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The total remaining recoverable reserves in coalbed 1 as of May 26, 2000 contained on <br />leased lands controlled by National King Coal are approximately 1,900,000 tons. <br />Production Data - The current operation mines entirely within the Upper Menefee coal seam <br />just south of the East Alkali Tract. The current mine is capable of producing up to 300,000 <br />tons/year, and maximum annual federal production to date was 262,481 tons which occurred <br />in 1998. The total mine production that year was 283,211 tons. The 2000 production rate <br />after the first quarter indicates the total production for the mine would be about 160,000 <br />tons/year. The ideal yearly production for NKC would be 300,000 tons per year in order to <br />meet financial cash flow demands for the operation. <br />Life of Mine - The recoverable reserves currently available to the King Coal mine operation <br />include 1.6 M tons of federal coal and 0.3 M tons of fee coal which total about 1.9 million <br />tons and would provide about 6.3 years of expected mine life at the 300,000 tpy production <br />rate. <br />Manpower - The current manpower level averages about 33 people. A recent layoff has <br />reduced the manpower to the lower level but this is considered to be a temporary situation, <br />awaiting greater market demand for the coal and increasing the manpower level up to 50 <br />employees.. <br />Coal sales for 1999 expressed as a percentage are as follows: <br />1. <br />Cement Production <br />80% <br />2. <br />Electric Utilities <br />11 <br />3. <br />Domestic <br />4% <br />4. <br />Tourist Trains* <br />2 <br />5. <br />Other <br />30 <br />*As a note of interest, National King Coal supplies the narrow <br />gauge railroads (tourist trains) in Durango, Colorado and Chama, <br />New Mexico. <br />0 <br />