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in both 1975 and 1976. The tonnage output from Energy Mine No. 2 has <br />dropped substantially since 1976, and mining is expected to cease in <br />• this area during the latter part of 1974. <br />Part of the Energy Mine No. 2 area consists of private lands in Sections <br />24 and 25 of Township 5 North, Range 87 West and other private lands in <br />Sections 19, 20, and 30 of Township 5 North, Range 86 West. In addition, <br />Energy Mine No. 2 includes all of Federal Coal Lease C-0128433 and C- <br />20900, and portions of Federal Coal Leases C-081330 and D-052547. <br />Energy Fuels owns, in fee, all of the surface acreage within the Energy <br />Mine No. 2 area. <br />Mine No. 3 - Tonnage, Location and Ownership. Energy Mine No. 3 began <br />producing coal from a surface operation in 1975 as shown on Table 1, <br />Historical Production Rates, page 3. An adjacent underground mining <br />operation, known as the Middle Creek Mine, has been initiated recently <br />with the development of portals in a final highwall. <br />• Energy Mine No. 3 consists of lands in Sections 1, 2, 11, 12, and 13 of <br />Township 5 North, Range 85 West. The surface within the mine area is <br />entirely owned by Energy Fuels; the coal is exclusively under private <br />ownership or held under state coal leases. <br />Crushing and Load-out Facilities. The three mine areas are served by a <br />single 12-mile rail spur which was installed from near Milner, Colorado <br />in 1962 at Energy Fuels' expense for the specific purpose of servicing <br />its mines. The Denver & Rio Grande Western Railroad is the rail carrier, <br />and production from the Energy Fuels mines represents 25% of the total <br />coal freight volume moved by that carrier. <br />All of Energy Fuels' coal production is shipped by rail from two loading <br />plants constructed along the spur. Both plants crush mine-run coal to <br />~~ <br />customer specifications and then load coal into rail cars at the "unit <br />train" rates specified in the applicable tariffs covering freight rates <br />from the mines to customers' plants. <br />• -13- <br />