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Peerless Resources, Inc. will be mining to the maximum physical and <br />economical constraints practical utilizing appropriate underground <br />engineering technologies. The projected overall recovery from the <br />underground mining of the "A" Coal Seam will be 60 percent with a <br />projected 35 percent from development operations and an additional 25 <br />percent from underground slabbing. <br />The mining layout shown on the Mine Plan Map (Map 11) has been designed <br />to maximize the number of panels and to minimize waste of coal reserves <br />near the boundaries of the property. The main entries will be oriented <br />so that panel development can run either parallel or perpendicular to <br />the permit boundaries. Peerless Resources, Inc. has designed the panels <br />so that no oddly shaped or small isolated blocks will be left. <br />Although maximum recovery is an integral part of the planned mining, <br />some factors and conditions must be considered to insure the protection <br />of personnel, coal reserves and the environment. Coal reserves will not <br />be recovered in the following areas: <br />1. Areas where the coal is less than 4 feet thick will not be <br />mined because mining under such conditions is not economically <br />feasible. <br />2. Coal will only be partially extracted in the immediate <br />vicinity of the Coal Gulch Mine entries. Consequently any <br />disturbance to these structures resulting from subsidence <br />will be prevented. <br />3., Solid coal barriers will be left intact to isolate and protect <br />main entries from the .mined-out panels. <br />4. Solid coal barriers will be left between certain panels for <br />fire and floor protection and to prevent gas accumulation. <br />These barriers will minimize the potential for the loss of the <br />• entire coal reserve, should a fire occur. <br />2.05-13 <br />