2017-11-01_PERMIT FILE - C1981035 (22)

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2.05.2 - OPERATION PLAN - ESTIMATED AREA FOR LIFE OF MINE OPERATIONS PRODUCTION METHODS AND EQUIPMENT The King II Mine is an underground coal mining operation employing room and pillar design and techniques for extraction of the coal resource from the upper Menefee seam. The engineering and design of the mine require that coal reserves be divided into sections or panels convenient for extraction and in alignment with the mains to facilitate access and extraction. Rooms (larger open areas from which coal is extracted) are developed. Coal pillars are left at the periphery of the rooms to support the main roof. The size, location, and number of rooms and pillars are determined by the physical characteristics (thickness, load bearing capability, presence of non -coal inclusions) of the coal in a given location of the mine. With the completion of a given panel or section (when all minable coal has been extracted), the remaining pillars are mined as the operation retreats from the panel. In this way, the recovery of the coal is maximized. Site work began at the King II mine April, 2007. The first coal was extracted July 25, 2007. Proven coal reserves at present are approximately 5 million tons. Annual production during 2016 was 628,952.60 tons. Total shipping from the mine is governed by La Plata County Special Land Use Permit PL2012-0089 and associated Road Improvement Agreement (RIW) (see Appendix 2(1). The annual projected maximum production of coal as per said permit is approximately 1,070,000 tons (depending on average loaded tons per truck) upon completion of Phase 5 or the RIW, based on approximately 28.5 average loaded tons per truck, 120 trucks per day, 6 days per week. Various other agency permits limit production to 1.3 million tons. Total life of mine at maximum projected production is estimated to be 5 years (August, 2022). The coal is mined using one or two continuous mining units (sections). These sections consist of one or two continuous miners, 2-4 shuttle cars, one or two dual boom roof drills (bolter machines), a feeder/breaker belt feeder, and a 12,470- 950/480 volt power center. After coal is cut from the face by the continuous miner, it is loaded into the shuttle cars for transporting to the conveyor belt and removal from the mine. OPERATION DESCRIPTION The King II Mine, being an underground operation, affected the majority of surface lands during the construction of surface facilities. The lands affected by the construction of mine surface facilities and mine access is specifically described in Sections 2.04.3 (Site Description and Land Use), 2.04.9 (Soils), 2.04. 10 (Vegetation) and 2.04.11 (Fish and Wildlife Resources) of this document. All areas of potential and actual surface disturbance for the King II Mine have been incorporated into the permit document. GCC Energy does not anticipate obtaining a new, separate five-year permit for any areas other than those depicted or described in the King II permit at this time, nor are changes in operations or facilities anticipated at this time. GCC Energy, LLC King II Mine Section 2.05.2 Page 1 July 11, 2017 (RN -07)