# EDGAR Filing Document

**Accession Number:** 0000789933
**File Stem:** 0000789933-23-000003
**Filing Date:** 2023-1
**Character Count:** 440724
**Document Hash:** 329d37df392c19b928b8a596b5a87a6a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000789933-23-000003.hdr.sgml**: 20230119

**ACCESSION NUMBER**: 0000789933-23-000003

**CONFORMED SUBMISSION TYPE**: 10-K/A

**PUBLIC DOCUMENT COUNT**: 54

**CONFORMED PERIOD OF REPORT**: 20211231

**FILED AS OF DATE**: 20230119

**DATE AS OF CHANGE**: 20230119

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NACCO INDUSTRIES INC
- **CENTRAL INDEX KEY:** 0000789933
- **STANDARD INDUSTRIAL CLASSIFICATION:** BITUMINOUS COAL & LIGNITE SURFACE MINING [1221]
- **IRS NUMBER:** 341505819
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-09172
- **FILM NUMBER:** 23537874

**BUSINESS ADDRESS:**
- **STREET 1:** 5875 LANDERBROOK DR
- **STREET 2:** SUITE 220
- **CITY:** CLEVELAND
- **STATE:** OH
- **ZIP:** 44124-4069
- **BUSINESS PHONE:** 4402295123

**MAIL ADDRESS:**
- **STREET 1:** 5875 LANDERBROOK DR
- **CITY:** CLEVELAND
- **STATE:** OH
- **ZIP:** 44124

?xml version="1.0" ? nacco-20211231

    

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-K/A**

**Amendment No. 1**

---

| | | |
|:---|:---|:---|
| (Mark One) | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☑ | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| | **For the fiscal year ended** | **December 31, 2021** |

---

**or**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Commission File No. 1-9172**

**NACCO INDUSTRIES, INC.**

(Exact name of registrant as specified in its charter)

---

| | | | |
|:---|:---|:---|:---|
| **Delaware** | **Delaware** | **Delaware** | **34-1505819** |
| (State or other jurisdiction of incorporation or organization) | (State or other jurisdiction of incorporation or organization) | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| **5875 Landerbrook Drive,** | **5875 Landerbrook Drive,** | **Suite 220** | |
| **Cleveland,** | **Ohio** | | **44124-4069** |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **(440) 229-5151**

Securities registered pursuant to Section 12(b) of the Act

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Class A Common Stock, $1 par value per share | NC | New York Stock Exchange |

---

Class B Common Stock is not publicly listed for trade on any exchange or market system; however, Class B Common Stock is convertible into Class A Common Stock on a share-for-share basis.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp; Yes ◻&nbsp;&nbsp;&nbsp;&nbsp;**No** 🗹

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

&nbsp;&nbsp;&nbsp;&nbsp; Yes ◻&nbsp;&nbsp;&nbsp;&nbsp;**No** 🗹

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

&nbsp;&nbsp;&nbsp;&nbsp; **Yes** 🗹&nbsp;&nbsp;&nbsp;&nbsp; No ⬜

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

&nbsp;&nbsp;&nbsp;&nbsp; **Yes** 🗹&nbsp;&nbsp;&nbsp;&nbsp; No ⬜

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Large accelerated filer | ☐ | **Accelerated filer** | ☑ | Non-accelerated filer | ☐ | **Smaller reporting company** | ☑ | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

&nbsp;&nbsp;&nbsp;&nbsp; Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;**No** ☑

Aggregate market value of Class A Common Stock and Class B Common Stock held by non-affiliates as of June 30, 2021 (the last business day of the registrant's most recently completed second fiscal quarter): $109,032,630

Number of shares of Class A Common Stock outstanding at December 31, 2022: 5,782,954

Number of shares of Class B Common Stock outstanding at December 31, 2022: 1,566,129

Auditor Firm ID: 42 Auditor Name: Ernst & Young LLP Auditor Location: Cleveland, Ohio

    

------

**EXPLANATORY NOTE**

NACCO Industries, Inc.<sup>®</sup> ("NACCO" or the "Company") is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to amend our Annual Report on Form 10-K for the year ended December 31, 2021, which we filed with the Securities and Exchange Commission (the "SEC") on March 2, 2022 (the "Original Filing"). The Original Filing is amended by this Amendment to provide amended disclosures pursuant to correspondence with the staff (the "Staff") of the Securities and Exchange Commission ("SEC") in connection with the Staff's review of new property disclosure requirements for publicly traded mining companies recently implemented by the SEC and reflected in our Original Filing for the first time. The following items were impacted by these amended disclosures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Part 1. Item 2. Properties is amended and restated in its entirety in response to comments received from the SEC staff with respect to the Original Filing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Part II. Item 9A. Controls and Procedures is revised to reflect management's conclusion that the Company's disclosure controls and procedures were not effective at December 31, 2021 due to the change in determination of mineral resources and mineral reserves and the omission of certain required disclosures under subpart 1300 of Regulation S-K;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exhibits 96.1, 96.2 and 96.3 have been deleted. The Company determined that The Coteau Properties Company ("Coteau"), The Falkirk Mining Company ("Falkirk") and Coyote Creek Mining Company ("Coyote Creek") will each be classified as "Exploration Stage Properties" pursuant to Items 1300 through 1305 of Regulation S-K and therefore the Company will not estimate mineral resources and reserves for Coteau, Falkirk and Coyote Creek in accordance with Items 1300 through 1305 of Regulation S-K. Coteau, Falkirk and Coyote Creek will continue to be classified as exploration stage properties until such time as proven or probable mineral reserves have been established even though they continue to deliver lignite to their respective customers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exhibit 96.4. The Company has filed an amended version of the Mississippi Lignite Mining Company Technical Report Summary (which is filed herewith as Exhibit 96.4) which supersedes the previously filed report. The following items are reflected in this Amendment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ An increase in the Mineral Reserve tonnage estimate and a decrease in the Mineral Resource tonnage estimate exclusive of Mineral Reserves to reflect the Mineral Reserve increase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Add the LOM production schedule, historical and forecasted coal prices and historical production detail;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Provide additional detail of the terms of the lignite sales agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Provide additional detail in the economic analysis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Provide additional detail around property location.

Other than the items referenced above, this Amendment does not attempt to modify or update the Original Filing. This Amendment does not reflect events occurring after the date of the Original Filing or modify or update those disclosures that may be affected by subsequent events. Such subsequent matters are or will be addressed in subsequent reports filed by the Company with the SEC. Accordingly, this Amendment should be read in conjunction with the Original Filing. Capitalized terms not defined in this Amendment have the meaning givens to them in the Original Filing.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934 (the "Exchange Act"), this Amendment also includes as exhibits the certifications of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The Company is not including certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) because no financial statements are filed with this Amendment.

------

**<u>NACCO INDUSTRIES, INC.</u>**

**<u>**TABLE OF CONTENTS**</u>**

---

| | | | |
|:---|:---|:---|:---|
| | | | PAGE |
| **<u>[PART I.](#i5b9a341b15db480dad089dcd23584ce1_10)</u>** | | | |
| | <u>[Item 2.](#i5b9a341b15db480dad089dcd23584ce1_28)</u> | <u>[PROPERTIES](#i5b9a341b15db480dad089dcd23584ce1_28)</u> | <u>[1](#i5b9a341b15db480dad089dcd23584ce1_28)</u> |
| **<u>[PART II.](#i5b9a341b15db480dad089dcd23584ce1_46)</u>** | | | |
| | <u>[Item 9A.](#i5b9a341b15db480dad089dcd23584ce1_94)</u> | <u>[CONTROLS AND PROCEDURES](#i5b9a341b15db480dad089dcd23584ce1_94)</u> | <u>[24](#i5b9a341b15db480dad089dcd23584ce1_94)</u> |
| **<u>[PART IV.](#i5b9a341b15db480dad089dcd23584ce1_121)</u>** | | | |
| | <u>[Item 15.](#i5b9a341b15db480dad089dcd23584ce1_124)</u> | <u>[EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](#i5b9a341b15db480dad089dcd23584ce1_124)</u> | <u>[25](#i5b9a341b15db480dad089dcd23584ce1_124)</u> |
| <u>[SIGNATURES](#i5b9a341b15db480dad089dcd23584ce1_127)</u> | <u>[SIGNATURES](#i5b9a341b15db480dad089dcd23584ce1_127)</u> | <u>[SIGNATURES](#i5b9a341b15db480dad089dcd23584ce1_127)</u> | <u>[32](#i5b9a341b15db480dad089dcd23584ce1_127)</u> |

---

------

**PART I**

**Item 2. PROPERTIES**

**<u>Coal Mining Segment - Operations</u>**

**NACCO-owned Properties**

**1.0 INTRODUCTION**

Information concerning the Company's mining properties in this Form 10-K have been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, which first became applicable to the Company for the year ended December 31, 2021. These requirements differ significantly from the previously applicable disclosure requirements of SEC Industry Guide 7. Among other differences, subpart 1300 of Regulation S-K requires the Company to disclose its mineral resources, in addition to its mineral reserves, both in the aggregate and for each of the Company's individually material mining properties.

As used in this Report on Form 10-K, the terms "mineral resource," "measured mineral resource," "indicated mineral resource," "inferred mineral resource," "mineral reserve," "proven mineral reserve" and "probable mineral reserve" are defined and used in accordance with subpart 1300 of Regulation S-K. Under subpart 1300 of Regulation S-K, mineral resources may not be classified as "mineral reserves" unless the determination has been made by a qualified person that the mineral resources can be the basis of an economically viable project. Readers are specifically cautioned not to assume that any part or all of the mineral deposits (including any mineral resources) in these categories will ever be converted into mineral reserves, as defined by the subpart 1300 of Regulation S-K.

Readers are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources are estimates based on limited geological evidence and sampling and have a too high of a degree of uncertainty as to their existence to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Estimates of inferred mineral resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher category. Therefore, readers are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be the basis of an economically viable project, or that it will ever be upgraded to a higher category. Likewise, readers are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted to mineral reserves. See "Item 1A - "Risk Factors" on page 20.

The information that follows is derived, for the most part, from, and in some instances is an extract from, the technical report summary ("TRS") prepared in compliance with the Item 601(b)(96) and subpart 1300 of Regulation S-K. The TRS was prepared by employees of the Company. Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Report on Form 10-K. The information regarding Coteau, Falkirk and Coyote Creek was reviewed by employees of the Company that are qualified persons as defined by subpart 1300 of Regulation S-K.

Coteau, Falkirk, Coyote Creek and Mississippi Lignite Mining Company ("MLMC"), each wholly-owned subsidiaries of NACCO, operate surface coal mines under long-term contracts with power generation companies pursuant to a service-based business model.

The Company operates additional surface coal mines where the customer owns or controls the coal tonnages. The Company conducts activities to extract these customer-owned coal tonnages pursuant to long-term contracts. The Company has determined these properties are not subject to subpart 1300 of Regulation S-K reporting and has not estimated mineral resources or reserves for these properties in accordance with subpart 1300 of Regulation S-K.

------

Locations of the properties subject to SEC Section 1300 reporting are shown in Figure 1.1 Surface Coal Mines Operational During 2021 Subject to SEC Section 1300 reporting.

![nacco-20211231_g1.jpg](nacco-20211231_g1.jpg)

Figure 1.1 Surface Coal Mines Operational During 2021 Subject to SEC Section 1300 Reporting

A summary of coal production at the Mines subject to SEC Section 1300 Reporting for the past three years has been tabulated and is presented on Table 1.1 Production Summary.

---

| | | | |
|:---|:---|:---|:---|
| | Tons (in millions) | Tons (in millions) | Tons (in millions) |
| | 2019 | 2020 | **2021** |
| The Coteau Properties Company | 13.5 | 12.6 | **12.5** |
| The Falkirk Mining Company | 7.4 | 7.2 | **7.9** |
| Coyote Creek Mining Company | 1.7 | 2 | &nbsp;&nbsp;&nbsp;**2** |
| Mississippi Lignite Mining Company | 2.6 | 2.5 | &nbsp;&nbsp;&nbsp;**3** |
| Totals | 25.2 | 24.3 | **25.4** |

---

Table 1.1 Production Summary

------

**2.0 MINING PROPERTIES SUBJECT TO SUBPART 1300 OF REGULATION S-K REPORTING**

**2.1 Red Hills Mine — Mississippi Lignite Mining Company**

MLMC is the owner and operator of the Red Hills Mine. The Red Hills Mine is a lignite surface mine in production. Prior to MLMC, there were no previous mining operations on the Red Hills Mine property.

The MLMC contract is the only operating coal contract in which the Company is responsible for all operating costs, capital requirements and final mine reclamation; therefore, MLMC is consolidated within NACCO's financial statements. MLMC sells coal to its customer at a contractually agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates. Profitability at MLMC is affected by customer demand for coal and changes in the indices that determine sales price and actual costs incurred.

A summary of coal production at MLMC for the past three years has been tabulated and is presented on Table 2.1 Production Summary.

---

| | | | |
|:---|:---|:---|:---|
| | Tons (in millions) | Tons (in millions) | Tons (in millions) |
| | 2019 | 2020 | **2021** |
| Mississippi Lignite Mining Company | 2.6 | 2.5 | **3.0** |

---

Table 2.1 Production Summary

The Red Hills Mine generally produces between 2 million and 3 million tons of lignite coal annually. The Red Hills Mine started delivering coal in 2000. All production from the mine is delivered to its customer's Red Hills Power Plant.

The Red Hills Mine, operated by MLMC, is located approximately 120 miles northeast of Jackson, Mississippi (Figure 2.1). The entrance to the mine is by means of a paved road located approximately one mile west of Highway 9. MLMC owns in fee approximately 7,343 acres of surface interest and 4,425 acres of coal interests. MLMC holds leases granting the right to mine approximately 5,794 acres of coal interests and the right to utilize approximately 5,597 acres of surface interests. MLMC holds subleases under which it has the right to mine approximately 1,593 acres of coal interest. The majority of the leases held by MLMC were originally acquired during the mid-1970s to the early 1980s with terms extending 50 years, many of which can be further extended by the continuation of mining operations. The lignite deposits of the Gulf Coast are found primarily in a narrow band of strata that outcrops/subcrops along the margin of the Mississippi Embayment. The potentially exploitable tertiary lignites in Mississippi are found in the Wilcox Group. The outcropping Wilcox is composed predominately of non-marine sediments deposited on a broad flat plain.

The towns of Ackerman, Eupora, Starkville, Louisville, Kosciusko, and numerous smaller communities are within a 40-mile radius of the Red Hills Mine and provide a vast employment base. Furthermore, Mississippi State University (MSU) is located approximately 30 miles east of the mine in Starkville. MLMC has a history of partnership with MSU as well as the local community colleges for science, technology, engineering, and mathematics (STEM) research and skilled trades training.

The Red Hills Mine sources power for mine office facilities and operations from 4-County Electric Power Association, and water for the mine office facilities from the Choctaw Water Association. Fuel for equipment is supplied by Dickerson Petroleum located in Kosciusko. The Red Hills Mine has, or is currently constructing, all supporting infrastructure for mining operations.

Local access to the Red Hills Mine is by way of Highway 9 between Ackerman, Mississippi and Eupora, Mississippi which connects to Pensacola Road that leads to the Red Hills Mine paved access road. Pensacola Road connects with Highway 9 approximately 5 miles north of Ackerman, MS. The mine road is approximately 1 mile west from Highway 9 along Pensacola Road.

Travel to the Red Hills Mine by air is possible using the Jackson-Medgar Wiley Evers International Airport in Jackson, Mississippi, approximately 104 miles south of the mine, and then using ground transportation, traveling via Highway 25, Highway 15, and Highway 9. Alternatively, the Golden Triangle Regional Airport is a smaller airport approximately 50 miles from the Red Hills Mine by means of Highway 82 west, Highway 15 south, and Highway 9 north.

------

The Red Hills Mine is in close proximately to river ports of the Tennessee-Tombigbee Waterway and the Mississippi River. The Lowndes County Port is approximately 60 miles east of the mine. The Port of Greenville is approximately 135 miles west of the mine, and the Port of Vicksburg, approximately 150 miles southwest of the mine. All ports are connected by major state and federal highways.

In additional to transportation via roadways, air and waterways, the Kansas City Southern (KCS) railroad has a depot located approximately 5 miles south of the mine in Ackerman, and is accessible by Highway 9 and Highway 15.MLMC currently has all permits in place for the Red Hills Mine to operate and adhere to a mine plan projected through April 2032. No mineral processing occurs at the Red Hills Mine.

The geology encountered at the Red Hills Mine is stratigraphic in nature with depositional sequences of sands, silts, clays, and lignite. The vertical repetition of geologic strata facilitated a straightforward setting to establish and study the baseline geological, geochemical, geotechnical, and geohydrological conditions at the Red Hills Mine.

Development of the Red Hills Mine began in 1997, with full commercial deliveries commencing in 2002. The mining operation is comprised of four major equipment fleets. Primary removal of burden is achieved with one 82-cubic yard electric-powered dragline, four large track-type push dozers, and a truck and shovel fleet utilizing a 41-cubic yard electric rope shovel. Lignite is mined using a surface miner or a hydraulic backhoe to load a fleet of end dump haul trucks, and is directly shipped to the RHPP or the lignite stockpile. The overall average quality of the mined lignite seams meets the required power plant quality specifications. Therefore, no mineral processing is performed by MLMC.

The mine office facilities and original equipment fleets at the Red Hills Mine were constructed, acquired, or purchased new during the development stage of the mine. The facilities and equipment are maintained to allow for safe and efficient operation. The equipment is well maintained, in good physical condition and is either updated or replaced periodically with newer models or upgrades available to keep up with modern technology. As equipment wears out, MLMC evaluates what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment.

The total cost of the property and equipment, net of applicable accumulated amortization, depreciation and impairment as of December 31, 2021 is $67.9 million.

The Red Hills Mine currently has no significant encumbrances to the property. No mining permit violations have been issued at the Red Hills Mine in the past ten years. One notice of violation ("NOV") was issued in April 2020 for a water quality exceedance that was determined not to be the fault of Red Hills Mine and no further action was required. Permitting requirements are discussed in Section 17.0 of the TRS.

------

**Figure 2.1 – Red Hills Mine Location**

![nacco-20211231_g2.jpg](nacco-20211231_g2.jpg)

Mineral resources and reserves have been summarized from the TRS for MLMC and have been included as Table 2.2 and Table 2.3. Qualities are being reported on an as-received moisture basis. Prices in Table 2.2 are based on economic cut-off grades of $30.00 MMBTU at MLMC. Prices in Table 2.3 are based on economic cut-off grades of $28.04 MMBTU at MLMC.

Material assumptions and criteria used in the determination of Mineral Resource and Mineral Reserves reported herein are provided within the filed TRS for the Mississippi Lignite Mining Company – Red Hills Mine dated December 2022.

Section 11.0 of the TRS describes the key assumptions, parameters, and methods used for the estimation of Mineral Resources. Assumptions include a maximum cumulative stripping ratio of 18:1 based on an assumed lignite sales price of $30 per ton. A further description of the verified drilling data used to model the lignite deposit for estimation of Mineral Resources is provided in Section 7.2 Drilling Exploration, 8.0 Sample Preparation, Analyses, and Security, and Section 9.0 Data Verification.

Section 12.0 of the TRS describes the key assumptions, parameters, and methods used for the estimation of Mineral Reserves, and include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximum stripping ratio 14:1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mining production rates on a cubic yard and per ton basis remain relatively consistent with historical performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mining costs on a unit basis remain relatively consistent with historical performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimum minable lignite thickness: 1.0 feet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimum parting thickness before seams are composited: 6.0 inches;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximum depth of mining: approximately 320 feet;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lignite density defined by seam from coal core drilling data and modified by dilution parameters and approximately 80 lb/ft³; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recovery rates by seam ranging from 67% to 100%.

Modifying factors including dilution parameters and technical information related to the mining process are described in detail under Section 13.0 Mining Methods. Economic factors to support the Mineral Reserve estimates are described in Section 18.0 Capital and Operating Costs and 19.0 Economic Analyses.

The Mineral Resources presented in Table 2.2 below have been estimated by applying a series of geologic and physical limits as well as high-level mining and economic constraints. The mining and economic constraints were limited to a level sufficient to support reasonable prospect for future economic extraction of the estimated Mineral Resources. The categorized Mineral Resources reported herein are exclusive of Mineral Reserves.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Lignite Coal** | **Resource Classification** | **Tonnage** | **Grades/Qualities** | **Grades/Qualities** | **Grades/Qualities** | **Grades/Qualities** |
| **Lignite Coal** | **Resource Classification** | **Tonnage** | **Calorific Value (Btu/lb)** | **Moisture (%wt)** | **Ash (%wt)** | **Sulfur (%wt)** |
| Mississippi Lignite Mining Company | Measured | 11475500 | 5110 | 44.0 | 14.1 | 0.6 |
| Mississippi Lignite Mining Company | Indicated | 15221580 | 5260 | 44.3 | 14.5 | 0.7 |
| Mississippi Lignite Mining Company | Measured + Indicated | 26697080 | 5200 | 44.2 | 14.3 | 0.6 |
| Mississippi Lignite Mining Company | Inferred | 0 | 0.00 | 0.0 | 0.0 | 0.0 |

---

Note:

–Coal Resources are exclusive of Mineral Reserves and are stated in-situ

–Coal Resources are based on an economic cutoff of $30/MMBtu

Table 2.2 Mineral Resources Summary as of December 31, 2021

The Mineral Reserves presented in Table 2.3 below were determined to be the economically mineable portion of the measured and indicated Mineral Resources after the consideration of modifying factors related to the mining process. Inferred Mineral Resources were not considered for Mineral Reserves.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Lignite Coal** | **Reserve Classification** | **Tonnage** | **Grades/Qualities** | **Grades/Qualities** | **Grades/Qualities** | **Grades/Qualities** |
| **Lignite Coal** | **Reserve Classification** | **Tonnage** | **Calorific Value (Btu/lb)** | **Moisture (%wt)** | **Ash (%wt)** | **Sulfur (%wt)** |
| Mississippi Lignite Mining Company | Proven | 17167910 | 5070 | 43.5 | 15 | 0.6 |
| Mississippi Lignite Mining Company | Probable | 10263240 | 5080 | 43.1 | 15.1 | 0.6 |
| Mississippi Lignite Mining Company | Total | 27431150 | 5080 | 43.4 | 15 | 0.6 |

---

Note:

–Mineral Reserves have been demonstrated to be economic based on a positive cash flow

–Mineral Reserves are stated on a Run of Mine basis

–An economic cutoff in the Life of Mine plan averaged $28.04/MMBtu and was used to demonstrate coal reserves

–Recovery varies by coal seam and ranges from 67% to 100%

Table 2.3 Mineral Reserves Summary as of December 31, 2021

Previously, Mineral Reserves for the Red Hills Mine were reported following Industry Guide 7 guidance. All controlled tonnage that met the general mining parameters were considered for reserves and subdivided based on whether an area was currently permitted for mining or not. Mineral Resources were not considered since they were not allowed to be reported under Industry Guide 7. Furthermore, subcategories of Mineral Resources as measured, indicated, or inferred and Mineral Reserves as proven or probable were not considered.

------

Table 2.4 below summarizes the Mineral Reserves reported under Industry Guide 7 at the end of the last two fiscal years. Table 2.5 describes the difference between the Mineral Reserves and Mineral Resources reported last fiscal year and as of December 31, 2021.

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| | | | |
|:---|:---|:---|:---|
| **Report Date** | **Committed Tons\*** | **Uncommitted Tons\*\*** | **Total Tons** |
| January 1, 2021 | 161020544 | 76306957 | 237327501 |
| January 1, 2020 | 105969007 | 134118244 | 240087251 |
| \*Committed tons were defined as controlled tons which fell within the Life-of-Mine (LOM) permit boundary. | \*Committed tons were defined as controlled tons which fell within the Life-of-Mine (LOM) permit boundary. | \*Committed tons were defined as controlled tons which fell within the Life-of-Mine (LOM) permit boundary. | \*Committed tons were defined as controlled tons which fell within the Life-of-Mine (LOM) permit boundary. |
| \*\*Uncommitted tons were defined as controlled tons which fell outside the LOM permit boundary.<br>^ The difference in allotment of tons to each category from 2020 to 2021 was due to the permit approval for a new mine area (SMCRA permit MS-004). | \*\*Uncommitted tons were defined as controlled tons which fell outside the LOM permit boundary.<br>^ The difference in allotment of tons to each category from 2020 to 2021 was due to the permit approval for a new mine area (SMCRA permit MS-004). | \*\*Uncommitted tons were defined as controlled tons which fell outside the LOM permit boundary.<br>^ The difference in allotment of tons to each category from 2020 to 2021 was due to the permit approval for a new mine area (SMCRA permit MS-004). | \*\*Uncommitted tons were defined as controlled tons which fell outside the LOM permit boundary.<br>^ The difference in allotment of tons to each category from 2020 to 2021 was due to the permit approval for a new mine area (SMCRA permit MS-004). |

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Table 2.4. Summary of Prior Mineral Reserves

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| | | | |
|:---|:---|:---|:---|
| **Resource Classification** | **December 31, 2021 Tonnage** | **January 1, 2021 Tonnage** | **Percent Change** |
| Measured | 11475500 | N/A | N/A |
| Indicated | 15221580 | N/A | N/A |
| Measured + Indicated | 26697080 | N/A | N/A |
| Inferred | 0 | N/A | N/A |
| **Reserve Classification** | **December 31, 2021 Tonnage** | **January 1, 2021 Tonnage** | **Percent Change** |
| Proven | 17167910 | N/A | N/A |
| Probable | 10263240 | N/A | N/A |
| Proven + Probable | 27431150 | 237327501 | -88% |

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Table 2.5. Net difference of reported Mineral Resources and Mineral Reserves from previous reporting period to current reporting period.

*Explanation of discrepancies.* The primary cause of the variance between Mineral Resources and Mineral Reserves from January 1, 2021 to the current report date is due to a change in methodology in categorization of Mineral Resources and Reserves from an interpretation of Industry Guide 7 regulations to following subpart 1300 of Regulation S-K. Interpretations and guidance of the S-K 1300 regulations narrowed the basis of Mineral Resources and furthermore Mineral Reserves such that a Mineral Resource is defined as:

"A concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is a reasonable estimate of mineralization, taking into account relevant factors, such as cut-off grade, likely mining dimensions, location, or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled."

And a Mineral Reserve is defined as:

"The economically mineable part of a measured or indicated Mineral Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted."

Additional impacts to the variance in reported Mineral Resources and Reserves from the previous report date to the current report date include depletion where MLMC mined 3,197,478 tons in 2021.

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**2.2 Material Properties with no Mineral Resources or Mineral Reserves** 

The lignite coal tonnages at Coteau, Falkirk and Coyote Creek have not been classified as "measured resources", "indicated resources", or "inferred resources" as defined in Items 1300 through 1305 of Regulation S-K, and as a result, do not have any "proven" or "probable" reserves under such definition and are therefore classified as an "Exploration Stage Property" pursuant to Items 1300 through 1305 of Regulation S-K. Coteau, Falkirk and Coyote Creek will continue to be classified as exploration stage properties until such time as proven or probable mineral reserves have been established in accordance with subpart 1300 of Regulation S-K, even though they continue to deliver lignite to their respective customers.

At Coteau, Coyote Creek and Falkirk, the Company is paid a management fee per ton of coal or heating unit (MMBtu) delivered. Each contract specifies the indices and mechanics by which fees change over time, generally in line with broad measures of U.S. inflation. The customers are responsible for funding all mine operating cost, including final mine reclamation, and directly or indirectly providing all of the capital required to build and operate the mine. This contract structure eliminates the Company's exposure to spot coal market price fluctuations.

Coteau, Coyote Creek and Falkirk each have only one customer for which they extract and deliver coal. These customers operate coal-fired electric generation power plants adjacent to each mine location (and in the case of Coteau, a synthetic natural gas and chemical/fertilizer production facility).

The sales price under the Coteau, Coyote Creek and Falkirk contracts are not market driven. Unlike traditional sales made based on market factors, under the provisions of the long-term mining agreements, the coal sales price at Coteau, Coyote Creek and Falkirk includes (i) all costs incurred to extract, process and deliver coal (i.e. the cost of production) and (ii) the agreed-upon profit per ton of coal or MMBtu unit delivered to the customer. Cost of production includes all the costs actually incurred in the operation of the mine including mining, processing and delivery of coal. Costs included within revenue include all production, transportation and maintenance costs including without limitation the following types of costs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Labor, which include wages and all related payroll taxes, benefits and fringes, including welfare plans; group insurance, vacations and other comparable benefits of employees

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Materials and supplies,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Tools,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Machinery and equipment not capitalized or leased,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Costs of acquiring interests in coal reserves and surface lands

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Rental of machinery and equipment,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Power costs,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Reasonable and necessary services by third parties

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Insurance including worker's compensation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Certain taxes, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Cost of reclamation

The contractually-determined coal sales price includes reimbursement of all costs incurred and the agreed-upon profit. The agreed-upon profit adjusts based on changes in the level of established indices (e.g., CPI-U and/or PPI indices). The cost-plus nature of the contracts provide assurance that all costs incurred, including contemporaneous and final reclamation, will be reimbursed by the respective customer and negates any risk of loss which allows the mines to remain cash flow positive through the end of the contract terms. The coal sales price as well as profitability at Coteau, Falkirk and Coyote Creek are not subject to any change based on market factors. Profitability at these mines is affected by two factors: demand for coal (because this impacts units of agreed profit that are charged) and changes in the indices that determine coal sales price (because this adjusts the agreed-upon per unit profit). Under any scenario, Coteau, Coyote Creek and Falkirk will be cash flow positive as a result of the terms of the mining agreements.

Extraction of Coteau, Coyote Creek and Falkirk's lignite tonnages is only economically viable as a result of the long-term mining agreements in place with each mine's respective customer. The development of the Coteau, Coyote Creek and Falkirk mines was conducted in tandem with the development of the respective mine mouth power plants each serve. The power plants were designed to operate exclusively on the coal provided by the adjacent mines. No other market exists for the lignite at Coteau, Coyote Creek and Falkirk as the cost of transportation makes sales to any entity other than the current mine-mouth operator unprofitable.

Coteau, Coyote Creek and Falkirk meet the definition of a variable interest entity ("VIE"). In each case, NACCO is not the primary beneficiary of the VIE as it does not exercise financial control; therefore, NACCO does not consolidate the results of these operations within its financial statements. Instead, these contracts are accounted for as equity method investments. The income before income taxes associated with these VIEs is reported as Earnings of unconsolidated operations on the

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Consolidated Statements of Operations, and the Company's investment is reported on the line Investments in Unconsolidated Subsidiaries in the Consolidated Balance Sheets

**Coteau**

The Freedom Mine, operated by Coteau, generally produces between 12.5 million and 13.5 million tons of lignite coal annually. The mine started delivering coal in 1983. All production from the mine is delivered to Dakota Coal Company, a wholly owned subsidiary of Basin Electric. Dakota Coal Company then sells the coal to the Synfuels Plant, Antelope Valley Station and Leland Olds Station, all of which are operated by affiliates of Basin Electric. The Synfuels Plant is a coal gasification plant that manufactures synthetic natural gas and produces fertilizers, solvents, phenol, carbon dioxide, and other chemical products for sale.

During 2020, Basin Electric informed Coteau that it is considering changes that may result in modifications to its Synfuels Plant that could potentially reduce or eliminate coal requirements at the Synfuels Plant. Basin Electric indicated that if it decides to proceed with any changes that could reduce or eliminate the use of coal, the feedstock change is not expected to occur before 2026.

During August 2021, Bakken and Basin Electric signed a non-binding term sheet to purchase the assets of the Synfuels Plant. Bakken stated the closing date is expected to be April 1, 2023. As part of the term sheet between Basin Electric and Bakken, Basin Electric indicated that the Synfuels Plant will continue existing operations through 2025. The closing is subject to the satisfaction of specified conditions. Basin Electric is also considering other options for the Synfuels Plant if the transaction with Bakken does not close.

The Freedom Mine is located approximately 90 miles northwest of Bismarck, North Dakota (Figure 2.2). The main entrance to the Freedom Mine is accessed by means of a paved road and is located on County Road 15. Coteau holds 380 leases granting the right to extract approximately 34,016 acres of coal interests and the right to utilize approximately 23,455 acres of surface interests. In addition, Coteau owns in fee 33,805 acres of surface interests and 4,107 acres of coal interests. Substantially all of the leases held by Coteau were acquired in the early 1970s and have been replaced with new leases or have lease terms for a period sufficient to meet Coteau's contractual production requirements.

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**Figure 2.2 – Freedom Mine Location**

![nacco-20211231_g3.jpg](nacco-20211231_g3.jpg)

The towns of Beulah, Hazen, and Stanton along with other smaller communities are within a 40-mile radius of the Freedom Mine and provide a vast supply of the employment base. Employees also comes from the cities of Bismarck, Minot, and Dickinson, all of which are less than 100 miles away from the mine.

The Freedom Mine sources power for mine office facilities and operations from Roughrider Electric Cooperative, and water for the mine office facilities from the Southwest Water Authority. Fuel for equipment is supplied by multiple local vendors. The Freedom Mine has, or is currently constructing, all supporting infrastructure for mining operations.

The main entrance to the Freedom Mine is accessed by traveling north of Beulah on Highway 49 for one mile, then north on County Road 21 for two miles, then west on County Road 26 for three miles, and then north on County Road 15 for two miles as shown on Figure 1.0. Location of the Freedom Mine.

Travel to the Freedom Mine by air is possible by means of the Bismarck Municipal Airport, Bismarck, ND, which is approximately 90 miles southeast of the mine. From the airport, the mine is accessed by means of ground transportation by traveling west approximately 50 miles via Interstate 94, taking exit 110 and traveling north approximately 28 miles on ND Highway 49 to Beulah, ND, and so on as explained in the previous paragraph.

Travel to the Freedom Mine by rail is possible using the Amtrak Network, which runs through northern North Dakota mostly along the US Highway 2 corridor, and passes through the larger cities of Williston, Minot, Grand Forks, and Fargo, and smaller cities of Stanley, Rugby, and Devils Lake. From these locations, the mine can be accesses via ground transportation on Interstate 29 or Interstate 94 and various highways. The main highways are US Highway 2, US Highway 83, US Highway 85, US Highway 200, and US Highway 281.

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North Dakota's freight rail service is largely provided by Burlington Northern Santa Fe Railway and Canadian Pacific Railway.

The coal tonnages are located in Mercer County, North Dakota, starting approximately two miles north of Beulah, North Dakota. The center of the basin is located near the city of Williston, North Dakota, approximately 100 miles northwest of the Freedom Mine. The economically mineable coal occurs in the Sentinel Butte Formation, and is overlain by the Coleharbor Formation. The Coleharbor Formation unconformably overlies the Sentinel Butte Formation. It includes all of the unconsolidated sediments resulting from deposition during glacial and interglacial periods. Lithologic types include gravel, sand, silt, clay and till. The modified glacial channels are in-filled with gravels, sands, silts and clays overlain by till. The coarser gravel and sand beds are generally limited to near the bottom of the channel fill. The general stratigraphic sequence in the upland portions of the reserve area consists of till, silty sands and clayey silts.

Fill-in drilling programs are routinely conducted by Coteau for the purpose of refining guidance related to ongoing operations. It is common practice at the Freedom Mine to tighten the drilling density with-in the three to four-year block ahead of active operations to an average drill hole spacing of 660-feet. However, additional exploration may also be scheduled in areas farther out to increase confidence in future mine plan projections.

Coteau utilizes standard surface mining techniques to extract coal from the proposed permit area. Mining operations will typically occur in a sequence of seven events: SPGM removal, overburden removal, coal removal, overburden replacement, final grading, SPGM replacement, and revegetation.

The mine office facilities and original equipment fleets at the Freedom Mine were constructed, acquired, or purchased new during the development stage of the mine. The facilities and equipment are maintained to allow for safe and efficient operation. The equipment is well maintained, in good physical condition and is either updated or replaced periodically with newer models or upgrades available to keep up with modern technology. As equipment wears out, Coteau evaluates what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment.

The total cost of the property, plant and equipment, net of applicable accumulated amortization, depreciation and impairment as of December 31, 2020 is $96.2 million.

The Freedom Mine currently has no significant encumbrances to the property. No NOVs have been issued at the Freedom Mine in the past three years. Coteau currently has all permits in place for the Freedom Mine to operate through 2031. Permit expansions required to extend the life of the mine through 2045 will be acquired as needed. No mineral processing occurs at the Freedom Mine.

Previously, Mineral Reserves for the Freedom Mine were reported following Industry Guide 7 guidance. All controlled tonnage that met the general mining parameters were considered for reserves and subdivided based on whether an area was currently permitted for mining or not. Mineral Resources were not considered since they were not allowed to be reported under Industry Guide 7. Furthermore, subcategories of Mineral Resources as measured, indicated, or inferred and Mineral Reserves as proven or probable were not considered

Table 2.6 below summarizes the Mineral Reserves reported under Industry Guide 7 at the end of the last two fiscal years.

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| | |
|:---|:---|
| **Report Date** | **Total Tons** |
| January 1, 2021 | 438033501 |
| January 1, 2020 | 432795311 |

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Table 2.6. Summary of Prior Mineral Reserves – Freedom Mine

*Explanation of discrepancies.* The primary cause for such a large variance between Mineral Reserves from January 1, 2021 to the current report date is due to a change in methodology in categorization of Mineral Resources and Reserves from an interpretation of Industry Guide 7 regulations to following subpart 1300 of Regulation S-K. Tighter interpretations and guidance of the S-K 1300 regulations narrowed the basis of Mineral Resources and furthermore Mineral Reserves such that there are currently no Mineral Resources or Mineral Reserves in accordance with subpart 1300 of Regulation S-K for Coteau.

------

**Falkirk Mine**

The Falkirk Mine generally produces between 7 million and 8 million tons of lignite coal annually. The mine started delivering coal in 1978 primarily for the Coal Creek Station, an electric power generating station owned by GRE. In 2014, Falkirk began delivering coal to Spiritwood Station, another electric power generating station owned by GRE.

In May 2020, GRE announced its intent to sell or retire Coal Creek Station and modify Spiritwood Station to be fueled by natural gas. During June 2021, GRE entered into an agreement to sell Coal Creek Station and the adjacent high-voltage direct current transmission line to Bismarck, North Dakota-based Rainbow Energy and its affiliates. The transaction closed in the second quarter of 2022.

The Falkirk Mine, operated by Falkirk, is located approximately 50 miles north of Bismarck, North Dakota on a paved access road off U.S. Highway 83 (Figure 2.3). Falkirk holds 335 leases granting the right to extract approximately 43,486 acres of coal interests and the right to utilize approximately 24,324 acres of surface interests. In addition, Falkirk owns in fee 40,666 acres of surface interests and 1,788 acres of coal interests. Substantially all of the leases held by Falkirk were acquired in the early 1970s with initial terms that have been further extended by the continuation of mining operations.

The towns of Underwood and Washburn are located within ten miles of the mine, with other small communities also nearby. Numerous employees also reside in Bismarck and Mandan, a distance of about 50 miles.

The Falkirk Mine receives both its power and water from Coal Creek Station. However, Falkirk's East shift change building receives water from McLean-Sheridan Rural Water. Fuel for equipment is supplied by multiple local vendors including: Farstad Oil, Missouri Valley Petroleum, and Enerbase Cooperative Resources.

The main entrance to the Falkirk Mine is accessed by traveling north from Bismarck on State Highway 83 for approximately 50 miles, then going west on the access road, 1st Street SW located four miles south of Underwood. The mine office is located two miles to the west.

Travel to the Falkirk Mine by air is possible using the Bismarck Airport in Bismarck, ND, approximately 55 miles south of the mine, and then using ground transportation, traveling via US Highway 83.

The main railway systems near the Falkirk Mine are Canadian Pacific, BNSF, and Dakota Missouri Valley & Western (DMVW). DMVW crosses through the Falkirk Mine Reserve.

The coal tonnages are located in McLean County, North Dakota, from approximately nine miles northwest of the town of Washburn, North Dakota to four miles north of the town of Underwood, North Dakota. Structurally, the area is located on an intercratonic basin containing a thick sequence of sedimentary rocks. The economically mineable coal occurs in the Sentinel Butte Formation and the Bullion Creek Formation and are unconformably overlain by the Coleharbor Formation. The Sentinel Butte Formation conformably overlies the Bullion Creek Formation. The general stratigraphic sequence in the upland portions of the reserve area (Sentinel Butte Formation) consists of till, silty sands and clayey silts, main hagel lignite bed, silty clay, lower lignite of the hagel lignite interval and silty clays. Beneath the Tavis Creek, there is a repeating sequence of silty to sand clays with generally thin lignite beds.

Operationally, overburden and interburden removal are accomplished using scrapers, dozers, front end loaders, truck shovel fleets, and draglines. Lignite is mined with front end loaders or hydraulic backhoes, and loaded into haul trucks to transport to the stockpile or directly to the customer via truck dumps and conveyors.

Fill-in drilling programs are routinely conducted by Falkirk for the purpose of refining guidance related to ongoing operations. It is common practice at the Falkirk Mine to tighten the drilling density with-in the three to four-year block ahead of active operations to an average drill hole spacing of 1320-feet. However, additional exploration may also be scheduled in areas farther out to increase confidence in future mine plan projections.

