Reclamation and has been accepted by the Council on Environmental Quality. Although no assurance can be given as to when or whether the project will commence, the most recent estimates call for the first coal deliveries in 1981. Utah also operates a strip coal mine (San Juan mine) located approximately eight miles north of the Navajo mine under a contract with the owner, Western Coal Company. The contract calls for extraction and delivery of coal on behalf of the owner to and as required by two public utilities. Deliveries commenced in mid-1973. Utah has given Western Coal Company a conditional option to purchase coal from the Navajo mine as required to fuel a portion of the requirements of additional proposed generating units. Craig MineUnited States Utah's coal deposits near Craig, Colorado, are located on 16,733 acres of land held by Utah under leases from federal, state and county governments and from private parties. Such leases expire or require readjustment of terms between 1978 and 1992 but in general contain clauses permitting renewal so long as coal continues to be produced in paying quantities. The leasehold area is estimated to contain approximately 100 million tons of coal which can be surface mined and underground coal deposits of approximately 200 million recoverable tons which could be mined depending upon future market developments. This estimate of tonnage in the coal deposits has been increased by 150 million tons during 1975 based on current drilling information. The extent to which this deposit is commercially mineable will be determined as additional deep drilling information becomes available and feasibility is established. In 1973 Utah executed a contract to sell steam coal from Craig mine to four utilities to supply the fuel requirements for 35 years for two steam turbine electric generators of about 350 net megawatts each. Such contract provides for deliveries of steam coal beginning in 1977 at an average rate of about 2.1 million tons annually. The first of such generating units is scheduled for commercial operation in 1978, the second in 1979. See "Pending Legal ProceedingsCraig Mine, Colorado." Uranium Lucky Mc Mine and Shirley Basin MineUnited States Utah's Lucky Mc open-pit mine and mill are located in the Gas Hills District of Wyoming, near Riverton. The mill is currently operating at a capacity of approximately 2 million pounds of uranium oxide in concentrate annually. A second open-pit uranium mine and mill are located in the Shirley Basin area of Wyoming. The Shirley Basin mill is currently operating at a capacity of approximately 2.2 million pounds of uranium oxide in concentrate annually. As of October 31, 1975, Utah estimated that it had approximately 1.9 million tons of uranium-bearing material averaging 0.24% uranium oxide (none of which contains less than 0.05%) in the Gas Hills area, approximately 6.0 million tons of uranium-bearing material averaging 0.15% uranium oxide (none of which contains less than 0.05%) in the Shirley Basin area and approximately 4.0 million tons of uranium-bearing material averaging 0.11% uranium oxide (none of which contains less than 0.05%) in the Green Mountain area of Wyoming, all mineable by open-pit methods. If a determination is made to develop and mine the Green Mountain area, it is expected that the Green Mountain material will be processed through the mill at Lucky Mc. The crushing, grinding and other facilities of the Lucky Mc mill are presently being expanded at a cost of approximately $1.5 million so that the daily level of concentrate production can be maintained as high as possible should the lower grade Green Mountain material be processed there. Utah considers the reserves in the three areas sufficient to allow production through 1985. In addition, at Green Mountain, Utah has completed very preliminary drilling of a mineralized area below a depth of 1,000 feet which has the potential for future development. The extent to which this mineralized area will become commercially mineable cannot be determined until considerable additional deep drilling information becomes available and feasibility is established. At July 31, 1976, Utah had commitments to ship 17.7 million pounds of uranium oxide in concentrate through 1984 which will require approximately 6.2 million tons of uranium-bearing material averaging 0.15% uranium oxide content. The prices relative to the backlog are subject to adjustment based on changes in labor and wholesale price indices as published by the Bureau of Labor Statistics (U.S. Department of Labor). The weighted average sales price of the backlog is $18.18 per pound as compared with $10.32 per pound at October 31, 1975. Such price for deliveries through October 31, 1978 is $0.21 below the average, and for deliveries thereafter, $0.27 above the average. 