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 ........

The Lower Mason seam is accessed via drift entry. Rich Gap is a thermal coal operation and operates on the WPP lease.

Production is scheduled for 255 days each year, which represents production on Monday through Friday and occasional Saturdays and idle holidays. On each day, one production section is scheduled to produce coal on two shifts; the third shift is reserved for maintenance and mine conveyor belt and power moves. The section is with one continuous miner available for production. Productivity is planned at the rate of 205 feet of advance for each unit-shift of operation. A total of 46 employees are assigned to the mine.

Principal production equipment on each section includes a continuous miner, two roof bolters, three shuttle cars, and two scoops. Coal is extracted from the production face with the continuous miner and hauled to the mine conveyor in shuttle cars. At the conveyor belt, the coal is discharged from the shuttle cars onto a feeder breaker for transfer onto the conveyor. The conveyors carry the coal to the outside, where it is stacked on the ground to await transport to the Kopper Glo coal preparation plant and load-out.

Expected annual production averages approximately 202,000 marketable tons. Rich Gap is projected to begin operations in 2018 and continue into 2021, after which the equipment and personnel will proceed to the Ben’s Branch Mine.

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