The mine office facilities and original equipment fleets at the Falkirk Mine were constructed, acquired, or purchased new during the development stage of the mine. The facilities and equipment are maintained to allow for safe and efficient operation. The equipment is well maintained, in good physical condition and is either updated or replaced periodically with newer models or upgrades available to keep up with modern technology. As equipment wears out, Falkirk evaluates what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment.

------

The total cost of the property, plant and equipment, net of applicable accumulated amortization, depreciation and impairment as of December 31, 2021 is $93.8 million.

The Falkirk Mine currently has no significant encumbrances to the property. No Notice of Violations (NOVs) have been issued at the Falkirk Mine in the past three years. There are no outstanding permits related to the life of mine ("LOM") plan awaiting regulatory approval. The Falkirk Mining Company currently has all permits in place to operate and adhere to the current mine plan. No mineral processing occurs at the Falkirk Mine.

Previously, Mineral Reserves for the Falkirk Mine were reported following Industry Guide 7 guidance. All controlled tonnage that met the general mining parameters were considered for reserves and subdivided based on whether an area was currently permitted for mining or not. Mineral Resources were not considered since they were not allowed to be reported under Industry Guide 7. Furthermore, subcategories of Mineral Resources as measured, indicated, or inferred and Mineral Reserves as proven or probable were not considered.

Table 2.7 below summarizes the Mineral Reserves reported under Industry Guide 7 at the end of the last two fiscal years.

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| | |
|:---|:---|
| **Report Date** | **Total Tons** |
| January 1, 2021 | 370580372 |
| January 1, 2020 | 375689844 |

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Table 2.7. Summary of Prior Mineral Reserves – Falkirk Creek

*Explanation of discrepancies.* The primary cause for such a large variance between Mineral Reserves from January 1, 2021 to the current report date is due to a change in methodology in categorization of Mineral Resources and Reserves from an interpretation of Industry Guide 7 regulations to following subpart 1300 of Regulation S-K. Tighter interpretations and guidance of subpart 1300 of Regulation S-K narrowed the basis of Mineral Resources and furthermore Mineral Reserves such that there are currently no Mineral Resources or Mineral Reserves in accordance with subpart 1300 of Regulation S-K for Falkirk.

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**Figure 2.3 – Falkirk Mine Location**

![nacco-20211231_g4.jpg](nacco-20211231_g4.jpg)

**Coyote Creek**

The Coyote Creek Mine generally produces between 1.5 million and 2.0 million tons of lignite annually. The mine began delivering coal in 2016 to the Coyote Station owned by Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Company and Northwestern Corporation. In September 2021, Otter Tail Power Company filed its 2022 Integrated Resource Plan in Minnesota and North Dakota which included its intent to start the process of withdrawal from its 35 percent ownership interest in Coyote Station power plant with an anticipated exit from the plant by December 31, 2028.

The Coyote Creek Mine is located approximately 70 miles northwest of Bismarck, North Dakota (Figure 2.4). The main entrance to the Coyote Creek Mine is accessed by means of a four-mile paved road extending west off of State Highway 49. Coyote Creek holds a sublease to 86 leases granting the right to mine approximately 8,129 acres of coal interests and the right to utilize approximately 15,168 acres of surface interests. In addition, Coyote Creek Mine owns in fee 160 acres of surface interests and has four easements to conduct coal mining operations on approximately 352 acres.

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**Figure 2.4 – Coyote Creek Mine Location**

![nacco-20211231_g5.jpg](nacco-20211231_g5.jpg)

The towns of Beulah, Hazen, and Stanton along with other smaller communities are within a 40-mile radius of the Coyote Creek Mine and provide a vast supply and employment base. A vast supply and employment base also come from some of the major cities of Bismarck, Minot, and Dickinson, all of which are less than 100 miles away from the mine.

The Coyote Creek Mine sources power for mine office facilities and operations from Roughrider Electric Cooperative and Montana-Dakota Utilities Co., and water for the mine office facilities from the Southwest Water Authority. Fuel for equipment is supplied by multiple local vendors. The Coyote Creek Mine has all supporting infrastructure for mining operations.

The main entrance to the mine will be accessed by traveling south of Beulah on Highway 49 for five miles, then west on County Road 25 for four miles. The general location of the Coyote Creek Mine is shown in Figure 1.0 Location of Coyote Creek Mine.

Travel to the Coyote Creek Mine by air is possible using the Bismarck Municipal Airport, Bismarck, ND, approximately 75 miles southeast of the mine. From the airport, the mine is accessed using ground transportation by traveling west approximately 50 miles via Interstate 94, taking exit 110 and traveling north approximately 21 miles on ND Highway 49 to County Road 25, then west for four miles on County Road 25.

Travel to the Coyote Creek Mine by rail is possible using the Amtrak Network, which runs through northern North Dakota mostly along the US Highway 2 corridor, and passes through the larger cities of Williston, Minot, Grand Forks, and Fargo, and smaller cities of Stanley, Rugby, and Devils Lake. From these locations, the mine can be accesses via ground transportation on Interstate 29 or Interstate 94 and various highways. The main highways are US Highway 2, US Highway 83, US Highway 85, US Highway 200, and US Highway 281.

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North Dakota's freight rail service is largely provided by Burlington Northern Santa Fe Railway and Canadian Pacific Railway.

The coal tonnages are located in Mercer County, North Dakota, starting approximately six miles southwest of Beulah, North Dakota. The center of the basin is located near the city of Williston, North Dakota, approximately 110 miles northwest of the Coyote Creek Mine. The economically mineable coal occurs in the Sentinel Butte Formation, and is overlain by the Coleharbor Formation. The Coleharbor Formation unconformably overlies the Sentinel Butte Formation. It includes all of the unconsolidated sediments resulting from deposition during glacial and interglacial periods. Lithologic types include gravel, sand silt, clay and till. The modified glacial channels are in-filled with gravels, sands, silts and clays overlain by till. The coarser gravel and sand beds are generally limited to near the bottom of the channel fill. The general stratigraphic sequence in the upland portions of the reserve area consists of till, silty sands and clayey silts.

Fill-in drilling programs are routinely conducted by Coyote for the purpose of refining guidance related to ongoing operations. It is common practice at the Coyote Creek Mine to tighten the drilling density with-in the three to four-year block ahead of active operations to an average drill hole spacing of 660-feet. However, additional exploration may also be scheduled in areas farther out to increase confidence in future mine plan projections.

Operationally, overburden removal is accomplished using scrapers, dozers, front end loaders, excavators, truck fleets, and a dragline. Lignite is mined with front end loaders, and loaded into haul trucks to transport to the coal stockpile.

The mine office facilities and original equipment fleets at the Coyote Creek Mine were constructed, acquired, or purchased during the development stage of the mine. The facilities and equipment are maintained to allow for safe and efficient operation. The equipment is well maintained, in good physical condition and is either updated or replaced periodically with newer models or upgrades available to keep up with modern technology. As equipment wears out, Coyote evaluates what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment.

The total cost of the property, plant and equipment, net of applicable accumulated amortization, depreciation and impairment as of December 31, 2021 is $131.7 million.

The Coyote Creek Mine currently has no significant encumbrances to the property. No NOVs have been issued at the Coyote Creek Mine in the past three years. There are no outstanding permits related to the LOM plan awaiting regulatory approval. Coyote currently has all permits in place for the Coyote Creek Mine to operate and adhere to a mine plan projected through 2040. No mineral processing occurs at the Coyote Creek Mine.

Previously, Mineral Reserves for the Coyote Creek Mine were reported following Industry Guide 7 guidance. All controlled tonnage that met the general mining parameters were considered for reserves and subdivided based on whether an area was currently permitted for mining or not. Mineral Resources were not considered since they were not allowed to be reported under Industry Guide 7. Furthermore, subcategories of Mineral Resources as measured, indicated, or inferred and Mineral Reserves as proven or probable were not considered.

Table 2.8 below summarizes the Mineral Reserves reported under Industry Guide 7 at the end of the last two fiscal years.

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| | |
|:---|:---|
| **Report Date** | **Total Tons** |
| January 1, 2021 | 72411342 |
| January 1, 2020 | 69590257 |

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Table 2.8. Summary of Prior Mineral Reserves – Coyote Creek

*Explanation of discrepancies.* The primary cause for such a large variance between Mineral Reserves from January 1, 2021 to the current report date is due to a change in methodology in categorization of Mineral Resources and Reserves from an interpretation of Industry Guide 7 regulations to following subpart 1300 of Regulation S-K. Tighter interpretations and guidance of subpart 1300 of Regulation S-K narrowed the basis of Mineral Resources and furthermore Mineral Reserves such that there are currently no Mineral Resources or Mineral Reserves in accordance with subpart 1300 of Regulation S-K for Coyote Creek.

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**3.0 Internal Control Disclosure Over Mineral Resources and Reserves** 

The modeling and analysis of the Company's resources and reserves has been developed by Company mine personnel and reviewed by several levels of internal management, including the QPs, and in some instances, third parties. The development of such resources and reserves estimates, including related assumptions, was a collaborative effort between the QPs, Company staff and in some instances, third parties. This section summarizes the internal control considerations for the Company's development of estimations, including assumptions, used in resource and reserve analysis and modeling.

When determining resources and reserves, as well as the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as demonstration of economic viability, points of reference and grade, are specific and attainable. The QPs and Company management agree on the reasonableness of the criteria for the purposes of estimating resources and reserves. Calculations using these criteria are reviewed and validated by the QPs.

Geological modeling and mine planning efforts serve as a base assumption for resource estimates at MLMC. These outputs have been prepared and reviewed by both Company personnel and third parties. Mine planning decisions are determined and agreed upon by Company management. Management adjusts forward-looking models by reference to historic mining results, including by reviewing actual versus predicted levels of production from the mineral deposit, and if necessary, re-evaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining of the mineral deposit, coupled with product quality validation pursuant to Company and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the deposit. Geologic modeling assumptions are evaluated to historic mining results and are adjusted if necessary to better reflect actual mining results. Ongoing quality validation of production also provides a means to monitor for any potential changes in quality. Also, ongoing monitoring of ground conditions within the mine, surveying for evidence of subsidence and other visible signs of deterioration that may signal the need to re-evaluate rock mechanics and structure of the mine ultimately inform extraction ratios and mine design, which underpin mineral reserve estimates.

Management also assesses risks inherent in mineral resource and reserve estimates, such as the accuracy of geophysical data that is used to support mine planning, identifying hazards and informing operations of the presence of mineable deposits. Also, management is aware of risks associated with potential gaps in assessing the completeness of mineral extraction licenses, entitlements or rights, or changes in laws or regulations that could directly impact the ability to assess mineral resources and reserves or impact production levels. Risks inherent in overestimated reserves can impact financial performance when revealed, such as changes in amortizations that are based on life of mine estimates.

**4.0 Customer-owned Properties**

**South Hallsville No. 1 Mine — The Sabine Mining Company**

The South Hallsville No. 1 Mine generally produces between 1.5 million and 2.0 million tons of lignite annually. The mine began delivering coal in 1985. All production from the mine is delivered to Southwestern Electric Power Company's ("SWEPCO") Henry W. Pirkey Plant (the "Pirkey Plant"). SWEPCO is an American Electric Power ("AEP") company. The mine's coal tonnages are owned and controlled by AEP. The Company conducts activities to extract these customer-owned and controlled coal tonnages.

During 2020, AEP announced its intent to retire the Pirkey Plant in 2023. SWEPCO expects deliveries from Sabine to continue until the first quarter of 2023 at which time Sabine expects to begin final reclamation. Funding for mine reclamation is the responsibility of SWEPCO.

The South Hallsville No. 1 Mine, operated by Sabine, is located approximately 150 miles east of Dallas, Texas on FM 968. The entrance to the mine is by means of a paved road. Sabine has no title, claim, lease or option to acquire any of the reserves at the South Hallsville No. 1 Mine. Southwestern Electric Power Company controls all of the reserves within the South Hallsville No. 1 Mine.

------

**Five Forks Mine — Demery Resources Company, LLC**

The Five Forks Mine generally produces between 0.1 million and 0.3 million tons of lignite annually. The mine began delivering coal in 2012 and is located approximately three miles north of Creston, Louisiana on State Highway 153. The mine's coal tonnages are owned and controlled by the customer. The Company conducts activities to extract these customer-owned and controlled coal tonnages.

Access to the Five Forks Mine is by means of a paved road. Demery has no title, claim, lease or option to acquire any of the coal tonnages at the Five Forks Mine. Demery's customer, Five Forks Mining, LLC, controls all of the coal tonnages within the Five Forks Mine.

**5.0 Facilities and Equipment**

The facilities and equipment for each of the coal mines are maintained to allow for safe and efficient operation. The equipment is well maintained, in good physical condition and is either updated or replaced periodically with newer models or upgrades available to keep up with modern technology. As equipment wears out, the mines evaluate what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment, and proceed with that replacement.

The mining method and total cost of the property, plant and equipment, net of applicable accumulated amortization, depreciation and impairment as of December 31, 2021 is set forth in the chart below:

---

| | | |
|:---|:---|:---|
| **Location** | **Mining Method** | **Total Historical Cost of Mine<br>Property, Plant and Equipment<br>(excluding Coal Land, Real Estate<br>and Construction in Progress), Net of<br>Applicable Accumulated<br>Amortization, Depreciation and Impairment** |
|  |  | (*in millions)* |
| **Unconsolidated Mining Operations** |  |  |
| Freedom Mine — The Coteau Properties Company | Dragline operation with 3 draglines | $96.2 |
| Falkirk Mine — The Falkirk Mining Company | Dragline operation with 4 draglines | $93.8 |
| South Hallsville No. 1 Mine — The Sabine Mining Company | Dragline operation with 4 draglines | $59.3 |
| Five Forks Mine — Demery Resources Company, LLC | Truck-shovel operation <sup>(a)</sup> | $— |
| Coyote Creek Mine — Coyote Creek Mining Company, LLC | Dragline operation with 1 dragline | $131.7 |
| **Consolidated Mining Operations** |  |  |
| Red Hills Mine — Mississippi Lignite Mining Company | Dragline operation with 1 dragline | $67.9 |
| Other | N/A | $1.2 |

---

<sup>(a)</sup> Predominantly all of Demery's machinery and equipment is owned by its customer.

------

**<u>NAMining Segment - Operations</u>**

NAMining provides contract mining services for independently owned mines and quarries, primarily operating and maintaining draglines at limestone quarries and utilizing other mining equipment at sand and gravel quarries. During 2021, NAMining operated 32 draglines and other equipment at 25 quarries. Of the 32 draglines, 9 are owned by the Company and 23 are owned by customers. At December 31, 2021, NAMining had $35.5 million in property, plant and equipment, net of applicable accumulated amortization, depreciation and impairment.

The mining process at the limestone mines involves excavating limestone from a water-filled quarry utilizing draglines. The excavated limestone is transported and processed by the customer. The following mines were operational during 2021:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Location Name** | **Aggregate** | **Location** | **State** | **Customer** | **Year NACCO Started Operations** |
| White Rock — North | Limestone | Miami | FL | WRQ | 1995 |
| Krome | Limestone | Miami | FL | Cemex | 2003 |
| Alico | Limestone | Ft. Myers | FL | Cemex | 2004 |
| FEC | Limestone | Miami | FL | Cemex | 2005 |
| SCL | Limestone | Miami | FL | Cemex | 2006 |
| Card Sound | Limestone | Florida City | FL | Cemex | 2009 |
| Central State Aggregates | Limestone | Zephyrhills | FL | McDonald Group | 2016 |
| Mid Coast Aggregates | Limestone | Sumter County | FL | McDonald Group | 2016 |
| West Florida Aggregates | Limestone | Hernando County | FL | McDonald Group | 2016 |
| St. Catherine | Limestone | Sumter County | FL | Cemex | 2016 |
| Center Hill | Limestone | Sumter County | FL | Cemex | 2016 |
| Inglis | Limestone | Crystal River | FL | Cemex | 2016 |
| Titan Corkscrew | Limestone | Ft. Myers | FL | Titan America | 2017 |
| Palm Beach Aggregates | Limestone | Loxahatchee | FL | Palm Beach Aggregates | 2017 |
| Perry | Limestone | Lamont | FL | Martin Marietta | 2018 |
| SDI Aggregates | Limestone | Florida City | FL | Blue Water Industries | 2018 |
| Queensfield | Sand and gravel | King William County | VA | King William Sand and Gravel Company, Inc. | 2018 |
| County Line <sup>(a)</sup> | Limestone | Pasco County | FL | K&M Pasco 130 Holdings, LLC | 2019 |
| Newberry | Limestone | Alachua County | FL | Argos USA, LLC | 2019 |
| Titan Pennsuco | Limestone | Miami | FL | Titan America | 2020 |
| Seven Diamonds | Limestone | Pasco County | FL | Seven Diamonds, LLC | 2021 |
| Johnson County | Sand and gravel | Johnson County | IN | Martin Marietta | 2021 |
| Little River | Sand and gravel | Ashdown | AR | Lehigh Hanson | 2021 |
| Rosser | Sand and gravel | Ennis | TX | Lehigh Hanson | 2021 |
| Brooksville Cement Plant | Limestone | Brooksville | FL | Cemex | 2021 |

---

<sup>(a)</sup> The County Line contract was terminated during the third quarter of 2021. NAMining mined 0.1 million and 0.2 million tons of limestone at this location during the 2021 and 2020 periods, respectively.

NAMining's customers control all of the limestone and sand reserves within their respective mines. NAMining has no title, claim, lease or option to acquire any of the reserves at any of the mines where it provides services.

Access to the White Rock mine is by means of a paved road from 122nd Avenue.

Access to the Krome mine is by means of a paved road from Krome Avenue.

Access to the Alico mine is by means of a paved road from Alico Road.

Access to the FEC mine is by means of a paved road from NW 118th Avenue.

Access to the SCL mine is by means of a paved road from NW 137th Avenue.

Access to the Card Sound mine is by means of a paved road from SW 408th Street.

------

Access to the Central State Aggregates mine is by means of a paved road from Yonkers Boulevard.

Access to the Mid Coast Aggregates mine is by means of a paved road from State Road 50.

Access to the West Florida Aggregates mine is by means of a paved road from Cortez Boulevard.

Access to the St. Catherine mine is by means of a paved road from County Road 673.

Access to the Center Hill mine is by means of a paved road from West Kings Highway.

Access to the Inglis mine is by means of a paved road from Highway 19 South.

Access to the Titan Corkscrew mine is by means of a paved road from Corkscrew Road.

Access to the Palm Beach Aggregates mine is by means of a paved road from State Road 80.

Access to the Perry mine is by means of paved road from Nutall Rise Road.

Access to the SDI Aggregates mine is by means of paved road from SW 167<sup>th</sup> AVE.

Access to the Queensfield Mine is by means of paved road from Dabney's Mill Road (SR 604).

Access to the County Line mine is by means of paved road from 18744 County Line Road.

Access to the Newberry mine is by means of paved road from NW County Road 235 (CR 235).

Access to the Titan Pennsuco mine is by means of a paved road from NW 121<sup>st</sup> Way.

Access to the Seven Diamonds mine is by means of a paved road from US-41 S/Broad St.

Access to the Johnson County mine is by means of a paved road from Old State 37/N Waverly Park Road.

Access to the Little River mine is by means of an unpaved road from Little River 60.

Access to the Rosser mine is by means of a paved road from TX-34 S.

Access to Brooksville Cement plant is by means of a paved road from Cement Plant Road.

**<u>Minerals Management - Operations</u>**

As an owner of royalty and mineral interests, the Company's access to information concerning activity and operations of its royalty and mineral interests is limited. The Company does not have information that would be available to a company with oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests. Consequently, the exact number of wells producing from or drilling on the Company's mineral interests at a given point in time is not determinable. The following table sets forth the Company's estimate of the number of gross and net productive wells as of December 31, 2021:

---

| | | |
|:---|:---|:---|
| | **Gross** | **Net** |
| Oil | **467** | **0.9** |
| Natural Gas | **398** | **11.4** |
| Total | **865** | **12.3** |

---

Gross wells are the total wells in which an interest is owned.

Net wells are calculated based on the Company's net royalty interest, factoring in both ownership percentage of gross wells and royalty rate.

The majority of the Company's producing mineral and royalty interest acreage now, or in the future, can be pooled with third-party acreage to form pooled units. Pooling proportionately reduces the Company's royalty interest in wells drilled in a pooled unit, and it proportionately increases the number of wells in which the Company has such reduced royalty interest.

------

The following table includes the Company's estimate of acreage for oil and gas mineral interests, NPRIs, and ORRIs as of December 31, 2021:

---

| | | |
|:---|:---|:---|
| | **Gross Acres** | **Net Royalty Acres** |
| Appalachia | **34661** | **36199** |
| East Texas/Haynesville | **6477** | **7455** |
| Permian | **63998** | **1243** |
| Eagle Ford | **15510** | **1712** |
| Other | **7139** | **13327** |
| Total | **127785** | **59936** |

---

The Company may own more than one type of interest in the same tract of land, but the overlap is not significant. Net Royalty Acres are calculated based on the Company's ownership and royalty rate, normalized to a standard 1/8<sup>th</sup> royalty lease, and assumes a 1/4<sup>th</sup> royalty rate for unleased acres.

The following table includes the Company's estimate of developed and undeveloped acreage based on the gross acres in a basin or region and includes mineral interests, NPRIs, and ORRIs as of December 31, 2021:

---

| | | | |
|:---|:---|:---|:---|
| | **Developed Acreage** | **Undeveloped Acreage** | **Gross Acreage** |
| Appalachia | **28011** | **6650** | **34661** |
| East Texas/Haynesville | **5253** | **1224** | **6477** |
| Permian | **62496** | **1503** | **63998** |
| Eagle Ford | **15510** | **0** | **15510** |
| Other | **1021** | **6118** | **7139** |
| Total | **112291** | **15495** | **127785** |

---

Undeveloped acres are either unleased and open or are leased acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil or natural gas, regardless of whether such acreage contains proved reserves.

**Production and Price History**

The following table sets forth the estimated oil and natural gas production data related to the Company's mineral and royalty interests as well as certain price and cost information for the years ended December 31:

---

| | | |
|:---|:---|:---|
| | **2021** <sup>(4)</sup> | **2020** |
| **Production data:** |  |  |
| Oil (bbl) <sup>(1)</sup> | **32627** | 2239 |
| NGL (bbl) <sup>(1)</sup> | **63559** | 68599 |
| Residue gas (Mcf) <sup>(2)</sup>  | **6225422** | 7981545 |
| Total BOE <sup>(3)</sup> | **1133756** | 1401095 |
| **Average realized prices:** |  |  |
| Oil (bbl) <sup>(1)</sup> | $**66.87** | $36.27 |
| NGL (bbl) <sup>(1)</sup> | $**29.33** | $14.56 |
| Residue gas (Mcf) <sup>(2)</sup>  | $**3.36** | $1.87 |
| **Average unit cost** |  |  |
| BOE <sup>(3)</sup> | $**4.99** | $6.01 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(2)</sup> Mcf. One thousand cubic feet of natural gas at the contractual pressure and temperature bases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(3)</sup> BOE. Barrel of Oil Equivalent, a conversion factor of 6 MCF of gas was used for 1 equivalent bbl of oil.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(4)</sup> As an owner of mineral and royalty interests, the Company's access to information concerning activity and operations of its royalty and mineral interests is limited. As a result, the Company estimated the last two months of 2021 production and pricing data using projections based on decline rates of wells and prior expense information.

**Evaluation and Review of Reserves**

The reserves estimates as of December 31, 2021 were prepared by Haas Petroleum Engineering Services, Inc. ("Haas Engineering"). Haas Engineering has provided reservoir engineering services, consulting and ongoing support for major and independent petroleum companies, public utilities, financial institutions, investors, and government agencies since 1980. Haas Engineering does not own an interest in NACCO or any of the Company's properties, nor is it employed on a contingent basis. A copy of Haas Engineering's estimated proved reserve report as of December 31, 2021 is incorporated by reference herein to Exhibit 99.1 to this Form 10-K.

The properties evaluated are located in Alabama, Louisiana, Ohio, Pennsylvania, and Texas and represent all of the Company's oil and gas reserves. A reserves audit is not the same as a financial audit. Reserve engineering is a subjective process of estimating volumes of economically recoverable oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation. As a result, the estimates of different engineers often vary. In addition, the results of drilling, testing, and production may justify revisions of such estimates. Accordingly, reserve estimates often differ from the quantities of oil and natural gas that are ultimately recovered. Estimates of economically recoverable oil and natural gas and of future net revenues are based on several variables and assumptions, all of which may vary from actual results, including geologic interpretation, prices, and future production rates and costs.

The reserves estimates have been prepared using standard engineering practices generally accepted by the petroleum industry. Decline curve analysis was used to estimate the remaining reserves of pressure depletion reservoirs with enough historical production data to establish decline trends. Reservoirs under non-pressure depletion drive mechanisms and non-producing reserves were estimated by volumetric analysis, research of analogous reservoirs, or a combination of both. Reserves have been estimated using deterministic and probabilistic methods. The appropriate methodology was used, as deemed necessary, to estimate reserves in conformance with SEC regulations. The maximum remaining reserves life assigned to wells included in this report is 50 years.

Total net proved reserves are defined as those natural gas and hydrocarbon liquid reserves to the Company's interests after deducting all royalties, overriding royalties, and reversionary interests owned by outside parties that become effective upon payout of specified monetary balances. All reserves estimates have been prepared using standard engineering practices generally accepted by the petroleum industry and conform to guidelines developed and adopted by the SEC.

**Technologies Used in Reserve Estimation** 

The SEC's reserves rules allow the use of techniques that have been proved effective by actual production from projects in the same reservoir or an analogous reservoir or by other evidence using reliable technology that establishes reasonable certainty. The term "reasonable certainty" implies a high degree of confidence that the quantities of oil, natural gas and/or NGLs actually recovered will equal or exceed the estimate. To achieve reasonable certainty, the Company employed technologies that have been demonstrated to yield results with consistency and repeatability. The technologies and economic data used in the estimation of the Company's proved reserves include, but are not limited to, well logs, geologic maps, seismic data, well test data, production data, historical price and cost information and property ownership interests. The accuracy of the estimates of the Company's reserves is a function of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the quality and quantity of available data and the engineering and geological interpretation of that data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• estimates regarding the amount and timing of future operating costs, development costs and workovers, all of which may vary considerably from actual results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future prices of oil, natural gas and NGLs, which may vary considerably from those estimated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the judgment of the persons preparing the estimates.

------

The following table presents the Company's estimated net proved oil and natural gas reserves as of December 31, 2021 based on the reserve report prepared by Haas Engineering, the Company's independent petroleum engineering firm. All of the Company's reserves are located in the United States.

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| | | | |
|:---|:---|:---|:---|
| | **Net reserves as of December 31, 2021** | **Net reserves as of December 31, 2021** | **Net reserves as of December 31, 2021** |
| | **Oil (bbl)** <sup>(1)</sup>  | **NGL (bbl)** <sup>(1)</sup> | **Residue gas (Mcf)** <sup>(2)</sup> |
| Proved developed | 167430 | 282230 | 16617360 |
| Proved undeveloped | 220 | 90 | 1210 |
| Total | 167650 | 282320 | 16618570 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(2)</sup> Mcf. One thousand cubic feet of natural gas at the contractual pressure and temperature bases.

As an owner of mineral and royalty interests and not working interests, the Company is not required to make capital expenditures and did not make capital expenditures to convert proved undeveloped reserves from undeveloped to developed.

**Internal Control Disclosure**

The Company's internal staff works closely with Haas Engineering to ensure the integrity, accuracy and timeliness of the data used to calculate proved reserves relating to NACCO's assets. Internal technical team members met with independent reserve engineers periodically during the period covered by the reserves report to discuss the assumptions and methods used in the proved reserve estimation process.

The preparation of the Company's proved reserve estimates are completed in accordance with internal control procedures. These procedures, which are intended to ensure reliability of reserve estimations, include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Review and verification of historical production data, which data is based on actual production as reported by third-party producers who lease the Company's royalty and mineral interests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Preparation of reserve estimates by Haas Engineering under the direct supervision of internal staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Review by the President of Catapult Mineral Partners of all of the Company's reported proved reserves at the close of each quarter, including the review of all significant reserve changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verification of property ownership by the Company's land department; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No employee's compensation is tied to the amount of reserves booked.

The Minerals Management Segment's Business Operations Manager is the technical person primarily responsible for overseeing the preparation of the internal reserve estimates and for coordinating with Haas Engineering in the preparation of the third-party reserve report. The Business Operations Manager has over 10 years of industry experience with positions of increasing responsibility and reports directly to the President of Catapult Mineral Partners, the Company's business unit focused on managing and expanding the Company's portfolio of oil and gas mineral and royalty interests.

**<u>Headquarter locations</u>**

NACCO leases office space in Mayfield Heights, Ohio, a suburb of Cleveland, Ohio, which serves as its corporate headquarters.

Coal Mining and Minerals Management lease corporate headquarters office space in Plano, Texas.

NAMining leases office and warehouse space in Medley, Florida.

------

**PART II**

**Item 9A**. **CONTROLS AND PROCEDURES**

**Evaluation of disclosure controls and procedures:** An evaluation was carried out under the supervision and with the participation of the Company's management, including the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures as of December 31, 2021. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. The Company's management concluded at the time of the Original Filing that our disclosure controls and procedures were effective as of December 31, 2021. Solely as a result of the changes we had to make to the mining disclosures as described elsewhere in this Amendment, the Company's management has re-performed an evaluation and have concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2021 regarding the mining property disclosure of Mineral Resources and Mineral Reserves. Because the amended and omitted disclosures do not affect our financial statements, there is no change to our conclusion of the effectiveness of our internal control over financial reporting as of December 31, 2021 set forth in the Original Filing.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

**Management's report on internal control over financial reporting:** Management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of management, including the principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation under the framework, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2021. The Company's effectiveness of internal control over financial reporting as of December 31, 2021 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report, set forth in the Original Filing.

**Changes in internal control:** There have been no changes in the Company's internal control over financial reporting, that occurred during the fourth quarter of 2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

------

**PART IV**

**Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

The following exhibits, as required by Item 601 of Regulation S-K, are filed with this Amendment.

---

| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| (3) Articles of Incorporation and By-laws. | (3) Articles of Incorporation and By-laws. |
| 3.1(i) | Restated Certificate of Incorporation of the Company is incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, Commission File Number 1-9172. |
| 3.1(ii) | <u>[Amended and Restated By-laws of the Company are incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed by the Company on December 18, 2014, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993314000084/exhibit31.htm)</u> |
| (4) Instruments defining the rights of security holders, including indentures. | (4) Instruments defining the rights of security holders, including indentures. |
| 4.1 | The Company by this filing agrees, upon request, to file with the Securities and Exchange Commission the instruments defining the rights of holders of long-term debt of the Company and its subsidiaries where the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. |
| 4.2 | The Mortgage and Security Agreement, dated April 8, 1976, between The Falkirk Mining Company (as Mortgagor) and Cooperative Power Association and United Power Association (collectively, as Mortgagee) is incorporated herein by reference to Exhibit 4(ii) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, Commission File Number 1-9172. |
| 4.3 | Amendment No. 1 to the Mortgage and Security Agreement, dated as of December 15, 1993, between Falkirk Mining Company (as Mortgagor) and Cooperative Power Association and United Power Association (collectively, as Mortgagee) is incorporated herein by reference to Exhibit 4(iii) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, Commission File Number 1-9172. |
| 4.4 | <u>[Amended and Restated Stockholders' Agreement, dated as of September 29, 2017, among NACCO Industries, Inc., the other signatories thereto and NACCO Industries, Inc., as depository, is incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed by the Company on October 5, 2017, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993317000056/nchbbspinoct2017ex104.htm)</u> |
| 4.5 | <u>[Amendment to Amended and Restated Stockholders' Agreement, dated as of February 14, 2019, among NACCO Industries, Inc., the other signatories thereto and NACCO Industries, Inc., as depository, is incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000013/exhibit45201810-k.htm)</u> |
| 4.6 | <u>[Second Amendment to Amended and Restated Stockholders' Agreement, dated as of February 12, 2021, by and among the Depository, NACCO Industries, Inc., the new Participating Stockholders identified on the signature pages thereto and the Participating Stockholders under the Amended and Restated Stockholders' Agreement, dated as of September 29, 2017, as amended, is incorporated by reference to Exhibit 60 of the Company's General statement of acquisition of beneficial ownership on Form SC 13D, filed on February 12, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000119312521041640/d127958dex9960.htm)</u> |
| 4.7 | <u>[Third Amendment to Amended and Restated Stockholders' Agreement, dated as of February 11, 2022, by and among the Depository, NACCO Industries, Inc., the new Participating Stockholders identified on the signature pages thereto and the Participating Stockholders under the Amended and Restated Stockholders' Agreement, dated as of September 29, 2017, as amended, is incorporated by reference to Exhibit 99.8 of the Company's General statement of acquisition of beneficial ownership on Form SC 13D, filed on February 11, 2022, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000119312522036877/d263132dex998.htm)</u> |
| 4.8 | <u>[Description of Securities is incorporated herein by reference to Exhibit 4.6 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993320000017/exhibit46to201910-k.htm)</u> |

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| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| (10) Material contracts | (10) Material contracts |
| 10.1\* | <u>[NACCO Industries, Inc. Supplemental Executive Long-Term Incentive Bonus Plan (Amended and Restated March 1, 2012) is incorporated herein by reference to Appendix B to NACCO's Definitive Proxy Statement, filed by NACCO on March 16, 2012, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000050/ncdef14a31812.htm#s3D848290080B65B364A61114E3236392)</u> |
| 10.2\* | <u>[NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated March 1, 2019) is incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed by the Company on May 8, 2019, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000035/exhibit102may19.htm)</u> |
| 10.3\* | <u>[NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated March 1, 2021) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on May 19, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000027/exhibit101ncmay21annual.htm)</u> |
| 10.4\* | <u>[NACCO Industries, Inc. Non-Employee Directors' Equity Compensation Plan (Amended and Restated May 8, 2019) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on May 8, 2019, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000035/exhibit101may19.htm)</u> |
| 10.5\* | <u>[NACCO Industries, Inc. Non-Employee Directors' Equity Compensation Plan (Amended and Restated May 19, 2021) is incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed by the Company on May 19, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000027/exhibit102ncmay21annual.htm)</u> |
| 10.6\* | <u>[Form of Award Agreement for the NACCO Industries, Inc. Supplemental Executive Long-Term Incentive Bonus Plan is incorporated by reference to Exhibit 10.8 to the Company's Current Report on Form 8-K, filed by the Company on September 17, 2012, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000115/nchyincentiveplanex108.htm)</u> |
| 10.7\* | <u>[Form of Cashless Exercise Award Agreement for the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan is incorporated herein by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993320000017/exhibit109201910-k.htm)</u>  |
| 10.8\* | <u>[Form of Non-Cashless Exercise Award Agreement for the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan is incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993320000017/exhibit1010201910-k.htm)</u> |
| 10.9 | <u>[Separation Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/1709164/000170916417000003/separationex101.htm)</u> |
| 10.10 | <u>[Tax Allocation Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.3 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/1709164/000170916417000003/taxallocationex103.htm)</u> |
| 10.11 | <u>[Consulting Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Alfred M. Rankin, Jr., is incorporated by reference to Exhibit 10.5 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on October 5, 2017, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993317000056/nchbbspinoct2017ex105.htm)</u> |
| 10.12 | <u>[Amendment to Consulting Agreement, dated as of December 15, 2020, between NACCO Industries, Inc. and Alfred M. Rankin, Jr., is incorporated by reference to Exhibit 10.1 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on December 15, 2020, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993320000070/exhibitq42020amrconsulting.htm)</u> |
| 10.13 | <u>[Amendment to Consulting Agreement, dated as of December 21, 2021, between NACCO Industries, Inc. and Alfred M. Rankin, Jr., is incorporated by reference to Exhibit 10.1 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on December 22, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000065/amendmenttorankinconsultin.htm)</u> |
| 10.14\* | <u>[NACCO Industries, Inc. Short-Term Incentive Compensation Plan (Effective as of March 1, 2019) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on February 13, 2019, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000004/exhibit99-stipq119.htm)</u> |
| 10.15\* | <u>[The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.12 to the Company's Current Report on Form 8-K, filed by the Company on December 19, 2007, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000095015207009730/l29253aexv10w12.htm)</u> |
| 10.16\* | <u>[Amendment No. 1 to The North America Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.41 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000095012310020094/l38668exv10w41.htm)</u> |
| 10.17\* | <u>[The North American Coal Corporation Annual Incentive Compensation Plan (Amended and Restated Effective March 1, 2015) is incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed by the Company on May 18, 2015, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993315000039/exhibit1032015nacoalstip.htm)</u> |

---

------

---

| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| 10.18\* | <u>[Amendment No. 2 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993311000019/ncex1040201010k.htm)</u> |
| 10.19 | <u>[Coteau Lignite Sales Agreement by and between The Coteau Properties Company and Dakota Coal Company, dated as of January 1, 1990, is incorporated herein by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1011coteaulignitesales.htm)</u> |
| 10.20 | <u>[First Amendment to Coteau Lignite Sales Agreement by and between The Coteau Properties Company and Dakota Coal Company, dated as of June 1, 1994, is incorporated herein by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1012firstamendmenttoco.htm)</u> |
| 10.21 | <u>[Second Amendment to Coteau Lignite Sales Agreement by and between The Coteau Properties Company and Dakota Coal Company, dated as of January 1, 1997, is incorporated herein by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1013secondamendmenttoc.htm)</u> |
| 10.22 | <u>[Option and Put Agreement by and among The North American Coal Corporation, Dakota Coal Company and the State of North Dakota, dated as of January 1, 1990, is incorporated herein by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1014.htm)</u> |
| 10.23 | <u>[First Amendment to the Option and Put Agreement by and among The North American Coal Corporation, Dakota Coal Company and the State of North Dakota, dated as of June 1, 1994, is incorporated herein by reference to Exhibit 10.15 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1015.htm)</u> |
| 10.24 | <u>[Lignite Sales Agreement by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, dated as of April 1, 1998, is incorporated herein by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1016mlmcandchoctaw.htm)</u> |
| 10.25 | <u>[First Amendment to Lignite Sales Agreement by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, dated as of August 30, 2016, is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on November 1, 2016, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993316000124/exhibit101q316.htm)</u> |
| 10.26 | <u>[Pay Scale Agreement by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, dated as of September 29, 2005, is incorporated herein by reference to Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1017.htm)</u> |
| 10.27 | <u>[Consent and Agreement by and among Mississippi Lignite Mining Company, Choctaw Generation Limited Partnership, SE Choctaw L.L.C. and Citibank, N.A., dated as of December 20, 2002, is incorporated herein by reference to Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000134/ncex1029mlmcconsentandagre.htm)</u> |
| 10.28 | <u>[Amendment No. 1 to Lignite Sales Agreement, Settlement Agreement and Release by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, LLLP, dated as of November 16, 2018, is incorporated herein by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000013/exhibit1033201810-k.htm)</u> |
| 10.29 **^** | <u>[Amendment No. 2 to Lignite Sales Agreement, Settlement Agreement and Release by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, LLLP, dated as of November 24, 2021.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit1029.htm)</u> |
| 10.30 | <u>[Second Restatement of Coal Sales Agreement by and between The Falkirk Mining Company and Great River Energy, dated as of January 1, 2007, is incorporated herein by reference to Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1018falkirk.htm)</u> |
| 10.31 | <u>[Amendment No. 1 to Second Restatement of Coal Sales Agreement, by and between The Falkirk Mining Company and Great River Energy, dated as of January 21, 2011, is incorporated herein by reference to Exhibit 10.19 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1019.htm)</u> |
| 10.32 | <u>[Amendment No. 2 to Second Restatement of Coal Sales Agreement, by and between The Falkirk Mining Company and Great River Energy, dated as of March 1, 2014, is incorporated herein by reference to Exhibit 10.52 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993314000020/ncech1052201310k.htm)</u> |
| 10.33 | <u>[Amendment No. 3 to Second Restatement of Coal Sales Agreement, by and between The Falkirk Mining Company and Great River Energy, dated as of January 1, 2019, is incorporated herein by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000013/exhibit1037201810-k.htm)</u> |

