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projected that ERL would sell in excess of 2 million tons of coal
per year. This tabular analysis, however, bore the qualification
that all projections were hypothetical and were in no way
warranted or guaranteed.
The offering materials advised potential investors that
there were no assurances as to the accuracy of the recoverable
coal estimates upon which the substance of the offering materials
depended. Potential investors were also advised by the offering
materials that ERL did not have any existing long-term contracts
for the sale of coal and that future demand for coal was
unpredictable. The offering materials further advised potential
investors that McIntyre had limited experience in the mining
business and that extensive competition should be expected from
entities with substantially superior financial, technical, and
intellectual resources. The offering materials also discussed
the probable likelihood of labor disputes common to the
geographic area in which the land covered by the lease was
situated.
ERL executed the lease agreement for the coal property on
December 1, 1980. The terms of the lease were consistent with
the representations presented in the offering materials.
In 1980 and 1981, ERL received eight mining permits. Two of
the mines were never operated; the remaining six mines produced
an approximate total of 167,000 tons of coal. All ERL mining
operations ceased by the end of 1981, and no other coal was
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