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• <br />COAL RESERVES <br />Previous R2P2 applications and mining plans envisioned mining only the <br />B Seam. During mining, the quality of the B seam in the northwest portion of <br />Coal Lease C•01538 was too poor to justify continued mining of the B seam. <br />Further analysis of the drill holes in the region has revealed that the B seam is <br />split into thin stringers of coal interbedded with rock. The quality of the drill <br />logs and other available data is extremely poor. It seems that the more <br />detailed the information on these drill holes is the worse the seam would <br />appear. Three of the more detailed logs are shown in Exhibit 1. Research has <br />indicated that the coal and rock were physically separated prior to analysis for <br />quality and that only the thickness of the coal section was reported when <br />developing the reserves for the coal seam. <br />Until there is evidence that the B seam is good enough to mine, no <br />L <br />further mining is proposed for the B seam. It is possible that some coal in the <br />B seam would be good enough quality to mine. Powderhorn will drill the B <br />seam while developing the C seam to assess the quality of the B seam. The <br />holes will be between 500 and 1,000 feet apart. The core retrieved will be <br />analyzed to determine the quality of the B seam. <br />The C seam reserves will be recovered using underground mining <br />methods. The C seam reserve in the Roadside North Mine is an area of <br />1,147.61 acres with a coal reserve base of 10,257,907 in place raw tons. The <br />reserve area is located on Map D-lA. Based on the Cameo B seam experience, <br />variability in coal quality is expected. Limited drill hole data exists for the <br />Cameo C seam and the seam does not outcrop in the mining area. ^`' P,,,~,o~ <br />The initial mine plan is designed to leave corridors to provide access to <br />• <br />the B seam should drilling prove that the quality has improved. The initial plan <br />will recover 1,897,203 in place raw tons for a recovery of approximately 34 <br />percent. A mining height of five feet is used in this mine plan. If the drilling <br />confirms unmarketable quality of the B seam, it will be abandoned entirely and <br />the access corridors will also be mined. <br />PHCC R2P2 Page 5 <br />2.28-99 <br />