The coal resources and coal reserves reported herein are located in the western foothills of Alberta where a stratigraphic sequence of approximately 150 m of Lower Cretaceous non-marine clastic sediments contain seven coal seams ranging in thickness from 7 metres to 1.5 metres. The Company coal leases are within a larger area of economic coal measures known as the Smoky River Coalfield.

The deposit is extensively deformed by the compressive tectonics of the Laramide Orogeny, with thrust faulting and folding creating thickened coal zones up to 5 times the stratigraphic thickness of the seams. Fault throw is up to 2000 m, and fold amplitudes are up to 1500 m. Dips range from flat to vertical, with the limbs of major folds being generally deformed by smaller scale parasitic folding and imbricate small scale thrust faulting.

Surface resources areas are found within the most severely structured zones, where thickening of the coal seams under compressive tectonic forces is extensive. Underground resource areas are found is less structured areas where flat bottomed synclines, or gentle anticlines with limb dips of less than 25 degrees, lie between the more structured zones. These zones of gently dipping coal measures can be up to 2 km in width and in general do not show extensive structural thickening of the coal seams.

Coal quality of the various coal resource areas is well understood from an extensive database of exploration core sampling, explorat ........

The previous owner of the CST Canada Coal Limited property suspended surface operations in the No. 8 Mine February 1, 2015 and suspended underground mining operations in the No. 12 South B2 mine December 24, 2015.

After approximately 2 months of haul road rehabilitation and waste dump foundation preparation, completed while waiting for the lifting of the surface mine suspension by the Alberta provincial government regulatory authority, mining resumed in the West Extension pit phase of No. 8 Mine. From this resumption July 18, 2018 surface mining operations have been continuous until now.

The surface mines employ the truck and shovel operation generally employed in mountainous areas. The overlaying waste rock is drilled and blasted and then removed in benches. Bench height is 10 or 15 metres, depending on the size of loading units used. The waste is trucked to designated waste storage areas, located within prior disturbed areas wherever practical.

The last layer of waste is then cleaned off coal seams using tracked dozers and smaller backhoe units, and the coal loaded onto coal haulage units for transport to the washing plant. Usually coal from more than one source is produced at the same time to enable a proper coal blend designed to meet customer specifications.

The most recent underground mine at No. 12 South B2 was complete for the 7 Seam as of January 24, 2015, and the portal was sealed as per regulatory requirements, with fina ........

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