Much of this vast area is as yet unexplored, but we have developed coking coal reserves in the Blackwater area estimated at 128 million tons, and these are reasonably near an existing railroad. We are discussing with the Japanese steel companies the possibility of bringing this coal into production in 1967 or 1968, with sales indicated at 1 million to 1 1/2 million tons of coal annually under a ten-year contract. Part of the interest in our proposal, both from the standpoint of the buyer and seller, stems from the possibility of developing even larger reserves of better quality coking coal on the northern end of our property, where the prospects are promising but the developmental drilling has not proceeded sufficiently far to enable us to determine with accuracy the size of the reserves. While the steel mills are learning to use less coking coal per ton of steel produced, coking coal of good quality is hard to come by and much in demand, particularly by the Japanese steel mills which import their high quality coking coal primarily from West Virginia. Australian coal has obvious advantages from a transportation cost standpoint, if it can be brought into production with an investment that is reasonable in relation to the sales that can be made. Frankly, we had not anticipated that pressure from the Japanese would come on us quite so soon to develop this deposit, and we are accelerating our work accordingly. Among the things yet to be accomplished but currently under way is the consummation of a definitive agreement with the State of Queensland for the actual development of our Blackwater deposits. Future Expansion Finally, to my third category, which is concerned with things which we have or are doing that provide the possibilities of development at a point more remote in time than the things that we have been discussing. Dealing in wasting assets, a mining company must constantly seek new mineral resources to replenish those which it is currently taking out of the 12 ground, and the first step in this process is a continuing program for finding new deposits. In the relatively short time that Utah has been actively engaged in mining, we have been unusually successful in locating and developing new mineral deposits, as our record testifies. We are continuing our exploration efforts and currently have programs under way in Canada, the Western United States, Australia, including Tasmania, and our search seeks new minerals in addition to those in which we are currently interested. The extent to which these efforts will be successful cannot, of course, be predicted accurately at this time, for successful discovery demands a degree of luck along with a high degree of skill. Dayton We do have two deposits resulting from our past efforts that are worthy of special mention. The first of these is the Dayton iron ore deposit near Carson City, Nevada in which Utah has a 50% interest. Here the development work has indicated a reserve of 45 million tons of ore suitable for beneficiation for sale as either pellets or sinter feed. It could be sold either to Japan or to an integrated steel mill in the San Francisco Bay Area when and if one is constructed. The cost of rail haul from Nevada to San Francisco puts it at some economic disadvantage compared with tidewater mines serving the Japanese market such as Marcona. Dayton would produce a high quality product relatively free from deleterious elements and should be susceptible of profitable development when market conditions are favorable. Meanwhile, the carrying cost is nominal, and we can afford to wait for the appropriate time. Craig The last deposit that I would like to touch on is a coal deposit near Craig, Colorado where we control 50 million tons of strippable coal and some 300 million 13