---

------

---

| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| 10.34 | <u>[Restatement of Option Agreement by and among The Falkirk Mining Company, Cooperative Power Association, United Power Association, and the State of North Dakota, dated as of January 1, 1997, is incorporated herein by reference to Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1020.htm)</u> |
| 10.35 | <u>[Termination Agreement and Release, by and among The Falkirk Mining Company, Great River Energy and NoDak Energy Investments Corporation, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit106q221-0003falkirk.htm)</u> |
| 10.36 **^** | <u>[Amendment No. 1 to Termination Agreement and Release, by and between The Falkirk Mining Company, NoDak Energy Investments Corporation and Great River Energy, dated as of December 28, 2021.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit1036.htm)</u> |
| 10.37<br>\*\*\* | <u>[Coal Sales Agreement, by and between The Falkirk Mining Company and Rainbow Energy Center, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit101q221-falkirkxcsa.htm)</u> |
| 10.38<br>\*\*\* | <u>[Guaranty by REMC Assets, LP, dated June 17, 2021, is incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit102q221-remcguarant.htm)</u> |
| 10.39<br>\*\*\* | <u>[Mortgage, Assignment of Leases, Rents and As-Extracted Collateral, Security Agreement, Financing Statement and Fixture Filing, by and between The Falkirk Mining Company and Rainbow Energy Center, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit103q221-nai_1519069.htm)</u> |
| 10.40 | <u>[Security Agreement, by and between The Falkirk Mining Company and Rainbow Energy Center, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit104q221-nai_1519049.htm)</u> |
| 10.41 | <u>[Option Agreement, by and between The Falkirk Mining Company, Rainbow Energy Center, LLC and the State of North Dakota, Doing Business as The Bank of North Dakota, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000049/exhibit105q221-0004rainbow.htm)</u> |
| 10.42 | <u>[Third Restatement of Lignite Mining Agreement by and between The Sabine Mining Company and Southwestern Electric Power Company, dated as of January 1, 2008, is incorporated herein by reference to Exhibit 10.21 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.+](http://www.sec.gov/Archives/edgar/data/789933/000078993313000024/ncex1021sabine.htm)</u> |
| 10.43 | <u>[Amendment No. 1 to Third Restatement of Lignite Mining Agreement by and between The Sabine Mining Company and Southwestern Electric Power Company, dated as of October 18, 2013 is incorporated herein by reference to Exhibit 10.43 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993315000015/exhibit1043201410-k.htm)</u> |
| 10.44 | <u>[Option Agreement by and among The North American Coal Corporation, Southwestern Electric Power Company and Longview National Bank, dated as of January 15, 1981, is incorporated herein by reference to Exhibit 10.22 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1022.htm)</u> |
| 10.45 | <u>[Addendum to Option Agreement, by and among The North American Coal Corporation, Southwestern Electric Power Company and Longview National Bank, dated as of January 15, 1981 is incorporated herein by reference to Exhibit 10.23 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1023.htm)</u> |
| 10.46 | <u>[Amendment to Option Agreement, by and among The North American Coal Corporation, Southwestern Electric Power Company and Longview National Bank, dated as of December 2, 1996, is incorporated herein by reference to Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1024.htm)</u> |
| 10.47 | <u>[Second Amendment to Option Agreement, by and among The North American Coal Corporation, Southwestern Electric Power Company and Regions Bank, dated as of January 1, 2008, is incorporated herein by reference to Exhibit 10.25 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1025.htm)</u> |

---

------

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| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| 10.48 | <u>[Agreement by and among The North American Coal Corporation, Southwestern Electric Power Company, Texas Commerce Bank-Longview, Nortex Mining Company and The Sabine Mining Company, dated as of June 30, 1988, is incorporated herein by reference to Exhibit 10.26 to the Company's Quarterly Report on Form 10-Q/A, filed by the Company on March 20, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993312000129/ncex1026.htm)</u> |
| 10.49 | <u>[Lignite Sales Agreement between Coyote Creek Mining Company, L.L.C. and Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Co. and Northwestern Corporation dated as of October 10, 2012 is incorporated herein by reference to Exhibit 10.58 to the Company's Annual Report on Form 10-K, filed by the Company on March 6, 2013, Commission File Number 1-9172.++](http://www.sec.gov/Archives/edgar/data/789933/000078993313000013/ncexh1058201210k.htm)</u> |

---

---

| | |
|:---|:---|
| 10.50 | <u>[First Amendment to Lignite Sales Agreement, dated as of January 30, 2014, between Coyote Creek Mining Company, L.L.C. and Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc. and NorthWestern Corporation is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 8-K, filed by the Company on January 30, 2014, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993314000005/firstamendmenttolignitesal.htm)</u> |
| 10.51 | <u>[Second Amendment to Lignite Sales Agreement, dated as of March 16, 2015, between Coyote Creek Mining Company, L.L.C. and Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc., and NorthWestern Corporation is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on May 5, 2015, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993315000035/exhibit101coyote.htm)</u> |
| 10.52\* | <u>[Amendment No. 3 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on October 30, 2013, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993313000078/ncexhibit101q313.htm)</u> |
| 10.53\* | <u>[Amendment No. 4 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.54 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993315000015/exhibit1054201410-k.htm)</u> |
| 10.54\* | <u>[Amendment No. 5 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.57 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, Commission File Number I-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993316000069/exhibit1057.htm)</u> |
| 10.55\* | <u>[Amendment No. 6 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.52 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, Commission File Number I-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993317000007/exhibit1052201610-k.htm)</u> |
| 10.56 | <u>[Agreement, dated as of March 16, 2015, among The North American Coal Corporation, Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc. and Northwestern Corporation is incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed by the Company on May 5, 2015, Commission File Number 1-9172](http://www.sec.gov/Archives/edgar/data/789933/000078993315000035/exhibit102coyote.htm)</u>. |
| 10.57 | <u>[The North American Coal Corporation Excess Retirement Plan (Amended and Restated Effective January 1, 2020) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on December 18, 2019, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993319000065/exhibit101-thenorthamerica.htm)</u> |
| 10.58 | <u>[Amended and Restated Credit Agreement by and among The North American Coal Corporation and the Lenders party thereto and KeyBank National Association as Syndication Agent, PNC Bank National Association as Administrative Agent and KeyBanc Capital Markets Inc. and PNC Capital Markets LLC as Joint Lead Arrangers and Joint Bookrunners, dated as of August 11, 2017 is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on August 15, 2017, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993317000048/exhibit101aug17.htm)</u> |
| 10.59 | <u>[Amended and Restated Credit Agreement by and among The North American Coal Corporation and the Guarantors party thereto and the Lenders party thereto and KeyBank National Association as Syndication Agent, PNC Bank National Association as Administrative Agent and KeyBanc Capital Markets Inc. and PNC Capital Markets LLC as Joint Lead Arrangers and Joint Bookrunners, dated as of November 12, 2021 is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on November 15, 2021, Commission File Number 1-9172.](http://www.sec.gov/Archives/edgar/data/789933/000078993321000061/ex101-pncxnorthamericancoa.htm)</u> |
| 10.60 | <u>[Revolving Credit Commitment Increase Agreement, dated as of December 10, 2021 is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on December 13, 2021. Commission File Number 1-9172.](https://www.sec.gov/Archives/edgar/data/789933/000078993321000063/dec 21-revolvingcreditincre.htm)</u> |

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(21) **^ &nbsp;&nbsp;&nbsp;&nbsp;**<u>[Subsidiaries.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit21202110-k.htm)</u>

(23) &nbsp;&nbsp;&nbsp;&nbsp;Consents of experts and counsel.

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| | |
|:---|:---|
| 23.1 **^** | <u>[Consents of experts and counsel.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit231202110-k.htm)</u> |
| 23.2\*\* | <u>[Consent of Qualified Person](exhibit232202110-ka.htm)</u> |
| 23.3\*\* | <u>[Consent of Qualified Person](exhibit233202110-ka.htm)</u> |

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(24) Powers of Attorney.

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| | |
|:---|:---|
| 24.1 **^** | <u>[A copy of a power of attorney for John S. Dalrymple.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit241202110-k.htm)</u> |
| 24.2 **^** | <u>[A copy of a power of attorney for John P. Jumper.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit242202110-k.htm)</u> |
| 24.3 **^** | <u>[A copy of a power of attorney for Dennis W. LaBarre.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit243202110-k.htm)</u> |
| 24.4 **^** | <u>[A copy of a power of attorney for Michael S. Miller.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit244202110-k.htm)</u> |
| 24.5 **^** | <u>[A copy of a power of attorney for Richard de J. Osborne.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit245202110-k.htm)</u> |
| 24.6 **^** | <u>[A copy of a power of attorney for Alfred M. Rankin, Jr.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit246202110-k.htm)</u> |
| 24.7 **^** | <u>[A copy of a power of attorney for Matthew M. Rankin.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit247202110-k.htm)</u> |
| 24.8 **^** | <u>[A copy of a power of attorney for Roger F. Rankin.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit248202110-k.htm)</u> |
| 24.9 **^** | <u>[A copy of a power of attorney for Lori J. Robinson.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit249202110-k.htm)</u> |
| 24.10 **^** | <u>[A copy of a power of attorney for Robert S. Shapard.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit2410202110-k.htm)</u> |
| 24.11 **^** | <u>[A copy of a power of attorney for Britton T. Taplin.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit2411202110-k.htm)</u> |

---

(31) Rule 13a-14(a)/15d-14(a) Certifications.

---

| | |
|:---|:---|
| 31(i)(1) \*\* | <u>[Certification of J.C. Butler, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.](exhibit311202110-ka.htm)</u> |
| 31(i)(2) \*\* | <u>[Certification of Elizabeth I. Loveman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.](exhibit312202110-ka.htm)</u> |
| (32) **^** | <u>[Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by J.C. Butler, Jr. and Elizabeth I. Loveman.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit32202110-k.htm)</u> |
| (95) **^** | <u>[Mine Safety Disclosure Exhibit.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit95202110-k.htm)</u> |
| 96.4\*\* | <u>[Technical Report Summary relating to the Mississippi Lignite Mining Company, dated December 31, 2021 - Revision 1, as amended December 16, 2022.](exhibit964-mlmcsk1300x21re.htm)</u> |
| (99.1) **^** | <u>[Reserve Report of Catapult Mineral Partners.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit991-2021.htm)</u> |
| (99.2) **^** | <u>[Supplemental Figures Attachment.](http://www.sec.gov/Archives/edgar/data/789933/000078993322000015/exhibit992-supplschedule.htm)</u> |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

------

---

| | |
|:---|:---|
| \* | Management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item15(b) of this Annual Report on Form 10-K. |
| \*\* | Filed herewith. |
| **^** | Previously filed as an exhibit to the Company's Annual Report on Form 10-K filed with the SEC on March 2, 2022. |
| \*\*\* | Certain confidential information contained in this agreement has been omitted because it (i) is not material and (ii) would be competitively harmful if publicly disclosed. |
| **+** | Portions of Exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on Rule 24b-2 and an Order from the Commission granting the Company's request for confidential treatment dated March 27, 2013. Portions for which confidential treatment has been granted have been marked with three asterisks [\*\*\*] and a footnote indicating "Confidential treatment requested". |
| ++ | Portions of Exhibit have been omitted and filed separately with the Securities and Exchange Commission in reliance on Rule 24b-2 and an Order from the Commission granting the Company's request for confidential treatment dated April 2, 2013. Portions for which confidential treatment has been granted have been marked with three asterisks [\*\*\*] and a footnote indicating "Confidential treatment requested". |

---

------

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| NACCO Industries, Inc. | NACCO Industries, Inc. |
| By: | /s/ Elizabeth I. Loveman |
|  | Elizabeth I. Loveman |
|  | Vice President and Controller <br>(principal financial and accounting officer) |

---

January 19, 2023

## Exhibit 23.2

**Exhibit 23.2**

**Consent of Sara T. McKenzie**

I consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Registration Statement (Form S-8 No. 333-256443) pertaining to the Amended and Restated Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Registration Statement (Form S-8 No. 333-256445) pertaining to the Amended and Restated Non-Employee Directors' Equity Compensation Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Registration Statement (Form S-8 No. 333-231316) pertaining to the Amended and Restated Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Registration Statement (Form S-8 No. 333-231315) pertaining to the Amended and Restated Non-Employee Directors' Equity Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Registration Statement (Form S-8 No. 333-139268) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Registration Statement (Form S-8 No. 333-166944) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)Registration Statement (Form S-8 No. 333-183242) pertaining to the NACCO Industries, Inc. Supplemental Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)Registration Statement (Form S-8 No. 333-217862) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective March 1, 2017), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)Registration Statement (Form S-8 No. 333-217900) pertaining to NACCO Industries, Inc. Non-Employee Directors' Equity Compensation Plan (Amended and Restated Effective May 9, 2017);

of the references to my name, the use of the SEC S-K 1300 Technical Report Summary, Revision 1, Mississippi Lignite Mining Company – Red Hills Mine, Ackerman, Mississippi (the "Technical Report") and the information derived from the Technical Report, including any quotation from or summarization of the Technical Report, which are included in the Annual Report on Form 10-K.

---

| | |
|:---|:---|
| | /s/ Sara T. McKenzie |
| January 19, 2023 | |

---

## Exhibit 23.3

**Exhibit 23.3**

**Consent of Leonard R. Dolby**

I consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Registration Statement (Form S-8 No. 333-256443) pertaining to the Amended and Restated Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Registration Statement (Form S-8 No. 333-256445) pertaining to the Amended and Restated Non-Employee Directors' Equity Compensation Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Registration Statement (Form S-8 No. 333-231316) pertaining to the Amended and Restated Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Registration Statement (Form S-8 No. 333-231315) pertaining to the Amended and Restated Non-Employee Directors' Equity Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Registration Statement (Form S-8 No. 333-139268) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Registration Statement (Form S-8 No. 333-166944) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)Registration Statement (Form S-8 No. 333-183242) pertaining to the NACCO Industries, Inc. Supplemental Executive Long-Term Incentive Compensation Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)Registration Statement (Form S-8 No. 333-217862) pertaining to the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan (Amended and Restated Effective March 1, 2017), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)Registration Statement (Form S-8 No. 333-217900) pertaining to NACCO Industries, Inc. Non-Employee Directors' Equity Compensation Plan (Amended and Restated Effective May 9, 2017);

of the references to my name, the use of the SEC S-K 1300 Technical Report Summary, Revision 1, Mississippi Lignite Mining Company – Red Hills Mine, Ackerman, Mississippi (the "Technical Report") and the information derived from the Technical Report, including any quotation from or summarization of the Technical Report, which are included in the Annual Report on Form 10-K.

---

| | |
|:---|:---|
| | /s/ Leonard R. Dolby |
| January 19, 2023 | |

---

## Exhibit 31.1

**Exhibit 31(i)(1)**

**Certifications** 

I, J.C. Butler, Jr., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this annual report on Form 10-K/A of NACCO Industries, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | January 19, 2023 | /s/ J.C. Butler, Jr. |
| | | J.C. Butler, Jr. |
| | | President and Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31(i)(2)** 

**Certifications** 

I, Elizabeth I. Loveman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this annual report on Form 10-K/A of NACCO Industries, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected , or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | January 19, 2023 | /s/ Elizabeth I. Loveman |
| | | Elizabeth I. Loveman |
| | | Vice President and Controller <br>(principal financial officer) |

---

## Exhibit 96.4

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine

Ackerman, Mississippi &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Effective Date: December 31, 2021

Report Date: February 2, 2022

Amendment Date: December 16, 2022

Report Prepared by:

![image_0a.jpg](image_0a.jpg)

Mississippi Lignite Mining Company

1000 McIntire Road

Ackerman, MS 39735

**Signed by Qualified Persons:** 

Leonard Dolby, P.E.

Sara McKenzie, RPG, P.E.

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**Table of Contents**

---

| | |
|:---|:---|
| Signature and Report Date | [9](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.&nbsp;&nbsp;&nbsp;&nbsp;Executive Summary | [12](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.1.&nbsp;&nbsp;&nbsp;&nbsp;Property Description and Ownership | [12](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.2.&nbsp;&nbsp;&nbsp;&nbsp;Geology and Mineralization | [13](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.3.&nbsp;&nbsp;&nbsp;&nbsp;Status of Exploration | [13](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.4.&nbsp;&nbsp;&nbsp;&nbsp;Development and Operations | [14](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.5.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Resource Estimate | [14](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.6.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Reserve Estimate | [15](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.7.&nbsp;&nbsp;&nbsp;&nbsp;Economic Assessment | [17](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.8.&nbsp;&nbsp;&nbsp;&nbsp;Permitting Requirements | [20](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 1.9.&nbsp;&nbsp;&nbsp;&nbsp;Qualified Person's Conclusions and Recommendations | [20](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 2.&nbsp;&nbsp;&nbsp;&nbsp;Introduction | [21](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.&nbsp;&nbsp;&nbsp;&nbsp;Property Description | [24](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.1.&nbsp;&nbsp;&nbsp;&nbsp;Property Location | [24](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.2.&nbsp;&nbsp;&nbsp;&nbsp;Property Area | [26](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.3.&nbsp;&nbsp;&nbsp;&nbsp;Leases and Mineral Rights | [26](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.4.&nbsp;&nbsp;&nbsp;&nbsp;Significant Encumbrances to the Property | [35](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.5.&nbsp;&nbsp;&nbsp;&nbsp;Significant Factors and Risks | [35](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 3.6.&nbsp;&nbsp;&nbsp;&nbsp;Registrant Royalties and Interests | [35](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 4.&nbsp;&nbsp;&nbsp;&nbsp;Accessibility, Climate, Local Resources, Infrastrucutre, and Physiography | [36](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 4.1.&nbsp;&nbsp;&nbsp;&nbsp;Physiography, Topography and Vegetation | [36](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 4.2.&nbsp;&nbsp;&nbsp;&nbsp;Accessibility | [36](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 4.3.&nbsp;&nbsp;&nbsp;&nbsp;Climate | [37](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 4.4.&nbsp;&nbsp;&nbsp;&nbsp;Local Resources and Infrastructure | [37](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 5.&nbsp;&nbsp;&nbsp;&nbsp;History of the Property | [38](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 5.1.&nbsp;&nbsp;&nbsp;&nbsp;Previous Operations | [38](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 5.2.&nbsp;&nbsp;&nbsp;&nbsp;Exploration and Development History Prior to MLMC | [38](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.&nbsp;&nbsp;&nbsp;&nbsp;Geological Setting, Mineralization and Deposit | [39](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.1.&nbsp;&nbsp;&nbsp;&nbsp;Geology | [39](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.1.1.&nbsp;&nbsp;&nbsp;&nbsp;Regional Geology | [39](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.1.2.&nbsp;&nbsp;&nbsp;&nbsp;Local and Property Geology | [41](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.2.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Deposit Type | [41](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

---

| | |
|:---|:---|
| 6.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Gravel Creek Member | [41](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Grampian Hills Member | [42](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Tuscahoma Formation | [42](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 6.3.&nbsp;&nbsp;&nbsp;&nbsp;Stratigraphic Column | [43](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| 7.&nbsp;&nbsp;&nbsp;&nbsp;Exploration | [47](#i2ba3bad0421d4582a3d0dc53d6af6e8c_10) |
| 7.1.&nbsp;&nbsp;&nbsp;&nbsp;Exploration | [47](#i2ba3bad0421d4582a3d0dc53d6af6e8c_10) |
| 7.2.&nbsp;&nbsp;&nbsp;&nbsp;Drilling Exploration | [47](#i2ba3bad0421d4582a3d0dc53d6af6e8c_10) |
| 7.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Drilling Type and Extent | [47](#i2ba3bad0421d4582a3d0dc53d6af6e8c_10) |
| 7.2.2.&nbsp;&nbsp;&nbsp;&nbsp;General Drilling Procedures | [50](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Drilling Exploration Programs | [51](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.2.4.&nbsp;&nbsp;&nbsp;&nbsp;Qualified Person Opinion – Drilling Exploration | [54](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.3.&nbsp;&nbsp;&nbsp;&nbsp;Hydrogeologic Characterization | [54](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.3.1.&nbsp;&nbsp;&nbsp;&nbsp;Surface Water | [54](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.3.2.&nbsp;&nbsp;&nbsp;&nbsp;Groundwater | [55](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.3.3.&nbsp;&nbsp;&nbsp;&nbsp;Qualified Person Opinion – Hydrogeologic Characterization | [56](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| 7.4.&nbsp;&nbsp;&nbsp;&nbsp;Geotechnical Studies | [58](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 7.4.1.&nbsp;&nbsp;&nbsp;&nbsp;Early Geotechnical Studies | [58](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 7.4.2.&nbsp;&nbsp;&nbsp;&nbsp;Buffer Block Study | [59](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 7.4.3.&nbsp;&nbsp;&nbsp;&nbsp;Qualified Person Opinion – Geotechnical Studies | [60](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.&nbsp;&nbsp;&nbsp;&nbsp;Sample Preparation, Analysis, and Security | [62](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.1.&nbsp;&nbsp;&nbsp;&nbsp;Sample Collection and Shipment | [62](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.2.&nbsp;&nbsp;&nbsp;&nbsp;Sample Preparation and Analysis | [63](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Receiving Dock/Sample Storage Room | [64](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Prep Room | [65](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Laboratory Testing | [65](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.3.&nbsp;&nbsp;&nbsp;&nbsp;Quality Control Procedures | [65](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 8.4.&nbsp;&nbsp;&nbsp;&nbsp;QP Statement on the Adequacy of Sample Preparation, Security and Analytical Procedures | [66](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.&nbsp;&nbsp;&nbsp;&nbsp;Data Verification | [67](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.1.&nbsp;&nbsp;&nbsp;&nbsp;Data Verification Procedures for Mineral Resources | [67](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.1.1.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Drillhole Data and Geologic (Mineral Resource) Model | [67](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.1.2.&nbsp;&nbsp;&nbsp;&nbsp;Verification of the Reasonable Prospect for Economic Extraction to Support Mineral Resource Estimation | [68](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.1.3.&nbsp;&nbsp;&nbsp;&nbsp;Limitations on Data Verification for Mineral Resources | [68](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.1.4.&nbsp;&nbsp;&nbsp;&nbsp;QP's Statement of Adequacy of Data for Mineral Resources | [68](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

---

| | |
|:---|:---|
| 9.2.&nbsp;&nbsp;&nbsp;&nbsp;Data Verification Procedures for Mineral Reserves | [69](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Hydrogeology Data | [69](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Geotechnical Data | [69](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Cut-off Grade, Dilution Assumptions and Modifying Factors | [69](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.4.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Ultimate Pit Configuration | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.5.&nbsp;&nbsp;&nbsp;&nbsp;Verification of Cost Estimate, Pricing Assumptions, and Economic Analysis | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.6.&nbsp;&nbsp;&nbsp;&nbsp;Workforce, Staffing and Equipment | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.7.&nbsp;&nbsp;&nbsp;&nbsp;Environmental Factors | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.8.&nbsp;&nbsp;&nbsp;&nbsp;Limitations on Data Verification for Mineral Reserves | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 9.2.9.&nbsp;&nbsp;&nbsp;&nbsp;QP's Statement of Adequacy of Data for Mineral Reserves | [70](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 10.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Processing | [71](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Resource Estimates | [72](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.&nbsp;&nbsp;&nbsp;&nbsp;Key Assumptions, Parameters and Methods | [72](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.1.&nbsp;&nbsp;&nbsp;&nbsp;Horizons | [72](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.2.&nbsp;&nbsp;&nbsp;&nbsp;Quality Parameters and Density Determination | [73](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.3.&nbsp;&nbsp;&nbsp;&nbsp;Modeling Process | [74](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.4.&nbsp;&nbsp;&nbsp;&nbsp;Justification of Modeling Methods | [74](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.5.&nbsp;&nbsp;&nbsp;&nbsp;Limits and Constraints on the Mineral Resource Estimates | [74](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.6.&nbsp;&nbsp;&nbsp;&nbsp;Generation of Pit Shells for Mineral Resource Estimates | [75](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.1.7.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Resource Classification and Uncertainty | [76](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| 11.2.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Resource Estimates | [80](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Basis for Mineral Resource Estimate | [80](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Resource Statement | [81](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.3.&nbsp;&nbsp;&nbsp;&nbsp;Cut-off Quality, Assumed Cost and Sales Price | [81](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.4.&nbsp;&nbsp;&nbsp;&nbsp;QP's Classification of Mineral Resources | [81](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.5.&nbsp;&nbsp;&nbsp;&nbsp;Uncertainty in the Mineral Resource Estimates | [81](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 11.6.&nbsp;&nbsp;&nbsp;&nbsp;QP's Opinion on Potential Influences Affecting Mineral Resource Estimates | [82](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Reserve Estimates | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.1.&nbsp;&nbsp;&nbsp;&nbsp;Key Assumptions, Parameters, and Methods | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.1.1.&nbsp;&nbsp;&nbsp;&nbsp;Stripping Ratio and Pit Limits | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.1.2.&nbsp;&nbsp;&nbsp;&nbsp;Lignite Quality | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.1.3.&nbsp;&nbsp;&nbsp;&nbsp;Modeled Mining Parameters | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.1.4.&nbsp;&nbsp;&nbsp;&nbsp;Assumptions and Modifying Factors | [83](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

---

| | |
|:---|:---|
| 12.1.5.&nbsp;&nbsp;&nbsp;&nbsp;Method | [84](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.2.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Reserve Estimates | [85](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Basis for Mineral Reserve Estimate | [85](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.3.&nbsp;&nbsp;&nbsp;&nbsp;Cut-off Quality and Sales Price | [86](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.4.&nbsp;&nbsp;&nbsp;&nbsp;Mineral Reserve Statement | [86](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.5.&nbsp;&nbsp;&nbsp;&nbsp;Multiple Commodity Mineral Reserve | [86](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 12.6.&nbsp;&nbsp;&nbsp;&nbsp;QP's Opinion on Risk Factors that could Affect Mineral Reserve Estimates | [86](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 13.&nbsp;&nbsp;&nbsp;&nbsp;Mining Methods | [88](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| 13.1.&nbsp;&nbsp;&nbsp;&nbsp;Geotechnical and Hydrological Considerations | [90](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.1.1.&nbsp;&nbsp;&nbsp;&nbsp;Pit Design | [90](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.1.2.&nbsp;&nbsp;&nbsp;&nbsp;SPOIL STABILITY STUDIES | [91](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.1.3.&nbsp;&nbsp;&nbsp;&nbsp;Excess Spoil Piles | [94](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.&nbsp;&nbsp;&nbsp;&nbsp;Lignite Production Rate, Mine Life, Mining Dimensions and Dilution and Recovery Factors | [94](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Production Rate | [94](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Mine Life | [95](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Mining Dimensions | [95](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.4.&nbsp;&nbsp;&nbsp;&nbsp;Haulroad Design | [95](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.5.&nbsp;&nbsp;&nbsp;&nbsp;Mining Dilution | [95](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.2.6.&nbsp;&nbsp;&nbsp;&nbsp;Recovery Factors | [96](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.3.&nbsp;&nbsp;&nbsp;&nbsp;Requirements for Stripping and Backfilling | [96](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 13.4.&nbsp;&nbsp;&nbsp;&nbsp;Major Equipment and Personnel | [98](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 14.&nbsp;&nbsp;&nbsp;&nbsp;Processing and Recovery Methods | [100](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 15.&nbsp;&nbsp;&nbsp;&nbsp;Infrastructure | [101](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| 16.&nbsp;&nbsp;&nbsp;&nbsp;Market Studies | [103](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 16.1.&nbsp;&nbsp;&nbsp;&nbsp;Markets | [103](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 16.2.&nbsp;&nbsp;&nbsp;&nbsp;Material Contracts | [103](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.&nbsp;&nbsp;&nbsp;&nbsp;Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups | [104](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.1.&nbsp;&nbsp;&nbsp;&nbsp;Environmental and Baseline Studies | [104](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.2.&nbsp;&nbsp;&nbsp;&nbsp;Waste Disposal, Site Monitoring and Water Management | [104](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.2.1.&nbsp;&nbsp;&nbsp;&nbsp;Waste Disposal | [104](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.2.2.&nbsp;&nbsp;&nbsp;&nbsp;Site Monitoring | [105](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.2.3.&nbsp;&nbsp;&nbsp;&nbsp;Water Management | [105](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.3.&nbsp;&nbsp;&nbsp;&nbsp;Project Permitting Requirements | [105](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

---

| | |
|:---|:---|
| 17.3.1.&nbsp;&nbsp;&nbsp;&nbsp;Permit Status | [105](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.3.2.&nbsp;&nbsp;&nbsp;&nbsp;Reclamation Bond Requirements | [108](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.4.&nbsp;&nbsp;&nbsp;&nbsp;Plans, Negotiations, or Agreements with Local Individuals or Groups | [108](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.5.&nbsp;&nbsp;&nbsp;&nbsp;Mine Closure Plans | [108](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.6.&nbsp;&nbsp;&nbsp;&nbsp;QP's Opinion of Adequacy of Current Plans | [108](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 17.7.&nbsp;&nbsp;&nbsp;&nbsp;Description of any Commitments to Ensure Local Procurement and Hiring | [108](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 18.&nbsp;&nbsp;&nbsp;&nbsp;Capital and Operating Costs | [110](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 18.1.&nbsp;&nbsp;&nbsp;&nbsp;Operating Costs | [110](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 18.2.&nbsp;&nbsp;&nbsp;&nbsp;Capital Costs | [110](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 19.&nbsp;&nbsp;&nbsp;&nbsp;Economic Analysis | [112](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 19.1.&nbsp;&nbsp;&nbsp;&nbsp;Key Assumptions, Parameters and Methods | [112](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 19.2.&nbsp;&nbsp;&nbsp;&nbsp;Annual Cash Flows | [112](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 19.3.&nbsp;&nbsp;&nbsp;&nbsp;Sensitivity Analysis | [114](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 20.&nbsp;&nbsp;&nbsp;&nbsp;Adjacent Properties | [115](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 21.&nbsp;&nbsp;&nbsp;&nbsp;Other Relevant Data and Information | [116](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 22.&nbsp;&nbsp;&nbsp;&nbsp;Interpretations and Conclusions | [117](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 23.&nbsp;&nbsp;&nbsp;&nbsp;Recommendations | [118](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 24.&nbsp;&nbsp;&nbsp;&nbsp;References | [119](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| 25.&nbsp;&nbsp;&nbsp;&nbsp;Reliance on Information Provided by the Registrant | [120](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |

---

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SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**List of Tables**

---

| | |
|:---|:---|
| Table 1.1 Mineral Resource Estimates | [15](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 1.2 LOM Production Schedule | [16](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 1.3 Mineral Reserve Estimate | [16](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 1.4 Historical and Forecasted Coal Price | [17](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 1.5 Summary of Income Statement and Cash Flow for LOM plan delivering approximately 27.2 million MMBtu | [19](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 3.1 Identification of Leases | [27](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 3.2 Identification of Acquisitions | [31](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 5.1 Historical Production | [38](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Table 7.1 Exploration Drilling Summary | [51](#i2ba3bad0421d4582a3d0dc53d6af6e8c_16) |
| Table 8.1 List of ASTM standards for Standard Laboratory, Casper location | [64](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Table 11.1 Quality Limits (as-received basis) | [72](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Table 11.2 Stratigraphic Horizons | [73](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Table 11.3 Mineral Resource Categories – distances from core hole | [77](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Table 11.4 Mineral Resource Estimates | [81](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| Table 12.1 Mineral Reserve Estimates | [86](#i2ba3bad0421d4582a3d0dc53d6af6e8c_28) |
| Table 13.1 Effective highwall angle by depth | [90](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 13.2 LOM Production Schedule | [95](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 13.3 ROM Dilution Parameters | [96](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 13.4 Recovery Rates by Seam | [96](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 13.5 Major and primary auxiliary equipment list | [99](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 13.6 MLMC Personnel | [99](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Table 16.1 Historical and Forecasted Coal Price | [103](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| Table 17.1 Red Hills Mine Permit Summary and Status | [106](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| Table 18.1 LOM Operating Costs to deliver approximately 27.2 million MMBtu per year | [110](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| Table 18.2 LOM Capital Costs to deliver approximately 27.2 million MMBtu per year | [111](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| Table 19.1 Summary of Income Statement and Cash Flow for LOM plan delivering approximately 27.2 million MMBtu | [113](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |
| Table 19.2 Effect of 15% increase in delivered MMBtu | [114](#i2ba3bad0421d4582a3d0dc53d6af6e8c_40) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**List of Figures**

---

| | |
|:---|:---|
| Figure 3.1 Regional Location Map | [24](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Figure 3.2 Location of the Red Hills Mine | [25](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Figure 6.1 Geologic Formations of Mississippi (Dicken, Nicholson, Horton, Foose, & Mueller, 2005) | [40](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Figure 6.2 Stratigraphic Column of the Red Hills Mine | [43](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Figure 6.3 Geologic Cross Sections planer reference | [44](#i2ba3bad0421d4582a3d0dc53d6af6e8c_1) |
| Figure 6.4 Geologic Cross Section E-W2, MS-002 permit area (Excerpted from SMCRA permit MS-002, R3, Appendix 2509-6) | [45](#i2ba3bad0421d4582a3d0dc53d6af6e8c_4) |
| Figure 6.5 Geologic Cross Sections C-C' and D-D', MS-004 permit area (Excerpted from SMCRA permit MS-004, Appendix 2509-6) | [46](#i2ba3bad0421d4582a3d0dc53d6af6e8c_7) |
| Figure 7.1 Location of Drill Holes | [49](#i2ba3bad0421d4582a3d0dc53d6af6e8c_13) |
| Figure 7.2 Groundwater Map | [57](#i2ba3bad0421d4582a3d0dc53d6af6e8c_19) |
| Figure 7.3 Location of Geotechnical Borings | [61](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Figure 8.1 NACoal 2020 Round Robin Program Summary. (NACoal, 2020) | [66](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Figure 11.1 Distribution of distance between quality drill holes | [76](#i2ba3bad0421d4582a3d0dc53d6af6e8c_22) |
| Figure 11.2 Red Hills Mine Mineral Resource Classifications; distance from core hole | [79](#i2ba3bad0421d4582a3d0dc53d6af6e8c_25) |
| Figure 13.1 Layout of the Red Hills Mine | [89](#i2ba3bad0421d4582a3d0dc53d6af6e8c_31) |
| Figure 13.2 Typical Pit Configuration for plan at steady state. (Mississippi Lignite Mining Company, 2019) | [91](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 13.3 Soil Stability Assessment. (Barr Engineering, 2014) | [92](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 13.4 Slope Stability Study (Aquaterra Engineering, LLC., 2010) | [93](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 13.5 Pit Layout - Truck and shovel operation. (Mississippi Lignite Mining Company, 2019) | [97](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 13.6 Pit Layout - Dozer operation. (Mississippi Lignite Mining Company, 2019) | [97](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 13.7 Pit Layout - Dragline operation. (Mississippi Lignite Mining Company, 2019) | [98](#i2ba3bad0421d4582a3d0dc53d6af6e8c_34) |
| Figure 15.1 Red Hills Mine Facilities Map | [102](#i2ba3bad0421d4582a3d0dc53d6af6e8c_37) |

---

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**Signature and Report Date**

The effective date of this Technical Report Summary (TRS) is December 31, 2021.

![image_1a.jpg](image_1a.jpg)

------

SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

CERTIFICATE OF QUALIFIED PERSON LEONARD R. DOLBY

(a)At the time of the study, I was the Engineering Manager at Mississippi Lignite Mining Company's Red Hills Mine in Ackerman, MS; a position I held since my hire in 2017. At the time of the Revision 1 signing, I am an independent consultant for NACCO Industries.

(b)This certificate applies to the Technical Report Summary titled, "SEC S-K 1300 Technical Report Summary, Revision 1, Mississippi Lignite Mining Company – Red Hills Mine, Ackerman, Mississippi."

(c)I am a Qualified Person (QP) for the purpose of SEC S-K 1300. My qualifications as a qualified person are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.I am a graduate of the Pennsylvania State University with a Bachelor of Science in Mining Engineering in 1983.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.I am a Professional Engineer of the state of Mississippi (License Number 28353).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.I am a Registered Member of the Society for Mining, Metallurgy and Exploration, Inc. (SME Number 00822358).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.My relevant experience of over 38 years, for the purpose of the Technical Report Summary, includes 11 years of mining operations experience, 10 years of consulting experience and 17 years in various technical roles, all of which have been in the coal industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.As the Engineering Manager for Mississippi Lignite Mining Company's Red Hills Mine, I conducted personal inspections of each mining area on a regular basis described in this Technical Report Summary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.I am responsible for the sections listed in the signature table on page 6 of this Technical Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.I have read SEC S-K 1300 Technical Report Summary requirements. The part of the Technical Report Summary for which I am responsible has been prepared in compliance with this requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.At the effective date of the Technical Report Summary, to the best of my knowledge, information, and belief, the parts of the Technical Report Summary for which I am responsible, contains all scientific and technical information that is required to be disclosed to make the Technical Report Summary not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.I consent to the filing of the Technical Report Summary as an exhibit to NACCO Industries, Inc.'s annual report. I also consent to the use of any quotes or summaries in that annual report to the extent they pertain to the Technical Report Summary sections for which I am responsible.

Dated this 16th day of December, 2022

![image_2a.jpg](image_2a.jpg)

Leonard R. Dolby

Mississippi Lignite Mining Company

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

CERTIFICATE OF QUALIFIED PERSON SARA T. MCKENZIE

(a)At the time of the study, I was an Engineer at the Mississippi Lignite Mining Company's Red Hills Mine in Ackerman, MS; a position I held from 2014 through February 2022. From 2011 through 2014, I worked at the Red Hills Mine as an engineering intern and co-op. At the time of the Revision 1 signing, I am an independent consultant for NACCO Industries

(b)This certificate applies to the Technical Report Summary titled, "SEC S-K 1300 Technical Report Summary, Revision 1, Mississippi Lignite Mining Company – Red Hills Mine, Ackerman, Mississippi."

(c)I am a Qualified Person (QP) for the purpose of SEC S-K 1300. My qualifications as a qualified person are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.I am a graduate of the Missouri University of Science and Technology with a Bachelor of Science in Geological Engineering in 2014.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.I am a Professional Engineer of the state of Mississippi (License Number 32051).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.I am a Registered Professional Geologist of the State of Mississippi (License Number 0975).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.My relevant experience of over 8 years including full-time and co-op experience, includes exploration, mine geology and various technical roles in the coal industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.As an engineer at Mississippi Lignite Mining Company's Red Hills Mine, I oversaw the drilling exploration programs at the mine and conduct personal inspections of each mining area on a regular basis described in this Technical Report Summary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.I am responsible for the sections listed in the signature table on page 6 of this Technical Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.I have read SEC S-K 1300 Technical Report Summary requirements. The part of the Technical Report Summary for which I am responsible has been prepared in compliance with this requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.At the effective date of the Technical Report Summary, to the best of my knowledge, information, and belief, the parts of the Technical Report Summary for which I am responsible, contains all scientific and technical information that is required to be disclosed to make the Technical Report Summary not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.I consent to the filing of the Technical Report Summary as an exhibit to NACCO Industries, Inc.'s annual report. I also consent to the use of any quotes or summaries in that annual report to the extent they pertain to the Technical Report Summary sections for which I am responsible.

Dated this 16th day of December, 2022

![image_3a.jpg](image_3a.jpg)

Sara T. McKenzie

Mississippi Lignite Mining Company

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SEC S-K 1300 Technical Report Summary

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**1. Executive Summary**

This amended Technical Report Summary (TRS) was prepared for the Mississippi Lignite Mining Company (MLMC) to report Mineral Resources and Mineral Reserves for the Red Hill Mine in Choctaw County, Mississippi. This TRS report updates the previously submitted TRS included as Exhibit 96.4 to NACCO Industries, Inc.'s Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission on March 2, 2021. The following items were impacted by this amendment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An increase in the Mineral Reserve tonnage estimate and a decrease in the Mineral Resource tonnage estimate exclusive of Mineral Reserves to reflect the Mineral Reserve increase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Add the LOM production schedule, historical and forecasted coal prices and historical production detail;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail of the terms of the lignite sales agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail in the economic analysis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail around property location.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1.Property Description and Ownership** 

NACCO Industries (NACCO), through a portfolio of mining and natural resources businesses, operates under three business segments: Coal Mining, North American Mining and Minerals Management. The Coal Mining segment operates surface coal mines under long-term contracts with power generation companies and an activated carbon producer pursuant to a service-based business model. Coal is surface-mined in North Dakota, Texas, Mississippi and Louisiana. Each mine is fully integrated with its customer's operations.

The Red Hills Mine, an active lignite surface mine in Mississippi, is operated by MLMC, a wholly-owned subsidiary of North American Coal (NACoal) which is a wholly-owned subsidiary of NACCO. The Red Hills Mine was designed to supply approximately 2.6 to 3.2 million tons of lignite per year to the adjacent RHPP. Actual production is dictated by customer MMBtu demand. MLMC provides the lignite for the RHPP under a contract that runs through April 2032. Mining dimensions are discussed in Sections 13.1 and 13.3 of this TRS.

MLMC is the exclusive supplier of lignite to the Red Hills Red Hills Power Plant (RHPP) in Choctaw County, Mississippi under a lignite sales agreement (LSA) with Choctaw Generation Limited Partnership (CGLP) that runs through April 2032. The RHPP supplies electricity to the Tennessee Valley Authority (TVA) under a long-term Power Purchase Agreement (PPA). CGLP leases the RHPP from a Southern Company subsidiary pursuant to a leveraged lease arrangement. The Life of Mine (LOM) plan used in this TRS report covers the period from January 2022 through April 2032 as the LOM plan assumes the RHPP will not continue to operate after the expiration of the current LSA with CGLP and the expiration of the existing PPA between TVA and CGLP in April 2032. MLMC sells coal to CGLP at a contractually agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates. MLMC is responsible for all operating costs, capital requirements and final mine reclamation. Profitability at MLMC is affected by customer demand for coal and changes in the indices that determine sales price and actual costs incurred. As diesel fuel is heavily weighted among the indices used to determine the coal sales price, fluctuations in diesel fuel prices can result in significant fluctuations in earnings at MLMC. Additional discussion of material contracts is provided in "16.0 Market Studies - 16.2 – Material Contracts."

