The coal reserves reported herein are typically low-volatile bituminous coals which exhibit metallurgical coal characteristics. The primary coal-bearing formations on these Properties are of the Pennsylvanian System of the Carboniferous Period, and are part of the Pottsville Formation. The average seam thickness for coal horizons in these formations ranges from less than 1 foot to more than 5 feet. Within the subject Properties, coal zones can locally exceed 10 feet where individual coal beds merge to form a single mineable unit. Coal reserve deposits on the Properties average approximately 1,700 in depth below the surface of the Properties. Structurally, the strata form a homocline that exhibits a regional northwest-southeast strike and a regional southwestward dip of less than one percent. The seams are continuous across much of the Properties with complex zones of offset due to faulting. Seams generally retain normal stratigraphic sequences and are rarely modified from predeformational thickness.

Mineable coal beds within the subject Properties are typically low-ash, low-sulfur, highthermal content, and low-volatile bituminous coals. Although maximum seam thickness may reach over 10 feet, the seam thickness of the mineable zones in this evaluation generally averages 4.5 to 5.0 feet. These mineable zones include the Mary Lee and Blue Creek seams which define the coal reserves that are presented herein. These seams are present and continuous across the entirety of the Properties, with the exception of localized zones disrupted by faulting. These seams have been extensively deep mined on adjacent properties and appear, from CBM gas development wells, to demonstrate additional resource potential beyond the boundary of the Properties. The seams average approximately 1,700 in depth below the property surface and 1,200 below MSL.

The Mary Lee and Blue Creek coal seams are part of the Mary Lee depositional coal zone. The Mary Lee seam averages 18 inches in thickness across the subject Properties and is characterized by a single bench of bright-banded coal with no significant rock partings. The Mary Lee seam is stratigraphically 2.5 to 3.0 feet above the Blue Creek seam. The Blue Creek seam averages 4.5 feet in thickness and is characterized by bright banded coal with a boney zone near the middle of the seam. The seam contains no major rock partings. The total combined thickness of the Mary Lee to Blue Creek zone averages approximately 8.5 feet. The two seams are separated by a shale interval that averages 2.5 to 3.0 feet in thickness.

The metallurgical coal is mined using longwall extraction technology with development support from continuous miners. Mine No. 4 - underground operation with single longwall system.

The mining plan at the No. 4 Mine is based upon underground longwall mining methods, which incorporates the use of the room-and-pillar method which facilitates and supports the production from the longwall equipment. Two coal seams within close proximity of each other, the Blue Creek and Mary Lee seams are currently being mined simultaneously (locally referred to as “twin seam mining”), at a depth of approximately 2,000 feet. Both seams are suitable for metallurgical purposes and/or as a compliance steam coal.

Description:
- Seam - Blue Creek/Mary Lee;
- Seam height - 45 inches;
- Cutting height - 85 inches;
- Panel width - 1,115 ft;
- Panel length - 4,000-13,000 ft;
- Over-burden - 1,600 ft;
- No. of gate entries - 4;
- Depth of cut - 36 inches;
- Shearer - Joy 7LS-1D;
- Haulage system - Ultratrac 2000;
- Roof support yield (tons) - Joy 1,300;
- Face conveyor type (strand, motors) - JWR with CSTs, 42-mm chain, twin strand inboard, three 1,200-hp motors;
- Face conveyor width/speed - 1,000 mm/305 fpm;
- Stageloader type, width, speed - JWR, 1,300 mm, 420 fpm;
- Crusher - JWR.

Mine No. 4 preparation plant services the mine via a skip system which transports extracted coal from an underground bunker to the surface facility. The Mine No. 4 preparation plant has a capacity to process 1,300 raw metric tons per hour.

Mine No. 4 is a longwall operation that uses a longwall shearing machine for the 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 delivers the coal to a skip system. 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.

Mine No. 4 preparation plant has also routinely been upgraded with the latest technology. This preparation plant runs the most mode ........