NOTE

—ACQUISITIONS

July 1, 2016,

the Company acquired from Alpha Natural Resources, Inc. (i) a preparation plant and coal loading facility, (ii)

one

idle mine and related mining equipment; (iii) mobile equipment used in conjunction the coal preparation plant (iv) various contracts and (v) coal reserves (collectively referred to as the Knox Creek Acquisition) for cash consideration of

$220

thousand, the payment of about

$83

thousand of property taxes and lease and contract cure costs, the assumption of

$15

thousand in a construction obligation and the assumption of reclamation obligations of approximately

$7.4

million. Transaction costs associated with the acquisition totaling

$320

thousand are included in the statements of operations.

The Company use

s the preparation plant and loading facility for processing of coal mined from its existing reserves. It does

not

presently intend to resume mining operations at the currently idle mine. Acquired coal reserves were

not

economically recoverable at prevailing market prices at the acquisition date.

The Knox Creek Acquisition

was accounted for as a business combination. The total acquisition consideration was allocated to the acquired assets and liabilities assumed based on their relative fair market values as determined by an independent valuation as follows:

Allocation of purchase price:
Preparation plant and equipment	$	6,053,138
Idle mining equipment		407,300
Mobile equipment		1,273,500
Total assets acquired		7,733,938
Asset retirement obligations		(7,416,164	)
Other liabilities		(15,200	)
Net assets acquired	$	302,574

The results of operations of the acquired business are included in the statement

s of operations as of the date of acquisition. Pro forma results of operations for this acquisition have

not

been presented because the acquisition is

not

material.