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The Red Hills Mine is located approximately 7 miles northwest of Ackerman, Mississippi in Choctaw County, which is approximately 120 miles northeast of Jackson, Mississippi. The entrance to the mine is by means of a paved road located approximately 1 mile west of MS Highway 9.

MLMC owns in fee approximately 7,343 acres of surface interest and 4,425 acres of coal interest. MLMC holds leases granting the right to mine approximately 5,794 acres of coal interests and the right to utilize approximately 5,597 acres of surface interests. MLMC holds subleases under which it has the right to mine approximately 1,593 acres of coal interest. Most of the leases held by MLMC have terms extending 50 years, and can be further extended by the continuation of mining operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2.Geology and Mineralization**

The Red Hills Mine is in the Wilcox Group of Mississippi which is the most prolific lignite-bearing stratum in the state of Mississippi. The formations within the Wilcox Group and the underlying Midway Group consist of sands, silts, clay, and lignite which were deposited during Paleogene time, approximately 66 to 23 million years ago. Deposition occurred in a cyclical manner representing a transition from a transgressive sequence of valley fill, marginal marine strata to predominantly regressive, nonmarine, deltaic strata.

During each depositional geologic sequence, organic material was repeatedly buried by sediment in an ideal, oxygen-free environment. This ideal environment was attributed to the humid, subtropical conditions and high water-table of wetlands present during Paleogene time which prevented plant matter from decaying prior to burial. The oxygen-free environment combined with heat and pressure from continual deposition of overlying sediments allowed for the formation of peat and further mineralization of lignite over time by undergoing a process known as humification and biochemical gelification.

The average thickness of the Wilcox section containing the mineable lignite seams at the Red Hills Mine and surrounding area is approximately 140 feet. Mineable lignite seams may be as thin as 1-foot and typically do not exceed 5-feet in thickness. Currently, six primary lignite seams are targeted for mining.

The local structural geology for the Red Hills Mine follows the regional structure with a northwest-southeast strike dipping to the southwest. The lignite seams are gently undulating due to differential compaction of the underlying sediments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.3.Status of Exploration** 

Exploration programs described in this TRS have considered the stratigraphic nature of the mineralization for the determination of hole spacing, drilling and sampling method, and quality analyses in order to geologically map and evaluate the structural and quality characteristics of the lignite deposit. The Red Hills Mine lignite deposit is evaluated on a seam-by-seam basis. Drilling exploration data including geologic lithologies, qualities, and hole locations have been compiled in an electronic, geologic database.

From 1975 through 1980 drilling campaigns were completed under the sole direction of Phillips Coal Company (Phillips). Since 1997, independent drilling and geophysical logging contractors have operated under the guidance and direction of MLMC.

Over 1,400 drill holes including pilot holes, coal core holes, overburden holes, geotechnical holes, and monitoring wells have been drilled within the Red Hills Mine lignite deposit. Drilling campaigns conducted at the mine have comprised largely of rotary wash drilling methods. Drill holes were geophysically logged for natural gamma,

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density, caliper, and resistivity responses to obtain data related to the subsurface structure. Coal core samples collected for quality analyses were sent to independent commercial laboratories for testing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.4.Development and Operations** 

The Red Hills Mine is a multiple lignite seam surface mining operation which supplies approximately 2.6 to 3.2 million tons of lignite per year to the adjacent RHPP. Actual annual production is dictated by customer demand. The RHPP supplies electricity to TVA under a long-term PPA. MLMC's customer's demand for coal is driven by the decision of which power plants to dispatch as determined by TVA. An increase in the number of days TVA dispatches the RHPP would increase demand. A decrease in the number of days TVA dispatches the RHPP would reduce demand.

The lignite at the Red Hills Mine surface mining operation is uncovered using dragline, dozer, and conventional truck and shovel mining methods due to the proximity of the lignite to the surface and the physical characteristics of the deposit. Lignite is mined using a surface miner or a hydraulic backhoe to load a fleet of end dump haul trucks and is directly shipped to the RHPP or the lignite stockpile. The overall average Run of Mine (ROM) quality of the mined lignite seams meets the required power plant quality specifications. Therefore, no mineral processing is performed by MLMC.

The Red Hills Mine began operations in the MS-002 permit area in Mine Area 1 and is in the process of transitioning to Mine Area 3 within the MS-004 permit area. Initial development of the Red Hills Mine began in 1998, with full production and commercial deliveries commencing in 2002. Boxcut construction for Mine Area 3 began in 2021 where mining will continue through April 2032. The Red Hills Mine has, or is currently constructing, all supporting infrastructure for mining operations within the permitted areas.

The Red Hills Mine employs a staff and workforce of approximately 200 employees with fluctuations in employment levels for changes in demand at the RHPP or special projects such as the transition of mining from Mine Area 1 to Mine Area 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.5.Mineral Resource Estimate** 

The Mineral Resources in this TRS have been estimated by applying a series of geologic and physical limits as well as high-level mining and economic constraints. The mining and economic constraints were limited to a level sufficient to support reasonable prospect for economic extraction of the estimated Mineral Resources. The potential for economic extraction is justified by the terms of the existing LSA with the RHPP that runs through April 2032.

The QP based the Mineral Resource estimates for the Red Hills Mine on a stratigraphic geologic model generated from the verified drilling exploration data. For a lignite seam to be considered a Mineral Resource by the QP, the seam must have a minimum of ten coal core samples for quality estimation, and an average coal core quality which fell within the quality limits set forth by the LSA. Mineral Resources were then further defined for each identified lignite seam by applying projected pit shells based on physical constraints, including but not limited to lease and fee coal boundaries, and a maximum cumulative stripping ratio of 18:1 based on an assumed lignite sales price of $30 per ton.

Mineral Resources were divided into three categories of Measured, Indicated, or Inferred and were ranked by increasing level of confidence. The Mineral Resource categorization applied by the QP included the consideration of the type and amount of data per drill hole and the spatial distribution of drill holes. Measured Mineral Resources are

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defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is less than or equal to 1,000 feet. Indicated Mineral Resources are defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is greater than 1,000 feet and less than or equal to 3,000 feet. Inferred Mineral Resources are defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is greater the 3,000 feet and less than or equal to 5,000 feet.

Mineral Resources as of December 31, 2021 are shown in Table 1.1, and are reported as in-situ tons such that no adjustments were made to account for mining recovery or losses. Mineral Resources are reported exclusive of in-situ Mineral Reserves.

**Table 1.1 Mineral Resource Estimates**

![image1a.jpg](image1a.jpg)

In the opinion of the QP it is important to note that additional exploration may positively or negatively affect Mineral Resource estimates. Additionally, Mineral Resource estimates may be materially affected by a change in the assumptions including general mining costs and land control. New regulations may also impose additional economic factors, delays to future permit renewals, or restrictions to physical estimation boundaries.

At the time of this TRS, the QP is not aware of any specific factors that would materially affect the Mineral Resource estimates presented herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.6.Mineral Reserve Estimate** 

The Mineral Reserves in this TRS were determined to be the economically mineable portion of the Mineral Resources after the consideration of modifying factors related to the mining process, which convert Measured Resources to Proven Mineral Resources and Indicated Resources to Probable Mineral Reserves. Inferred Mineral Resources were not considered for Mineral Reserves.

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Parameters for mining dilution, minimum mining thickness, and minimum parting thickness were applied by the QP to the geologic (Mineral Resource) model to create the Mineral Reserve model. Mining pits were projected based on current mining equipment operating parameters and a maximum cumulative stripping ratio of 14:1 based on an estimated average price per ton of $28.04. Mining pits were then sectioned into 500-foot blocks; adjusting endwall blocks as necessary. Blocks were reviewed by the QP to ensure quality thresholds were met. Recovery rates were applied to the lignite tonnages by seam and then the blocks were sequenced based on a projected total delivered heat requirement measured in million British Thermal Units (MMBtu) through the LOM plan to determine the Measured and Indicated Resources that would be converted to Proven and Probable Mineral Reserves. The details of the LOM plan are shown in Table 1.2.

**Table 1.2 LOM Production Schedule** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** |
| Delivered Coal (000 tons) | 2675 | 2683 | 2679 | 2680 | 2674 | 2668 |
| Delivered MMBTU (000) | 27212 | 27212 | 27212 | 27212 | 27212 | 27212 |
| Calorific Value, Btu/lb | 5076 | 5082 | 5096 | 5091 | 5066 | 5036 |
| Total Overburden Material (000 CY) | 27641 | 23126 | 23106 | 25574 | 30037 | 33275 |
|  | **2028** | **2029** | **2030** | **2031** | **2032** | **Total** |
| Delivered Coal (000 tons) | 2690 | 2691 | 2672 | 2658 | 662 | **27431** |
| Delivered MMBTU (000) | 27212 | 27212 | 27212 | 27212 | 6803 | **278923** |
| Calorific Value, Btu/lb | 5030 | 5069 | 5101 | 5144 | 5141 | **5084** |
| Total Overburden Material (000 CY) | 34165 | 34108 | 34021 | 35442 | 6580 | **307076** |

---

This disclosure of Mineral Reserves is based upon the QP's opinion that the LOM plan and cost estimates have been completed to a Pre-feasibility (PFS) level of accuracy, as defined in 17 Code of Federal Regulations (CFR) Part 229.1300, which includes and supports the QP's determination of Mineral Reserves.

The Red Hills Mine Mineral Reserve, as of December 31, 2021, is shown in Table 1.3.

**Table 1.3 Mineral Reserve Estimate**![imagea.jpg](imagea.jpg)

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The QP's opinion on risks related to Mineral Reserve estimates include changes in customer demand for any reason, including, but not limited to, dispatch of power generated by other energy sources ahead of coal, fluctuations in demand due to unanticipated weather conditions, regulations or comparable policies which may promote planned and unplanned outages at the RHPP, economic conditions, including an economic slowdown and a corresponding decline in the use of electricity, governmental regulations and/or inflationary adjustments which could have a material adverse effect on MLMC's financial condition, results of operations and cash flows.

At the time of this TRS, the QP is not aware of any specific factors that would materially affect the Mineral Reserve estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.7.Economic Assessment** 

The primary driver in determining the economic viability of the Red Hills Mine was the expected annual operating performance of the RHPP, which was forecasted using two main inputs: the annual projection notice (nomination for MMBtu requirements) received from the RHPP and a comparison to historical prior years actual delivered lignite fuel. The annual MMBtu requirement used in the Red Hills LOM Economic Model was approximately 27.2 million MMBtu. This resulted in a production schedule of approximately 2.7 million tons (Mt) of dedicated lignite per year each year until LSA contract expiration in April 2032.

LOM operating costs for a plan delivering approximately 27.2 million MMBtu per year to the RHPP total approximately $830 million (M). Operating costs included major cost categories for mine development, burden removal, severing of lignite, reclamation, maintenance and handling of stockpiled lignite and delivery to the adjacent RHPP along with the necessary maintenance required to keep all equipment operating safely and efficiently.

Capital costs to fulfill the LSA for a plan delivering approximately 27.2 million MMBtu per year to the RHPP are expected to total approximately $32 M. Capital Costs included categories for equipment expenditures, mine development, mitigation, and land acquisitions.

The base price for the dedicated lignite is defined in the LSA and consists of eight indexed components including a power cost component, a pass-through component, a royalty component and a fixed component. Over the LOM plan, the average price per ton for lignite delivered and sold is $28.04 providing revenues totaling approximately $769 M. The Red Hills Mine began commercial deliveries in 2001. The sales price over the last three years has averaged approximately $27 as shown in Table 1.4. The forecasted coal price for the LOM is also shown in Table 1.4.

**Table 1.4 Historical and Forecasted Coal Price** 

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Historical | 2019 | 2020 | 2021 | Total |  |  |  |  |  |  |  |  |
| Tons Sold (000 ton) | 2562 | 2538 | 3025 | 8125 |  |  |  |  |  |  |  |  |
| Coal Price $/Ton | 26.54 | 27.61 | 27.20 | 27.12 |  |  |  |  |  |  |  |  |
| Forecasted | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | Total |
| Tons Sold (000 ton) | 2675 | 2683 | 2679 | 2680 | 2674 | 2668 | 2690 | 2691 | 2672 | 2658 | 662 | 27431 |
| Coal Price $/Ton | 28.46 | 23.96 | 26.40 | 28.61 | 27.04 | 27.25 | 29.23 | 28.08 | 29.45 | 30.90 | 32.37 | 28.04 |

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The projected annual cash flow forecast based on the lignite production schedule over the remaining LOM results in a total after-tax cash flow projection of $80 M resulting in a net present value of $42 M at a 10% discount rate.

The Economic Assessment used what could be considered a conservative assumption in light of historical trends, current conditions and expected future developments for delivered fuel to the RHPP of approximately 27.2 million MMBtu annually. Therefore, the QP is of the opinion that any downside risks to the economic viability of the project to be minimal. There is a risk to the LOM plan if the RHPP takes less than the LOM plan MMBtu's, but this scenario is not considered a significant risk as a result of the minimum take provisions included in the LSA. Other downside risks modeled were the effects of an increase in diesel prices and labor.

The Income Statement and Annual Cash Flows based on the lignite production schedule for the LOM plan, along with the Net Present Value are detailed in Table 1.5. A Discount Rate of 10% was used, as this was consistent with the Red Hills Mine's weighted average cost of capital. The calculation of Net Present Value and Internal Rate of Return are nuanced due to the ongoing nature of this mining operation. As modeled, the cash flows for the period 2022 through 2045 indicate the project is cash flow positive over the remaining life of the project.

In the opinion of the QP, the income statement and cash flow projection based on the LOM plan assumptions as shown in Table 1.5 are reasonable in light of historical trends, current conditions and expected future developments. As modeled, the future cash flow projection is estimated to be approximately $80 M and the net present value is estimated to be approximately $42 M.

Note that the net present value calculated for this report does not consider previous cash inflows and outflows and is only calculated from 2022 through the remainder of the LOM.

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**Table 1.5 Summary of Income Statement and Cash Flow for LOM plan delivering approximately 27.2 million MMBtu**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Income Statement ($M unless noted)** | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** | **2028** |
| **Tons Sold (in thousands)** | **2675** | **2683** | **2679** | **2680** | **2674** | **2668** | **2690** |
| <u>Revenue/Ton</u> | $28.46 | $23.96 | $26.40 | $28.61 | $27.04 | $27.25 | $29.23 |
| **Total Revenue** | **$76134** | **$64302** | **$70730** | **$76687** | **$72292** | **$72699** | **$78623** |
| **<u>Expenses</u>** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor, Materials, Fuel | $40401 | $38201 | $38133 | $39582 | $41071 | $42490 | $44297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalties & Production Taxes | $2988 | $3263 | $2952 | $3348 | $3938 | $3974 | $3178 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses | $30102 | $32227 | $37981 | $38957 | $35878 | $33845 | $36185 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes | $317 | ($1127) | ($1000) | ($624) | ($1031) | ($913) | ($604) |
| **Net Income** | **$2326** | **($8261)** | **($7335)** | **($4577)** | **($7563)** | **($6697)** | **($4432)** |
| **EBITDA** | $22372 | $10664 | $10779 | $14158 | $10761 | $11820 | $13459 |
| Capital Expenditures | ($6318) | ($6249) | ($4674) | ($2760) | ($1700) | ($3943) | ($3203) |
| Investing Activities | ($2884) | ($1069) | $6813 | $6699 | $2981 | ($1770) | $2620 |
| Financing Activities | ($2194) | ($3335) | ($4448) | ($5399) | ($5664) | ($5145) | ($4860) |
| Mine Closing | - | ($8695) | ($5777) | ($996) | ($348) | ($206) | ($100) |
| Income Taxes | ($317) | $1127 | $1000 | $624 | $1031 | $913 | $604 |
| **Increase (decrease) in Cash** | **$10660** | **($7558)** | **$3692** | **$12325** | **$7061** | **$1671** | **$8520** |
| **Income Statement ($M unless noted)** | **2029** | **2030** | **2031** | **2032** | **2033-2045** | **Total** |  |
| **Tons Sold (in thousands)** | **2691** | **2672** | **2658** | **662** | **-** | **27431** |  |
| <u>Revenue/Ton</u> | $28.08 | $29.45 | $30.90 | $32.37 |  |  |  |
| **Total Revenue** | **$75557** | **$78688** | **$82130** | **$21423** | **-** | **$769266** |  |
| **<u>Expenses</u>** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor, Materials, Fuel | $45355 | $46071 | $47612 | $10844 | - | $434058 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalties & Production Taxes | $2887 | $2343 | $2574 | $1291 | $494 | $33229 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other  | $33841 | $33035 | $27158 | $20633 | $10756 | $370598 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes | ($783) | ($331) | $574 | ($1361) | ($1350) | ($8234) |  |
| **Net Income** | **($5743)** | **($2430)** | **$4212** | **($9984)** | **($9900)** | **($60384)** |  |
| **EBITDA** | $11515 | $14129 | $21062 | ($3791) | ($1261) | $135665 |  |
| Capital Expenditures | ($1503) | ($1306) | - | - | - | ($31655) |  |
| Investing Activities | $2162 | $4471 | ($1924) | $22404 | $10619 | $51123 |  |
| Financing Activities | ($5055) | ($4184) | ($3120) | ($2066) | ($4569) | ($50040) |  |
| Mine Closing | ($50) | ($50) | ($50) | ($9938) | ($7020) | ($33230) |  |
| Income Taxes | $783 | $331 | ($574) | $1361 | $1350 | $8234 |  |
| **Increase (decrease) in Cash** | **$7851** | **$13391** | **$15393** | **$7971** | **($881)** | **$80097** |  |
| **NET Present Value (10%)** | **$42126** |  |  |  |  |  |  |
| **Internal Rate of Return** | **38.4%** |  |  |  |  |  |  |

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.8.Permitting Requirements**

The Red Hills Mine operates under the state of Mississippi Surface Coal Mining and Reclamation Permit MS-002, Renewal 3 and Surface Coal Mining and Reclamation Permit MS-004 issued by the Mississippi Department of Environmental Quality (MDEQ) under delegated authority of the United States Department of the Interior, Office of Surface Mining Reclamation Enforcement (OSMRE) Surface Mining Control and Reclamation Act (SMCRA). In addition to the mining permit, MLMC has secured 45 other permit and agreements, including a National Pollutant Discharge Elimination System (NPDES) permit and an Individual Permit issued by the United States Army Corp of Engineers (USCOE). All permits have been secured and continue to be renewed in a timely fashion.

MLMC currently has all permits in place for the Red Hills Mine to operate and adhere to a mine plan projected through April 2032. Barring any regulatory changes out of MLMC's control, the QP does not anticipate hurdles for approval of future renewal applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.9.Qualified Person's Conclusions and Recommendations**

In the QP's opinion, the geological data, sampling, modeling, and estimate are carried out in a manner that both represents the data well and mitigates the likelihood of material misrepresentations for the statements of Mineral Resources. There are currently no recommendations for Mineral Resources.

In the QP's opinion, the operational and mine planning data, LOM Plan, and estimation are carried out in a manner that both represents the data and operational experience and methodology well and mitigates the likelihood of material misrepresentations for the statements of Mineral Reserves. There are currently no recommendations for Mineral Reserves.

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**2. Introduction**

This amended Technical Report Summary (TRS) was prepared for the Mississippi Lignite Mining Company (MLMC), a wholly-owned subsidiary of the North American Coal Corporation (NACoal) which is a wholly-owned subsidiary of NACCO.

This TRS report updates the previously submitted TRS included as Exhibit 96.4 to NACCO Industries, Inc.'s Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission on March 2, 2021. The following items were impacted by this amendment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An increase in the Mineral Reserve tonnage estimate and a decrease in the Mineral Resource tonnage estimate exclusive of Mineral Reserves to reflect the Mineral Reserve increase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Add the LOM production schedule, historical and forecasted coal prices and historical production detail;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail of the terms of the lignite sales agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail in the economic analysis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide additional detail around property location.

The purpose for which this TRS was prepared is to report Mineral Resources and Mineral Reserves for the Red Hill Mine located in Choctaw County, Mississippi.

The sources of information and data contained in the technical report or used in its preparations were supplied by MLMC and include data used to produce geologic models, Annual and Life of Mine (LOM) plans, production data, environmental support documents, independent technical studies, resource and reserve estimates, cost estimates, and economic analyses. A large portion of the technical information is summarized from active Surface Mining Control and Reclamation Act (SMCRA) permits addressing Title 11 of the Miss. Admin. Code Pt.8, Ch-2, Mississippi Commission on Environmental Quality Regulations Governing Surface Coal Mining, hereby known as the mine permit requirements. Additional references to specific studies and documents are provided in Section 24.0 of this TRS.

Qualified Persons (QPs) are employed by MLMC. As such, inspections of the Red Hills Mine are conducted to perform the duties of their respective jobs on a regular basis and no individual date of inspection has been identified. Sara T. McKenzie is serving as the Mineral Resource QP, a Registered Professional Geologist and licensed Professional Engineer, who has direct oversight of the drilling exploration programs, and is directly involved in mine development projects and daily production operations at the Red Hills Mine. Leonard R. Dolby, is serving as the Mineral Reserve QP, a licensed Professional Engineer and registered SME member, who has direct engagement with daily production operations and oversight and management of technical projects as the Engineering Manager, and is directly involved in the development of the LOM finances at the Red Hills Mine.

This is the first TRS filed to the United States Securities and Exchange Commission (SEC) therefore no preexisting TRS exists with the SEC.

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Unless otherwise stated, the terms of reference for this TRS include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• US English spelling;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Imperial units of measurement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lignite qualities are presented in weight percent (wt%) and lignite tonnages are present in short tons (2000 lbs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Coordinate System is presented in imperial units using the North American Datum 1983 (NAD83), Mississippi East State Plane;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nominal US Dollars as of 2021.

Key Acronyms and definitions for this TRS include:

---

| | |
|:---|:---|
| &nbsp;&nbsp;AOP | &nbsp;&nbsp;Annual Operating Plan |
| &nbsp;&nbsp;AR | &nbsp;&nbsp;As-Received Basis |
| &nbsp;&nbsp;ARO | &nbsp;&nbsp;Asset Retirement Obligation |
| &nbsp;&nbsp;ASTM | &nbsp;&nbsp;American Society for Testing and Materials |
| &nbsp;&nbsp;BCY | &nbsp;&nbsp;Bank Cubic Yard |
| &nbsp;&nbsp;BMPs | &nbsp;&nbsp;Best Management Practices |
| &nbsp;&nbsp;BOX | &nbsp;&nbsp;Base of Oxidation |
| &nbsp;&nbsp;BUD | &nbsp;&nbsp;Beneficial (Ash) Use Determination |
| &nbsp;&nbsp;Cardno GLS | &nbsp;&nbsp;Cardno Geophysical Logging Services |
| &nbsp;&nbsp;Century GLS | &nbsp;&nbsp;Century Geophysical Logging Services |
| &nbsp;&nbsp;CGLP | &nbsp;&nbsp;Choctaw Generation Limited Partnership |
| &nbsp;&nbsp;COC | &nbsp;&nbsp;Chain of Custody |
| &nbsp;&nbsp;CRIRSCO | &nbsp;&nbsp;Committee for Mineral Reserves International Reporting Standards |
| &nbsp;&nbsp;DMRs | &nbsp;&nbsp;Discharge Monitoring Reports |
| &nbsp;&nbsp;DTM | &nbsp;&nbsp;Digital Terrain Model |
| &nbsp;&nbsp;EIS | &nbsp;&nbsp;Environmental Impact Statement |
| &nbsp;&nbsp;FoS | &nbsp;&nbsp;Factor of Safety |
| &nbsp;&nbsp;GEA | &nbsp;&nbsp;Geotechnical Engineering Associates |
| &nbsp;&nbsp;gpm | &nbsp;&nbsp;Gallons per Minute |
| &nbsp;&nbsp;GSE | &nbsp;&nbsp;Great Southern Engineering |
| &nbsp;&nbsp;HDPE | &nbsp;&nbsp;High Density Polyethylene |
| &nbsp;&nbsp;Lbs | &nbsp;&nbsp;Pounds |
| &nbsp;&nbsp;LOM | &nbsp;&nbsp;Life of Mine |
| &nbsp;&nbsp;LSA | &nbsp;&nbsp;Lignite Sales Agreement |
| &nbsp;&nbsp;M | &nbsp;&nbsp;Million (dollars) |
| &nbsp;&nbsp;MA1 | &nbsp;&nbsp;Mine Area 1 |
| &nbsp;&nbsp;MA3 | &nbsp;&nbsp;Mine Area 3 |
| &nbsp;&nbsp;MDA&H | &nbsp;&nbsp;Mississippi Department of Archives and History |
| &nbsp;&nbsp;MDEQ | &nbsp;&nbsp;Mississippi Department of Environmental Quality |
| &nbsp;&nbsp;MDOT | &nbsp;&nbsp;Mississippi Department of Transportation |
| &nbsp;&nbsp;MLMC | &nbsp;&nbsp;The Mississippi Lignite Mining Company |
| &nbsp;&nbsp;MMbtu | &nbsp;&nbsp;Metric Million British Thermal Units |
| &nbsp;&nbsp;MS-002 permit | &nbsp;&nbsp;Surface Mining Control and Reclamation Act (SMCRA) permit MS-002, Renewal 3 |
| &nbsp;&nbsp;MS-004 permit | &nbsp;&nbsp;Surface Mining Control and Reclamation Act (SMCRA) permit MS-004 |
| &nbsp;&nbsp;mg/L | &nbsp;&nbsp;Milligrams per Liter |
| &nbsp;&nbsp;msl | &nbsp;&nbsp;Mean Sea Level |
| &nbsp;&nbsp;Mt | &nbsp;&nbsp;Million Tons |

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---

| | |
|:---|:---|
| &nbsp;&nbsp;MSU | &nbsp;&nbsp;Mississippi State University |
| &nbsp;&nbsp;MS | &nbsp;&nbsp;Mississippi |
| &nbsp;&nbsp;NACCO | &nbsp;&nbsp;NACCO Industries |
| &nbsp;&nbsp;NACoal | &nbsp;&nbsp;North American Coal |
| &nbsp;&nbsp;NOV | &nbsp;&nbsp;Notice of Violation |
| &nbsp;&nbsp;NPDES | &nbsp;&nbsp;National Pollutant Discharge Elimination System |
| &nbsp;&nbsp;NPS | &nbsp;&nbsp;National Park Service |
| &nbsp;&nbsp;NRCS | &nbsp;&nbsp;Natural Resources Conservation Service |
| &nbsp;&nbsp;OSMRE | &nbsp;&nbsp;United States Department of the Interior, Office of Surface Mining Reclamation Enforcement |
| &nbsp;&nbsp;Phillips | &nbsp;&nbsp;Phillips Coal Company |
| &nbsp;&nbsp;Prox | &nbsp;&nbsp;Proximate |
| &nbsp;&nbsp;PPA | &nbsp;&nbsp;Power Purchase Agreement |
| &nbsp;&nbsp;QAR PTP | &nbsp;&nbsp;Proficiency Testing Program by Quality Assurance Resources, LLC |
| &nbsp;&nbsp;QA/QC | &nbsp;&nbsp;Quality Assurance/Quality Control |
| &nbsp;&nbsp;QP(s) | &nbsp;&nbsp;Qualified Person(s) |
| &nbsp;&nbsp;RHPP | &nbsp;&nbsp;Red Hills Power Plant |
| &nbsp;&nbsp;R-O-M | &nbsp;&nbsp;Run of Mine |
| &nbsp;&nbsp;R-O-W | &nbsp;&nbsp;Right of Way |
| &nbsp;&nbsp;SEC | &nbsp;&nbsp;United States Security and Exchange Commission |
| &nbsp;&nbsp;SG | &nbsp;&nbsp;Specific Gravity |
| &nbsp;&nbsp;S-K 1300 | &nbsp;&nbsp;SEC's Subpart S-K 1300 (17 CFR Part 229.1300) |
| &nbsp;&nbsp;SMCRA | &nbsp;&nbsp;Surface Mining Control and Reclamation Act |
| &nbsp;&nbsp;SPGM | &nbsp;&nbsp;Suitable Plant Growth Material |
| &nbsp;&nbsp;SPT | &nbsp;&nbsp;Standard Penetration Testing |
| &nbsp;&nbsp;SWPPP | &nbsp;&nbsp;Storm Water Pollution and Prevention Plan |
| &nbsp;&nbsp;TDS | &nbsp;&nbsp;Total Dissolved Solids |
| &nbsp;&nbsp;TRS | &nbsp;&nbsp;Technical Report Summary |
| &nbsp;&nbsp;TSS | &nbsp;&nbsp;Total Suspended Solids |
| &nbsp;&nbsp;TVA | &nbsp;&nbsp;the Tennessee Valley Authority |
| &nbsp;&nbsp;USCOE | &nbsp;&nbsp;United States Corps of Engineers |
| &nbsp;&nbsp;USCS | &nbsp;&nbsp;Unified Soil Classification System |
| &nbsp;&nbsp;USGS | &nbsp;&nbsp;United States Geological Survey |
| &nbsp;&nbsp;WOTUS | &nbsp;&nbsp;Waters of the United States |

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**3. Property Description**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1.Property Location** 

The Red Hills Mine is an operating lignite surface mine located approximately 7 miles northwest of Ackerman, Mississippi, in Choctaw County, which is approximately 120 miles northeast of Jackson, Mississippi (Figure 3.1).

**Figure 3.1 Regional Location Map**

The entrance to the mine is by means of a paved road that is located approximately 1 mile west of MS Highway 9. The general location of the Red Hills Mine is shown in Figure 3.2. The RHPP is adjacent to the Red Hills Mine.

![image_6a.jpg](image_6a.jpg)

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Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**Figure 3.2 Location of the Red Hills Mine**

![image_7a.jpg](image_7a.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2.Property Area**

The Red Hills Mine is encompassed by two permit areas, MS-002 and MS-004 as indicated in Figure 3.1. Two Mineral Resource areas fall within the MS-002 permit area, and are identified as Mine Area 1 and Mine Area 2. A third Mineral Resource area falls within the MS-004 permit area, and is identified as Mine Area 3. Mine Area 1 and Mine Area 3 include Mineral Reserves in addition to Mineral Resources. Mine Area 2 is a small, permitted auxiliary pit which may be used for tons to supplement the mine plan, but is not currently sequenced in the LOM plan, and as such only includes Mineral Resources, not Mineral Reserves. Mine Area 1 is 356 acres, Mine Area 2 is 202 acres, and Mine Area 3 is 2,197 acres.

MLMC holds leases granting the right to mine approximately 5,794 acres of coal interests and the right to utilize approximately 5,597 acres of surface interests. In addition to leases with independent landowners, MLMC owns in fee approximately 7,343 acres of surface interest and 4,425 acres of coal interest. MLMC holds subleases under which it has the right to mine approximately 1,593 acres of coal interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3.Leases and Mineral Rights**

The name or number and expiration date of each title, claim, mineral right, lease, or option under which MLMC or an affiliated NACCO company has or will have the right to hold or operate on the property is described on Table 3.1 (Identification of Leases) and Table 3.2 (Identification of Acquisitions).

The leases, sub-leases and fee acquisitions were obtained by land acquisition staff employed by Phillips and NACoal. Most of the leases held by MLMC have terms extending 50 years, and can be further extended by the continuation of mining operations. The surface and mineral leases and associated sub-leases held by MLMC require payments specified by lease agreement to retain the property. Typically, a standard production royalty rate of $0.50 per ton of lignite mined is tied to the leases. Royalties are calculated monthly based on surveyed mined tons and are paid to the landowners on a quarterly basis. In addition to production royalties, payments related to landowner leases may also include surface damage payments and/or advanced royalties.

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**Table 3.1 Identification of Leases** 

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| | | | |
|:---|:---|:---|:---|
| **Lease Id** | **Lease Type** | **Lease Date** | **Lease Expiration Date** |
| 955-900002 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900003 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900004 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900005 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900006 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900007 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900008 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900009 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900010 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900011 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900012 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900013 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900014 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900015 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900016 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900017 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900018 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900019 | Coal Lease | 12/31/2013 | 12/30/2038 |
| 955-900023 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900024 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900025 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900026 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900027 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900028 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900029 | Coal Lease | 7/10/2015 | 7/9/2040 |
| 955-900030 | Coal Lease | 10/26/2015 | 10/25/2040 |
| 955-900031 | Coal Lease | 10/26/2015 | 10/25/2040 |
| 955-900032 | Coal Lease | 5/6/2016 | 5/5/2041 |
| 955-900033 | Coal Lease | 10/1/2017 | 9/30/2042 |
| 955-900038 | Coal Lease | 6/1/2019 | 5/31/2044 |
| 956-929484 | Coal Lease | 5/9/1975 | 5/8/2025 |
| 956-929485 | Coal Lease | 5/9/1975 | 5/8/2025 |
| 956-929508 | Coal Lease | 5/14/1975 | 5/13/2025 |
| 956-929557 | Coal Lease | 5/13/1975 | 5/12/2025 |
| 956-929588 | Coal Lease | 3/5/1981 | 3/4/2031 |
| 956-929589 | Coal Lease | 6/16/1975 | 6/15/2025 |
| 956-929597 | Coal Lease | 6/24/1975 | 6/23/2025 |
| 956-929599 | Coal Lease | 5/12/1975 | 5/11/2025 |
| 956-929603 | Coal Lease | 6/26/1975 | 6/25/2025 |
| 956-929646 | Coal Lease | 6/2/1975 | 6/1/2025 |

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| | | | |
|:---|:---|:---|:---|
| 956-929743 | Coal Lease | 5/14/1975 | 5/13/2025 |
| 956-929744 | Coal Lease | 6/11/1975 | 6/10/2025 |
| 956-929745 | Coal Lease | 6/11/1975 | 6/10/2025 |
| 956-929748 | Coal Lease | 5/22/1978 | 5/21/2028 |
| 956-929749 | Coal Lease | 8/7/1975 | 8/6/2025 |
| 956-929750 | Coal Lease | 8/4/1975 | 8/3/2025 |
| 956-929751 | Coal Lease | 6/17/1975 | 6/16/2025 |
| 956-929752 | Coal Lease | 6/5/1975 | 6/4/2025 |
| 956-929755 | Coal Lease | 8/7/1975 | 8/6/2025 |
| 956-929757 | Coal Lease | 8/25/1975 | 8/24/2025 |
| 956-929759 | Coal Lease | 8/27/1975 | 8/26/2025 |
| 956-929801 | Coal Lease | 10/24/1974 | 10/23/2025 |
| 956-929802 | Exploration Contract & Coal Lease | 10/30/1974 | 10/29/2025 |
| 956-929803 | Coal Lease | 9/4/1975 | 9/3/2025 |
| 956-929835 | Exploration Contract & Coal Lease | 10/24/1974 | 10/23/2025 |
| 956-929839 | Coal Lease | 9/15/1975 | 9/14/2025 |
| 956-929841 | Coal Lease | 9/15/1975 | 9/14/2025 |
| 956-929842 | Coal Lease | 9/24/1975 | 9/23/2025 |
| 956-929910 | Exploration Contract & Coal Lease | 10/11/1974 | 10/10/2025 |
| 956-929911 | Exploration Contract & Coal Lease | 10/28/1974 | 10/27/2025 |
| 956-929954 | Coal Lease | 9/22/1975 | 9/21/2025 |
| 956-929955 | Coal Lease | 9/25/1975 | 9/24/2025 |
| 956-929956 | Coal Lease | 9/26/1975 | 9/25/2025 |
| 956-929957 | Coal Lease | 9/20/1975 | 9/19/2025 |
| 956-929958 | Coal Lease | 10/2/1975 | 10/1/2025 |
| 956-929959 | Coal Lease | 10/3/1975 | 10/2/2025 |
| 956-930068 | Coal Lease | 10/13/1975 | 10/12/2025 |
| 956-930187 | Coal Lease | 10/7/1975 | 10/6/2025 |
| 956-930280 | Coal Lease | 12/18/1975 | 12/17/2025 |
| 956-930367 | Coal Lease | 12/16/1975 | 12/15/2025 |
| 956-930413 | Coal Lease | 2/27/1976 | 2/26/2026 |
| 956-930414 | Coal Lease | 2/27/1976 | 2/26/2026 |
| 956-930474 | Coal Lease | 1/26/1976 | 1/25/2026 |
| 956-930480 | Coal Lease | 2/3/1976 | 2/2/2026 |
| 956-930482 | Coal Lease | 2/25/1976 | 2/24/2026 |
| 956-930483 | Coal Lease | 2/19/1976 | 2/18/2026 |
| 956-930488 | Coal Lease | 3/18/1976 | 3/17/2026 |
| 956-930493 | Coal Lease | 3/10/1976 | 3/9/2026 |
| 956-930494 | Coal Lease | 3/17/1976 | 12/31/2036 |
| 956-930495 | Coal Lease | 3/22/1976 | 3/21/2026 |
| 956-930497 | Coal Lease | 3/23/1976 | 3/22/2026 |
| 956-930499 | Coal Lease | 3/18/1976 | 3/17/2001\* |

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| | | | |
|:---|:---|:---|:---|
| 956-930500 | Coal Lease | 3/8/1976 | 3/7/2026 |
| 956-930501 | Coal Lease | 3/31/1976 | 3/30/2026 |
| 956-930513 | Coal Lease | 4/21/1976 | 4/20/2026 |
| 956-930514 | Coal Lease | 4/21/1976 | 4/20/2026 |
| 956-930515 | Coal Lease | 4/13/1976 | 4/12/2026 |
| 956-930516 | Coal Lease | 5/1/1976 | 4/30/2026 |
| 956-930530 | Coal Lease | 5/4/1976 | 5/3/2026 |
| 956-930593 | Coal Lease | 3/16/1976 | 3/15/2026 |
| 956-931123 | Coal Lease | 4/11/1978 | 4/10/2028 |
| 956-931124 | Coal Lease | 4/11/1978 | 4/10/2028 |
| 956-931250 | Coal Lease | 8/14/1978 | 8/13/2028 |
| 956-931266 | Coal Lease | 1/19/1983 | 1/18/2008\* |
| 956-931267 | Coal Lease | 1/21/1983 | 1/20/2008\* |
| 956-931308 | Coal Lease | 6/25/1980 | 6/24/2030 |
| 956-931314 | Coal Lease | 7/31/1980 | 7/30/2030 |
| 956-931316 | Coal Lease | 8/12/1980 | 8/11/2030 |
| 956-931317 | Coal Lease | 9/11/1980 | 9/10/2030 |
| 956-931318 | Coal Lease | 9/18/1980 | 9/17/2030 |
| 956-931323 | Coal Lease | 10/8/1980 | 10/7/2030 |
| 956-931395 | Coal Lease | 7/29/1981 | 7/28/2031 |
| 956-931396 | Coal Lease | 8/24/1981 | 8/23/2031 |
| 956-931397 | Coal Lease | 8/24/1981 | 8/23/2031 |
| 956-931398 | Coal Lease | 2/10/1982 | 2/9/2032 |
| 956-931409 | Coal Lease | 7/31/1981 | 7/30/2031 |
| 956-931473 | Coal Lease | 3/25/1982 | 3/24/2032 |
| 956-931474 | Coal Lease | 3/25/1982 | 3/24/2032 |
| 956-931475 | Coal Lease | 4/9/1982 | 4/8/2032 |
| 956-931476 | Coal Lease | 6/28/1982 | 6/27/2032 |
| 956-931477 | Coal Lease | 6/8/1982 | 6/7/2032 |
| 956-931478 | Coal Lease | 6/28/1982 | 6/27/2032 |
| 956-931479 | Coal Lease | 12/2/1982 | 12/1/2032 |
| 956-931480 | Coal Lease | 12/2/1982 | 12/1/2032 |
| 956-931481 | Coal Lease | 3/25/1982 | 3/24/2032 |
| 956-931484 | Coal Lease | 5/10/1982 | 5/9/2032 |
| 956-931485 | Coal Lease | 5/10/1982 | 5/9/2032 |
| 956-931524 | Coal Lease | 10/8/1982 | 10/7/2032 |
| 956-931537 | Coal Lease | 12/13/1982 | 12/12/2032 |
| 956-931577 | Coal Lease | 5/3/1983 | 5/2/2008\* |
| 956-931579 | Coal Lease | 5/2/1983 | 5/1/2008\* |
| 956-931640 | Coal Lease | 7/2/1997 | 7/1/2047 |
| 956-931641 | Coal Lease | 7/2/1997 | 7/1/2047 |
| 956-931642 | Coal Lease | 7/11/1997 | 7/10/2047 |

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| | | | |
|:---|:---|:---|:---|
| 956-931643 | Coal Lease | 7/18/1997 | 7/17/2047 |
| 956-931644 | Coal Lease | 7/2/1997 | 7/1/2047 |
| 956-931645 | Coal Lease | 7/2/1997 | 7/1/2047 |
| 956-931646 | Coal Lease | 7/2/1997 | 7/1/2047 |
| 956-931647 | Coal Lease | 7/11/1997 | 7/10/2047 |
| 956-931648 | Coal Lease | 7/18/1997 | 7/17/2047 |
| 956-931649 | Coal Lease | 7/2/1997 | 7/2/2047 |
| 956-931658 | Coal Lease | 11/23/1999 | 11/22/2024 |
| 956-931677 | Coal Lease | 5/17/2000 | 5/16/2050 |
| 956-931705 | Coal Lease | 7/16/2001 | 7/15/2026 |
| 956-931706 | Coal Lease | 10/6/2005 | 10/5/2030 |
| 956-931708 | Coal Excavation Lease | 12/10/2007 | 12/9/2047 |
| 956-931709 | Coal Lease | 3/22/2010 | 3/21/2035 |
| 956-931710 | Coal Lease | 5/25/2011 | 5/24/2061 |
| 956-931711 | Coal Lease | 12/20/2012 | 12/19/2062 |
| 956-931712 | Coal Lease | 12/17/2012 | 12/16/2062 |
| 956-931713 | Coal Lease | 12/20/2012 | 12/19/2062 |
| 956-931714 | Coal Lease | 9/11/2013 | 9/10/2063 |
| 956-931716 | Coal Lease | 12/20/2013 | 12/19/2063 |
| 956-931718 | Lignite Mining Lease | 9/25/2013 | 9/24/2063 |
| 956-931719 | Coal Lease | 12/20/2013 | 12/19/2063 |
| 956-931723 | Coal Lease | 4/19/2016 | 4/18/2066 |
| 956-931724 | Coal Lease | 9/9/2016 | 9/8/2066 |
| 956-931728 | Coal & Lignite Lease Agreement | 11/14/2017 | 11/13/2047 |
| 956-931729 | Coal Lease | 11/16/2017 | 11/15/2067 |
| 956-931730 | Lignite Mining Lease | 12/18/2017 | 12/17/2067 |
| 956-931734 | Coal Lease | 9/28/2018 | 9/27/2043 |
| 956-931735 | Coal Lease | 1/23/2019 | 1/22/2044 |
| 956-931737 | Coal Lease | 3/13/2019 | 3/12/2069 |
| 956-931738 | Coal Strip Mining Lease | 10/25/2019 | 10/24/2034 |
| 956-931742 | Coal Lease | 1/31/2021 | 1/30/2071 |
| 956-931743 | Coal Lease | 6/25/2021 | 6/24/2071 |

---

\*Lease continued past expiration by annual payment.

