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7 <br />Memorandum Re: Kerr Historical Overview <br />November 28, 1994 <br />Page 3 <br />with the base sales contract it needed for continued expansion of <br />its operations. <br />In 1979, Kerr produced and sold 686,000 tons of coal and <br />employed an average of 115 hourly and salaried people. Mine plans <br />were developed on the basis oP an annual production of 750,000 <br />tons par year. Mine life was projected through 1989 at this rate <br />of production. To assist in mine planning for this level of <br />production, a contract was issued to Flour Mining & Metals, Inc. <br />to analyze mining methods, reserves, and costs of mining the <br />entire northern extension of the Suddeth Seam on the Johnny Moore <br />Syncline. <br />At the rate of production in 1979, the coal reserves on the <br />non-federal leasehold would be exhausted by early 1981. <br />Permitting. Upon acquisition of the Mine by Energy Fuels, a <br />permit issued by the State of Colorado allowed mining on some 360 <br />acres of the non-federal leasehold. With the success of Kerr's <br />marketing efforts with Union Electric and others, efforts were <br />begun to secure a permit for the entire area to the north that <br />Kerr planned to mina. <br />Zn September of 1980, within a month after issuance of <br />federal lease C-22777, Kerr submitted an application for a mine <br />permit to the Colorado Mined Land Reclamation Division and the <br />Office of Surface Mining. A Colorado permit (C-OOS-80) was iasu~d <br />on B~bruary is, 1981 and 08ri I[in~ Plea Approval Co-0002 ra^ isauad <br />oa March 20, 1981. <br />The plan that was approved by the state and federal permits <br />provided for extension of mining to the north in a series of three <br />pits. Pit 1 would be the initial pit opened on the federal lease <br />C-22777. Bino• the parr Pit and the northern end o! the 720 Pit <br />had alr~adp b~~n baoktill~d, overburden from Pit 1 would be <br />utilized in backfillinq the 720 Pit, the southernmost pit. Pit 2 <br />would ba opened north of Pit 1, and the overburden from Pit 2 <br />would be backfilled in Pit 1. Pit 3, the largest pit at the mine, <br />would be opened north of Pit 2 and would extend off the northern <br />boundary oP the federal lease C-22777 to the private leasehold <br />held by Kerr. Overburden from Pit 3 would be backfilled in Pits <br />1, 2 and 3. Projected volumes of overburden were sufficient to <br />restore all the pits to their original contours. <br />The approved Mine Plan is shown on Map 1, dated July 16, <br />1980. The approved Backfillinq and Grading Plan is shown on Map <br />33, dated July 16, 1980. Copies of both maps are being provided. <br />