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.

CAPP currently operates the Double Mountain Deep Mine, an underground mine utilizing the room and pillar mining method, the Straight Creek Mine, a surface mine utilizing contour and auger mining methods, and the Cooper Ridge Deep Mine which is currently developing the main line entries. CAPP operated the Clear Fork Mine, a surface mine utilizing contour and highwall mining methods during 2015.

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.

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. The active Clear Fork Mine is a contour mining operation within the Rich Mountain A Lower and Upper Jellico seams. 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.

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. The active Clear Fork Mine is a contour mining operation within the Rich Mountain A Lower and Upper Jellico seams. 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. Equipment replacement is scheduled at appropriate times over the period for the equipment owned by Kopper Glo. Capital replacement expenditures for the equipment currently operating at Clear Fork are assumed by Cardno to be the responsibility of a contractor and therefore are not included in the financial model.

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.

All of the highwall mining activity will be linked to active contour surface mining at each of the reserve areas. Majority of the contouring involves second cuts on existing highwalls created prior to reclamation requirements of Surface Mining Control and Reclamation Act of 1977 (SMCRA). The second cuts vary in width based on highwall and strip ratio limitations. Additional room, if necessary, to accommodate the highwall miner will be provided by the existing pre-law bench. Drive penetration in the mine model ranges from 300 feet to 600 feet. The advance of highwall mining along the highwall is based on a production level of two highwall miner holes per day. The minimum cutting height assigned in the model is 36 inches. Annual production from the mine plan ranges from 130,000 tons to 211,000 tons and averages approximately 153,000 tons. Highwall mining staffing is modeled based on nine employees for each unit.

All highwall mining production is transported by contract trucking companies to the Kopper Glo coal preparation facilities for washing and railroad car loading at the batch load-out.

Underground mine reserves are mined using continuous mining methods. One mine is presently 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, and Cumberland Gap seams. The mine plan and financial model includes 23.64 million underground tons.

The projected mines are set-up similarly to the present operations. Each mine is scheduled to operate one to four production sections. The production sections are configured as single continuous miner sections.

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.