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**Table 3.2 Identification of Acquisitions** 

---

| | | | |
|:---|:---|:---|:---|
| **Agreement Id** | **Agreement Type** | **Agreement Date** | **Agreement Expiration Date** |
| 957-MLC001 | Warranty Deed | 8/19/1998 | 8/18/2097 |
| 957-MLC002 | Coal Warranty Deed | 10/1/1997 | 12/31/2099 |
| 957-MLC003 | Warranty Deed | 9/17/1998 | 9/16/2097 |
| 957-MLC004 | Warranty Deed | 12/22/2000 | 12/21/2999 |
| 957-MLC005 | Warranty Deed | 9/20/2001 | 9/19/2100 |
| 957-MLC006 | Warranty Deed | 10/12/1998 | 12/31/2099 |
| 957-MLC007 | Warranty Deed | 10/1/2001 | 9/30/2100 |
| 957-MLC008 | Warranty Deed | 1/22/2002 | 1/21/2101 |
| 957-MLC009 | Warranty Deed | 1/22/2002 | 1/21/2101 |
| 957-MLC010 | Warranty Deed | 10/29/1996 | 10/28/2096 |
| 957-MLC011 | Warranty Deed | 6/1/1999 | 6/1/2099 |
| 957-MLC012 | Warranty Deed | 1/5/1999 | 1/5/2098 |
| 957-MLC013 | Coal and Lignite Deed | 7/8/2005 | 7/7/2104 |
| 957-MLC014 | Special Warranty Deed | 4/2/1998 | 4/1/2097 |
| 957-MLC015 | Special Warranty Deed | 8/11/1998 | 8/10/2097 |
| 957-MLC016 | Warranty Deed | 9/5/1998 | 12/31/2099 |
| 957-MLC017 | Warranty Deed | 1/24/2000 | 1/24/2099 |
| 957-MLC018 | Warranty Deed | 8/19/1998 | 8/19/2097 |
| 957-MLC019 | Warranty Deed | 1/24/2000 | 1/23/2099 |
| 957-MLC020 | Warranty Deed | 8/17/1998 | 8/16/2098 |
| 957-MLC021 | Warranty Deed | 6/30/1998 | 6/29/2097 |
| 957-MLC022 | Warranty Deed | 3/11/1998 | 3/10/2098 |
| 957-MLC023 | Warranty Deed | 2/25/2003 | 2/24/2102 |
| 957-MLC024 | Warranty Deed | 11/10/1998 | 11/9/2097 |
| 957-MLC025 | Warranty Deed | 11/24/1998 | 11/23/2097 |
| 957-MLC026 | Warranty Deed | 5/14/1999 | 5/13/2098 |
| 957-MLC027 | Warranty Deed | 4/8/1999 | 4/7/2098 |
| 957-MLC028 | Warranty Deed | 4/22/1999 | 4/22/2999 |
| 957-MLC029 | Warranty Deed | 7/7/1999 | 7/6/2098 |
| 957-MLC030 | Warranty Deed | 5/2/2003 | 5/1/2102 |
| 957-MLC031 | Warranty Deed | 5/5/2003 | 5/4/2102 |
| 957-MLC032 | Warranty Deed | 5/2/2003 | 5/1/2102 |
| 957-MLC033 | Warranty Deed | 7/8/2003 | 7/7/2102 |
| 957-MLC034 | Warranty Deed | 3/17/2004 | 12/31/2099 |
| 957-MLC035 | Warranty Deed | 7/16/2004 | 7/15/2103 |
| 957-MLC036 | Warranty Deed | 11/15/2004 | 12/31/2999 |
| 957-MLC037 | Warranty Deed | 2/18/2005 | 12/31/2999 |
| 957-MLC038 | Warranty Deed | 2/23/2005 | 2/22/2104 |
| 957-MLC039 | Warranty Deed | 4/8/2005 | 4/7/2104 |
| 957-MLC040 | Warranty Deed | 2/28/2006 | 2/27/2105 |

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| | | | |
|:---|:---|:---|:---|
| 957-MLC041 | Warranty Deed | 6/28/2007 | 6/28/2106 |
| 957-MLC042 | Warranty Deed | 7/26/2006 | 7/25/2105 |
| 957-MLC043 | Warranty Deed | 10/28/2006 | 10/27/2105 |
| 957-MLC044 | Warranty Deed | 10/28/2006 | 10/27/2105 |
| 957-MLC045 | Warranty Deed | 10/27/2006 | 10/26/2105 |
| 957-MLC046 | Warranty Deed | 8/1/2007 | 7/31/2106 |
| 957-MLC047 | Warranty Deed | 11/20/2007 | 11/19/2106 |
| 957-MLC048 | Special Warranty Deed | 11/7/2007 | 11/6/2106 |
| 957-MLC049 | Warranty Deed | 11/26/2007 | 11/25/2106 |
| 957-MLC050 | Warranty Deed | 6/13/2008 | 12/31/2099 |
| 957-MLC051 | Warranty Deed | 9/4/2008 | 12/31/2099 |
| 957-MLC052 | Warranty Deed | 4/23/2009 | 12/31/2999 |
| 957-MLC053 | Warranty Deed | 12/21/2010 | 12/31/2999 |
| 957-MLC054 | Warranty Deed | 5/25/2011 | 12/31/2999 |
| 957-MLC055 | Special Warranty Deed | 6/27/2011 | 12/31/2999 |
| 957-MLC056 | Special Warranty Deed | 7/3/2011 | 12/31/2999 |
| 957-MLC057 | Special Warranty Deed | 7/8/2011 | 12/31/2999 |
| 957-MLC058 | Warranty Deed | 10/13/2011 | 12/31/2999 |
| 957-MLC059 | Warranty Deed | 10/13/2011 | 12/31/2999 |
| 957-MLC060 | Warranty Deed | 12/30/2011 | 12/31/2999 |
| 957-MLC061 | Warranty Deed | 7/17/2012 | 12/31/2099 |
| 957-MLC062 | Warranty Deed | 7/13/2012 | 12/31/2099 |
| 957-MLC063 | Warranty Deed | 7/13/2012 | 12/31/2099 |
| 957-MLC064 | Warranty Deed | 9/20/2012 | 12/31/2099 |
| 957-MLC065 | Warranty Deed | 12/6/2012 | 12/31/2999 |
| 957-MLC066 | Warranty Deed | 12/6/2012 | 12/31/2099 |
| 957-MLC067 | Warranty Deed | 12/3/2012 | 12/31/2099 |
| 957-MLC068 | Warranty Deed | 4/3/2013 | 12/31/2099 |
| 957-MLC069 | Warranty Deed | 12/20/2012 | 12/31/2099 |
| 957-MLC070 | Warranty Deed | 12/17/2012 | 12/31/2099 |
| 957-MLC071 | Warranty Deed | 12/14/2012 | 12/31/2099 |
| 957-MLC072 | Warranty Deed | 12/14/2012 | 12/31/2099 |
| 957-MLC073 | Warranty Deed | 12/20/2012 | 12/31/2099 |
| 957-MLC074 | Warranty Deed | 12/20/2012 | 12/31/2099 |
| 957-MLC075 | Warranty Deed | 10/5/2012 | 12/31/2099 |
| 957-MLC076 | Warranty Deed | 4/3/2013 | 12/31/2099 |
| 957-MLC077 | Warranty Deed | 5/3/2013 | 12/31/2099 |
| 957-MLC078 | Warranty Deed | 6/13/2013 | 12/31/2999 |
| 957-MLC079 | Warranty Deed | 6/14/2013 | 12/31/2099 |
| 957-MLC080 | Warranty Deed | 9/11/2013 | 12/31/2099 |
| 957-MLC081 | Special Warranty Deed | 12/31/2013 | 12/31/2999 |
| 957-MLC082 | Special Warranty Deed | 12/31/2013 | 12/31/2099 |

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| | | | |
|:---|:---|:---|:---|
| 957-MLC084 | Warranty Deed | 12/20/2013 | 12/31/2099 |
| 957-MLC085 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC086 | Quit Claim Deed | 7/10/2015 | 12/31/2999 |
| 957-MLC087 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC088 | Warranty Deed | 12/20/2013 | 12/31/2999 |
| 957-MLC089 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC091 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC092 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC094 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC095 | Quit Claim Deed | 7/10/2015 | 12/31/2099 |
| 957-MLC096 | Quit Claim Deed | 10/26/2015 | 12/31/2099 |
| 957-MLC097 | Quit Claim Deed | 10/26/2015 | 12/31/2099 |
| 957-MLC098 | Quit Claim Deed | 10/26/2015 | 12/31/2099 |
| 957-MLC099 | Quit Claim Deed | 5/6/2016 | 12/31/2099 |
| 957-MLC100 | Quit Claim Deed | 9/1/2016 | 12/31/2099 |
| 957-MLC101 | Quit Claim Deed | 9/1/2016 | 12/31/2099 |
| 957-MLC102 | Quit Claim Deed | 9/1/2016 | 12/31/2099 |
| 957-MLC103 | Quit Claim Deed | 6/1/2017 | 12/31/2099 |
| 957-MLC109 | Quit Claim Deed | 10/1/2017 | 12/31/2099 |
| 957-MLC111 | Quit Claim Deed | 6/1/2019 | 12/31/2099 |
| 957-MLC112 | Quit Claim Deed | 4/1/2020 | 12/31/2099 |
| 609-RML061 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML062 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML063 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML064 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML065 | Warranty Deed | 12/31/2013 | 12/31/2999 |
| 609-RML066 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML067 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML068 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML069 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML070 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML071 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML072 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML073 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML074 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML075 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML076 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML077 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML078 | Warranty Deed | 12/31/2013 | 12/31/2999 |
| 609-RML079 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML080 | Warranty Deed | 12/31/2013 | 12/31/2099 |
| 609-RML081 | Warranty Deed | 9/10/2013 | 12/31/2999 |

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| | | | |
|:---|:---|:---|:---|
| 609-RML082 | Warranty Deed | 9/10/2013 | 12/31/2099 |
| 609-RML084 | Warranty Deed | 7/10/2015 | 12/31/2099 |
| 609-RML085 | Warranty Deed | 12/20/2013 | 12/31/2099 |
| 609-RML086 | Warranty Deed | 12/20/2013 | 12/31/2999 |
| 609-RML087 | Warranty Deed | 12/20/2013 | 12/31/2099 |
| 609-RML088 | Warranty Deed | 12/20/2013 | 12/31/2999 |
| 609-RML089 | Warranty Deed | 12/20/2013 | 12/31/2099 |
| 609-RML091 | Warranty Deed | 2/21/2014 | 12/31/2099 |
| 609-RML092 | Warranty Deed | 7/21/2014 | 12/31/2099 |
| 609-RML094 | Warranty Deed | 10/16/2014 | 12/31/2099 |
| 609-RML095 | Warranty Deed | 2/19/2015 | 12/31/2099 |
| 609-RML096 | Quit Claim Deed | 6/8/2015 | 12/31/2099 |
| 609-RML097 | Warranty Deed | 6/25/2015 | 12/31/2099 |
| 609-RML098 | Warranty Deed | 6/25/2015 | 12/31/2099 |
| 609-RML099 | Warranty Deed | 8/12/2015 | 12/31/2099 |
| 609-RML100 | Warranty Deed | 4/8/2016 | 12/31/2099 |
| 609-RML101 | Warranty Deed | 4/8/2016 | 12/31/2099 |
| 609-RML102 | Warranty Deed | 5/8/2016 | 12/31/2099 |
| 609-RML103 | Warranty Deed | 9/9/2016 | 12/31/2099 |
| 609-RML104 | Warranty Deed | 2/11/2017 | 12/31/2099 |
| 609-RML105 | Warranty Deed | 5/26/2017 | 12/31/2099 |
| 609-RML106 | Warranty Deed | 6/14/2017 | 12/31/2099 |
| 609-RML107 | Warranty Deed | 6/28/2017 | 12/31/2099 |
| 609-RML108 | Warranty Deed | 7/28/2017 | 12/31/2099 |
| 609-RML109 | Warranty Deed | 8/23/2017 | 12/31/2099 |
| 609-RML110 | Warranty Deed | 8/28/2017 | 12/31/2099 |
| 609-RML111 | Warranty Deed | 10/10/2017 | 12/31/2099 |
| 609-RML112 | Special (Limited) Warranty Deed | 12/21/2017 | 12/31/2099 |
| 609-RML113 | Warranty Deed | 1/26/2018 | 12/31/2099 |
| 609-RML114 | Warranty Deed | 1/23/2018 | 12/31/2099 |
| 609-RML115 | Warranty Deed | 3/16/2018 | 12/31/2099 |
| 609-RML116 | Warranty Deed | 6/18/2020 | 12/31/2099 |
| 609-RML117 | Warranty Deed | 11/28/2018 | 12/31/2099 |
| 609-RML118 | Warranty Deed | 3/21/2019 | 12/31/2099 |
| 609-RML119 | Warranty Deed | 3/21/2019 | 12/31/2099 |
| 609-RML120 | Warranty Deed | 6/4/2019 | 12/31/2099 |
| 609-RML121 | Warranty Deed | 12/30/2019 | 12/31/2099 |
| 609-RML122 | Warranty Deed | 2/26/2020 | 12/31/2099 |
| 609-RML123 | Warranty Deed | 7/17/2020 | 12/31/2099 |
| 609-RML124 | Warranty Deed | 12/10/2020 | 12/31/2099 |
| 609-RML125 | Warranty Deed | 1/11/2021 | 12/31/2099 |
| 609-RML126 | Warranty Deed | 6/15/2021 | 12/31/2099 |

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---

| | | | |
|:---|:---|:---|:---|
| 609-RML127 | Warranty Deed | 9/3/2021 | 12/31/2099 |
| 609-RML128 | Warranty Deed | 11/18/2021 | 12/31/2099 |
| 609-RML129 | Warranty Deed | 12/23/2021 | 12/31/2099 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4.&nbsp;&nbsp;&nbsp;&nbsp;Significant Encumbrances to the Property**

The Red Hills Mine currently has no significant encumbrances to the property. No mining permit violations have been issued at the Red Hills Mine in the past ten years. One NOV was issued in April 2020 for a water quality exceedance that was determined to not be the fault of Red Hills Mine and no further action was required. Permitting requirements are discussed in Section 17.0 of this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5.Significant Factors and Risks**

MLMC has not identified any significant risks that may affect the right or ability to perform work on the property. However, if a lease were to expire and MLMC had not yet noticed this property for disturbance by mining activities, the landowner may choose not to release this property for mining.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6.Registrant Royalties and Interests**

Discussed in Section 3.3 of this TRS.

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**4. Accessibility, Climate, Local Resources, Infrastrucutre, and Physiography**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1.Physiography, Topography and Vegetation**

The Red Hills Mine, located in Choctaw County, Mississippi, is part of the "red hills phase" of the North Central Hills physiographic province. The region is characterized by dissected upland hills and relatively wide flats in the major stream drainages. The maximum relief of the Red Hills Mine is approximately 280 feet (msl), with the elevation ranging from 360 feet (msl) in the Big Bywy drainage in the north to nearly 640 feet (msl) in the Tertiary upland ridge tops in the southeastern area of the Red Hills Mine.

The Soil Survey of Choctaw County indicate the land-use of the county is approximately 73-percent commercial forestland. Vegetative baseline studies of the permitted areas further indicate the prominent vegetation of the Red Hills Mine to be forested pine plantations along with managed pine habitats which include prepared clearcuts and areas with young, planted pine. Other vegetative designations include deciduous forest, grassland, cropland, and residential lawns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2.Accessibility** 

Local access to the Red Hills Mine is by way of Highway 9 between Ackerman, Mississippi and Eupora, Mississippi which connects to Pensacola Road that leads to the Red Hills Mine paved access road. Pensacola Road connects with Highway 9 approximately 5 miles north of Ackerman, MS. The mine road is approximately 1 mile west from Highway 9 along Pensacola Road.

Travel to the Red Hills Mine by air is possible using the Jackson-Medgar Wiley Evers International Airport in Jackson, Mississippi, approximately 104 miles south of the mine, and then using ground transportation, traveling via Highway 25, Highway 15, and Highway 9. Alternatively, the Golden Triangle Regional Airport is a smaller airport approximately 50 miles from the Red Hills Mine by means of Highway 82 west, Highway 15 south, and Highway 9 north.

The Red Hills Mine is in close proximately to river ports of the Tennessee-Tombigbee Waterway and the Mississippi River. The Lowndes County Port is approximately 60 miles east of the mine. The Port of Greenville is approximately 135 miles west of the mine, and the Port of Vicksburg, approximately 150 miles southwest of the mine. All ports are connected by major state and federal highways.

In additional to transportation via roadways, air and waterways, the Kansas City Southern (KCS) railroad has a depot located approximately 5 miles south of the mine in Ackerman and is accessible by Highway 9 and Highway 15.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3.Climate**

The climate of the Red Hills Mine varies seasonally with a warm, humid summer and a generally mild, humid winter. The Red Hills Mine operates through all seasons. Heavy precipitation events may temporarily slow production but have minimal impact on the overall mining operation. Nearby Ackerman, Mississippi has the following climate (Climate in Ackerman, Mississippi, 2021):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 56 inches of rain annually, on average

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• One inch of snow per year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 96 days per year with some sort of precipitation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 217 sunny days per year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Temperatures: July High: 90°F; January Low: 31°F

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4.Local Resources and Infrastructure**

The towns of Ackerman, Eupora, Starkville, Louisville, Kosciusko, and numerous smaller communities are within a 40-mile radius of the Red Hills Mine and provide a vast employment base. Furthermore, Mississippi State University (MSU) is located approximately 30 miles east of the mine in Starkville. MLMC has a history of partnership with MSU as well as the local community colleges for science, technology, engineering, and mathematics (STEM) research and skilled trades training.

The Red Hills Mine sources power for mine office facilities and operations from 4-County Electric Power Association, and water for the mine office facilities from the Choctaw Water Association. Fuel for equipment is supplied by a local vendor. Most supplies to operate the mine are within the region. The Red Hills Mine has, or is currently constructing, all supporting infrastructure for mining operations through the LOM plan. See Section 15.0 of the TRS for further detail pertaining to the mine specific infrastructure.

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**5. History of the Property**

The Red Hills Mine began operations in the MS-002 permit area in Mine Area 1 and is in the process of transitioning to Mine Area 3 within the MS-004 permit area. Initial development of the Red Hills Mine began in 1998, with full production and commercial deliveries commencing in 2002. Boxcut construction for Mine Area 3 began in 2021 where mining will continue through April 2032. The Red Hills Mine has, or is currently constructing, all supporting infrastructure for mining operations within the permitted areas.

Excluding the partial year of 2001, the average tons sold from 2002-2021 was 3,125,000 tons/year. Table 5.1 shows the historical production for Red Hills Mine.

**Table 5.1 Historical Production** 

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Tons Sold (000 ton) | 475 | 2906 | 3739 | 3572 | 3595 | 3593 | 3388 | 3022 | 3747 | 3597 | 2708 |
|  | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |  |
| Tons Sold (000 ton) | 3065 | 3169 | 2628 | 3173 | 3049 | 2417 | 2997 | 2562 | 2538 | 3025 |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.&nbsp;&nbsp;&nbsp;&nbsp;Previous Operations**

There are no previous mining operations on the Red Hills Mine property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2.Exploration and Development History Prior to MLMC** 

Original exploration of the Red Hills Mine area was conducted by Phillips from 1975 to 1980. Phillips contracted independent drilling services to drill and geophysically log over 800 boreholes. Phillips identified 387 million tons of lignite across 21,500 acres through the initial exploration. The data collected from the Phillips' drilling exploration was the basis of the Red Hills Project, which included the Red Hills Mine and the RHPP.

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**6. Geological Setting, Mineralization and Deposit**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.Geology**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.1. Regional Geology**

The Red Hills Mine is in the Wilcox Group of Mississippi (Figure 6.1) which is the most prolific lignite-bearing stratum in the state of Mississippi. The Wilcox Group and underlying Midway Group were deposited during Paleogene time; 66 to 23 million years ago. The most prominent characteristics of the Wilcox Group formations are the cyclical deposition and lateral persistence of the lithologic units, especially the lignite seams. The stratigraphy of the Wilcox Group is depicted on Figure 6.2. The section from the Gravel Creek Member through the Tuscahoma Formation represents a transition from a transgressive sequence of valley fill, marginal marine strata (lower Gravel Creek) to predominantly regressive, nonmarine, deltaic strata (upper Gravel Creek through the Tuscahoma).

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**Figure 6.1 Geologic Formations of Mississippi (Dicken, Nicholson, Horton, Foose, & Mueller, 2005)**

![image_8a.jpg](image_8a.jpg)

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During each depositional geologic sequence, organic material was repeatedly buried by sediment in an ideal, oxygen-free environment. This ideal environment was attributed to the humid, subtropical conditions and high water-table of wetlands present during Paleogene time which prevented plant matter from decaying prior to burial. The oxygen-free environment combined with heat and pressure from continual deposition of overlying sediments allowed for the formation of peat and further mineralization of lignite over time by undergoing a process known as humification and biochemical gelification.

The regional structural geology is fairly consistent. The regional strike is northwest-southeast. The strata are nearly flat lying, dipping to the southwest at only 25 to 35 feet per mile. No evidence of any significant faulting has been observed in the region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.2. Local and Property Geology**

The average thickness of the Wilcox section containing the mineable lignite seams at the Red Hills Mine and surrounding area is approximately 140 feet (Figure 6.2). Vertical repetition of the geological characteristics results in a straightforward depositional setting facilitating comprehensive analysis of the geological, as well as the geochemical, geotechnical, and geohydrological baseline conditions of the Red Hills Mine.

Following the regional geology, trends in lignite seam sulfur content at the Red Hills Mine support a geologic transition from marine to nonmarine environments. Increased sulfur values are generally associated with marine influences. The C-seam marks a transition from higher sulfur below to lower sulfur contents above.

The local structural geology for the Red Hills Mine also follows the regional structure with a northwest-southeast strike dipping to the southwest. The lignite seams are gently undulating due to differential compaction of the underlying sediments. Small, localized faults have been encountered within the lignite seams while mining through the MS-002 permit area, and are anticipated to be encountered in the MS-004 permit area. These faults have been discontinuous and the seam displacement has typically been less than 10 feet. The faults have not materially affected mining or production at the Red Hills Mine.

Since mining began, no unique or especially significant geological features, formations, or paleontological resources have been identified at the Red Hills Mine. No known workings of active, inactive, or abandoned underground mines have been identified. Additionally, no fatal flaws related to geological conditions have been identified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2.Mineral Deposit Type**

The Red Hills Mine is solely focused on mining lignite from the project area. Details on the geological units encountered at the Red Hills Mine are described below and shown in Figure 6.1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2.1. Gravel Creek Member**

The top of the Gravel Creek Member of the Nanafalia Formation (Wilcox Group) lies just below the C-seam and includes a thin sand layer directly beneath the C-seam. The C-seam is currently the lowest lignite seam stratigraphically mined. However, upon further exploration, the B-seam may be mined in the future, particularly in areas with low laying terrain within the MS-004 permit area.

A basal sand unit, of up to 100 feet in thickness or more, characterizes the Gravel Creek Member. From the limited drill hole data that extends through this member, it appears that these sand units can be fairly widespread, but also may be completely absent. On the geophysical logs and limited cuttings data, the sand unit typically appears to be

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fairly massive and poorly- to well-sorted, fine- to medium-grained sand. These sand units, along with the sands in the underlying Coal Bluff Formation (Midway Group) are often referred to as the Lower Wilcox aquifer.

Above this basal sand are interbedded silt, clay, sand and lignite (A-seam). Due to the relative depth, anticipated lower quality, and closer proximity to the basal sands, the A-seam is not currently considered a resource targeted for mining.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2.2. Grampian Hills Member**

Five of the six lignite seams recovered at Red Hills Mine are contained in the Grampian Hills Member of the Nanafalia Formation (Wilcox Group). The formation conformably overlies the Gravel Creek Member and consists of interbedded and interlaminated clays, silts, sands, and lignite. Overall, the section is relatively sand poor.

The clays and silts are typically finely interlaminated. Munsell color varies from dark gray (N 4/ to N 5/) to greenish gray (10BG 5/1). Immediately below the lignite seams, the color is dark grayish brown (10YR 4/2) due to the presence of carbonaceous fragments. These carbonaceous layers often contain lignitized plant roots establishing an autochthonous origin for the peats that formed the lignite seams.

The sands are light gray (2.5Y 7/1) to gray (N 5/) or greenish gray (5GY 5/1). The pale greenish-gray color of many of the sands and silts is a distinctive feature of this unit. Typically, the sands are very-fine-grained, and commonly interbedded with silts and clays. One exception is the tabular sand bed between the D-seam and C-seam. The sand units between the D-seam and G-seam are typically silty, infrequent, lenticular, and probably represent narrow sand channels in the crevasse splay sequences that were penecontemporaneous with peat accumulation. Sand and silty sands compact much less than silts and clays. This phenomenon is probably the chief cause of the gentle structural undulations found in the lignite seams.

Cemented horizons, commonly referred to as "hard streaks", are also associated with the sand units. These indurated zones are most abundant within the sand channels and the silty, sandy natural levee deposits flanking the channels. The thickness of these hard streaks ranges from less than one foot to about two feet. These zones are cemented with calcite, silica, iron oxide, or siderite, and are suggestive of periods of sub-areal oxidizing conditions during deposition. Modern analogies in the natural levee deposits of the Mississippi Delta have been noted.

The color of the lignite seams ranges from black (N 2.5/) to very dark gray (10Y 3/1). Occasional layers of carbonaceous clay or zones of clay clasts increase the ash content of the lignite. The minimum thickness for recovery is one foot. The maximum thickness of the lignite seams is about eight feet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2.3.Tuscahoma Formation**

The Tuscahoma Formation (Wilcox Group) conformably overlies the Grampian Hills Member of the Nanafalia Formation. The basal portion of this formation is the uppermost stratum to be disturbed by mining. The base of the Tuscahoma is marked by a predominantly sandy, often coarse-grained unit with a variable thickness of 10 feet to 110 feet. The variability is due to the occurrence of contemporaneously bedded clay, silt, and lignite. Laterally, these sands grade into finer grained overbank deposits including lignite seams. The overbank facies of the Tuscahoma are essentially identical to the descriptions for the Grampian Hills Member described above.

The H-seam, which is the uppermost seam that will be consistently recovered, lies at the base of the Tuscahoma. Because of its relatively high stratigraphic position, the H-seam is restricted to the upland areas above approximately

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450 feet in elevation within the Red Hills Mine. Other lignite seams lying above the H-seam, including the H2-seamand the I-seam, may be encountered on occasion and are mined when seam thickness and quality are sufficient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3.Stratigraphic Column**

A typical stratigraphic column is shown on Figure 6.2 while a planer view of two cross sections are is included on Figure 6.3. Geologic cross section E-W2 and geologic cross section C-C' are included as Figure 6.4 and Figure 6.5, respectively. The cross-sections were constructed primarily based on the drill hole geophysical logs supplemented with lithology descriptions from the drill cuttings, as well as the data from the core holes. The stratigraphic framework of the geologic cross sections follows the detailed surface mapping and subsurface investigations completed by the MDEQ, Office of Geology.

**Figure 6.2 Stratigraphic Column of the Red Hills Mine**

![image_9a.jpg](image_9a.jpg)

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**Figure 6.3 Geologic Cross Sections planer reference**

![image_10a.jpg](image_10a.jpg)

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**Figure 6.4 Geologic Cross Section E-W2, MS-002 permit area (Excerpted from SMCRA permit MS-002, R3, Appendix 2509-6)**

![image_11a.jpg](image_11a.jpg)

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**Figure 6.5 Geologic Cross Sections C-C' and D-D', MS-004 permit area (Excerpted from SMCRA permit MS-004, Appendix 2509-6)**

![image_12a.jpg](image_12a.jpg)

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**7.&nbsp;&nbsp;&nbsp;&nbsp;Exploration**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1.Exploration**

No exploration work other than drilling and associated geophysical logging has been conducted at the Red Hills Mine. Geophysical logging is discussed with drilling in Section 7.2 of this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.Drilling Exploration**

Data collected during drilling exploration programs at the Red Hills Mine is the sole information available for modeling the lignite deposit for the determination of Mineral Resources. Coal core drilling following the U.S. Geological Survey's (USGS) guidance for sampling coal for chemical analysis is the exclusive method used by Red Hills Mine for modeling quality of the lignite deposit. The Red Hills Mine lignite deposit is evaluated on a seam by seam basis. Drilling exploration data including geologic lithologies, qualities, and hole locations have been compiled electronically in Excel files. Cross sections produced from drill hole data are shown in Section 6.3 of this TRS. The information below summarizes the various drilling programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.1. Drilling Type and Extent**

Drilling exploration programs conducted at the Red Hills Mine have comprised largely of rotary wash drilling methods. For the purpose of this TRS, senior geologist and field geologist refer to qualified representatives of MLMC and/or NACoal. Historically, MLMC has contracted independent drilling services and geophysical logging services to operate under the guidance and direction of MLMC. Drill holes completed at the Red Hills Mine are vertical in orientation and have been broken into four categories which are described below. A drill hole location map for the Red Hills Mine is presented in Figure 7.1.

Exploratory drill holes, also referred to as pilot holes, typically range in size from 4.0 to 4.5-inches outer hole diameter (od) and terminate at a minimum of 10-feet below the lowest targeted lignite seam as specified by the senior geologist. Drill hole cuttings are typically recovered by the driller, in accordance with established drilling and sampling protocols, on a 5 or 10-foot interval and are described by the field or senior geologist. All pilot holes are geophysically logged by an independent geophysical logging contractor for natural gamma, density, caliper, and resistivity responses. Related drilling data has been reviewed by the QP for inclusion in the geologic model.

Coal core holes to collect samples for quality testing are advanced next to pilot holes at specified locations in accordance with protocols described herein. Core holes are typically 6.5-inches (od) or 4.25-inches (od) with a respective sample diameter of 3.3-inches (od) or 2.125-inches (od). Samples are collected with a double core barrel or Shelby tube sampler. Coring intervals are determined by the field geologist and reviewed by the senior geologist based on the pilot hole's geophysical log and cuttings descriptions. Core holes terminate 10-feet below the lowest targeted lignite seam. Typically, coal cores from the drilling campaigns at the Red Hills Mine are fully recovered. The minimum core recovery accepted is 90-percent (see Section 8.0 for discussion on sample preparation). Coal core data have been reviewed by the QP for inclusion in the geologic model.

Overburden core holes, or continuous cores, are drilled following protocols similar to the coal cores as described above. Rather than specifying specific intervals to collect coal cores for quality testing, overburden cores are advanced in continuous ten-foot core sections using a double core barrel or Shelby tube sampler from top of hole to bottom of hole such that the field or senior geologist can log and sample burdens in addition to lignite. Burden (overburden and interburden) samples are shipped to a separate independent soil laboratory for geochemical

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analysis. Overburden cores require 75-percent total run recovery for soil analysis, while coal core intervals require a minimum of 90-percent recovery within continuous core runs, such that parameters outlined for coal core collection previously are maintained. Data specific to the coal cores collected during these continuous core sampling programs have been reviewed by the QP for inclusion in the geological model.

The fourth, and final, category of drill holes are comprised of geotechnical holes and monitoring wells which have been geophysically logged and extend through multiple coal seams. These drill holes follow the parameters outlined for pilot holes and available data has been reviewed by the QP.

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**Figure 7.1 Location of Drill Holes**

![image_13a.jpg](image_13a.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.2. General Drilling Procedures** 

Details may vary with each exploration program and are discussed in the next subsection, however general procedures for drilling at Red Hills Mine include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of land control; acquire drilling leases for properties not owned or previously leased and noticed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Site preparation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Rotary wash drilling by an independent drilling contractor; typically, cuttings are collected every 5-feet until a depth of 30-feet is reached then cuttings are collected every 10-feet to final depth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist logs description of cuttings including depth, texture, general color.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Independent contractor geophysically logs drill hole for natural gamma, density, caliper, and resistivity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist reviews geophysical log.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hole determined complete and abandoned by independent drilling contractor in accordance with state regulatory requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Survey drill hole collar location.

To continue with a coal core hole:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Coring intervals are determined by field or senior geologist from pilot hole geophysical log.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Coal core drilling by an independent drilling contractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Core extracted from barrel by independent drilling contractor and placed in logging tray.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist cleans core sample of drilling mud, measures the core length and identifies the roof and floor. If an acceptable length of core is not recovered, independent drilling contractor may attempt to retrieve the remaining core from the current hole. If no success, the core run interval will be "re-cored" as an additional core hole. After sufficient attempts have been made to re-core the interval, the field geologist may accept a core recovery of 90-percent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist logs the core including depths, fractures, texture, color, and characteristics of the lignite.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist double bags and double tags sample.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Once all intervals are cored, independent contractor geophysically logs drill hole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Field geologist reviews geophysical log.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hole determined complete and abandoned by independent drilling contractor in accordance with state regulatory requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Survey drill hole collar location.

Additional drilling tasks include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintaining daily drilling report and record of collected samples.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proper storage of lignite core samples in secure location of the mine office and transfer to the warehouse to prepare for shipment to laboratory.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.3. Drilling Exploration Programs**

Numerous drilling exploration programs have been conducted at the Red Hills Mine. Over 1,400 exploration holes have been drilled. 281 of those drill hole locations were sampled for coal quality testing. Figure 7.1 and the text below describes the various drilling programs at Red Hills to date.

**Table 7.1 Exploration Drilling Summary**![image_14a.jpg](image_14a.jpg)

Notes:

1 Contracted by Phillips Coal Company; included Diversified Drilling Services

2 Pilot Holes include Geotechnical Holes

3 Core Holes include Continuous Core Holes

4 Pilot Holes include Geotechnical Holes and Monitoring Wells

5 Core data excluded from model due to uncertainty in drilling method

6 Pilot Holes include Monitoring Wells

<u>1975 - 1980</u>

From 1975 to 1980 Phillips conducted drilling exploration activities. Independent drilling contractors including Diversified Drilling Services and Century Geophysical Logging Services (Century GLS) completed this work using rotary wash drilling methods. Initial hole spacing in 1975 and 1976 averaged three quarters of a mile. In 1979 and 1980, the general spacing of drill holes averaged 1500-feet, however spacing still exceeded a half mile in areas.

All drill holes were geophysically logged, and field logs were maintained to describe the geology. Coal cores collected during these drilling campaigns had an average linear core recovery of 99.8% and were analyzed by Core Laboratories, Inc. in Tyler, Texas. The method used to survey these drill hole locations is unknown.

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These data were the basis for the characterization of the lignite deposit to justify the Red Hills Project including the Red Hills Mine and the RHPP. Despite uncertainty in how these early drill holes were surveyed, the data collected by Phillips has remained fairly consistent when compared to current fill-in drilling and quality analyzed during active mining operations. The QP has evaluated the reliability of the drilling data provided by Phillips to NACoal including review of geophysical logs, field logs, and coal quality certificates. Drill holes deemed reliable, such that at minimum lithology could be verified by a geophysical log have been used to model the lignite structure, and core holes in which the quality data could be verified by laboratory reports were used to model lignite quality. Original drilling files acquired from Phillips are securely stored in the NACoal corporate warehouse.

<u>1997-1998</u>

In 1997 and 1998, MLMC conducted a drilling exploration program which primarily increased the drill hole density of the first 5-year mining block in the MS-002 permit area to an average spacing of 1000-feet or less. 12 of the 59 drill holes were distributed across the northern portion of the permit area and largely consisted of continuous cores in which soil geochemistry was evaluated in addition to lignite quality. Phillips personnel oversaw drilling activities. Drilling activities consisted of rotary wash methods and was performed by Diversified Drilling Services and Century GLS. Geophysical logs, field logs, and lab results were maintained for each hole during this program. The average coal core recovery rate from 1997 through 1998 was 100%. Coal cores were analyzed by Core Laboratories, Inc. in Tyler, Texas. Collar surveys were obtained by handheld GPS units. It is unknown to what accuracy these surveys were obtained. However, the QP feels the data is appropriate for use in the geologic model after comparison of the collar elevations with the pre-mine topography.

<u>2000-2008</u>

From 2000 through 2008 Diversified Drilling Services and Century GLS were contracted by MLMC to drill over 180 holes using rotary wash methods. Hole types included pilots, coal cores, and continuous cores which increased the hole density, again to an average spacing of 500-feet, within the MS-002 permit area immediately ahead of active mining. Senior and field geologists from MLMC oversaw these drilling activities and logged core samples. The average coal core recovery rate from 2000 through 2008 was 99.9%. Core samples were shipped to Standard Laboratories in Casper, Wyoming for analysis. Collar surveys were originally obtained by Trimble units connected to a known base station, followed by Leica survey equipment for a brief period until Topcon Hyper V Rovers with RTK correction tied to a known GPS base were established in 2007.

Upon the QP's review of drilling data completed from 2000 to 2008, copies of the laboratory analysis for the 22 core holes in 2003 were not available to check the quality inputs stored in the electronic, geologic database. The QP contacted Standard Laboratories for copies of the original quality reports. However, the time of record exceeded the laboratory's holding period of seven years and copies were not available. The QP then compared the related quality of the drilling database to the associated month end reconciliation reports and found that modeled tonnages in the area of the 2003 drilling were representative of the actual mined tonnage as shipped to the RHPP. As such, it is the QP's opinion that the quality values documented in the electronic, geologic database for these 22 holes are representative of the deposit.

<u>2009-2015</u>

From 2009 through 2015, MLMC contracted Aquaterra Engineering, LLC (Aquaterra), a Terracon Company, which fully transitioned to Terracon in 2011 to perform drilling exploration work. Century GLS and Cardno Geophysical Logging Services (Cardno GLS) were contracted by MLMC to geophysically log the drill holes. Approximately 180

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holes were drilled including pilots, coal cores, continuous cores, and monitoring wells. The majority of drilling was once again focused in the MS-002 permit area ahead of mining operations to achieve an average drill hole density of 1000-feet or less. However, in 2015, MLMC also began fill-in drilling within the MS-004 permit area where the next mine area was projected to be in full operation in 2023. The extent of work for the MS-004 permit area included 6 continuous core holes and 3 monitoring well locations. Senior and field geologists from MLMC oversaw these drilling activities and logged core samples which were shipped to Standard Laboratories in Casper, Wyoming for analysis. The average coal core recovery rate from 2009 through 2015 was 100%. Collar surveys were obtained by Topcon Hyper V Rovers with RTK correction tied to a known GPS base.

Most of the area drilled from 2009 through 2015 in the MS-002 permit area was mined out by December 2020.

<u>2016</u>

In 2016, Liberty Fuels, another subsidiary of NACoal, conducted drilling services for MLMC under a mutual cost reimbursement agreement. Cardno GLS was contracted to geophysically log the drill holes. 34 holes were drilled using rotary wash methods within the MS-002 and MS-004 permit areas. Two core holes were drilled successfully during this program targeting the F-seam and C-seam quality in the MS-004 permit area. Due to poor core recovery on multiple attempts, no other seams were sampled for quality during this program. Senior and field geologists from MLMC oversaw these drilling activities and logged core samples which were shipped to Standard Laboratories in Casper, Wyoming for analysis. The coal core recovery of the sampled F- and C-seams in 2016 was 100%. Collar surveys were obtained by Topcon Hyper V Rovers with RTK correction tied to a known GPS base.

