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MCC would have to stop its development mining, prepare and submit a revision application <br />and await approval before again proceeding with development mining operations. Timing and <br />sequencing aspects of development mining are such that the CM equipment must be moved <br />to a new area of development as soon as the minimum mineable height (for the LW) is <br />reached and the development process is halted. Delays resulting from seeking a new revision <br />are not acceptable as the mining sequence requires the CM equipment to be moved <br />elsewhere in the mine to meet the development requirements of our production commitments. <br />In addition, MCC would not be able to exactly determine how far the LW panel should <br />ultimately be extended on the projection map because, as stated above, it is impossible to <br />know exactly where the coal seam decreases in thickness to where it is not economical to <br />mine (without development mining the LW panel perimeter.) MCC cannot accept CM <br />development delays to allow for multiple permitting guesses regarding the extent of the coal <br />thickness as we progress entries into the projected LW panel. <br />? Leaving mineable coal reserves behind due to unrealistic permitting delays is <br />Unacceptable. <br />Per its executed federal coal leases, MCC has in good faith committed to the BLM that we will <br />do all that is economically practical for maximum recovery of the mineable coal reserves. This <br />commitment to mine as much coal as is economically recoverable is a requirement of our coal <br />lease in order to generate as much revenue (from royalties, etc.) for the Government as <br />possible. To accomplish such, MCC works closely with the BLM to determine when the coal <br />thickness is no longer adequate to economically mine. The BLM inspects the working faces of <br />the CM entries with MCC's Geologist at least quarterly and together they determine the extent <br />of the coal seam that is economically mineable based on coal thickness and coal quality. This <br />determination is made as the CM equipment develops the entries and exposes the coal seam. <br />If mining were delayed to seek a new revision each time the coal thickness indicated that <br />development should proceed to maximize coal recovery, the resulting delay would cause <br />mining of the coal to no longer be economical and thus be bypassed and left behind. Coal left <br />behind at the outermost end of a LW panel would most likely never be recovered and thus lost <br />as a resource to the Government and as revenue to the public. Leaving economically <br />recoverable coal behind due to unrealistic permitting delays is unacceptable. <br />? "Over Permitting" to avoid permit revisions is unacceptable due to obligations to <br />our share holders and would violate Sarbanes-Oxley regulations. <br />It has been suggested by Division staff that we could avoid non-compliance with the <br />regulations as were interpreted and alleged as a violation in this NOV by projecting the <br />mineable extent of the LW panels beyond projections that were made with the best available <br />information as interpolated from exploration drilling. The implied rational behind this <br />suggestion was that if MCC submitted maps that exaggerated and projected mine operations <br />to extend all the way to the lease and permit boundaries (see the following "over-permitting" <br />drawing), MCC's actual mining would always fall within the exaggerated mining projection, and <br />thus no further revisions to the permit would be needed. While "over permitting" might resolve <br />the allegation of mining outside the mine operations projected on a permit map, it would not be <br />an honest estimate of our mineable coal reserves. It would be unethical to overstate our coal <br />reserves as it would not be a true representation of the value of our reserve and thus a false <br />representation to our stockholders and government agencies, such as the BLM or the SEC per <br />the Sarbanes-Oxley regulations. It is not acceptable to overstate the extent of our coal reserve <br />as a method of avoiding unrealistic permitting requirements and the expectation of multiple <br />revisions in order to bound the projected mining. <br />10