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Report on GCC Energy Coal Transport Options <br />Method <br />Relative Capital <br />Relative <br />Level of <br />Environmental <br />Cost <br />Operating Cost <br />Production <br />Considerations <br />Over -the -road <br />Low to GCC — <br />High <br />Low — Small <br />Noise, dust, <br />trucks <br />use contractors <br />units 30 t <br />many trips <br />Off-road trucks <br />Low to GCC — <br />Medium/high <br />Medium — large <br />Private road, less <br />use contractor <br />units +100 t <br />trips <br />Conveyor belt <br />Medium <br />Low <br />Medium to high; <br />Quiet; fixed <br />best for 24/7 <br />position; away <br />operation <br />from public <br />Aerial <br />Very High <br />Low <br />Medium; best for <br />Overhead; quiet; <br />tram/conveyor <br />24/7 operation & <br />limited footprint <br />rugged terrain <br />Pipeline <br />Very High <br />Medium/low <br />Medium/high <br />Requires water <br />and dewatering <br />sys; quiet; <br />limited footprint <br />Discontinuous (mobile equipment) methods, such as over -the -road or off-road trucks allow the <br />mine operator to limit capital investment by using the maximum available time for transport <br />while matching number of units with production. Depending on required improvements and <br />maintenance, over -the -road trucks using public road may reduce capital investment to GCC <br />through contracting with operators who have their own equipment. Use of off-road trucks may <br />increase capital investment as compared to over -the -road truck because a single use roadway <br />would be required. In addition, there are fewer operators who would have their own equipment <br />willing to contract with GCC. <br />In the situation of GCC Energy, the number of truck trips across the existing public road is <br />significant because of the small volume of coal (25 to 30 tons) that can be carried by individual <br />over -the -road trucks. This negatively impacts the public road and other users as most county <br />roads are usually not designed and constructed for this level of use considering air quality, <br />turning radius, grades, line -of -sight, traffic controls and other considerations. The highest annual <br />production reported from King II Mine was in 2014 at 970, 780 tons. Even though this is a high <br />number of over -the -road truck trips, this is a relatively low annual production for a coal mine. <br />If off-highway trucks are used over a private single -use road, the total number of trips would be <br />reduced as compared with over -the -road trucks. Off-highway trucks individual capacity is from <br />50 to 250 tons depending on type of units available. Typical capacity would be about 100 tons. <br />Use of continuous haulage methods such as conveyors, provide low operating cost transport but <br />high capital investment for this single use method. In the case of GCC Energy production, if the <br />highest annual production volume is distributed over the available operating time, the average <br />hourly rate would be approximately 125 tons. For bulk material transport, this is a relatively low <br />value and thus, the advantage of low operating cost is adversely impacted by this low production <br />MINE ENGINEERS, INC. 5 December 15, 2015 <br />