<u>2017</u>

In 2017, MLMC contracted Great Southern Engineering (GSE) to collect lignite cores for quality assessment using sonic drilling methods, but due to uncertainty in the representative quality from excessive heating and fracturing of the coal cores during the sample collection process, the QP determined these coal core data would be excluded from the geologic model. 7 pilot holes in advance of these coal cores were conducted by Geotechnical Engineering Associates (GEA) using rotary wash methods. Century GLS geophysically logged these holes. Collar surveys were obtained by Topcon Hyper V Rovers with RTK correction tied to a known GPS base. Information related to the pilot holes in advance of these coal core holes, including geophysical logs and cuttings descriptions were evaluated by the QP and included in the geologic model to further define the structure of the lignite deposit.

<u>2018-2021</u>

From 2018 to 2021, MLMC contracted MHC X-Ploration Corporation, Century GLS, and Marshall Miller and Associates (previously Cardno GLS) to drill and geophysically log approximately 170 pilot holes, coal core holes, and a monitoring well. The holes were drilled using rotary wash methods, and were primarily concentrated in the MS-004 permit area to increase the drill hole density north of the planned boxcut location. However, drilling activities also included the MS-002 permit area as well as additional exploration outside the currently permitted areas. Senior and field geologists from MLMC oversaw these drilling activities and logged core samples which were shipped to Standard Laboratories in Casper, Wyoming for analysis. The average coal core recovery rate from 2018 through 2021 was 100%. Collar surveys were obtained by Topcon Hyper V Rovers with RTK correction tied to a known GPS base.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.4. Qualified Person Opinion – Drilling Exploration**

The drilling campaigns completed from 2015 through 2021 in conjunction with the original exploration conducted by Phillips chiefly influence the Red Hills Mine Mineral Resource estimations discussed in Section 11.0. The QP served as the senior geologist who oversaw the drilling exploration programs conducted from 2015 to 2021 at the Red Hills Mine.

As described in the above drilling programs, MLMC does plan exploration activities to attain an average 500-foot drilling density for the four-year projection ahead of active mining operations. This drilling density is optimal for day-to-day operations to capture the gentle undulation of the lignite seams. Identifying these slight differences in roof elevations is key to optimizing lignite recovery efforts, particularly on the thinner seams.

However, as a whole, it should be noted for the purpose of Mineral Resource estimations and LOM projections, the QP has determined a high level of confidence in a minimum drill hole spacing of 1500-feet to 2000-feet. This confidence comes from the continuity of the lignite seams including both lithologic and quality characteristics, as well as the ability to compare modeled seam projections to active and historical mining operations. Slight structural changes are defined in the tighter drill hole spacing, but overall thickness and quality does not drastically change in a 2000-foot spacing, see Section 6.0 for cross sections. Further justification of drill hole distances specific to Mineral Resource Classifications is discussed in Section 11.0.

Physical constraints such as stream buffers and unnavigable terrain may affect the consistency in drill hole spacing. Additionally, drilling exploration for later years does not always land within fully permitted areas which may limit the extent of disturbance allowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3. Hydrogeologic Characterization**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.1. Surface Water**

Beginning in 1996, surface water monitoring sites were established and monitored by Mississippi State University (MSU) under the direction of MLMC within the various streams and tributaries surrounding and intersecting the Red Hills Mine. Baseline flow rates collected by MSU were compared to selected USGS stations within the vicinity of the study area watershed and were analyzed to characterize general runoff conditions. Surface water flow measurements were performed at the monitoring stations using the velocity-area method. As recommended by the USGS, if the depth of flow was greater than two feet, a two-point method of measuring average velocity was used.

To further characterize study area watersheds, rainfall-runoff simulations were performed for storm events with a duration of 24 hours and different return periods. These simulations were performed using the U. S. Army Corps of Engineers HEC-1 flood hydrograph model. Necessary HEC-1 model input includes watershed area, specified rainfall loss and runoff methods, and a design precipitation event. The Soil Conservation Service (SCS) method, now the Natural Resources Conservation Service (NRCS), for abstractions utilizing a curve number (CN), was chosen as the loss rate method, and a SCS/NRCS idealized unit hydrograph was used to model watershed runoff response, as study area watersheds are generally small. Modeled precipitation events were obtained from the U. S. Weather Bureau's Technical Paper No. 40.

Based on baseline flow data, the average runoff for the Red Hills Mine was determined to be approximately 1.25 cfs/square mile of drainage area.

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Surface water samples from each monitoring site were collected and analyzed for physical and chemical parameters including pH, conductivity, total dissolved solids (TDS), sulfate, chloride, total suspended solids (TSS), iron, manganese, nitrates, dissolved trace metals, coliforms, acidity, alkalinity, and various organic pollutants. All of the monitoring sites exhibited waters with very similar water quality and with very small seasonal variations. Averages of general water quality results from baseline data include a pH of 6.9 s.u., conductivity of 55 umohos/cm, TDS of 54 mg/l, and TSS of 8 mg/l. Laboratory analytical analysis for samples taken from the monitoring sites for baseline water quality was conducted by Inter-Mountain Laboratories, Inc. Surface water samples were analyzed by EPA approved methods current at the time of sample collection.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.2. Groundwater**

In 1996 and 1997 MLMC contracted R.W. Harden & Associates to conduct hydrogeologic studies focusing on groundwater. Work conducted included construction of test wells, sampling of groundwater chemistry, measurement of potentiometric surfaces, and testing of the aquifers.

The primary water bearing strata at the Red Hills Mine is within the Wilcox group, which is composed primarily of fine-grained deposits of interbedded clay, sandy clay and silt. Sand thicknesses were acquired from geophysical log data gathered during the early Phillip's exploration drilling programs and test well installation for initial characterization of aquifers within the Red Hills Mine.

Approximately 43 test wells were installed as part of the initial studies (Figure 7.2). Water levels were measured quarterly in all test wells constructed to determine potentiometric surface of various sand units. Aquifer testing, including pump tests and slug tests, was conducted in 15 of the test wells to study the more permeable horizons in the overburden and underburden of the mine. The testing indicated transmissivities ranging from 0.2 to 16,600 gallons per day per foot, and provided a range of hydraulic conductivities ranging from 0.004 to 31 feet per day. Horizons with higher hydraulic conductivity were generally associated with the coarser sand units in the underburden. Aquifer test results in overburden sands generally show lower transmissivities because only thin sand layers are present and are typically of finer and siltier texture.

Laboratory hydraulic conductivity tests were conducted on clay samples taken from boreholes drilled in the permit area. Results from eight permeability tests indicated, as is typical of Wilcox clay units, that hydraulic conductivities of these clays were low, ranging from 1 x 10-7 to 9.4 x 10-9 centimeters per second, and thus, clay units acted as confining layers to the stratigraphically lower Wilcox sand units. Results of these tests indicated little or no vertical hydraulic communication between sand units separated by clay strata. The layers of clay, predominant in the overburden and underburden materials, act effectively as confining layers. This was confirmed by the results of the laboratory hydraulic conductivity tests indicating low values for these clays.

Natural groundwater movement rates, in both water-table and artesian areas, are very slow and range from a few feet to 50 feet per year in the more permeable sand zones. Vertical hydraulic communication between sand zones is known to be small when separated by low hydraulic conductivity clays. This was demonstrated by the amount of rejected recharge during aquifer testing, indicating little seepage into adjoining beds downdip, and pumping-test data, indicating essentially no influence on drawdown between overlying and underlying sand zones.

Twelve months of water well, monitoring well and spring groundwater quality data was collected by MSU from 21 test wells in 1997 for alkalinity, hardness, total suspended solids (TSS), major cations/anions and select metals. Water samples collected for analyses were analyzed by an independent laboratory, ETC Laboratory, in Memphis, TN. Groundwater samples were analyzed by EPA approved methods current at the time of sample collection.

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Groundwater quality results from the Wilcox sands is fresh with average total dissolved solids concentrations less than 300 milligrams per liter (mg/L) and minor to moderate iron and manganese concentrations thought to be naturally occurring.

No formal QA/QC document was available for the initial baseline data. However, use of duplicate samples and blanks were noted by the QP upon review of laboratory reports, chain of custody (COC) forms, and field notes related to the data collected by MSU and R.W. Harden & Associates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.3. Qualified Person Opinion – Hydrogeologic Characterization**

The hydrogeology of the Red Hills Mine has been well studied. MLMC has continued to gain an understanding of the water bearing units during mining, established groundwater and surface water monitoring programs, fill-in drilling, and installation of new monitoring wells. In the QP's opinion, these additional observations and collected data from the past 20 years of mining align with the results of the original surface water quantity measurements, aquifer tests, hydraulic conductivity tests, and water quality results.

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**Figure 7.2 Groundwater Map**

![image_15a.jpg](image_15a.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;**7.4. Geotechnical Studies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4.1. Early Geotechnical Studies**

Geotechnical soil drilling has been carried out at the property during several investigations. The most notable studies concerning baseline geotechnical properties are described below.

In 1997, Burns Cooley Dennis, Inc. conducted a study to establish ground conditions and geotechnical properties for the various formations in the Red Hills project area. Three geotechnical boreholes to a maximum depth of 70 feet were completed using a 6-inch diameter short-flight earth auger to a depth of 10-feet followed by rotary wash methods to final depth. Each boring was sampled to a depth of 60-feet, drilled an additional 10-feet then geophysically logged by Century GLS. All soils encountered during drilling were classified with respect to material composition and consistency or density by a geotechnical/geological engineer.

Following the previous investigation in 1997, Geoscience Engineering, LLC. completed four cored holes (including an initial pilot hole) drilled to depths ranging from 170 to 360 feet at a 6-inch diameter. The pilot holes and core holes were advanced using rotary wash methods. Soil Samples were collected using a double core barrel.

In 2004, Aquaterra Engineering, LLC. completed eight soil borings using rotary wash methods to a maximum depth of 200 feet. Each soil boring was advanced with a 4-inch diameter drill bit. The soil sampling program included the collection of both disturbed and undisturbed soil samples. The samples were collected at various depths. Relatively undisturbed samples were obtained by pushing a 3-inch diameter, Shelby tube sampler to collect soil samples for geotechnical laboratory testing. Locations of geotechnical borings are shown on Figure 7.3.

The typical geotechnical borehole log included the following geotechnical descriptions and records of the samples collected during investigation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Lithology</u>: Descriptions of the lithology (typically sandy silts, silts and clayey silts) are recorded for each stratigraphic interval in conjunction with a soil type in accordance with the Unified Soil Classification System (USCS). The soil types encountered by Burns Cooley Dennis, Inc., 1997 at the boring locations include clayey sands (SC), silty sands (SM), slightly silty sands (SP-SM), silty and sandy clays (CL), clays (CH) and lignite.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Consistency/Relative Density</u>: Aquaterra Engineering, LLC., 2004 determined the relative strength estimates of the sample by hand penetrometer readings. In the more granular conditions at this site and at locations where the very dry nature of the surface soils prevented undisturbed sampling, Standard Penetration Testing (SPT) was performed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Sample Type and Laboratory Data</u>: The soil borings included various samples collected during the geotechnical investigations. The Aquaterra Engineering investigation (2004) collected piston (Shelby tube) samples (2.0 to 2.5 feet in length) at nominal 10-foot intervals. The piston samples are considered to be relatively "undisturbed" samples and suitable for laboratory testing such as the various strength tests. The index properties determined were the moisture content, Atterberg limits, and grain size determination. The laboratory investigation by burns Colley Dennis, Inc., 1997, included unconfined compression tests, consolidated and unconsolidated undrained triaxial compression tests, water content determination, shear strengths, mechanical sieve analysis, proctor compaction tests, and chemical/corrosion testing. The laboratory investigation by Geoscience Engineering, LLC., 1997 determined the undrained shear strength,

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unconfined compression test, drained shear strength, moisture content, Atterberg limits, consolidation, and grain size analysis of site materials.

The geotechnical reports available for the QP's review did not document QA/QC protocols and procedures followed by the independent contractor at time of testing and sample collection, however the laboratory standards were indicated. The typical laboratory tests performed in the three investigations described above were performed in accordance with the relevant American Society for Testing and Materials (ASTM) standards at independent certified laboratories and include the following:

Soil Index properties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Moisture content determination – ASTM D 2216, ASTM D 4959

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Atterberg limit determination – ASTM D 4318

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consolidation tests – ASTM D 2435

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Grain size determination – ASTM D 422 and ASTM D 1140

Soil Strength properties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Direct shear strength tests – ASTM D 3080

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consolidated shear strength tests – ASTM D 3080

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unconfined compression tests – ASTM D 2166

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unconsolidated undrained triaxial tests – ASTM D 2850

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consolidated undrained triaxial compression tests – ASTM D 4767

In the QP's opinion the laboratory testing methods completed to determine the geotechnical soil parameters are appropriate for the purpose of detailed pit design outlined in Section 13.5 of this TRS.

Further detail concerning pit design and ground control parameters related to geotechnical studies and additional geotechnical studies related to pore water pressures and effects on pit stability are discussed in Section 13.0 Mining Methods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4.2. Buffer Block Study**

In 2011, NACoal conducted an additional geotechnical study to determine the design parameters for a buffer block left between future mine area boxcuts directly adjacent to previously mined pits at the Red Hills Mine. NACoal contracted Terracon, an independent geotechnical company, to drill, sample, and conduct laboratory testing for 8 soil borings within the area of interest (Figure 7.3). Century Geophysical, an independent contractor, geophysically logged the bore holes.

The soil sampling program included the collection of both disturbed and undisturbed soil samples. Relatively undisturbed samples were obtained by pushing a three-inch diameter, Shelby tube sampler a distance of two feet into the soil in general accordance with ASTM D1587.

After the Shelby tube was removed from the boring, the sample was carefully extruded in the field and visually classified. Relative strength estimates of the sample were obtained by penetrometer readings. Disturbed portions of the sample were discarded and the undisturbed sample was placed in a protective container for transportation to the laboratory. An additional portion of the sample was placed in a plastic jar to minimize moisture loss during transport to the laboratory and to aid in visual classification of the sample.

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In more granular conditions, the standard penetration test (SPT) was performed. In this case, representative disturbed samples were obtained in cohesionless soils by driving a 2-inch OD split-spoon sampler a distance of 18 inches into the soil with blows from a 140-pound hammer falling a distance of 30-inches (ASTM D 1586). Representative samples removed from the split spoon sampler and placed in plastic jars to minimize moisture loss provided a sample for laboratory testing.

At selected boring locations, auger samples were also collected to allow collection of soils for classification purposes only. In this case, the sample was retrieved directly from the auger being used to advance the boring. The auger sample was placed in a plastic jar to minimize moisture loss during transport to the laboratory.

The soil samples were delivered to the Terracon laboratory for testing. Laboratory test assignments were made by NACoal. Laboratory testing was accomplished to determine index and strength properties of the soils encountered. These procedures are listed below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Index properties: Moisture content (ASTM D2216), Atterberg Limits (ASTM D4318), Grain Size Determination (ASTM D422 and D1140), and Standard Effort Compaction Test (ASTM D 698)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Strength Tests: Unconfined Compression (ASTM D2166), Consolidated Undrained Triaxial Compression (ASTM D4767), Unconsolidated Undrained Triaxial Compression (ASTM D2850), Direct Shear Test (ASTM D3080)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Permeability Tests (ASTM D5084 and ASTM 2434)

All soils were visually classified and in accordance with criteria stipulated by Unified Soil Classification System (USCS).

During the soil boring advancement and sampling operation, observations for free groundwater was not made because the rotary wash technique was used for the entire boring advancement. Therefore, groundwater levels were not determined. However, ground water information from existing monitoring wells and on-site ground water management programs was available.

Using the results of the laboratory tests and field observations, NACoal conducted a slope stability analysis using the computer program Slope W and a method called Morgenstern-Price to obtain likely factors of safety for opening up a boxcut adjacent to a previously mined pit. Three scenarios for block widths between mine areas were analyzed including a 500-foot block, 250-foot block, and 100-foot block. All scenarios initially assumed 41-degree slopes on either side of the buffer block. All three scenarios resulted in a recommendation that the low wall of a new boxcut adjacent to a previously mined area should be no steeper than 30-degrees to prevent instability and increase the factor of safety near the low wall slope to 1.3.

In the QP's opinion the drilling, sampling, testing, and analysis completed were appropriate to establish low wall pit parameters for opening up a box cut for a new mine area adjacent to a previously mined pit. In the current LOM plan, this parameter only applies to the Mine Area 2 boxcut.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4.3. Qualified Person Opinion – Geotechnical Studies**

Subsurface conditions and geologic units encountered have remained fairly consistent since mining commenced in 2000. Overburden core holes in which individual sections of burden were collected and tested for physical and geochemical properties, as described previously under drilling exploration, have been evenly distributed throughout the permitted mine areas and continually serve as an indicator for soils to be encountered ahead of mining.

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Furthermore, the geologic structural data acquired from geophysical logs during drilling campaigns indicate consistent depths between burdens and lignite seams among other subsurface characteristics. Special situations, such as deep pore water pressures described in Section 13.0 of this TRS, have led to additional geotechnical studies specific to the issue encountered while mining. However, the general pit parameters defined by the above studies have not warranted a need for further studies from the continued information obtained from drilling exploration and active mining operations. The QP understands that additional geotechnical studies may be required on an as needed basis to address special conditions that may be encountered in future mining.

**Figure 7.3 Location of Geotechnical Borings**

![image_16a.jpg](image_16a.jpg)

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**8. Sample Preparation, Analysis, and Security**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1.Sample Collection and Shipment** 

The Red Hills Mine lignite deposit is evaluated on a seam by seam basis. As a regular practice in the coal industry, lignite cores are bagged and sent to the independent coal testing laboratory. The procedures at the Red Hills Mine for current and historical sample collection are summarized below.

Core runs are specified by the senior and/or field geologist by referencing the geophysical log of the pilot hole. As coal seams rarely exceed 6 feet in thickness, a single 10-foot core run can typically capture a full lignite seam. Once a specified core run is brought to the surface, the field geologist observes the drillers extract the lignite sample from the double barrel core to ensure the integrity of the sample is maintained, and to verify the top and the bottom of the coal core run. The core sample is transferred from the core barrel to a core cradle (i.e. halved pvc pipe) and is carried to the field geologist's work station. The field geologist washes excess drilling mud from the core sample with water, verifies the roof and floor of the lignite core is present and checks the expected coal seam thickness referenced from the pilot hole's geophysical log to determine coal core recovery. If full core recovery cannot be verified, the driller may attempt to retrieve the remainder of the lignite core run from the current hole. If no successful attempt is made to recover the remaining lignite, the driller must re-core the lost interval in a new adjacent core hole to achieve a minimum of 90-percent recovery.

Upon verifying recovery of the core run, the field geologist succinctly, but thoroughly logs the lignite run. A typical log describes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "to" and "from" depths of burdens and lignite;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• joints and fractures at specified depths;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• characteristics of burden above and below the lignite core;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• roof and floor of lignite seam (i.e. sharp or gradational);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• presence of pyrite or petrified wood;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• observations of clay or sands imbedded in the lignite core;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• and any other prominent characteristics.

After the field geologist describes the core run, the entire lignite section is double bagged and double tagged. Tags include the date, mine identifier, hole ID, seam ID, and "to" and "from" intervals. Double bagging preserves the moisture of the sample, and double tagging safeguards the identification of the sample from the field through transportation to the independent laboratory. Historically, Red Hills Mine has not photographed coal cores prior to bagging samples, but intends to incorporate photographs as a regular QA/QC practice in logging core samples beginning with the 2022 drilling campaign.

Lignite cores may be split into multiple samples for the following reasons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prominent roof, floors, or partings within a continuous seam;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of composition concentrations (i.e. to determine if sulfur trends toward top, middle or bottom of seam).

Total core runs are shipped for analysis following industry standards, thus split samples in the context of a retained sample are not stored at the Red Hills Mine. Lignite tends to be a high moisture coal which oxidizes rapidly and does not have a long shelf life once removed from the ground. If core split samples were retained, they would not be representative of in-situ coal properties over time.

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After samples are bagged, they are stored in a dry, shaded area, typically the field geologist's truck, until the geologist returns to the mine office. Core samples are then securely stored in the senior geologist's office until transferred by the geologist to specified pallet boxes in the warehouse to be shipped to the independent laboratory. The warehouse is climate controlled, such that the samples are not kept in a hot environment that could adversely affect the quality results. Furthermore, the Red Hills Mine office and warehouse is secured with user specified fob access and camera surveillance.

Prior to shipping the samples, the senior geologist reviews each sample against the field records and the chain-of-custody (COC). The date, mine identifier, hole ID, seam ID, and "to" and "from" intervals are verified. In addition to the COC included in the physical shipping container, a copy is emailed to the laboratory manager to notify that a shipment is in route. Copies of the COC forms for coal cores shipped from 2015 through 2021 were available for the QP to review. Coal core samples are shipped to the independent laboratory via insured freight with tracking information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.Sample Preparation and Analysis**

Minimum analyses of coal cores include short proximate (ash, calorific value (BTU/lb), sulfur, moisture) and specific gravity. These parameters are the primary quality inputs used to model the Red Hills Mine lignite deposit. Additional analyses of coal cores may include mineral analysis of ash, trace elements, ash fusion, and forms of sulfur. Historically, full proximate, ultimate analysis, and grindability have been requested on a specialized basis. However, these parameters are not modeled or currently relevant for consideration in Mineral Resource estimations.

As mentioned in Section 7.0, coal cores collected by Phillips in the early years of exploration were sent to Core Laboratories, Inc., an independent laboratory in Tyler, Texas. QA/QC information related to these samples was not provided to MLMC by Phillips when data was acquired in 2000. However, the QP was able to review laboratory certificates to verify quality data related to these core holes.

Since 2000, Red Hills Mine has sent lignite core samples to Standard Laboratories, Inc. (Standard), an independent laboratory in Casper, Wyoming for analyses. Standard is a certified ANAB Accredited and ISO 17025 accredited laboratory for coal including typical lignite coals.

The Mineral Resources QP and principal geologist for NACoal toured the Standard Laboratory facility in Casper, Wyoming on June 24, 2021. The QP reviewed procedures for chain of custody, QA/QC, and observed laboratory processes and found the operation to be clean, well-managed, and professionally operated. No concerns were noted.

Short proximate parameters, as used to define Mineral Resources and Reserves, are tested at the Casper laboratory location. Other tests at the Casper location include, but are not limited to, mineral analysis of ash and ash fusion. Lignite core samples requesting trace mineral analysis and forms of sulfur analyses are completed by the Freeburg, IL Standard laboratory location from sample splits prepared at the Casper location.

The laboratory ASTM standards used at the Casper location are listed in Table 8.1. A modification to ASTM D3302/D3302M-18 Total Moisture is completed at Standard. Due to lignite having a higher moisture content and faster oxidation rate than higher rank coals, the temperature limit for air-drying was modified to reduce the drying time. Minimal to no evidence of bias was noted in any of the parameters (TM, Dry Ash, AR BTU/lb, MAF Btu) in any of the modified drying times and temperature combinations.

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**Table 8.1 List of ASTM standards for Standard Laboratory, Casper location**

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| | | | |
|:---|:---|:---|:---|
| **Specific Tests and/or Properties Measured** | **Specification, Standard, Method, or Test Technique** | **Items, Materials or Product Tested** | **Key Equipment or Technology** |
| Ash in the Analysis Sample | ASTM D 3174 | Coal | Furnace |
| Calorific Value | ASTM D5865 | Coal | Calorimeter |
| Carbon, Hydrogen, and Nitrogen | ASTM D5373 | Coal | Elemental Analyzer |
| Equilibrium Moisture | ASTM D1412 | Coal | Waterbath Method |
| Free-Swelling Index | ASTM D720 | Coal | Electric Method |
| Fusibility of Ash | ASTM D1857 | Coal | Furnace |
| Grindability of Coal | ASTM D409/D409M (MOD) | Coal | Grindability Machine |
| Loss on Ignition | ASTM 7348 | Coal | Oven/Furnace |
| Major and Minor Elements | ASTM D6349 | Coal | ICP-OES, Mixed Acid Digestion |
| Mercury | ASTM D6722 | Coal | Direct Combustion Analysis |
| Moisture in the Analysis Sample | ASTM D3173 | Coal | Oven |
| Moisture (Total) | ASTM D3302/D3302M (MOD) | Coal | Commercial Method |
| Preparing Samples for Analysis | ASTM D2013/D3302M (MOD) | Coal | Crusher/Pulverizer |
| Sulfur (Total) | ASTM D4239 | Coal | Furnace |
| Volatile Matter | ASTM D7582 | Coal | TGA |
| Water Soluble Alkali Content | ASTM D8010 Method A | Coal | ICP-OES |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.1. Receiving Dock/Sample Storage Room**

The receiving dock doubles as the sample storage room and is climate controlled (ventilated and heat). Casper, WY has a moderate summer climate, with cold winters that can be mitigated with heaters. From the receiving dock and storage room there is access to the sample prep room and main laboratory.

During non-operational hours Standard is locked down with an active alarm system including door, window and motion detectors which is monitored by a local company.

Once a shipment is received, the shipment is logged and opened then the number of individual samples are logged along with the date and time. Each sample is cross referenced with the COC and is then weighed using certified balances. Paper records including Standard laboratory logs, COC's, and any additional paperwork received in the shipment are transferred to an electronic database at this point.

Once samples are logged, they are stored in this storage room until there is available space in the prep room. It was noted there is a slight potential for moisture loss during this storage period. MLMC acknowledges this potential and, as such, double bags samples in the field to preserve as much in-situ moisture as possible.

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Retained pulverized and dried 60-mesh samples are also stored in this room. These samples can be retested within 6 months for selective parameters. Due to the sample being dry and potential for oxidation moisture parameters and Btu/lb cannot be retested. Standard contacts and verifies with the client prior to disposal of retains.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.2. Prep Room** 

The prep room is a temperature-controlled room (AC and Heat) accessible from the receiving dock. Within the prep room samples are crushed to 8-mesh size using a Holmes crusher and are then run through a Holmes riffler. Pulverizer screens and rifflers are inspected daily, before and after each batch. The distance between the riffler fin spread is regularly checked in accordance with ASTM standards. An air hose is used to clean out after each sample to mitigate contamination. It was noted that the prep room was very clean. No visible residual material was observed in the riffler.

8-mesh samples are divided into 1000 g per tray following ASTM standards using calibrated balances. Additional sample material is placed in a bag which then has the air mechanically removed and heat sealed for storage in a separate room off of the prep room. The same storage process is used for round robin samples. Similar to the retained samples, Standard verifies with the client prior to disposal of sample splits.

Prepared 1000 g trays are placed in one of three air dry units for overnight drying following the modified standards discussed previously. Drying time and temperatures are regulated on the air-dry units. Certified thermometers are used which also indicate minimum and maximum temperature values to ensure there is no exceedance of the max allowable temperature. Temperature gauges are certified annually, and additional checks are performed quarterly.

Once air-drying is complete and samples are re-weighed and logged. Dried samples are pulverized to 60-mesh and split samples are obtained with a Holmes sample riffle. Split samples are stored in pre-labeled high-density polyethylene (HDPE) bottles with foam lined caps.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.3. Laboratory Testing**

After the prep room process, 60-mesh split bottles are transferred to the main portion of the laboratory where they are first run through a mixing wheel for 10 minutes to ensure a homogeneous sample. All equipment maintains logs of processes and results. This portion of the laboratory is climate controlled (AC and heat).

Review of all analysis results is by the laboratory manager, or assistant laboratory manager. Review includes but is not limited to identification of outliers, and comparison of results with historical information by site, if available. The laboratory manager may request a rerun on a sample if needed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.Quality Control Procedures**

There is currently no formal program in place at Red Hills Mine for the inclusion of blanks, standards, pulverized duplicates, or field duplicates. However, Standard completes several internal QA/QC checks to verify samples.

Standard also participates in a monthly round robin coal testing program including 32 other laboratories. A 4-mesh program and an 8-mesh program are included in this round robin. In 2020, Standard also participated in a lignite (coal) specific round robin testing program facilitated by NACoal including 8 commercial laboratories that were used by various NACoal mine locations. The round robin consisted of four samples labeled 2001, 2002, 2003, and 2004. Two samples were sourced from Red Hills Mine and two samples were sourced from another NACoal mine. The two locations provided a range of samples with variability in moisture, ash, sulfur and sodium. The labs

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participating in the round robin were provided 8-mesh splits and dried 60-mesh splits of all 4 samples. The general results are summarized in Figure 8.1. Standard is labeled "Laboratory #6" and all results fell within ASTM Range.

**Figure 8.1 NACoal 2020 Round Robin Program Summary. (NACoal, 2020)**

![image_17a.jpg](image_17a.jpg)

In addition to the monthly round robin coal program, a formal Proficiency Testing Program by Quality Assurance Resources, LLC (QAR PTP) which includes a 4-mesh program and 8-mesh program is also completed monthly. If there is an error or out of tolerance reported, an investigation is immediately completed. Upon investigation, corrective action will be taken to remediate the issue and additional training will be completed if deemed necessary. Trainings were documented. The most current QAR PTP results were posted and personally reviewed by the QP and NACoal's principal geologist during the lab visit.

Along with the above programs, internally at Standard, a daily short proximate testing program was in place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4.QP Statement on the Adequacy of Sample Preparation, Security and Analytical Procedures**

Although no formal written procedure existed until recently for the process to collect coal samples at the Red Hills Mine, the consistency in core collection from one drilling program to the next has been thoroughly documented. Through records review and personal observation of numerous drilling campaigns, it is the QP's opinion that historic coal core collection has remained consistent with U.S. Geological Survey's (USGS) guidance for sampling coal for chemical analysis. The process of double bagging and tagging the cores in addition to multiple checkpoints to log samples from field to shipment to the laboratory further ensures the integrity and security of each sample is maintained.

Additionally, in the QP's opinion the methodologies used by Standard Laboratories are within ASTM standards for sample preparation, process of sample splitting and reduction, general quality control, and security of samples to ensure that validity and integrity of samples is upheld.

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**9. Data Verification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1.Data Verification Procedures for Mineral Resources**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1.1. Verification of Drillhole Data and Geologic (Mineral Resource) Model**

The drilling database for the Red Hills Mine was organized into three Excel files related to lithology intervals, collar survey, and quality. The files encompassed the geologic modeling inputs including lithology picks, total depth of hole, base of oxidation (weathering), hole coordinates, and coal core quality data. A secondary compilation of drilling data was created to verify completeness of data related to each drill hole including the file location of geologist field logs and laboratory certificates or reports for core quality, and details of each drilling program such as contractors who performed the work and year drilled.

The drilling files were saved on the MLMC network drive which contains the geologic model and has limited access by engineering and geology at MLMC.

Once the drilling database was compiled, a series of routine data integrity checks were performed by the QP on the database to check for common errors and omissions. The QP visually inspected the database after updates were made, then conducted a second data validation check using Maptek Vulcan software. The validation checks included, but were not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verified each hole has a unique collar location.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verified the total hole depth on the collar table matches the total depth on the lithology table.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verified the from and to depths on the lithology table and quality table increase down hole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verified for overlapping intervals in the lithology table based on from and to depths.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Verified the from and to depths on the quality table match the associated seam depths on the lithology table.

For any errors or omissions reported, the QP reviewed the geophysical logs, field logs, and quality reports related to the specified holes to reconcile the differences.

After the initial checks were performed, the QP identified any holes in close proximity to other holes such as twinned or re-drilled holes. If two drill holes fell within 50-foot of one another, the data from the two holes was reviewed. The hole with the highest confidence and most complete data was selected to be included in the model. After database checks and reconciliations were completed, the QP completed the modeling process which is detailed in Section 11.1 of this TRS.

The QP who serves as the senior geologist at MLMC in conjunction with the corporate principal geologist for NACoal individually reviewed and validated the constructed geological model using various checks between drill hole data and modeled horizons. Drill hole locations were randomly selected to verify modeled values of each horizon and were found to be representative of the imported drill hole data. Additional visual inspection of the model included review of various consecutive cross sections as well as isopach maps of the modeled structure and quality. Newly modeled grids were also compared to previous models. Changes in modeled values were minor and isolated to areas where new drilling data had been included from recent exploration programs. Anomalies were reviewed against the original drill hole data, any errors in the drilling database were reconciled and the model was reconstructed.

It is the QP's opinion that the analytical results from the coal cores collected during MLMC's exploration programs are consistent with actual as-delivered quality from the active mining operations at the Red Hills Mine. This opinion was based on comparison of historical quality projected from the geologic model for the annual operating plans to

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actual as-delivered quality indicated by the customer's (Red Hills Power Plant) independent laboratory, Advanced Analytical Laboratories. It is also the QP's opinion that the modeled structure of the lignite seams is consistent with active mining operations based on comparisons of modeled seam thickness and trends against actual surveyed seam thicknesses and trends.

The QP found the geologic model for Mineral Resource estimation was a reasonable and reliable representation of the geologic structure and quality of the lignite seams (horizons) at the Red Hills Mine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1.2. Verification of the Reasonable Prospect for Economic Extraction to Support Mineral Resource Estimation**

The Red Hills Mine has acquired data related to mine development and production within the local lignite deposit over an extended operational history. The QP verified the assumptions made for the estimation of Mineral Resources were well within accuracy required for an initial assessment (IA) level of study based on actual historical metrics and a contract period defined by the LSA with the RHPP. Data referenced for verification included actual month end reconciliations, production reports, and mine permit requirements. The potential for economic extraction is justified by the terms of the existing LSA with the RHPP through April 2032.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1.3. Limitations on Data Verification for Mineral Resources**

Representatives of MLMC or NACoal were not involved in the original drilling exploration programs conducted by Phillips prior to 1997. MLMC obtained the collar surveys, geophysical logs, coal core analyses, and geologist field logs for each hole from Phillips, but was unable to observe the drilling, sampling, or sample preparation related to these data. The largest uncertainty lies in the method of the collar survey of the early data drilled from 1975 to 1980. It is unknown to what degree these holes were surveyed. Collar elevations for these early drill holes were plotted against a topographic digital terrain model (DTM) contoured at 5-foot intervals and checked for discrepancies. All plotted drill hole locations fell appropriately within the respective contour interval.

MLMC, historically, has contracted Diversified Drilling Services and Century GLS, contractors used by Phillips for the early exploration, to perform in-fill drilling programs, such that MLMC has gained familiarity in these contractors' drilling and downhole mapping methods. Furthermore, comparisons of new drilling data to the older Phillips data have been completed as fill-in drilling progresses ahead of mining. These comparisons, and the level of documentation Phillips provided upon acquisition of the coal assets translates to a level of confidence in these data to use in the geologic modeling for Mineral Resource estimation. Nonetheless, there is still some uncertainty related to the Phillips drill hole data which the QP has considered in the determination Mineral Resource estimations as discussed in Section 11.0 of this TRS.

Additionally, as discussed previously in Section 7.2 of this TRS, the QP was also unable to verify laboratory records for the 22 coal cores collected in 2003 as included in the drilling database. The QP reached out to the independent laboratory for copies of the original quality reports. However, the time of record exceeded the laboratory's holding period of seven years and copies were not available. The QP then compared the related quality of the drilling database to the associated month end reconciliation reports and found that modeled tonnages in the area of the 2003 drilling were representative of the actual mined tonnage as shipped to the RHPP. After this comparison, the QP determined the uncertainty in the modeled 2003 quality would not materially affect the Mineral Resource estimations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1.4. QP's Statement of Adequacy of Data for Mineral Resources**

Data disclosed in this TRS used for the preparation of geologic models for the purpose of Mineral Resource estimations at the Red Hills Mine have been verified by the QP. The QP has been involved with the collection of

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these data during drilling exploration programs since 2011 and has had direct oversight of the drilling campaigns at the Red Hills Mine since 2015. These data include drill hole surveys, geophysical logs, coal core quality, and other relevant test data. Procedures discussed previously in this section were used by the QP to reconcile any discrepancies upon review of the available data. In addition to a substantial geologic database, historical data since the mine opened the original boxcut in 2000 was available to the QP to review to ensure appropriate mining costs were applied to estimate Mineral Resources.

It is the QP's opinion that the data provided for this TRS is sufficient for the determination of Mineral Resources at the Red Hills Mine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.Data Verification Procedures for Mineral Reserves**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.1. Verification of Hydrogeology Data**

Groundwater and surface water studies were conducted on the Red Hills Mine site, as described in Section 7.3 of this TRS, and used to develop mine plans as described in Section 13.0 of this TRS. The QP has reviewed the findings of these studies and believe they are thorough, complete and provided the necessary information for the start-up and ongoing operation of the Red Hills Mine. Sampling and modelling techniques used in the studies were adequate and completed in a professional manner for a PFS level assessment of the hydrology/hydrogeology. The locations of the surface water sampling sites and monitoring/test well locations are adequate for the MS-002 and MS-004 areas. The Red Hills Mine has operated for 20 years and is continuously gaining an improved understanding of how the groundwater and surface water impacts mining operations along with environmental compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.2. Verification of Geotechnical Data**

Several geotechnical studies were initially conducted on the Red Hills Mine site as described in Section 7.4 of this TRS and subsequent studies conducted and described in Section 13.5 of this TRS. These studies have been reviewed by the QP and they provided the basis for the mine plan designs. Sampling and modelling techniques used in the studies were adequate and completed in a professional manner for a PFS level assessment of the geotechnical parameters. It is the opinion of the QP that the geotechnical studies reviewed have been consistent with responses from the active mining operation and are adequate for use in the MS-002 and MS-004 mining areas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.3. Verification of Cut-off Grade, Dilution Assumptions and Modifying Factors**

The QP reviewed the cut-off grade, dilution assumptions, and all modifying factors for completeness and reasonableness and found them to be consistent with the realized results from the active mining operation.

Quality reject specifications from the LSA are the basis for development of the cut-off grades. The QP has reviewed the cut-off grades and LSA and in his opinion these have been properly established.

Dilution parameters are reasonable and have been verified by comparing projected to actual as-delivered quality data which confirms the established dilution parameters are a good representation of final results. Recovery rates have been refined over the course of operating the Red Hills Mine and are constantly being compared to actual recoveries for verification.

Modifying factors used in pit designs, as described in Section 13.0 of this TRS, have remained consistent since mine inception with limited changes. The modifying factors have been reviewed by the QP and consistently applied in the mine design process.

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It is the opinion of the QP that the cut-off grade, dilution assumptions and modifying factors are adequate for purposes of determining Mineral Reserves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.4. Verification of Ultimate Pit Configuration**

The ultimate pit configuration is defined by physical constraints including permitted boundaries and related offsets and buffers, areas where the stripping ratio exceeds economic limits, and/or the limitations of the LOM sequence. It is the opinion of the QP that the ultimate pit configuration has been properly defined and is adequate for purposes of determining Mineral Reserves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.5. Verification of Cost Estimate, Pricing Assumptions, and Economic Analysis**

The QP has reviewed annual historical values for all costs, pricing assumptions and economic analysis to be reasonable for future projections, which are continuously refined annually as more data is collected from ongoing operations, to improve accuracy of the projections. These have been used to support parameters used during mine planning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.6. Workforce, Staffing and Equipment**

The QP considers that reconciliations of staffing and workforce requirements, actual equipment capacities and productivities have been appropriately considered while establishing reliable projections of executing the mine plan. The Red Hills Mine is an active, on-going operation and the staffing, workforce, and equipment requirements are well established.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.7. Environmental Factors**

The QP has worked closely with the Red Hills Mine Environmental Manager and has reviewed the site closure and reclamation plans and the related costs. Proper monitor programs to meet mine permit requirements are in place. Field work has been observed routinely by nature of the QP's on-site role to verify the conditions and assumptions that underscore the environmental data used in this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.8.Limitations on Data Verification for Mineral Reserves**

It is the opinion of the QP that there are no limitations to data verification for Mineral Reserves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2.9.QP's Statement of Adequacy of Data for Mineral Reserves**

The QP has verified the data disclosed, including prior technical studies used in the development of the modifying factors, cut-off grade, ultimate pit configuration, mine design, schedule, workforce and staff requirements, equipment needs, environmental factors, cost assumptions and pricing assumptions and economic analysis. The QP has been involved with the collection and use of this data since 2017 while serving as the Engineering Manager at the Red Hills Mine. Red Hills Mine has established internal policies and controls to manage the environmental, regulatory and social or community aspects for the mining operations. These are periodically reviewed by the QP and other managers at the Red Hills Mine and NACoal management for their effectiveness in a culture which follows the principle of continuous improvement. The QP is of the opinion that a reasonable level of verification has been completed and that no material issues have been left unidentified in the course of collecting and analyzing the data described in this report.

It is the QP's opinion that the data provided for this TRS is sufficient for the determination of Mineral Reserves at the Red Hills Mine.

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**10. Mineral Processing**

It was identified early on that the Red Hills Mine and power plant project would only be viable if the fuel source could be used as a direct feed ROM fuel source. Therefore, no washability tests for processing or metallurgical tests were conducted.

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**11. Mineral Resource Estimates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1. Key Assumptions, Parameters and Methods**

The QP developed the stratigraphic geologic model for Mineral Resource estimation using Maptek Vulcan software. All verified drilling data as of December 31, 2021 was considered for inclusion in the model. Key assumptions, parameters and methods to estimate Mineral Resources are discussed herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.1. Horizons**

The structure of the Red Hills Mine deposit is determined by "to" and "from" depth picks from geophysical logs and geologist's drill hole field logs correlated to the drill hole collar survey. Depth picks represent the roof or floor of a lignite seam which define each horizon or domain.

