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III IIIIIIIIIIIIIIII 999 MEIIORANDII![ FROK: Kerr Coal Company DATE: November 28, 1994 BDHJECT: Historic Overview QENERAL BAC1CtiROIIND The Marr Mina is located Colorado. eight miles east of Walden, The dominate structure in syncline, referred to as the Johnn is relatively narrow with steepl mined is commonly referred to as the coal seam generally increases degrees to about 80 degrees. The coal ranges from 35 ft. to 55 ft. western limb of the syncline approximately 2200 ft., levels off limb of the syncline to the sur the area is a NW-SE trending y Moore Syncline. The syncline y dipping limbs. The coal seam the "Suddeth Seam." The dip of as it moves north from about 55 stratigraphic thickness of the The coal seam outcrops on the and extends to a depth of and then ascends on the eastern face at approximately the same angle, outcropping some 500 ft. away at the southern end and some 1.5 miles away at the northern end. initial aiainq oparationa began in 197a on non-federal property, producing approximately 8,000 tons of coal in 1974 from the initial open pit (commonly called the "Marr Pit"). Production averaged about 20,000 tons per month through mid-1977. A tipple was built on the Union Pacific rail line in Walden. The line hauled coal to Union Pacific's main line in Laramie. 1CERR COAL In Auquat o! 1977, Energy Fuels acquired the Mina and immediately acquired a new equipment fleet designed to allow deeper mining. Kerr Coal Company ("Kerr"), an affiliate of Energy Fuels, took over control of operations in August of 1977. Sales of coal from the Mine in 1977 were approximately 350,000 tons. Energy Fuels believed the Mine could successfully produce and sell 750,000 tons to 1 million tons per year. Due to the very low sulfur content oP the coal (less than .308 sulphur), Energy Fuels believed that the impending Clean Air Act's requirements would enhance marketing efforts.