50 Production and shipping data for the five fiscal years ended October 31, 1975 and the nine months ended July 31, 1976 are presented below: Pounds Gas Hills Properties Shirley Basin Properties Uranium Oxide Total Pounds Pounds Pounds Recovered Pounds Uranium Uranium Uranium from Ore Uranium Oxide Fiscal Tons Ore Average Oxide Tons Ore Average Oxide Processed Oxide Shipped Year Processed Grade Recovered Processed Grade Recovered by Others Recovered (a)(b) 1971....................... 428,023 .231% 1,890,469 238,895 .154% 573,789 193,668 2,657,926 2,962,938 1972 ....................... 427,835 .281% 2,318,126 452,929 .226% 1.899,408 386,672 4.604.206 4,931,552 1973 ....................... 414,471 .253% 2,063,344 444,945 .225% 1,858,972 438,677 4,360,993 2,214,902 1974....................... 392,504 .267% 1,987,334 344,893 .175% 1,196,157 232,878 3,416,369 5,475,304 1975 ....................... 443,129 .219% 1,838,862 489,707 .195% 1,714,834 457,575 4.011,271 3,519,620 1976 (nine months)............. 326,488 .220% 1,367,372 397,176 .202% 1,514,143 547,186 3,428,701 2,543,562 (a) Includes 309,000 pounds purchased from outside sources in 1972. (b) Shipments of uranium oxide in concentrate declined in 1973 from the 1972 level because certain customers requested deferral to 1974 of concentrate shipments originally scheduled for 1973, and, as a result, less ore was processed to concentrate. In addition, a lower grade of ore was processed to concentrate in 1973 as compared to that processed in 1972. Information with respect to average operating cost, average production cost and average price received per pound of uranium oxide in concentrate recovered for the five fiscal years ended October 31, 1975 and the nine months ended July 31, 1976 is set forth in the table below. Information as to cost and price has been a matter of public record since Utah's early sales to the Atomic Energy Commission. Months Ended July 31, 1971 1972 1973 1974 1975 1976 Average operating cost (a).......... $3.76 $4.39 $5.00 $5.36 $7.49 $8.07 Average production cost (a)........ 4.48 5.49 6.26 6.84 9.18 9.10 Average price received................. 6.43 7.08 7.33 7.62 10.37 14.68 (a) Includes on-site mine and mill costs which do not include any allocation of exploration costs, corporate office general and administrative expenses or income taxes. The difference between average operating cost and average production cost is the provision for depreciation, depletion and amortization of mine and facilities. Production per pound of uranium oxide in concentrate produced from Shirley Basin is somewhat more costly than at the Gas Hills properties. A complaint alleging certain antitrust violations with respect to its uranium business was filed on October 15, 1976 against Utah by Westinghouse Electric Corporation. See "Pending Legal Proceedings Uranium BusinessUnited States." Department of Justice Letter In order to obtain confirmation from the Department of Justice that it has no present intention to take legal action to prevent or otherwise challenge the Merger (see "The MergerGovernment Approvals"), General Electric and Utah have agreed by the Amendment, attached hereto as Annex II, to divest themselves of management control of Utah's entire uranium assets until the year 2000, while retaining the beneficial ownership thereof. This will be done at the effective time of the Merger by depositing in a Delaware voting trust (the "Voting Trust") all of the outstanding shares of common stock of Lucky Mc Uranium Corporation ("Lucky Mc"), a wholly owned subsidiary of Utah to which, as between the two parties, Utah's uranium business has already been transferred. Certain procedural aspects of the transfer, principally affecting the rights of third parties, have not yet been accomplished but are expected to be completed prior to the effectiveness of the Merger. Prior to the year 2000, General Electric and its affiliates (as defined) will not be able to withdraw the Lucky Mc common stock from the Voting Trust except for sale to unaffiliated third parties, and if for any reason the Voting Trust, the term of which under Delaware law cannot at any time exceed 10 years, is not continuously renewed until the year 2000, the Voting Trustees must sell the deposited shares to non-affiliates. All Voting Trustees must be completely independent of and unaffiliated with either General Electric or Utah. At least one of the Voting Trustees must be a director of Lucky Mc. The initial five will be selected from among such persons as former public utility regulatory officials, deans of business schools, mining experts, officers of accounting firms and others. Voting Trustees will serve until death, resignation 51