Laboratory results for split cores are reviewed by the senior geologist prior to inclusion in the geologic database for modeling. Quality results for all split samples to identify composition concentrations are identified as a continuous seam in the geologic database. The weighted average is computed in the modeling process, which allows for a single composite value for each lignite seam per drill hole.

Roofs, floors and parting samples that meet a minable quality (see Table 11.1) are identified as part of the associated seam and are modeled in the same manner as the split samples described previously. Roofs, floors and partings that do not meet a minable quality are included in the geologic database as a point of record, but are not modeled with a seam identifier, and thus the quality and thickness of those sample splits are not composited with the associated seam.

**Table 11.1 Quality Limits (as-received basis)**

---

| | | |
|:---|:---|:---|
| **Parameter** | **Minimum** | **Maximum** |
| Calorific Value, Btu/lb | 4400 | 8000 |
| Moisture, %wt | 20.0 | 49.4 |
| Ash, %wt | 5.0 | 23.5 |
| Sulfur, %wt<sup>1</sup> | 0.2 | 1.2 |

---

<sup>1</sup> Sulfur values of LSA rounded to one decimal.

Table 11.2 presents the stratigraphic horizons modeled. Horizons considered for Mineral Resource estimates are indicated with an asterisk. Modeled horizons were required to have a minimum of ten coal core samples in the drilling database to be considered. The QP found a minimum of 10 coal core samples provided the statistical confidence to characterize the quality of a lignite seam.

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**Table 11.2 Stratigraphic Horizons**

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| | | |
|:---|:---|:---|
| **HORIZON ID** | **SEAM NAME** | **AVERAGE THICKNESS** |
| COJ | J-Seam | 1.7 |
| CI2 | I2-Seam | 1.1 |
| **COI\*** | **I-Seam\*** | **1.6** |
| CI1 | I1-Seam | 1.1 |
| **CH2\*** | **H2-Seam\*** | **1.4** |
| **COH\*** | **H-Seam\*** | **2.5** |
| CH1 | H1-Seam | 1.2 |
| **CG2\*** | **G2-Seam\*** | **1.4** |
| **COG\*** | **G-Seam\*** | **3.0** |
| CG1 | G1-Seam | 1.2 |
| CG3 | G3-Seam | 1.3 |
| CF2 | F2-Seam | 1.0 |
| **COF\*** | **F-Seam\*** | **2.8** |
| CF1 | F1-Seam | 1.4 |
| CE2 | E2-Seam | 0.9 |
| **COE\*** | **E-Seam\*** | **3.5** |
| CD6 | D6-Seam | 1.1 |
| **CD4\*** | **D4-Seam\*** | **1.3** |
| **CD2\*** | **D2-Seam\*** | **1.2** |
| **COD\*** | **D-Seam\*** | **3.3** |
| CC2 | C2-Seam | 0.9 |
| **COC\*** | **C-Seam\*** | **3.1** |
| CC1 | C1-Seam | 1.0 |
| CB2 | B2-Seam | 1.1 |
| **COB\*** | **B-Seam\*** | **3.1\*** |
| CB1 | B1-Seam | 1.5 |
| CB3 | B3-Seam | 1.0 |
| **\*** Indicates horizon with an average drill hole quality and an adequate number of core samples which meet the limits for consideration as a Mineral Resource. | **\*** Indicates horizon with an average drill hole quality and an adequate number of core samples which meet the limits for consideration as a Mineral Resource. | **\*** Indicates horizon with an average drill hole quality and an adequate number of core samples which meet the limits for consideration as a Mineral Resource. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.2. Quality Parameters and Density Determination**

The quality parameters modeled for determination of Mineral Resources are outlined in the LSA and include calorific value (Btu/lb), moisture (wt%), ash (wt%), and sulfur (wt%); typical Short Proximate analysis reported on an as-received (AR) basis. Four quality grids of the above parameters are modeled for each horizon. The minimum and maximum quality constraints which determine feasibility to be categorized as a Mineral Resource are also defined in the LSA and are listed in Table 11.1.

In addition to the quality grids, each lignite seam (horizon) has a modeled density grid. Specific Gravity (SG) analysis is regularly tested on lignite core samples. Modeled SG values by horizon are converted to a density grid in the modeling process by converting grams per cubic centimeter (g/cc3) to tons per cubic foot (tons/ft3) such that: SG \* Density of Water (62.43 lb/ft3) \* 2000 lb/ton.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.3. Modeling Process**

After the QP verified the drilling data following procedures outlined in Section 9.1 of this TRS, the stored drill hole data encompassing geologic lithology picks, quality data, and collar surveys was imported into the modeling software.

The lithology and location tables were then referenced by the modeling program and the structural model was developed. The lignite horizons were correlated and modeled using 50-foot grid cells. During the modelling process, lithologic data were extrapolated from ten surrounding drill holes using an inverse distance squared calculation to infill the grids where appropriate.

The base of oxidation (BOX) depth determined from drill cuttings and continuous (overburden) cores was modeled to provide the limit for suitable plant growth material (SPGM) for operations. This limit also generalizes the base of weathering in that lignite above this depth has been partially oxidized and typically exhibits unacceptable quality characteristics. The depth of the BOX layer was modeled by the grid calculation method using 50-foot grid cells and the extrapolated depth of the BOX from drill hole to drill hole. Lignite seams were then subcropped based on the BOX and lignite seams above the BOX were removed from the model.

The structural model was validated based on geological cross sections and isopach maps of the seam roofs and floors that were created, and checked by the QP. Any errors identified in the lithologic descriptions were reconciled.

Lignite quality was then modeled for the entire deposit. As described above, quality data was first composited for each lignite seam by drill hole. As with the structural model, the quality model uses 50-foot grid cells to model quality of the deposit. Drill holes missing quality data employed an inverse distance squared calculation to assign averaged values from ten surrounding drill holes.

In-situ tonnages for the lignite seams were calculated within Maptek Vulcan by applying a formula to each horizon by the area, thickness, density, and real/extrapolated quality values (i.e. modeled parameters).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.4. Justification of Modeling Methods**

Historically, geologic models at the Red Hills Mine have been generated using inverse distance methods. The models have proved to be consistent with field conditions (structure and quality), which is likely attributed to the simplistic, stratigraphic geology of the region as described in Section 6.0 of this TRS. Geologic units are laterally consistent with generally graded quality. Use of inverse distance methods has proven to be robust in continuous stratigraphic deposits. The QP did not see a need for MLMC to alter geologic modeling methods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.5. Limits and Constraints on the Mineral Resource Estimates**

The Mineral Resources presented in Table 11.4 were estimated by applying a series of geologic and physical limits in addition to mining and economic constraints which meet the level of accuracy required for an initial assessment

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(IA). The potential of economic extraction is justified by the terms of the existing LSA contract and are clearly defined through April 2032. Key constraints used by the QP to determine Mineral Resource estimates are summarized below. Details pertaining to physical constraints are discussed further within Sections 3.0 and 17.0 of this TRS. Mining and economic constraints specific to Mineral Resource estimates are discussed herein.

Geologic Constraints:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Modeled roof and floors of each lignite seam (horizon);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Base of oxidation (BOX).

Physical Constraints:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Topography surface;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lease and fee coal boundaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Surveys of mined out tonnages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Offsets from unleased land tracts and occupied dwellings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Buffers from state and federal parks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Existing roads and highways, major utilities, and major surface infrastructure without prior agreements for relocation or temporary closure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stream offsets for Waters of the US (WOTUS) that fall outside of mitigation permits.

Mining and Economic Constraints:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Resource categorization parameters based on distance from point of observation and drill hole sample count criteria;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Resource pit shells developed from general mine design parameters and reasonable unit costs used to determine the max cumulative strip ratio for the tonnage to be economical;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stated in-situ without any mining loss, dilution or other modifying factors applied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stated exclusive of Mineral Reserves;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Limits on quality parameters presented in Table 11.1. Quality limits are specified by the LSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.6. Generation of Pit Shells for Mineral Resource Estimates**

Resource pit shells were projected and confirmed to meet the supply requirements of the LSA.

The QP determined the maximum reasonable cumulative stripping ratio was 18:1 for the Red Hills Mine deposit assuming a lignite sales price based on the LSA of $30 per ton as of December 31, 2021. The sales price has historically remained fairly steady due to the single customer contract. Assumptions of mining costs were based on knowledge of surface mining methods in a simple multi-seam, stratigraphic deposit.

Three pit shells were identified for Mineral Resource estimates. Mine Area 1 and Mine Area 2 fall within the MS-002 permit area, and Mine Area 3 falls in the MS-004 permit area.

The geologic model was used to create a stripping ratio map of the deposit. Recovery of tonnage was assumed to be 100-percent. No dilution factors were applied. The C- seam was assumed by the QP to be the lowest potentially mined lignite seam for Mine Area 1 and Mine Area 2. The B-Seam was assumed by the QP to be the lowest potentially mined lignite seam for Mine Area 3 due to the shallower depth of the seam resulting from valley terrain and the structural dip of the lignite seams. Highwalls and endwalls were projected up from the lowest mineable

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seam to the topography at 40-degrees, an angle appropriate for surface mining in soft materials. Preliminary pit shells were determined by the QP based on the maximum cumulative stripping ratio, then modified for any physical constraints.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1.7. Mineral Resource Classification and Uncertainty** 

The Mineral Resource categorization applied by the QP includes the consideration of the abundance of data per drill hole and the spatial distribution of drill holes. Mineral Resources presented in this TRS were estimated and categorized as Measured, Indicated, or Inferred.

Table 11.2 identified the lignite seams for initial consideration of a Mineral Resource by the QP. The indicated seams had a minimum of ten coal core samples for quality estimation, and an average coal core sample quality which fell within the limits provided in Table 11.1. Mineral Resources were then further defined by the three identified resource pit shells.

As discussed in Section 7.2 all drill holes within the Red Hills Mine deposit obtained structural data related to the lignite seams, where a portion of these drill holes also included quality data from the collection of coal core samples. As such, the QP determined it would be appropriate that the defined distances for Mineral Resource categories were supported by the average distance between core holes. The distribution of the average distance between core holes is presented below in Figure 11.1. Accounting for the average distance between core holes would ensure an appropriate density of the quality data was included in each Mineral Resource category. Additionally, due to the methodology of the fill-in drilling at the Red Hills Mine, a greater density of quality data would naturally encompass a greater density of structural data.

**Figure 11.1 Distribution of distance between quality drill holes**

![image_18a.jpg](image_18a.jpg)

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From the summary statistics of the average distance between core holes, the lower quartile was 1,106 feet and the upper quartile was 3,404 feet.

Following the quartiles of the distribution as a baseline, the QP modeled various distances from core hole collar locations, and noted a correlating confidence level at the distances of 1,000 feet, 3,000 feet, and 5,000 feet. Confidence by the QP was determined from the density of quality and structural data available within each distance combined with the associated timeframe drilling data was collected. The data collected during drilling programs in which the QP oversaw held a greater weight than data collected in earlier years. Data collected by Phillips prior to MLMC held the least amount of confidence. The QP then conducted a comparison of the modeled values at various distances to actual historical data of mined out areas and noted minimal variance of less than 5-percent between modeled tons and actual mined tons at a distance less than 1,000 feet. At a distance greater than 1,000 feet and less than 3,000 feet some variance in modeled and actual values was noted, but was minimal such that comparisons of calorific values (BTU/lb) were still within 5-percent of actuals. No historic data was available for a comparison of modeled and actual values at a distance greater than 3,000 feet.

After review, the QP determined distances from core holes of 1,000 feet, 3,000 feet, and 5,000 feet were appropriate for categorization of Mineral Resources as Measured, Indicated, or Inferred (Table 11.3).

**Table 11.3 Mineral Resource Categories – distances from core hole**

---

| | | |
|:---|:---|:---|
| **Mineral Resource Category** | **Lower Distance (Ft)** | **Upper Distance (Ft)** |
| Measured | 0 | 1,000 |
| Indicated | 1,001 | 3,000 |
| Inferred | 3,001 | 5,000 |

---

As stated previously, all Mineral Resource categories meet the minimum of 10 samples for estimation, meet the quality limits, and fall within a defined resource pit shell. The distinguishing factor between Measured, Indicated, and Inferred Resources is the distance of the resource from a core hole as described below and shown in Figure 11.2.

Measured Mineral Resources are defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is less than or equal to 1,000 feet. An extensive amount of fill-in drilling has occurred in areas where core holes have been drilled at a distance within 1,000-feet of each other. At this distance, much of the structural data has been tightened to a density of 500-feet or less. Most of this drilling data was collected by MLMC using known sampling methods and surveying methods. Due to the level of control and oversight during collection of this drilling data, the resulting resource estimates have a high level of confidence by the QP and a low level of uncertainty.

Indicated Mineral Resources are defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is greater than 1,000 feet and less than or equal to 3,000 feet. While a portion of this data still relies on some of the early exploration data collected by Phillips, much of the area has been filled-in with data collected by MLMC using known sampling methods and surveying methods. While some uncertainty still exists in this data due to the influence of the early Phillips drilling, a moderate level of confidence in this data has been applied by the QP from more recent fill-in drilling.

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Inferred Mineral Resources are defined as tonnages which meet the general resource requirements and fall within an area where the distance from a core hole is greater the 3,000 feet. Modeled values at this distance require a large amount of interpolation from drilling data collected in the early exploration stage conducted by Phillip's from 1975 through 1980 and, as such, holds the greatest uncertainty in sample collection and survey methods. Fill-in drilling, including twinned holes would increase the confidence in these data.

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**Figure 11.2 Red Hills Mine Mineral Resource Classifications; distance from core hole**

![image_19a.jpg](image_19a.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;**11.2. Mineral Resource Estimates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.2.1. Basis for Mineral Resource Estimate**

The basis of the Mineral Resource estimates for the Red Hills Mine deposit and the methods in which they were prepared are summarized for this item. The S-K 1300 regulations (17 CFR 229.1300) define a Mineral Resource as:

"A concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is a reasonable estimate of mineralization, considering relevant factors, such as cut-off grade, likely mining dimensions, location, or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled."

Following definitions presented in 17 CFR 229.1300 and guidance from the Committee for Mineral Reserves International Reporting Standards (CRIRSCO), Mineral Resources are divided into three categories as listed below and are ranked by increasing level of confidence. Mineral Resources are reported as in-situ tons such that no adjustments have been made to account for mining recovery or losses.

Measured Mineral Resources are defined as a Mineral Resource for which quantity and quality are estimated on the basis of conclusive geological evidence and sampling such that the geologic certainty of the Mineral Resource is sufficient to allow the QP to apply modifying factors in detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Measured Mineral Reserves have the greatest confidence defined by the QP, and may be converted to a Proven Mineral Reserve.

Indicated Mineral Resources are defined as a Mineral Resource for which quantity and quality are estimated on the basis of adequate geological evidence and sampling such that the QP can apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. These Mineral Resources may be converted to a Probable Mineral Reserve. Indicated Mineral Resources have a moderate level of confidence determined by the QP, and could be upgraded to a Measured Mineral Resource with further exploration.

Inferred Mineral Resources are defined as a Mineral Resource for which quantity and quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and quality continuity. Inferred Mineral Resources have the lowest level of confidence determined by the QP.

The QP based the Mineral Resource estimates presented in Table 11.4 for the Red Hills Mine on a stratigraphic geologic model generated from the verified drilling exploration data presented in Section 7.2 of this TRS. The choice of stratigraphic modeling is due to the lateral persistence and continuous extent of the lignite seams.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.2.2. Mineral Resource Statement**

The categorized Mineral Resources reported herein are exclusive of in situ Mineral Reserves. The effective date of Mineral Resource estimates is December 31, 2021.

**Table 11.4 Mineral Resource Estimates**

![image_20a.jpg](image_20a.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;**11.3. Cut-off Quality, Assumed Cost and Sales Price**

Quality limits were previously discussed with Table 11.1 and in subsection Limits and Constraints on the Mineral Resource Estimates under Section 11.1 of this TRS.

Assumed cost and sales price to determine Mineral Resources was previously defined by the stripping ratio and discussed in subsection Generation of Pit Shells for Mineral Resource Estimates of Section 11.1 of this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.4. QP's Classification of Mineral Resources**

The criteria used by the QP to classify Mineral Resources into inferred, indicated, and measured Mineral Resources was previously discussed in subsection Mineral Resource Classification and Uncertainty under Section 11.1 of this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.5. Uncertainty in the Mineral Resource Estimates**

Uncertainty in the Mineral Resource estimates was previously discussed in in subsection Mineral Resource Classification and Uncertainty under Section 11.1 of this TRS.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.6. QP's Opinion on Potential Influences Affecting Mineral Resource Estimates**

Due to the contract provisions of the LSA, factors including contract term or likelihood of economic extraction, lignite sales price, and quality parameters/limits have far less risk of being affected than a mineral sold on the open market. Nonetheless some risks still need to be addressed.

Additional exploration may positively or negatively affect Mineral Resource estimates. Furthermore, Mineral Resource estimates may be materially affected by a change in the assumptions including general mining costs and land control. New regulations may impose additional economic factors, delays to future permit renewals, or restrictions to physical estimation boundaries.

The QP is not aware of any specific factors that would currently materially affect the prospect of economic extraction.

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**12. Mineral Reserve Estimates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1. Key Assumptions, Parameters, and Methods** 

To develop the estimate of Mineral Reserves, modifying factors were applied to Measured and Indicated Resources. Inferred Mineral Resources were not considered for Mineral Reserves. The following modifying factors were applied using key assumptions, parameters and methods to convert Mineral Resources to Proven and Probable Mineral Reserves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1.1. Stripping Ratio and Pit Limits**

The maximum stripping ratio for Mineral Reserves was determined from analysis of historical and future costs compared to the estimated base sales price per MMBtu as defined in the LSA through April 2032 as described in Section 19.0 of this TRS. The cost and price per MMBtu establish the maximum allowable stripping ratio limit of 14:1, which MLMC has found to provide the necessary economic mining cost compared to selling price. The maximum stripping ratio remains the same each year of the LOM plan. The base price for the dedicated lignite is defined in the LSA with the estimated average price per ton of $28.04 for lignite delivered and sold over the LOM plan. All costs were escalated at various rates based on the forward-looking Consumer/Producer Price Index with budgeted 2021 costs used as the base year. The maximum allowable cumulative stripping ratio establishes the pit limits within the Mineral Resource pit shells.

Stripping ratios remain relatively consistent across the MS-002 and MS-004 permit areas with the exception of high stripping ratios along the east side of MS-004 which defines the eastern boundary of mining.

Measured and Indicated Resources failing to meet the above criteria were not included in the Mineral Reserve estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1.2. Lignite Quality**

Lignite quality that failed to meet the minimum quality specifications as outlined in the LSA were eliminated from consideration and not included in the Mineral Reserve estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1.3. Modeled Mining Parameters** 

The geologic model used for estimation of Mineral Resources was modified to account for the minimum mining thickness of 1-foot and dilution parameters as described in Section 13.2 and Table 13.2 of this TRS. Additionally, seams with a parting thickness of less than 6-inches were composited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1.4. Assumptions and Modifying Factors**

The following key assumptions, parameters and modifying factors were used by the QP to estimate the recoverable Proven and Probable Reserves contained within the LOM:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All recoverable lignite required to fulfill the contractual obligations of the LSA are contained within the LOM plan pit extents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Geological structure and quality model are as described in Section 11.0 of this TRS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Only Measured and Indicated Resources were included;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximum stripping ratio 14:1;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mining production rates on a cubic yard and per ton basis remain relatively consistent with historical performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mining costs on a unit basis remain relatively consistent with historical performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Depth of weathering (base of oxidation) as defined by Section 11.0 of this TRS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimum minable lignite thickness: 1.0 feet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimum parting thickness before seams are composited: 6.0 inches;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximum depth of mining: approximately 320 feet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Mineral Reserves fall within the Mineral Resource pit shells which have clearly defined physical constraints;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mining dilution parameters defined in Table 13.2 R-O-M Dilution Parameters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lignite density defined by seam from coal core drilling data and modified by dilution parameters and approximately 80 lb/ft³;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recovery rates by seam as presented in Table 13.3;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Quality limits as defined by the LSA and presented in Table 11.1 were applied after dilution has been accounted for, and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Forecasted annual power plant MMBtu requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1.5. Method**

The RHPP provides a forecast of MMBtu requirements to MLMC on an annual basis. MLMC compares this forecast to historical plant requirements to develop a workplan of MMBtu demand for the LOM. The LOM plan assumes the RHPP will not continue to operate after the expiration of the current contract with CGLP in April 2032.

To develop the LOM plan, modifying factors including minimum mining thickness, minimum parting thickness, and mining dilution parameters were applied to the geologic (Mineral Resource) model within Maptek Vulcan to create the Mineral Reserve model.

MLMC engineers then project mining pits within Maptek Vulcan. Projections were directed to the topography from the lowest mineable lignite seam. The mining pit width is 170' based on the current mining equipment operating parameters. The mining pit length varies based on mining pit limits. Highwalls are projected at 42-degrees. Endwalls are projected at 40-degrees with the allowance for a 150-foot wide bench to establish haul roads. Final pit extents were limited by a maximum cumulative stripping ratio of 14:1. Each pit was then sectioned into 500-foot long blocks; adjusting endwall blocks as necessary. Further justification of pit design parameters is provided in Section 13.0 of this TRS.

Once mining pits were projected, volumes, tonnages, and associated quality parameters were exported by projected block and horizon from Maptek Vulcan. The blocks were exported as volume for burden horizons and as tons for lignite horizons. The QP reviewed the exported quality for each lignite horizon block to ensure quality thresholds were met. Any lignite block that did not meet the minimum quality parameters was not considered a Mineral Reserve and the associated block was considered waste material (burden block). The exported data was then brought into a mine sequencing program designed by NACoal and MLMC engineers which is a combination of MS Excel and SQL programming. The first step in the sequencing program was to apply recovery rates to lignite tonnages by seam.

Once the above modifying factors were applied, the sequencing program allotted lignite tonnages and burden volumes to the four major operational fleets of truck and shovel, dozer push, dragline, and lignite load and haul by

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period based on the workplan MMBtu requirements. The sequencer creates an output of volumes by fleet, including rehandle volumes, and projected tonnages and qualities by period.

This output then flowed through a series of steps to distribute tonnages and volumes to individual equipment to determine equipment hours based on equipment production rates. Calculations also included adjustments for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Equipment mechanical, operational, and weather availabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fleet capacity including limiting production factors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Variations in haulage routes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Assumptions for crew sizes and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• New and/or retiring equipment.

The output of allotted volumes, lignite tonnages, quality, and equipment hours by period were the inputs for the Red Hills Mine financial model. These inputs flow through the financial model, which was developed and refined by MLMC based on actual performance, along with escalated inputs for cost estimates for labor, materials and supplies, fuel and other cost components to generate cost projections for the LOM plan. In addition to general operating costs, contemporaneous reclamation, royalties, mine closure, and capital projects were projected and escalated accordingly. It is the opinion of the QP that the final LOM plan and related projected MMBtu costs and forecasted pricing justify the selection of the maximum stripping ratio and supports the conversion of Measured and Indicated Mineral Resources to Mineral Reserves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2. Mineral Reserve Estimates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2.1. Basis for Mineral Reserve Estimate**

This Item discloses the Mineral Reserve estimates for the Red Hills Mine based on the QP's detailed evaluation of the modifying factors as applied to indicated or measured mineral resources, which demonstrate economic viability of the Red Hills Mine property. The estimated Mineral Reserves are in accordance with the definitions of "Mineral Reserve" as described by the S-K 1300 regulations (17 CRF 229.1300) as:

"A coal reserve is the economically mineable part of a Measured or Indicated coal resource demonstrated by at least a Preliminary Feasibility Study, which includes information on mining, processing, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified."

Following definitions presented in 17 CFR 229.1300, and guidance from the Committee for Mineral Reserves International Reporting Standards (CRIRSCO), Mineral Reserves are divided into two categories as listed below and are ranked by increasing level of confidence.

Proven Mineral Reserve is the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.

Probable Mineral Reserve is the economically mineable part of an indicated and, in some cases, a measured mineral resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

The reference point at which Mineral Reserves are defined, is the point of sale to the RHPP, which is after two 20k ton storage silos following the truck dump hopper.

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This disclosure of Mineral Reserves is based upon the qualified person's opinion that the LOM plan has been completed to a PFS level of accuracy, as defined in 17 CFR Part 229.1300, which includes and supports the qualified person's determination of Mineral Reserves.

The LOM plan included annual stripping and lignite production qualities and quantities. Annual production costs were estimated based on the mine plan quantities, surface mining methods, equipment fleets in use, and unit prices that have been proven by historical production at the Red Hills Mine. The current mining methods, used at the Red Hills Mine since inception, are planned to continue until enough lignite reserve is depleted to fulfill the contractual obligations of the LSA for fuel supply to the RHPP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.3. Cut-off Quality and Sales Price**

Cut-off quality and price were previously discussed in Section 12.1 under subsection Stripping Ratio and Pit Limits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.4. Mineral Reserve Statement**

Based on the LOM plan and modifying factors discussed above, the Red Hills Mine contains the economically minable Mineral Reserves listed in Table 12.1. The Mineral Reserves include approximately 27.4 Mt of ROM lignite, with an average calorific value of 5,080 Btu/lb, moisture content of 43.4%wt., ash content of 15.0%wt., and sulfur content of 0.6%wt. The point of reference for Mineral Reserves is as delivered to the dump and RHPP silos as of December 31, 2021.

**Table 12.1 Mineral Reserve Estimates**

![table121mineralreserveesti.jpg](table121mineralreserveesti.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.5.Multiple Commodity Mineral Reserve**

The Red Hills Mine is a single commodity Mineral Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.6. QP's Opinion on Risk Factors that could Affect Mineral Reserve Estimates**

The Red Hills Mine began commercial deliveries in 2002. Since this is a well-established operation, the deposit, mining, and environmental aspects of the Project are very well understood. The knowledge for the Red Hills Mine is

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based on the collective experience of personnel from MLMC's site operations and technical disciplines gained since mine inception. This knowledge is supported by years of production data and observations at the Red Hills Mine.

The LOM plan included annual stripping and lignite production qualities and quantities. Production costs were estimated based on the mine plan quantities, surface mining methods, equipment fleets in use, and unit prices that have been proven by historical production at the Red Hills Mine. The current mining methods, used at the Red Hills Mine since inception, are planned to continue until enough lignite reserve is depleted to fulfill the contractual obligations of the LSA for fuel supply to the RHPP.

With this said, there are some risks that could materially affect Mineral Reserve estimates. Risks include changes in customer demand for any reason, including, but not limited to, dispatch of power generated by other energy sources ahead of coal, fluctuations in demand due to unanticipated weather conditions, regulations or comparable policies which may promote planned and unplanned outages at the RHPP, economic conditions, including an economic slowdown and a corresponding decline in the use of electricity, governmental regulations and/or inflationary adjustments which could have a material adverse effect on MLMC's financial condition, results of operations and cash flows.

Other risks include unforeseen changes in the LOM plan from additional exploration, changes in land control and new regulations that could delay future permit renewals or restrictions to physical mining boundaries.

At the time of this TRS, the QP is not aware of any specific factors that would currently materially affect the prospect of economic extraction.

Uncertainty in the Mineral Resource estimates was previously discussed in in subsection Mineral Resource Classification and Uncertainty under Section 11.1 of this TRS.

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**13. Mining Methods**

The Red Hills Mine began commercial deliveries in 2002. Since this is an established operation, the deposit, mining, and environmental aspects of the project are very well understood. The geological knowledge is based on the collective experience of personnel from MLMC operations, geology, engineering, environmental, and other disciplines gained during years of lignite mining at Red Hills Mine and other mining operations in the United States.

The lignite at Red Hills Mine surface mining operation is recovered using dragline and conventional truck and shovel mining methods due to the proximity of the lignite to the surface and the physical characteristics of the deposit. Mining operations progress in a five-step process, which includes clear and grub, overburden and interburden removal, lignite production, spoil backfill and grading, and reclamation. In the development phase, drainage and water control were established, and then the required infrastructure consisting of power, mine office and maintenance facilities, lignite stockpile facilities, and roadways were established.

The Red Hills Mine began operations in the MS-002 permit area in Mine Area 1 (MA1) and is in the process of transitioning to the MS-004 permit area to Mine Area 3 (MA3). The initial boxcut construction for MA3 began in 2021 and mining in this area will continue through April 2032. Figure 13.1 presents the layout of the Red Hills Mine and identifies the total area to be affected over the mine.

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**Figure 13.1 Layout of the Red Hills Mine**

![image_22a.jpg](image_22a.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **13.1. Geotechnical and Hydrological Considerations**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.1.1. Pit Design**

The initial geotechnical parameters for the design of the pit slopes was provided in the Geoscience Engineering report completed in 1997 and Aquaterra report completed in 1994 to define soil index properties and soil strength parameters as discussed previously in Section 7.4 of this TRS. The early geotechnical studies were the basis of the pit design which is fully detailed in the Red Hills Mine Ground Control Plan and summarized herein.

To determine highwall stability, a circular arc failure approach has been utilized. A minimum FoS of 1.2 was calculated using the Modified Bishop Method for each highwall configuration that will be encountered by the mine. Due to the depth and multiple seam nature of the lignite deposit, benching will be required to allow for continuous burden removal and lignite mining. For individual slopes less than 80 feet, the highwall angle is stable up to 70 degrees. Between 80 and 180 feet, the effective slope angle decreases with a linear relationship from 60 to 40 degrees as shown in Table 13.1.

**Table 13.1 Effective highwall angle by depth**

---

| | |
|:---|:---|
| **Depth (ft)** | **Effective Highwall Angle** |
| 80 to 110 | 60 degrees |
| 110 to 145 | 50 degrees |
| 145 to 180 | 40 degrees |

---

For slopes greater than 180 feet, benching is required. Figure 13.2 illustrates the combination of highwall slopes and safety benches that are used to meet the effective slopes outlined above. In general, the truck and shovel operating level is located 150 to 160 feet above the pit floor and naturally creates bench with a minimum width of 150 feet. When benches and offsets are accounted for pits may range from 100 to 210 feet in width. Initial design assumes a 170-foot pit width.

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**Figure 13.2 Typical Pit Configuration for plan at steady state. (Mississippi Lignite Mining Company, 2019)**

![image_23a.jpg](image_23a.jpg)

Low wall or spoil side angles were based on the type of materials found throughout the mine area, an angle-of-repose of 33 degrees was recommended by geotechnical studies. MLMC's digging plan reduces the effective spoil angle to 33 degrees or less by allowing for an operating bench on the spoil side of the pit.

As a whole, Red Hills Mine pits are designed with an effective highwall angle of approximately 42 degrees, effective endwall angles of approximately 40 degrees, and effective low wall angles of 33 degrees or less.

Mining has been ongoing at the Red Hills Mine since 1998 and the design methodology for the pit slopes has been satisfactory as evidenced by each pit progression. Due to the stratigraphic nature of the Red Hill Mine geology, which is checked by regular drilling exploration programs ahead of mining, repetition of geologic units leads to consistency in applying geotechnical parameters.

NACoal and MLMC engineering have made minor adjustment to the pit design since 1998. However, these adjustments are primarily for optimization, to address new equipment specifications or additional ramps to reduce haul distances. Other adjustments include additional benching in the highwall where topography is higher or the depth to the C-seam increases to establish ramps and functional road systems. This additional benching also increases the FoS of the highwall by reducing the overall effective angle in these instances. Optimization of drainage is another factor that greatly influences the pit design.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.1.2. SPOIL STABILITY STUDIES**

The bulk of geotechnical studies at the Red Hills Mine since 2004 pertain to spoil stability which influence operation plans for production and reclamation. Two types of spoil failures have been observed at the mine. The first type comprised of a rotational failure occurring at the toe of the dragline bench with radial cracks extending into the

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bench toward the spoil piles. The second bench failure type observed at the mine included heaving of the C-seam followed by a slump failure. There were several spoil studies performed using software packages developed by GEO-SLOPE International, and RocScience. Some of the pit slope analyses can be found in the report, titled "Design Report for Red Hills Mine Slope Stability Study" by Barr Engineering (Barr), 2014; "Red Hills Slope Stability Mitigation Test Plan" by Aquaterra, 2010; and "Red Hills Mine Slide Investigation" by Aquaterra, 2009.

**Figure 13.3 Soil Stability Assessment. (Barr Engineering, 2014)**

![image_24a.jpg](image_24a.jpg)

The report "Red Hills Slope Stability Mitigation Test Plan" by Aquaterra tried to determine changes in stresses and pore pressures during the mining operation. A 2-D coupled stress-pore pressure model was conducted using the Sigma/W application as developed by GEO-SLOPE International. The Sigma/W program provides a finite element mesh analysis stresses and deformations within the subsurface soils sing transient loads. An example of a slope stability analysis is presented in Figure 13.4.

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**Figure 13.4 Slope Stability Study (Aquaterra Engineering, LLC., 2010)**

![image_25a.jpg](image_25a.jpg)

To help remediate the potential rotational bench failures, the truck-shovel operation does not dump material within the first two spoil peaks from the active pit, and spoil piles are not to exceed 90-feet in height above the dragline bench height. Furthermore, extra attention is given to ensure water is not stored in spoil valleys for a prolonged period. In addition, the work area is inspected by shift supervisors and fleet leadmen for cracking, heaving, flowing groundwater, or any other abnormal conditions prior to starting work in an area, and following any precipitation or freeze/thaw event. The inspection requirements are specified as part of MLMC's safeguards under the Ground Control Plan. A certified person must document inspections of the work areas during each shift and after every rain, freeze, or thaw. Dragline operators and groundmen are continuously monitoring bench and spoil conditions as they dig.

Potential heaving of the C-seam followed by a slump failure was attributed to the ground water recharge and increased pore pressures due to seepage from three sand seams below the C-seam. These failures are described in depth in the Barr and Aquaterra reports. Based on these studies, earthquake drains, and dewatering well systems were implemented to address the increased head pressure from the lower aquifers. These systems were installed by registered drillers immediately following the severance of the C-seam. More details on these systems were provided in the "Red Hills Slope Stability Mitigation Test Plan" report. MLMC engineers continued to install earthquake

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drains for a few pits once the B-seam came back into existence. Once the earthquake drains were retired, MLMC then continued to monitor the pore pressures below the dragline bench as mining progressed with wireline piezometers for a few pits and noted no pressure changes. Although earthquake drains are not anticipated for the remainder of mining in the MS-002 permit area, they are anticipated for some future areas in the MS-004 permit area. This assumption is based on cross referencing sand thickness maps with the B-seam existence limits and projected pits. Pore pressures below bench grade will be monitored leading into this area of interest with the installation of wireline piezometers, followed by the installation of earthquake drains with the mining progression if deemed necessary by MLMC engineers.

A dewatering well system was installed annually ahead of mining from 2008 through 2014. As discussed in the hydrogeology portion of Section 7.3 of this TRS, the upper stratigraphic sands of the Wilcox sediments which are mined through are minor. The systems MLMC put into place were a recommendation from a geotechnical study with the idea that the groundwater flow, although minimal, was contributing to the saturation of the spoils contributing to spoil side failures. With this system in place, production saw a minor improvement in drier pit conditions, but costs to implement the system could not be justified and the program was discontinued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.1.3. Excess Spoil Piles**

In addition to pit design and spoil stability, regulations governing the permanent placement of excess spoil require geotechnical studies to ensure stability of the placed material. In 1999, Pritchard Engineering, Inc. carried out the geotechnical investigation to gather soil index properties and soil strength properties which were then used as inputs by NACoal to perform a stability study under static and seismic conditions for the excess spoil piles in the MS-002 permit area. MLMC is in the process of constructing the first lifts of the first excess spoil pile in for the MS-004 permit area. As mining operations continue in the MS-004 permit area, a geotechnical study of similar parameters will be conducted in 2022 by an independent service to assess the stability of the spoil piles in the MS-004 permit area. Due to the similarity of the pre-mine topography for the new excess spoil piles, similar soil characteristics/chemistry, the lateral extensiveness of the geology in the region, and furthermore an extended history of operating heavy equipment in various dump conditions, MLMC does not anticipate major changes to the mine plan from future geotechnical investigations of the excess spoil piles. Existing and proposed excess spoil pile locations are shown on Figure 13.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2. Lignite Production Rate, Mine Life, Mining Dimensions and Dilution and Recovery Factors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.1. Production Rate**

The Red Hills Mine was designed to supply approximately 2.6 to 3.2 million tons of lignite per year to the adjacent RHPP. Actual production is dictated by customer MMBtu demand. The details of the LOM plan are shown in Table 13.2.

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**Table 13.2 LOM Production Schedule**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** |
| Delivered Coal (000 tons) | 2675 | 2683 | 2679 | 2680 | 2674 | 2668 |
| Delivered MMBTU (000) | 27212 | 27212 | 27212 | 27212 | 27212 | 27212 |
| Calorific Value, Btu/lb | 5076 | 5082 | 5096 | 5091 | 5066 | 5036 |
| Total Overburden Material (000 CY) | 27641 | 23126 | 23106 | 25574 | 30037 | 33275 |
|  | **2028** | **2029** | **2030** | **2031** | **2032** | **Total** |
| Delivered Coal (000 tons) | 2690 | 2691 | 2672 | 2658 | 662 | **27431** |
| Delivered MMBTU (000) | 27212 | 27212 | 27212 | 27212 | 6803 | **278923** |
| Calorific Value, Btu/lb | 5030 | 5069 | 5101 | 5144 | 5141 | **5084** |
| Total Overburden Material (000 CY) | 34165 | 34108 | 34021 | 35442 | 6580 | **307076** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.2. Mine Life**

MLMC provides the lignite for the RHPP under a contract that runs through April 2032.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.3. Mining Dimensions**

Mining dimensions are discussed in Sections 13.1 and 13.3 of this TRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.4. Haulroad Design**

Haul roads and spoil ramps are typically designed to a width of 90 to 100 feet to allow for two-way traffic. In some circumstances, temporary one-way roads may be established with proper signage. Highwall ramps are designed to a width of 70 feet, and dragline walkways must be a minimum of 120 feet wide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.5. Mining Dilution** 

ROM tonnages at the Red Hills Mine meet the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimum mining thickness: 1.0 ft;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximum burden depth: approximately 320 feet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Average lignite density: approximately 80 lb/ft<sup>3</sup>

The base of weathering, which closely aligns with the depth of the BOX as described in Section 11.0 of this TRS may affect lignite recovery. Special considerations for lignite above this depth must be considered as it may have been partially oxidized and typically exhibits unacceptable quality characteristics for the power plant.

Mining dilution was initially determined from statistical analysis of coal core data collected from 1975 through 1997. During the 2011 drilling exploration program, roof and floor samples were collected and analyzed for each coal seam to verify dilution parameters used in modeling. The drilling data was compared to actual as-delivered quality data and confirmed that the original dilution parameters remained applicable. Dilution parameters are applied to all lignite seams and are listed in Table 13.3.

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**Table 13.3 ROM Dilution Parameters**

---

| | |
|:---|:---|
| **Structural (Roof and Floor)** | **Structural (Roof and Floor)** |
| Loss (ft) | 0.25 |
| Gain (ft) | 0.083 |
| **Quality (Roof and Floor)** | **Quality (Roof and Floor)** |
| Density (lb/ft<sup>3</sup>) | 85.4 |
| Calorific Value (Btu/lb) | 1859 |
| Moisture (%wt) | 26.48 |
| Ash (%wt) | 53.98 |
| Sulfur (%wt) | 0.26 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.6. Recovery Factors**

Recovery rates of individual coal seams are presented in Table 13.4 and were determined from various comparisons between surveyed severed tons, haul truck payloads, delivered tons to RHPP, and modeled tons accounting for dilution and minimum mining thickness. The low recovery of C-seam is due to a 50-foot wide swath of lignite that is left in the pit to assist with stabilizing the spoil and dragline bench.

**Table 13.4 Recovery Rates by Seam**

---

| | |
|:---|:---|
| **Seam** | **Recovery Rate** |
| H | 72% |
| G | 84% |
| F | 97% |
| E | 90% |
| D | 100% |
| C | 67% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.3. Requirements for Stripping and Backfilling**

The Red Hills Mine is a multiple lignite seam surface mining operation.

The primary burden removal units for a typical mining sequence at the Red Hills Mine include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one 82-cubic yard electric-powered walking dragline;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one 41-cubic yard electric rope shovel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a fleet of 150-ton and 200-ton end-dump haul trucks and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• four large track-type push dozers.

Lignite is severed and loaded by a surface miner or hydraulic backhoe.

Figure 13.5 through Figure 13.7 illustrate typical pit layouts to show the mining process. Similar mining processes will be followed in both MA1 and MA3 for production and reclamation. Figures are not to scale.

First, the truck and shovel fleet remove overburden to an elevation which approximates the first minable lignite seam; usually this will be the H-seam. This overburden material is hauled to fill in the topography to final grade during the reclamation process. Truck and shovel operations may be required to remove other interburdens and rehandle material depending on sequencing/production and reclamation planning.

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Following removal of the H-seam, the dozers push the interburden, which overlies the second G-seam, into the previously mined pit. This process is repeated through successive lignite seams until the accumulated interburden has reached a point where it is level across the pit. This typically occurs at or near the E-seam elevation.

