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program. The original plan called for a production rate of four million tons per year beginning January 1, 1977, and actual production for that year was 3,981,291 tons. The production increases realized from the 1972 expansion are shown in Table 1, Historical Production Rates, page 3. At the start of 1978, because of the lack of adjacent federal coal under lease, it became apparent that contract tonnages would not be met with the existing equipment. Therefore, the management of Energy Fuels made the critical decision to invest considerable sums in more flexible capital equipment in order to fulfill contractual obligations. Energy Fuels purchased a Marion 191, 15-cubic yard shovel, a Marion 204, 28- cubic yard shovel, a fleet of Euclid 170-ton trucks and Euclid 100-ton trucks. In 1978, inspite of the new equipment, coal production dropped to 3,698,863 tons, approximately 300,000 tons short of the 4-million-ton obligation. A substantial reason for the deficiency was the inefficient configurations in which the mine machinery was forced to work as a result of the inability to obtain timely federal leases. During the first six months of 1979, Energy Fuels produced 1,857,069 tons. However, because of insufficient coal reserves currently under permit, Energy Fuels will not be able to fulfill its remaining delivery obligations in 1979 and will be forced to curtail operations signifi- cantly if additional reserves are not available by January 1, 1980. Geographic Setting Energy Mines No. 1 and 2 are located approximately 25 miles southwest of Steamboat Springs, Colorado on County Road 1127 in the Twentymile Park area. County Road 1133 provides direct access to the mine from Steamboat Springs, while County Road 1127 runs between Oak Creek and Hayden. The mine site is served by the Denver S Rio Grande Western Railroad from a spur installed by Energy Fuels and th en purchased by • the Railroad. The elevation of the mining operation is approximately -5-