Summary:
Deposits
Sediments of the Upper Pottsville Mary Lee coal zone are Lower Pennsylvanian in age and comprised of cyclic sequences that include sandstone, siltstone, shale, and coal. Located within the middle of the Black Warrior Basin stratigraphic sequence, the Mary Lee and Blue Creek horizon is situated below drainage throughout the Property and is accessed by shafts.
The lithologic variability of the Mary Lee - Blue Creek sequence and enclosing strata is discussed below:
> The New Castle seam s present approximately 20 to 80 feet above the Mary Lee seam.
> Lithologic composition of the roof strata varies throughout the Property, consisting primarily of a coarsening-upward sequence of shale or sandy shale, with occasional sandstone channels located within the immediate or main roof of the Mary Lee seam.
> In areas where sandstone occupies the immediate roof of the Mary Lee seam, seam scouring may locally occur. Where sandstone channels are present within 4 to 6 feet above the Mary Lee (roof bolt horizon), there is potential for increased drawrock conditions and roof instability beneath the sandstone/shale contact.
> Thickness and composition of the stratum comprising the Middleman are variable, ranging from: shale, carbonaceous shale, o fireclay, to sandy shale.
> Areas, where the combined thickness of the Mary Lee - Blue Creek horizon is less than a minimum continuous miner cutting height (7.0 feet), are generally rare, and where this occurs, roof (and/or floor) strata are expected to be excavated as out-of-seam dilution (0SD).
> Areas where the thickness of the Blue Creek seam is less than a minimum longwall cutting height (5.0 feet), and only the Blue Creek seam is planned to be longwall mined, occur in the Northeast and Central areas.
> Compositional variability and thickness of the floor strata of the Blue Creek seam in a fining-upward sequence varying from: very soft, thick fireclay within the immediate floor, to sandy fireclay, shale, sandy shale, and finally sandstone within the first three feet below the seam. Fireclay varies in thickness, from less than a foot to more than 10 feet. Due to inherently high clay content, this stratum is typically moisture-sensitive and may degrade when exposed to water accumulation on the mine floor.
Mineable Seam Thickness Configurations
The mineable seam configuration of Mine No. 7 consists of the Mary Lee, Middleman, and Blue Creek seams, also referred to as “twin seam” mining, with the following thickness ranges.
> The Mary Lee typically averages 1.5 feet throughout the mine plan area.
> Between the two seams, the “Middleman” parting averages approximately 2.5 feet within areas where the Mary Lee and Blue Creek seams are projected to be longwall mined together; the parting generally thickens to the south.
> The Blue Creek seam, which typically represents the better metallurgical quality than the overlying Mary Lee seam, averages approximately 3.5 feet in thickness within the current resource areas. However, in the southern area, the Blue Creek seam thickens substantially, averaging 7.0 feet in thickness.
> The combined thickness of the Mary Lee through Blue Creek interval averages approximately 7.5- feet within areas where both seams are projected to be longwall mined together.
The Blue Creek seam regionally is subject to somewhat more erratic thickness variation than the overlying Mary Lee seam. Reasons for this are not entirely clear, but may be the result of channel incision, differential compaction, presence of contemporaneous (“growth”) faults, or other paleographic factors present during or subsequent to deposition of the Blue Creek paleoswamp.
Mineralization
Regional coal rank in the BWE generally ranges from a low-volatile coal in the southeastern portion of the basin to a high-volatile coal to the northwest. Due to the value of the Mary Lee and Blue Creek seams in the metallurgical coking coal market at the Mine No. 7 operation (and adjoining mines) to the south and east of the Property, the subject coal seams have been extensively mined in the region. Laboratory data for the Property on a dry, clean coal (1.50 - 1.55 float) basis indicates a typically low to medium-volatile bituminous coal product.
Warrior Met reports that the current market placement at Mine No. 7 is generally based on the Premium Low-Volatile Indices (PLV). Mine projections suggest that Mine No. 7's volatiles could gradually increase through reserve exhaustion, though Warrior Met anticipates that the degree to which this will impact derivation from the PLV will be minimal. The utilization of two longwalls at Mine No. 7 allows Warrior Met to strategically sequence the operation to blend coals of various volatiles. While this exercise was beyond MM&A's scope for reserve definition, the flexibility of two producing longwalls is notable. MMEA, with support from Warrior Met, has used the PLV for the pricing of coals throughout the life of the operation in the prefeasibility economic analysis presented herein.