Finally, the dragline sits spoil side on a bench primarily constructed from the material the dozers pushed and then removes both the D-seam and C-seam interburdens.

**Figure 13.5 Pit Layout - Truck and shovel operation. (Mississippi Lignite Mining Company, 2019)**

![image_26a.jpg](image_26a.jpg)

**Figure 13.6 Pit Layout - Dozer operation. (Mississippi Lignite Mining Company, 2019)**

![image_27a.jpg](image_27a.jpg)

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**Figure 13.7 Pit Layout - Dragline operation. (Mississippi Lignite Mining Company, 2019)**

![image_28a.jpg](image_28a.jpg)

Rough backfilling and grading of reclamation are accomplished using dozers as the haul trucks dump material between the dragline spoils. Hydraulic backhoes may be used to rehandle spoil material that exceeds final grade. In accordance with the mine permit requirements, a minimum of 4 feet of suitable plant growth material (SPGM), or red oxidized soil that meets textural parameters, must be placed on top of the gray unoxidized material in the dump unless otherwise approved. MLMC follows an approved final grading plan using a "balanced acreage" approach in that the same reclaimed areas must be brought up to grade within 29-months of lignite removal. This plan is approved for both permitted areas.

In MA1, mining progresses through three to four pits per year. Due to a shorter pit length in MA3, MLMC anticipates mining five to seven pits per year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.4. Major Equipment and Personnel**

A list of major and auxiliary equipment used at the Red Hills Mine is presented in Table 13.5. The equipment at the Red Hills Mine is well maintained, in good physical condition and is either updated or replaced periodically with newer models to maintain reliability and to keep up with technological advancements.

As equipment wears out, MLMC evaluates what replacement option will be the most cost-efficient, including the evaluation of both new and used equipment.

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**Table 13.5 Major and primary auxiliary equipment list**

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| | | | |
|:---|:---|:---|:---|
| **Unit(s)** | **Equipment** | **Approximate Production Rates** | **Major Fleet** |
| 1 | Marion 8200 Dragline | 3200 yd3 per hour | Dragline |
| 1 | P&H 2800 Electric Rope Shovel | 2100 yd3 per hour | Truck and Shovel (T-S) |
| 1 | Wirtgen 4200 Surface-miner | 2000 tons per hour | Lignite |
| 1 | CAT 6040 Hydraulic Backhoe | 1800 yd3 per hour | T-S/Lignite Support |
| 1 | CAT 6040 Hydraulic Shovel | 1800 yd3 per hour | T-S Support |
| 1 | CAT 5230 Hydraulic Shovel | 1400 yd3 per hour | Lignite |
| 1 | Komatsu PC2000 Hydraulic Backhoe | 1200 yd3 per hour | T-S/Lignite Support |
| 4 | CAT D-11 Tractors | 850 yd3 per hour | Dozer Push |
| 5 | CAT D-10 Tractors |  | Dragline/Dump Support |
| 1 | CAT D-8 LGP Tractor |  | Auxiliary Support |
| 3 | CAT D-6 LGP Tractor |  | Ash Placement |
| 1 | CAT 844 Rubber Tire Tractor |  | T-S Support |
| 12 | CAT 789 A, B, C, & D End-Dump Trucks | 200-ton payload | T-S and Lignite Haul |
| 4 | CAT 785 A & B End-Dump Trucks | 150-ton payload | T-S and Lignite Haul |
| 3 | CAT 773 Side-Dump Ash Train | 140-ton payload | Ash Placement |
| 2 | CAT 24 Class Motor Grader |  | Road/Reclamation Grading |
| 2 | CAT 16 Class Motor Grader |  | Road/Reclamation Grading |
| 1 | 21,000 Gallon CAT 777 Water Truck |  | Dust Suppression |
| 1 | 32,000 Gallon CAT 785 Water Truck |  | Dust Suppression |
| 3 | 3-5 yd3 CAT Backhoes |  | Auxiliary Support |
| 4 | 40 Tons CAT ADT trucks | 40-ton payload | Auxiliary Support |

---

At normal operating levels, the Red Hills Mine on average employs +/-200 personnel (Table 13.6).

**Table 13.6 MLMC Personnel**

---

| | | | |
|:---|:---|:---|:---|
| **STAFF** | **STAFF** | **WORKFORCE** | **WORKFORCE** |
| Full Time | 39 | Production | 97 |
| Interns/Co-ops | 1 or 2 | Maintenance | 56 |
| | | Warehouse | 5 |
| | | Temporary | Varies |

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**14. Processing and Recovery Methods**

The overall average quality of the mined lignite seams meets the quality specifications stated in the LSA without beneficiation. No mineral processing is performed by MLMC.

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**15. Infrastructure**

The Red Hills Mine public utility lines and facilities locations are presented in Figure 13.1 and Figure 15.1, showing the mine infrastructure and details of the mine facilities.

MLMC purchases power from 4-County Electric Power Association, a cooperative of the TVA. A 69kV line runs parallel to the TVA 500kV line from the Highway 9 Right-of-Way (R-O-W) to the mine office substation. This line then continues past the office to feed the RP-27-1 transformer and the Pump Building transformer. This line also terminates at a dragline substation pad that is currently not in use.

A second 69kV line runs north along the west R-O-W of Highway 9 to feed the dragline substation currently in use. This dragline substation will be used for the remainder of the MS-002 permit area, and the entire MS-004 permit area. MLMC anticipates a permit to bore under Highway 9 to feed dragline cable to the east side of the highway in 2022.

Water for the mine office facilities is supplied by the Choctaw Water Association via a 6-inch line which runs along the R-O-W of McIntire Road. A registered groundwater well sourced from the Lower Wilcox aquifer feeds the equipment wash bay, boot wash, irrigation, and fire hydrants.

The Red Hills Mine has a sanitary waste treatment plant with a permitted NPDES outfall. This is an active sludge treatment plant. Onsite sedimentation ponds are permitted for Beneficial Water Use and serve as the water source for dust suppression

There are no leach pads or tailings ponds at the Red Hills Mine. Lignite is mined and transported to a stockpile or to the customer's hopper. Public roads are not used for the transport of lignite to the RHPP. Mine site haul routes are depicted in Figure 13.1 and Figure 15.1. To transport lignite from the MS-004 permit area to Stockpile B or the customer's hopper, an overpass for Highway 9 traffic has been constructed northeast of the Hopper. Mine traffic generally travels below the Highway 9 traffic via an underpass. A secondary haul route will be available via the dragline deadhead road (currently under construction). This is an at-grade crossing approximately 1,300 feet southeast of the overpass/underpass. The highway department must be notified in advance to detour traffic around this at-grade crossing; therefore, this crossing will only be used to mobilize large equipment or emergency use.

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**Figure 15.1 Red Hills Mine Facilities Map**

![image_29a.jpg](image_29a.jpg)

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**16. Market Studies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.1. Markets**

The primary market for the Red Hills Mine lignite is the adjacent RHPP for which the mine was developed. The Red Hills Mine is a mine-mouth operation where the lignite is delivered directly to the power plant. The Red Hills Mine is a high moisture, low calorific value fuel, which precludes transporting the lignite as a viable option to expand market share, thus no known marketing studies have been conducted for the Red Hills Mine. The LOM plan assumes the RHPP will not continue to operate after the expiration of the current LSA with CGLP and the expiration of the existing PPA between TVA and CGLP in April 2032. The Red Hills Mine is expected to begin final reclamation in April 2032. NACoal and MLMC have made efforts to identify specialty niche markets for the lignite with limited success.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.2. Material Contracts**

Red Hills Mine is a fully developed and functioning mining operation. All aspects of the mining, haulage and delivery of lignite to the RHPP are defined in the LSA between CGLP and MLMC. The RHPP supplies electricity to the TVA under a long-term PPA. CGLP leases the RHPP from a Southern Company subsidiary pursuant to a leveraged lease arrangement. The LOM plan assumes the RHPP will not continue to operate after the expiration of the current LSA with CGLP and the expiration of the existing PPA between TVA and CGLP in 2032.

Red Hills Mine is an active operation and all material contracts are in place for the continued operation of the mine. The Red Hills Mine is a mine-mouth project where the lignite is delivered directly to the power plant using off highway haul trucks.

The base price for the dedicated lignite is defined in the LSA and consists of eight indexed components including a power cost component, a pass-through component, a royalty component and a fixed component. Over the LOM plan, the average price per ton for lignite delivered and sold is $28.04 providing revenues totaling approximately $769 M. The Red Hills Mine began commercial deliveries in 2001. The sales price over the last three years has averaged $27 as shown in Table 16.1. The forecasted coal price for the LOM is also shown in Table 16.1.

**Table 16.1 Historical and Forecasted Coal Price** 

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Historical | 2019 | 2020 | 2021 | Total |  |  |  |  |  |  |  |  |
| Tons Sold (000 ton) | 2562 | 2538 | 3025 | 8125 |  |  |  |  |  |  |  |  |
| Coal Price $/Ton | 26.54 | 27.61 | 27.20 | 27.12 |  |  |  |  |  |  |  |  |
| Forecasted | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | Total |
| Tons Sold (000 ton) | 2675 | 2683 | 2679 | 2680 | 2674 | 2668 | 2690 | 2691 | 2672 | 2658 | 662 | 27431 |
| Coal Price $/Ton | 28.46 | 23.96 | 26.40 | 28.61 | 27.04 | 27.25 | 29.23 | 28.08 | 29.45 | 30.90 | 32.37 | 28.04 |

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**17. Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.1. Environmental and Baseline Studies**

In July, 1998, a final Environmental Impact Statement (EIS) was issued for the Red Hills Power Project. The impacts of the Red Hills Mine were considered during this process. This EIS evaluated anticipated impacts associated with mining at the Red Hills Mine. The EIS evaluated project impacts to the following resources:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Air Resources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Geology

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Soils

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Groundwater Resources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Surface Water Resources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Aquatic Ecology

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Streams and Wetlands

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Terrestrial Ecology

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Threatened and Endangered Species

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Land Use

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cultural and Historical Resources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Socioeconomics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Environmental Justice

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transportation Facilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Public Health

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hazardous and Solid Waste

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noise

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recreation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Visual Resources

The EIS evaluated these areas individually for the action and no action alternatives as well as cumulative impacts for past, present and proposed actions. A Record of Decision (ROD) was issued August 8, 1998 by the TVA that detailed the decision to build the Red Hills Mine. The EIS encompasses all areas within the currently approved Surface Mine Control and Reclamation Act (SMCRA) permits.

The results of the geological baseline studies are detailed in Section 6.0 of this report. Additionally, the results of the surface and groundwater baseline studies and geotechnical studies are documented in Sections 7.3 and 7.4, respectively. In addition, the Red Hills Mine completed baseline assessments of the area soils, prime farmlands, land uses, biological resources, threatened and endangered species, and cultural resources which were used to support the mining permits continuously issued by the Mississippi Department of Environmental Quality (MDEQ) since 1998.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.2. Waste Disposal, Site Monitoring and Water Management** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.2.1. Waste Disposal**

No processing of lignite occurs at the Red Hills Mine; therefore, no lignite processing or tailing wastes have been or will be generated.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.2.2. Site Monitoring**

The Red Hills Mine is required to conduct routine groundwater, surface water and soil sampling in accordance with SMCRA and NPDES permit requirements. Surface and groundwater monitoring occur both within the active mine area as well as in adjacent, undisturbed areas upstream and downstream of the active mining operations. Red Hills Mine also conducts routine soil sampling to ensure the reclaimed environment meets regulatory chemical and textural requirements. The water and soil data are submitted to MDEQ in accordance with permit requirements.

Red Hills Mine will continue to monitor surface water, groundwater, and soils in accordance with all permit requirements until such time mining and reclamation activities are complete and MDEQ has released the entire project from the reclamation performance bond requirements. This release can only happen once Red Hills Mine has quantitatively demonstrated that the reclaimed areas meet performance criteria detailed in the mining permit. Once the reclamation performance bond is released, the Red Hills Mine will have no further site monitoring requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.2.3. Water Management** 

Because rainfall averages more than 55 inches per year, water management is a critical focus at the Red Hills Mine. Prior to initiating mining activities, streams that would otherwise flow through the active mine area are rerouted around the perimeter of the mine. This allows the natural hydrologic balance to be maintained except for stormwater that falls within the footprint of the active mine area. Red Hills manages stormwater by constructing large, strategically located sedimentation ponds. The sedimentation ponds are constructed in accordance with permit requirements to retain a 10-year, 24-hour storm event. Once the retained water meets NPDES water quality requirements, the water is released back into the natural system. The results of the NPDES monitoring are reported monthly to MDEQ through the eDMR system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.3. Project Permitting Requirements**

The Red Hills Mine is operating under the state of Mississippi Surface Coal Mining and Reclamation Permits MS-002, Renewal 3 and MS-004. The permits were issued by the Mississippi Department of Environmental Quality (MDEQ) under delegated authority of the United States Department of the Interior, Office of Surface Mining Reclamation Enforcement (OSMRE) under the Surface Mining Control and Reclamation Act (SMCRA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.3.1. Permit Status**

In addition to the mining permits, the Red Hills Mine is required to obtain and maintain numerous other regulatory permits and approvals (Table 17.1).

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**Table 17.1 Red Hills Mine Permit Summary and Status**

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| | | | |
|:---|:---|:---|:---|
| **Type of Permit** | **Name and Address of Issuing Authority** | **Identification Number** | **Status** |
| &nbsp;&nbsp;State Coal Exploration | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;NA | &nbsp;&nbsp;Issued 08/15/00 |
| &nbsp;&nbsp;License | &nbsp;&nbsp;Office of Geology |  |  |
|  | &nbsp;&nbsp;P. O. Box 20307 |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-1307 |  |  |
| &nbsp;&nbsp;State Coal Mining Permit | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;MS-002 Renewal 3 | &nbsp;&nbsp;Issued 02/13/18 |
|  | &nbsp;&nbsp;Office of Geology | &nbsp;&nbsp;MS-004 | &nbsp;&nbsp;Issued 02/11/20 |
|  | &nbsp;&nbsp;P.O. Box 20307 |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-1307 |  |  |
| &nbsp;&nbsp;Mine Identification No. | &nbsp;&nbsp;Mine Safety and Health Administration | &nbsp;&nbsp;No. 22-00690 | &nbsp;&nbsp;Issued 08/26/97 |
|  | &nbsp;&nbsp;U. S. Department of Labor |  |  |
|  | &nbsp;&nbsp;District II |  |  |
|  | &nbsp;&nbsp;135 Gemini Circle, Suite 213 |  |  |
|  | &nbsp;&nbsp;Birmingham, Alabama 35209 |  |  |
| &nbsp;&nbsp;State of Mississippi | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;No. MS0054046 | &nbsp;&nbsp;Modified 02/11/20 |
| &nbsp;&nbsp;Water Pollution Control | &nbsp;&nbsp;Office of Pollution Control | &nbsp;&nbsp;No. MSR108199 | &nbsp;&nbsp;Issued 06/15/20 |
| &nbsp;&nbsp;Permit (includes Mining | &nbsp;&nbsp;P. O. Box 10385 |  |  |
| &nbsp;&nbsp;Stormwater Pollution | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 |  |  |
| &nbsp;&nbsp;Prevention Plan) | &nbsp;&nbsp;Issuing Authority: Mississippi Environmental Quality Permit Board |  |  |
| &nbsp;&nbsp;Section 404 Permit | &nbsp;&nbsp;Vicksburg District | &nbsp;&nbsp;No. MVK-2017-257 | &nbsp;&nbsp;Issued 3/28/18 |
|  | &nbsp;&nbsp;P. O. Box 60 |  | &nbsp;&nbsp;Modified 7/11/18 |
|  | &nbsp;&nbsp;Vicksburg, MS 39180-0060 | &nbsp;&nbsp;No. MVK-2016-509 | &nbsp;&nbsp;Issued 12/21/20 |
| &nbsp;&nbsp;Section 401 State Water | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;NA | &nbsp;&nbsp;Issued by the |
| &nbsp;&nbsp;Quality Certification | &nbsp;&nbsp;Office of Pollution Control |  | &nbsp;&nbsp;Commission for |
|  | &nbsp;&nbsp;P. O. Box 10385 |  | &nbsp;&nbsp;USACE |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 |  |  |
|  | &nbsp;&nbsp;Issuing Authority: Mississippi Environmental Quality Permit Board |  |  |
| &nbsp;&nbsp;Exclusion for Rubbish | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;NA | &nbsp;&nbsp;Issued 08/25/98 |
| &nbsp;&nbsp;Disposal Activities | &nbsp;&nbsp;Office of Pollution Control |  |  |
|  | &nbsp;&nbsp;P. O. Box 10385 |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 |  |  |
| &nbsp;&nbsp;Mississippi Conditionally | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;MSR000005330 | &nbsp;&nbsp;Issued 3/17/99 |
| &nbsp;&nbsp;Exempt Small Quantity | &nbsp;&nbsp;Office of Pollution Control |  |  |
| &nbsp;&nbsp;Generator | &nbsp;&nbsp;P. O. Box 10385 |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 |  |  |
| &nbsp;&nbsp;Spill Prevention Control and | &nbsp;&nbsp;USEPA, Region IV and | &nbsp;&nbsp;NA | &nbsp;&nbsp;Revised 6/11/18 |
| &nbsp;&nbsp;Countermeasure Plan | &nbsp;&nbsp;Department of Environmental Quality |  |  |
|  | &nbsp;&nbsp;Office of Pollution Control |  |  |
|  | &nbsp;&nbsp;P. O. Box 10385 |  |  |

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| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 |  |  |
| &nbsp;&nbsp;Dragline Boom | &nbsp;&nbsp;U.S. Department of Transportation | &nbsp;&nbsp;NA | &nbsp;&nbsp;Exemption Request |
| &nbsp;&nbsp;Height | &nbsp;&nbsp;FAA |  | &nbsp;&nbsp;Approved 3/3/98 |
|  | &nbsp;&nbsp;2300 East Devon Avenue |  |  |
|  | &nbsp;&nbsp;Des Plains, Illinois 60018 |  |  |
| &nbsp;&nbsp;Radio Station Authorization | &nbsp;&nbsp;Federal Communications Commission | &nbsp;&nbsp;NA | &nbsp;&nbsp;Issued 10/21/2015 |
|  | &nbsp;&nbsp;Wireless Telecommunications Bureau |  |  |
| &nbsp;&nbsp;Water Withdrawal Permit | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;No. MS-GW-15160 | &nbsp;&nbsp;Well (Issued 8/25/98) |
| &nbsp;&nbsp;for Beneficial Uses | &nbsp;&nbsp;Office of Land and Water Resources | &nbsp;&nbsp;No. MS-GW-15254 | &nbsp;&nbsp;Well (Re-issued 07/16/2018) |
| &nbsp;&nbsp;for Public Water of the | &nbsp;&nbsp;P. O. Box 10385 | &nbsp;&nbsp;No. MS-SW-02755 | &nbsp;&nbsp;R-1 (Re-issued 05/12/2008) |
| &nbsp;&nbsp;State of Mississippi | &nbsp;&nbsp;Jackson, Mississippi 39289-0385 | &nbsp;&nbsp;No. MS-SW-02791 | &nbsp;&nbsp;P-4-1 (Re-issued 05/12/2008) |
|  |  | &nbsp;&nbsp;No. MS-SW-10088 | &nbsp;&nbsp;RP-33-1 (Issued 4/20/2009) |
|  |  | &nbsp;&nbsp;No. MS-SW-10104 | &nbsp;&nbsp;P-29-2 (Issued 6/22/2009) |
|  |  | &nbsp;&nbsp;No. MS-SW-10150 | &nbsp;&nbsp;RP-27-1 (Issued 8/23/2010) |
|  |  | &nbsp;&nbsp;No. MS-SW-10530 | &nbsp;&nbsp;SP-8 (Issued 5/4/2020) |
| &nbsp;&nbsp;Beneficial Use | &nbsp;&nbsp;Department of Environmental Quality | &nbsp;&nbsp;BUD 0015 | &nbsp;&nbsp;Issued 12/14/06 |
| &nbsp;&nbsp;Determination (BUD) | &nbsp;&nbsp;Office of Pollution Control | &nbsp;&nbsp;BUD 0099 | &nbsp;&nbsp;Issued 05/04/21 |
|  | &nbsp;&nbsp;P.O. Box 10385 |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39289-0631 |  |  |
| &nbsp;&nbsp;Handheld XRF Analyzer | &nbsp;&nbsp;Mississippi State Department of Health | &nbsp;&nbsp;No. X-326 | &nbsp;&nbsp;Issued 09/08/20 |
| &nbsp;&nbsp;Analytical X-Ray | &nbsp;&nbsp;Division of Radiology |  |  |
|  | &nbsp;&nbsp;3150 Lawson Street |  |  |
|  | &nbsp;&nbsp;Jackson, Mississippi 39213 |  |  |
| &nbsp;&nbsp;Construction on the R-O-W | &nbsp;&nbsp;Mississippi Department of Transportation (MDOT) | &nbsp;&nbsp;1-20-10-0069 | &nbsp;&nbsp;Issued 02/21/20 |
| &nbsp;&nbsp;of SR 9 in Choctaw County | &nbsp;&nbsp;P.O. Box 2060 |  |  |
| &nbsp;&nbsp;Bridge and Haul Road | &nbsp;&nbsp;Tupelo, Mississippi 38803-2060 |  |  |
| &nbsp;&nbsp;Work within TVA Transmission | &nbsp;&nbsp;TVA Transmission R-O-W Team | &nbsp;&nbsp;NA | &nbsp;&nbsp;Issued 03/23/20 |
| &nbsp;&nbsp;Right-of-Way | &nbsp;&nbsp;Tennessee Valley Authority |  |  |
|  | &nbsp;&nbsp;400 West Summit Hill Drive |  |  |
|  | &nbsp;&nbsp;Knoxville, TN 37902 |  |  |
| &nbsp;&nbsp;Road Closures, Relocations | &nbsp;&nbsp;The Choctaw County Board | &nbsp;&nbsp;Prewitt Road | &nbsp;&nbsp;Issued 08/01/2011 |
| &nbsp;&nbsp;and operations within 100' | &nbsp;&nbsp;of Supervisors | &nbsp;&nbsp;State HWY 415 | &nbsp;&nbsp;Issued 03/22/04 |
| &nbsp;&nbsp;of Outside Right of Ways | &nbsp;&nbsp;P. O. Box 250 | &nbsp;&nbsp;State HWY 415 | &nbsp;&nbsp;Issued 03/26/04 |
|  | &nbsp;&nbsp;Ackerman, Mississippi 39734 | &nbsp;&nbsp;East Clear Springs Rd. | &nbsp;&nbsp;Issued 03/22/04 |
|  |  | &nbsp;&nbsp;East Clear Springs Rd. | &nbsp;&nbsp;Issued 6/8/2009 |
|  |  | &nbsp;&nbsp;East Clear Springs Rd. | &nbsp;&nbsp;Issued 2012 |
|  |  | &nbsp;&nbsp;McIntire Road | &nbsp;&nbsp;Issued 10/02/05 |
|  |  | &nbsp;&nbsp;McIntire Road | &nbsp;&nbsp;Issued 2012 |
|  |  | &nbsp;&nbsp;McIntire Road | &nbsp;&nbsp;Issued 2013 |
|  |  | &nbsp;&nbsp;Nebo Road | &nbsp;&nbsp;Issued 03/17/03 |
|  |  | &nbsp;&nbsp;Nebo Road | &nbsp;&nbsp;Issued 2013 |
|  |  | &nbsp;&nbsp;Null Road | &nbsp;&nbsp;Issued 10/02/05 |

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| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;Null Road | &nbsp;&nbsp;Issued 2013 |
| | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 03/22/04 |
| | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 05/24/04 |
| | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 08/30/04 |
| | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 04/03/06 |
| | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 2013 |
|  | &nbsp;&nbsp;Salem-Bywy Road | &nbsp;&nbsp;Issued 2015 |
| &nbsp;&nbsp;MDOT | &nbsp;&nbsp;State HWY 415 | &nbsp;&nbsp;Issued 03/26/04 |
| &nbsp;&nbsp;Post Office Box 2060 | &nbsp;&nbsp;State HWY 9 | &nbsp;&nbsp;Issued 02/21/20 |
| &nbsp;&nbsp;Tupelo, Mississippi 38803-2060 | &nbsp;&nbsp;State HWY 9 | &nbsp;&nbsp;Issued 08/25/21 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.3.2. Reclamation Bond Requirements**

MDEQ regulations require the Red Hills Mine post a reclamation performance bond that would allow MDEQ to affect final reclamation of the project in the unlikely event the Red Hills Mine goes out of business. Bonding is calculated based on a worst-case scenario. The amount of the financial security as of December 31, 2021 is $74 M.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.4. Plans, Negotiations, or Agreements with Local Individuals or Groups** 

The Red Hills Mine has secured agreements with all third parties that are necessary to conduct mining operations in accordance with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.5. Mine Closure Plans**

Following the exhaustion of Mineral Reserves, the mine will be required to complete final remediation in accordance with detailed plans in the approved mining permit. Final reclamation and closure activities will begin in the original permit area in 2023 as active mining in this area phases out. Closure activities will continue throughout the mine life, with the projected completion of the expanded permit area in 2041. Financial assurance for the ultimate reclamation of facilities is documented in the reclamation plan, and security for costs that will be incurred to execute site closure is provided by a third-party insurer to the State of Mississippi in the form of a surety bond.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.6. QP's Opinion of Adequacy of Current Plans**

MLMC currently has all permits in place for the Red Hills Mine to operate and adhere to a mine plan projected through 2032. Barring any regulatory changes out of MLMC's control, the QP does not anticipate hurdles for approval of future renewal applications. The QP bases this opinion on the mine's history to meet regulatory requirements. No mine permit violations have been issued at the Red Hills Mine in the past ten years. Proper monitoring is ongoing in accordance with permit requirements. Furthermore, appropriate bonding and closure plans are in place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.7. Description of any Commitments to Ensure Local Procurement and Hiring**

Purchasing endeavors to place orders with regards to dependability and service records of the supplier, the nature of the guaranty and warranty of the product, its price, and quality. Preference is given to suppliers who are developing new and improved products or equipment, or designing and developing a special product, specifically for the Red

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Hills Mine. Consideration is also provided to local suppliers near the Red Hills Mine. Suppliers must have a reputation of adhering to specifications and delivery schedules.

Positions at the Red Hills Mine are posted with Mississippi Department of Employment Security for priority availability to all veterans and other job seekers. MLMC also participates with regional state job fairs, recruits on local college campuses, and participates in local community sponsored activities.

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**18. Capital and Operating Costs**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.1. Operating Costs**

Annual operating costs were estimated in conjunction with the mining methods discussed in Section 13.0. LOM operating costs for a plan delivering approximately 27.2 million MMBtu to the RHPP are expected to total approximately $830 M from January 2022 through the end of the LSA in April 2032 and are summarized in Table 18.1.

All costs were estimated to a PFS level of study based on historical costs and performance measures that have been maintained by MLMC since its inception. These costs are reviewed and updated on an annual basis to account for changes in site conditions or the operating plan. This information was then used to estimate the projected future costs included in the LOM plan from January 2022 through the expiration of the LSA in April 2032. All costs were escalated at various rates based on the forward-looking Consumer/Producer Price Index with budgeted 2021 costs used as the base year.

Operating costs included major cost categories for mine development, burden removal, severing of lignite, reclamation, maintenance and handling of stockpiled lignite and delivery to the adjacent RHPP along with the necessary maintenance required to keep all equipment operating safely and efficiently. Direct costs were categorized as expenses directly related to the severing and delivery of lignite. All other general business expenses were categorized as indirect costs. Direct costs included production, maintenance, and staff labor, materials and supplies, fuel, equipment repairs, outside contractors, administration, production taxes and royalties, depletion, depreciation, and amortization (DD&A), inventory adjustments, interest expense, income taxes, and accretion on asset retirement obligations (ARO). Accretion costs are calculated by taking the escalated cash flows of the ARO liability over time and discounting it to its present value as required under U.S. GAAP.

**Table 18.1 LOM Operating Costs to deliver approximately 27.2 million MMBtu per year**

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| | |
|:---|:---|
| **Operating Cost** | **Cost (M$)** |
| Direct Cost of Sales | $539.3 |
| Indirect Cost of Sales | $290.4 |
| Operating Cost | $829.6 |

---

Note: Total does not sum due to rounding

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.2. Capital Costs**

Capital Costs were estimated to a PFS level of study based on vendor quotes, historical land purchases, mine development costs, mitigation costs and other costs. Capital costs to fulfil the LSA for a LOM plan delivering approximately 27.2 million MMBtu per year to the RHPP are expected to total approximately $32 M from January 2022 through the end of the LSA in April 2032 and are summarized in Table 18.2. Consistent with operating costs, all capital costs were escalated at various rates based on the forward-looking Customer/Producer Price Index using 2021 as the base year.

There are risks regarding the estimated capital costs including escalating costs of raw materials, equipment availability or supply chain gaps.

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**Table 18.2 LOM Capital Costs to deliver approximately 27.2 million MMBtu per year**

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| | |
|:---|:---|
| **Capital Cost** | **Cost (M$)** |
| Equipment Expenditures | $18.2 |
| Development | $2.5 |
| Wetlands | $8.4 |
| Reserve/Land Acquisition | $2.6 |
| Capital Cost | $31.7 |

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**19. Economic Analysis**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.1. Key Assumptions, Parameters and Methods**

The primary key assumption to determine the economic viability of the Red Hills Mine was the annual operating performance of the RHPP. The forecasted operating performance of RHPP was determined using two main inputs: the annual projection notice (nomination for MMBtu requirements) received from the RHPP based on projected customer requirements and a comparison to prior years actual delivered lignite fuel to develop the expectation for future MMBtu requirements. The estimated annual MMBtu requirement used in the Red Hills LOM Model was approximately 27.2 million MMBtu. This resulted in a production schedule of approximately 2.7 Mt of dedicated lignite per year and was assumed to continue for the full LSA contract term, expiring in April 2032.

The base price for the dedicated lignite is defined in the LSA. This base price consists of eight indexed components including a power cost component, a pass-through component, a royalty component and a fixed component. Over the LOM, the average estimated sales price per ton for lignite delivered and sold was $28.04 providing revenues totaling approximately $769 M.

Key assumptions and methods used to determine the capital and operating costs associated with the production schedule were detailed previously in Section 18.0 Capital and Operating Costs of this TRS.

Additional key assumptions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The LOM production plan was based primarily on surface mining methods including a truck and shovel, dozer and dragline operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total number of employees per year was 200, plus temporary employees as needed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Diesel price was $1.63 per gallon at the beginning of 2021. This price was escalated based on the NYMEX curve as well as the Producer Price index (wpu057303) to reach $3.96 by 2032;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue $/MMBtu was escalated using the eight indexed components defined in the LSA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The economic analysis period of the Red Hills Mine LOM plan was the remaining production operation from January 1, 2022 until April 2032 plus 13 years of post-mining reclamation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• $.08/ton sold Reclamation Fee assessed on delivered tons;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Discount rate of 10% was used to account for cost of capital and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 12% estimated effective income tax rate. The effective income tax rate of 12% differs from the U.S. federal statutory rate primarily due to the benefit from percentage depletion. The benefit of percentage depletion is not directly related to the amount of pre-tax income recorded in a period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.2. Annual Cash Flows**

The Income Statement and Annual Cash Flows based on the lignite production schedule for the LOM plan, along with the Net Present Value are detailed in Table 19.1. A Discount Rate of 10% was used as this was consistent with the Red Hills Mine's weighted average cost of capital. The calculation of Net Present Value and Internal Rate of Return are nuanced due to the ongoing nature of this mining operation. As modeled, the cash flows for the period 2022 through 2045 indicate the project is cash flow positive over the remaining life of the project.

In the opinion of the QP, the income statement and cash flow projection based on the LOM plan assumptions as shown in Table 19.1 are reasonable in light of historical trends, current conditions and expected future

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developments. As modeled, the future cash flow projection is estimated to be approximately $80 M and the net present value is estimated to be approximately $42 M.

Note that the net present value calculated for this report does not consider previous cash inflows and outflows and is only calculated from 2022 through the remainder of the LOM.

**Table 19.1 Summary of Income Statement and Cash Flow for LOM plan delivering approximately 27.2 million MMBtu**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Income Statement ($M unless noted)** | **2022** | **2023** | **2024** | **2025** | **2026** | **2027** | **2028** |
| **Tons Sold (in thousands)** | **2675** | **2683** | **2679** | **2680** | **2674** | **2668** | **2690** |
| <u>Revenue/Ton</u> | $28.46 | $23.96 | $26.40 | $28.61 | $27.04 | $27.25 | $29.23 |
| **Total Revenue** | **$76134** | **$64302** | **$70730** | **$76687** | **$72292** | **$72699** | **$78623** |
| **<u>Expenses</u>** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor, Materials, Fuel | $40401 | $38201 | $38133 | $39582 | $41071 | $42490 | $44297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalties & Production Taxes | $2988 | $3263 | $2952 | $3348 | $3938 | $3974 | $3178 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses | $30102 | $32227 | $37981 | $38957 | $35878 | $33845 | $36185 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes | $317 | ($1127) | ($1000) | ($624) | ($1031) | ($913) | ($604) |
| **Net Income** | **$2326** | **($8261)** | **($7335)** | **($4577)** | **($7563)** | **($6697)** | **($4432)** |
| **EBITDA** | $22372 | $10664 | $10779 | $14158 | $10761 | $11820 | $13459 |
| Capital Expenditures | ($6318) | ($6249) | ($4674) | ($2760) | ($1700) | ($3943) | ($3203) |
| Investing Activities | ($2884) | ($1069) | $6813 | $6699 | $2981 | ($1770) | $2620 |
| Financing Activities | ($2194) | ($3335) | ($4448) | ($5399) | ($5664) | ($5145) | ($4860) |
| Mine Closing | - | ($8695) | ($5777) | ($996) | ($348) | ($206) | ($100) |
| Income Taxes | ($317) | $1127 | $1000 | $624 | $1031 | $913 | $604 |
| **Increase (decrease) in Cash** | **$10660** | **($7558)** | **$3692** | **$12325** | **$7061** | **$1671** | **$8520** |
| **Income Statement ($M unless noted)** | **2029** | **2030** | **2031** | **2032** | **2033-2045** | **Total** |  |
| **Tons Sold (in thousands)** | **2691** | **2672** | **2658** | **662** | **-** | **27431** |  |
| <u>Revenue/Ton</u> | $28.08 | $29.45 | $30.90 | $32.37 |  |  |  |
| **Total Revenue** | **$75557** | **$78688** | **$82130** | **$21423** | **-** | **$769266** |  |
| **<u>Expenses</u>** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor, Materials, Fuel | $45355 | $46071 | $47612 | $10844 | - | $434058 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalties & Production Taxes | $2887 | $2343 | $2574 | $1291 | $494 | $33229 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other  | $33841 | $33035 | $27158 | $20633 | $10756 | $370598 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes | ($783) | ($331) | $574 | ($1361) | ($1350) | ($8234) |  |
| **Net Income** | **($5743)** | **($2430)** | **$4212** | **($9984)** | **($9900)** | **($60384)** |  |
| **EBITDA** | $11515 | $14129 | $21062 | ($3791) | ($1261) | $135665 |  |
| Capital Expenditures | ($1503) | ($1306) | - | - | - | ($31655) |  |
| Investing Activities | $2162 | $4471 | ($1924) | $22404 | $10619 | $51123 |  |
| Financing Activities | ($5055) | ($4184) | ($3120) | ($2066) | ($4569) | ($50040) |  |
| Mine Closing | ($50) | ($50) | ($50) | ($9938) | ($7020) | ($33230) |  |
| Income Taxes | $783 | $331 | ($574) | $1361 | $1350 | $8234 |  |
| **Increase (decrease) in Cash** | **$7851** | **$13391** | **$15393** | **$7971** | **($881)** | **$80097** |  |
| **NET Present Value (10%)** | **$42126** |  |  |  |  |  |  |
| **Internal Rate of Return** | **38.4%** |  |  |  |  |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.3. Sensitivity Analysis**

Additional LOM scenarios were modeled to analyze the effect of changes in key assumptions. The most significant affect was an increase in the annual MMBtu requirement. Table 19.2 reflects a 15% upside case with an increased annual MMBtu requirement by the RHPP to 31,293,000 MMBtu, which is well within the operating capacity of the RHPP, and results in an increase in total projected after-tax cash flow to $163 M and a Net Present Value of $86 M at a 10% discount rate. Significant risk from a downside case, where the RHPP takes less than the LOM plan MMBtu's, is protected by a minimum annual take provision included in the LSA.

**Table 19.2 Effect of 15% increase in delivered MMBtu**

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| | | |
|:---|:---|:---|
| **Income Statement** | **Base Case (M$)** | **High Case (M$)** |
| MMBtu per Year | 27212000 | 31293000 |
| Revenue | $769.3 | $901.3 |
| Cost | $829.6 | $878.8 |
| Net Income | ($60.3) | $22.6 |
| EBITDA | $135.7 | $232.7 |
| Cash Flow (after Taxes) | $80.1 | $162.7 |
| NET Present Value (10%) | $42.1 | $85.6 |
| Internal Rate of Return | 38.4% | 190.8% |

---

Other key assumptions modeled and reviewed were the effects of an increase in diesel prices and labor. A 10% increase in the cost of diesel fuel had an average annual effect of $0.6 M. A 10% increase in the cost of labor had an annual average effect of approximately $1 M. The Red Hills Mine sells coal to the RHPP at a contractually agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates. Profitability at MLMC is affected by customer demand for coal and changes in the indices that determine sales price and actual costs incurred.

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**20. Adjacent Properties**

There are no other properties adjacent to the Red Hills Mine. There is no information used in this TRS that has been sourced from adjacent properties. No public drilling information was available or sourced for the development of the geological model.

The drilling and exploration activities at the Red Hills Mine well defines the lignite geology, Mineral Resources and Mineral Reserves. Due to this and the relatively simple geology at the Red Hills Mine, material changes to the Mineral Resource estimates and Mineral Reserve estimates are not likely if adjacent property information is included in future estimates.

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**21. Other Relevant Data and Information**

In the QPs opinion, all material information has been stated in the above sections of this TRS.

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**22. Interpretations and Conclusions**

In the QP's opinion, the geological data, sampling, modeling, and estimate are carried out in a manner that both represents the data well and mitigates the likelihood of material misrepresentations for the statements of Mineral Resources. There are currently no recommendations for Mineral Resources.

In the QP's opinion, the operational and mine planning data, LOM Plan, and estimation are carried out in a manner that both represents the data and operational experience and methodology well and mitigates the likelihood of material misrepresentations for the statements of Mineral Reserves. There are currently no recommendations for Mineral Reserves.

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**23. Recommendations**

The QP has no recommendations for additional work outside the scope of the existing LOM plan.

Current work plans that are budgeted in the discounted cash flows (DCF) that the Red Hills Mine will complete include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue with exploration drilling program (estimated at $1.3M for the LOM plan);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Monitor pit pore pressures in future in pit areas identified of potential concern (thick AB sands);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue seeking used equipment to reduce capital costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue current practices and reconciliations of actual to budget lignite recoveries, qualities and costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Update LOM plan projections and economic analyses accordingly.

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**24. References** 

Aquaterra Engineering, LLC. (2004, October 27). Geotechnical Investigation.

Aquaterra Engineering, LLC. (2009, April 15). Red Hills Mine Slide Investigation.

Aquaterra Engineering, LLC. (2010, April 15). Red Hills Slope Stability Mitigation Test Plan.

Barr Engineering. (2014, March). Design Report for Red Hills Mine Slope Stability Study.

Burns Cooley Dennis, Inc. (1997, June 23). Preliminary Geotechnical Investigation.

*Climate in Ackerman, Mississippi*. (2021, June 6). Retrieved from Best Places: https://www.bestplaces.net/climate/city/mississippi/ackerman

CRIRSCO. (2019, November). The International Reporting Template.

Dicken, C. L., Nicholson, S. W., Horton, J. D., Foose, M. P., & Mueller, J. A. (2005). Integrated Geologic Map Databases for the United States: Mississippi. *U.S. Geological Survey Open File Report 2005-1323*. Reston, VA: U.S. Geological Survey .

FEIS. (1998). Final Environmental Impact Statement . Tennessee Valley Authority.

Geoscience Engineering, LLC. (1997, August 27). Geotechnical Data Report Res Hills Lignite Mine.

Mississippi Lignite Mining Company. (2019, August 19). Red Hills Mine Ground Control Plan.

NACoal. (2020, November 30). 2020 Lignite Coal Quality Round Robin.

Pritchard Engineering, I., & NACoal. (1999, November 5). Stability of Excess Spoil Piles at the Red Hills Mine.

Tittle, D. (2013). *Getting the Coal Out*. NACCO Industries.

U.S. Department of the Interior. (1989). Methods for Sampling and Inorganic Analysis of Coal. *U.S. Geological Survey Bulletin 1823.*

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SEC S-K 1300 Technical Report Summary

Revision 1

Mississippi Lignite Mining Company – Red Hills Mine&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 2022

**25. Reliance on Information Provided by the Registrant**

At time of signing the Original Filing, the QPs for this report were employees of the registrant, and all information was sourced from the registrant or studies commissioned by the registrant.

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