The Property is situated in the southern portion of the Appalachian Basin, which contains two-fifths of the nations’ bituminous coal deposits and extends over 900 miles from northern Alabama to Pennsylvania.

The primary coal-bearing formations on the property are Carboniferous in age, being in the Pennsylvanian system, which includes the Breathitt Formation. The average mineable seam thickness for coal horizons in these formations ranges from 1 foot to over 6 feet. The coal seams are generally continuous and non-complex but may vary in thickness and may also be locally absent. Seams retain normal stratigraphic sequence throughout the Property and no evidence has been observed that seams have been modified from pre-deformational thicknesses.

Mineable coal seams within the Property are typically low-ash with the exception of the Joyner seam, and highthermal content bituminous coals. The maximum seam thic ness may reach over 6.0 feet in the Upper Jellico underground mines; however, the average mineable thickness of the seams in this evaluation generally ranges from 1 foot to 4 feet. Seams are generally continuous, but may be locally absent. Secondary discontinuity due to erosional features is present in most areas, resulting in seam outcropping, or visible exposure of the seam at the surface. Other than oxidation of the coal exposed at the surface, erosion of the seams has no significant impact on the mineralized deposits. All seams outcrop on the property ........

MSHA status was changed to NonProdActive on October 16, 2017.

The resource base for the Property consists of seven coal seams extending from the Joyner seam at the top of the stratigraphic column down through the Cumberland Gap seam . The topographic location of the many coal seams and the physical characteristics of the coal seams provide abundant opportunities to apply several of the coal mining methods routinely employed in Southern Appalachia.

Underground mine reserves are mined using continuous mining methods. One mine is active in the Rich Mountain seam (Double Mountain Mine). Production sections are configured as single-unit sections, employing one continuous miner and one roof bolter per section. The basic production design employed at the active mines was applied to projected operations where possible. In addition to future production at the active mine, underground mining was projected at four other resource areas in the Lower Mason, Jellico, seams. The mine plan and financial model includes 12.3 million underground tons.

The Double Mountain Deep Mine, an underground mine utilizing the room and pillar mining method. [2016 MDA, p. 10]

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