due to variations in the splitting/merging and quality characteristics of these coal beds, and in conjunction with the minimum continuous miner cutting height (5.50 feet), two mining configurations are present within the Clarion horizon.

Furthermore, due to variations within the database regarding the stratigraphic position of the 3800 and 3400 seam tags, and the manner in which core samples were analyzed, two additional engineering tags have been applied to the database (Clarion Upper Floor, or “CLRUF”, and Clarion Lower Floor, or “CLRLF”) in order to mark the position of the mine floor under two separate mining scenarios as described in Items 2 and 3 below. (Each of these engineering tags has a thickness of zero.)

1. The 4000 bench only ranges from 1.00 feet to 6.00 feet and is typically 4.00 to 5.50 feet within mine plan areas. It consists primarily of a dual-benched horizon with thin boney coal or carbonaceous shale parting (from 0.15 to 1 foot in thickness) between the two benches. This seam is mined alone where the underlying 3800 and 3400 benches are either absent or are practically beyond the mineable limit of the continuous miner. Wherever the thickness of the 4000 bench is less than 5.50 feet, the CLRUF and CLRLF engineering tags have been inserted below the 4000 Bench at a depth that equates to a minimum mining height of 5.50 feet (refer to Exhibits 1 and 2 in the Appendix of this report).

2. The 4000 + 3800 (upper leader) typical range from 5.70 to 7.00 feet within mine plan areas. The base of this mining scenario is defined by the CLRUF tag. A shale parting occurs between the two benches, ranging from 0.50 to 1.00 feet in thickness. Immediate floor strata are typically coal belonging to the high-ash 3400 bench. NOTE: This presentation of this modeling and reserve configuration is presented for informational purposes only. Reserves are not projected exclusive of the lower leader rash zone. While mining practices can periodically isolate the lower rash zone and exclude it from the mineable section, the report authors have opted to include the lower rash zone tonnage and associated quality degradation for reserve
computations.

3. The 4000 + 3800 (upper leader) + 3400 (lower leader): typical range from 7.00 to 8.50 feet within mine plan areas. The base of this mining scenario is defined by the CLRLF tag. A thin shale parting occurs between the 3800 and 3400 benches, ranging from 0.00 to 0.10 feet in thickness; the immediate floor underlying the 3400 bench is dark gray to black shale, with occasional fireclay.

The Clarion seam is situated below drainage throughout the Property and is accessible by existing slopes and shafts. Depending upon the thickness of the 4000 bench, and the underlying 3800 and 3400 benches, the composition of the mine floor can vary significantly across the projected mine area, from coal to carbonaceous shale to clayey shale or fireclay.

The lithologic composition of the immediate roof strata consists of dark gray to carbonaceous shale which typically coarsens upward to sandy shale and occasionally sandstone. Moreover, some areas of the mine roof demonstrate the influence of sandstone paleochannels, where finer-grained clastics have been entirely scoured within the immediate roof of the seam and replaced with sandstone strata.

The Leer South mine is active with five continuous mining sections and one longwall section currently operating in the Lower Kittanning Seam and four continuous miner units operating in the Clarion Seam. Continuous Miner operations at Leer South by Arch and its predecessor have been ongoing for many years. Longwall Mining has been ongoing for a number of years at Arch’s nearby Leer Mining Complex which operates in the Lower Kittanning Seam, with longwall mining commencing at Leer South in 2021. The mine plan and productivity expectations reflect historical performance and efforts have been made to adjust the plan to reflect future conditions. MM&A is confident that the mine plan is reasonably representative to provide an accurate estimation of coal reserves. Mine development and operation have not been optimized within the TRS.

Longwall production is scheduled for approximately 343 to 363 days each year, which represents production on seven days per week with allowances for holidays and longwall moves. On each day, the continuous mining sections and longwall produce coal on two shifts with an idle maintenance shift. The sections are configured as regular sections with one continuous miner available for production on each section. During mains development, two production units are brought together to work as a Super Section arrangement (two CM units operating on the same conveyor belt feeder). Productivity is planned at the rate of 100 feet of advance per shift of operation for the single continuous miner sections, 180 feet of advance per shift of operation for the Super Section miner sections and 50 feet per day of longwall retreat. Productivities are expected to increase moderately over time and reasonable ramp up expectations to increase productivity are included in the Arch model.

The longwall shearing machine is used for extraction of coal at the production face. A chain conveyor is used to remove coal from the longwall face for discharge onto the conveyor belt which then ultimately deliver it to an underground storage bunker. Development for the longwall is conducted by the extraction of coal from the production faces using continuous miners and haulage using shuttle cars to a feeder-breaker located at the tail of the section conveyor belt. The feeder-breaker crushes large pieces of coal and rock and regulates coal feed onto the mine conveyor. Roof-bolting machines are used for to support the roof on the development sections of the longwall mines. Roof-bolting machines are used to install roof bolts, and battery scoops are available to clean the mine entries and assist in delivery of mine supplies to work areas. Other supplemental equipment such as personnel carriers, supply vehicles, etc., are also used daily.

Mine conveyors typically range in width from 42 inches to 72 inches. Multiple belt flights are arranged in series to deliver raw coal to the underground storage. Along the main and sub-main entries and panels, a travel way is provided for personnel and materials by rubbertired equipment or on rail. Leer South utilizes a slope belt in order to transport ROM coal from the Lower Kittanning seam level underground storage bunker through a haulage slope to the underlying Clarion Seam workings and then through the Clarion Seam slope to the surface where the coal may be sampled, crushed and washed in the preparation plant and stockpiled to await shipment. Surface ventilation fans are installed as needed to provide a sufficient volume of air to ventilate production sections, coal haulage and transport entries, battery charging stations, and transformers in accordance with approved plans. High-voltage cables deliver power throughout the mine where transformers reduce voltage for specific equipment requirements.

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Arch currently operates a coal preparation plant at Leer South. The Leer South Plant operates at a feed rate of approximately 1,600 raw tons per hour (tph). Run of mine (ROM) coal is sent from the slope to the Raw Coal #1 stacking tube. From that point, it is reclaimed, and processing begins with the ROM material being screened at 3 inches. Oversized material is run through a rotary breaker. The rotary breaker rejects are discarded as a refuse product. Material passing the screen and rotary breaker is sent to the Raw Coal #2 stacking tube for further processing.

The material from the Raw Coal #2 stacking tube is reclaimed and sent to the processing plant where it is screened and washed based on relative sizes. Cleaning circuitry includes a heavy media vessel (plus ½ inch material), heavy media cyclone (1/2 inch by 1-mm material), spirals (1-mm by 100-mesh), and column flotation (100-mesh by 325-mesh). All vessel and cyclone materials are initially washed at a high gravity to ........