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, with the exception of the Cumberland Gap seam, which is below drainage. Coal seams are characterized by both single bench and multiple-bench coal horizons with parting (non-coal) material varying by seam and area. Seam parting is common within the coal seams on the Property with intra-seam parting material increasing drastically in some areas. Roof strata are typically shale or sandy shale with zones of sandstone roof being common. Floor strata are typically sandstone, shale, sandy shale, or fireclay.

Cooper Ridge is presently in the process of being permitted. The proposed mining activity is in the Joyner (JOY) and Upper Mason (UM) seams. HWM activity will be limited to areas of the UM seam of suitable thickness. Previous mining activity is evident on other Mason seams (Mason and Lower Mason), but difficulty in defining the extent of their depletion precludes inclusion of these seams in the reserves for this property.

Coal seams that outcrop along the hillside or that are located near the surface may be considered for mountaintop removal or contour surface mining methods. The surface mining methods allow recovery of resources that may lie too close to the surface for safe underground mining. Coal seams that are too thin to be underground mined economically can often be recovered successfully with surface mining methods. Contour mines advance along the coal seam outcrops with overburden back-stacked in the pit to eliminate the highwall, and excess material is placed in valley fills; however, Kopper Glo currently does not utilize valley fills for overburden storage. Total remaining surface mine production for the Kopper Glo mine plan and financial model is 1.41 million tons.

The active Clear Fork surface mine is a contour and highwall mining operation, and was modeled by Cardno as a contractor-operated mine. The Cardno model is based on the assumption that the Cooper Ridge and Davis Head of Hogcamp Branch mines will be company-operated contour and highwall mining operations. Cardno’s mine plan is based on the Clear Fork Mine being operated by a mobile equipment spread built around a Komatsu WA800 front-end loader and Komatsu 475A tractor, along with a Caterpillar 345C excavator. The company-operated Hitachi EX1900 shovel, which is the principle excavator for the second fleet of mobile surface equipment operating on the Kopper Glo property, is projected to operate at the end of 2015 at Cooper Ridge once the permit is approved. The surface mine operations are linked in the financial model by the progression of equipment spreads and crews from reserve area to reserve area. The configuration of the two equipment spreads, or fleets, presently utilized is maintained for the future mine projections. Surface mining activities are projected to continue at annual production rates ranging from 161,000 to 476,000 tons through year 2019.

Highwall mining production is forecasted to continue through 2018. A single company operated highwall mining unit is projected to be transferred to Clear Fork and begin operation in the first quarter of 2015. Cardno included a second company-operated highwall mining unit in the mine plan, projected to begin operation at Cooper Ridge in the first quarter of 2016. Highwall mining is also projected for the Davis Creek Head of Hogcamp Branch area. Highwall mining production will be sold as thermal coal.

Production from surface mines is crushed for railroad car loading and direct shipment to customers without coal preparation. All underground mine and highwall mining production will be washed at the Kopper Glo coal preparation facilities.

Coal is transported to the coal preparation plant and load-out facilities by coal trucks and conveyor belts. Surface mine production is transported by coal trucks to the truck dump and crushing facilities for railcar loading at the Kopper Glo unit train load-out.

Production from the active Double Mountain Mine and projected underground and highwall mines will be transported by coal trucks to the Kopper Glo plant. A new coal preparation plant will be constructed when the Cumberland Gap mine commences production.

Raw coal is fed directly into the coal preparation plant via a truck dump. Stockpile capacity includes approximately 20,000 tons of raw coal storage and 40,000 tons of clean coal storage at the plant.

The Kopper Glo Coal Preparation Plant is designed for 350 tons per hour (tph) raw coal feed. Raw coal is screened to provide sized material to each of three cleaning circuits.

Clean coal and refuse products are dewatered with vibratory screens, sieve screens, and centrifugal dryers. The thickener underflow is concentrated by belt presses and is transported to the combined refuse disposal facility by conveyor belt. The combined refuse disposal facility, located approximately 1.2 miles southwest of the plant on the Rock Creek, is reported to have life-of-mine capacity.

Clean coal is transported by a 42-inch wide conveyor, approximately 5,400 feet, to the 7,000-ton silo located at the load-out. The Kopper Glo load out facility is comprised of a single car load out and a batch weigh load-out. Coal is sampled and batch-weighed for loading railroad cars at the rate of 5,400 tph.