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(. • present capacity of 100,000 to 150,000 tons per year. Mine life of the tract is 7 to 10 years at this level of production. Equipment - The anticipated level of production rill be accomplished rith two continuous miner units, one producing coal 10 unit-shifts per week, the other 10 - 15 unit shifts per veek. Basic equipment is listed below: 2 Continuous Miners 2 Roof Bolters 9 Shuttle Cars 2 Feeder Breakers 2 Power Centers 2 Sump Pumps 36 Inch Conveyor Belt System 2 Auxiliary Faas 2 Utility Vehicles 1 LHD Surface Facilities Yent Tubiaq Manporer - Manpower to operate 2 production sections one shift per day, one maintenance shift, and surface and office staff totals 40 employees. An additional 8 to 10 employees could be required at full production to operate an additional production shift on one section. - Surface Facilities and Transportation - No nev surface facilities rill be required if National King is the successful bidder. Blue Flame would be required to construct a tipple, office, rarehouse, bath house, scale, and a septic tank and drain field. Additionally, the-electrical transmission system, mine portals and access road rill require upgrading. • All coal will be trucked from the mine site as the nearest railroad is at Gallup, Nex Mexico. Currently an average of 22, 26-30 ton trucks per day are required at National Ring Coal's operation. This vould increase to approximately 33 trucks per day at full production of 150,000 tons per year. Additionally; an undetermined number of pickup trucks and small trailers haul coal for the domestic market. Estimated Recovery - Recovery should meet or exceed 55 percent of the in-place/minable reserve base of 1,833,000 tons. Potential Markets - National Rinq Coal is supplying the available market at present, which primarily consists of cement plants in New Mexico and Arizona, the Durango-Silverton Narrox Gauge Railroad, and domestic coal users. If Blue Flame is the successful Bidder, it rill be probably be supplying the same market that National Ring Coal ie cnrreatly supplying. The lack of any other coal mines in the Durango area indicates that no other coal markets exist in the immediate area due to the level of industry in the area and the distance from rail haulage MARIMUM ECONOMIC RECOVERY DETERMINATION It has been determined by HLM mining engineers that Maximam Economic Recovery (MER) of this Federal Lease tract can be achieved by underground mining using the room and pillar method of mining as described in this • report.