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would require additional premarketing procedures. Moreover,
because the Wallins Creek seam had already been extensively
mined, the Coal Reserve Report concluded that no recoverable coal
reserves existed in the Wallins Creek seam. The Coal Reserve
Report continued and further discussed several shortcomings with
other potential seams.
The record does not support a finding that the Coal Reserve
Report was prepared by a qualified expert. The author of the
Coal Reserve Report subsequently became an employee of ERL and
performed other work for the coal partnerships organized and
operated by McIntyre. Nevertheless, the report estimates that
the property contained approximately 52.6 million tons of total
potential coal reserves. This figure consists of 23.6 million
tons in calculated recoverable reserves and 29 million tons in
possible additional reserves. The Coal Reserve Report explained,
however, that the above figure regarding possible additional
reserves was uncertain and that additional exploration was needed
to verify its accuracy. The Coal Reserve Report did not conclude
whether it would be profitable to mine the underlying property,
but it did indicate that a prudent production estimate was
approximately 1 million tons of coal per year. The Coal Reserve
Report did, however, warn potential investors that an in-depth
study was necessary before an assessment of the property’s
profitability could be made. No such study was ever performed.
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