that we were right, but by 1960 we had negotiated a long-term contract to supply Arizona Public Service which initially built two 175, 000 kw generating units and subsequently a third 225,000 kw unit at the mine-mouth requiring approximately 2 1/2 million tons of coal annually. Coal deliveries began in 1963 and attained their maximum earnings in 1967. Other utilities saw the light and by 1966 we had concluded a second contract under which two additional 755,000 kw units will be added, the first to begin operating in 1969 and the second in 1970. This will cause our annual deliveries to increase to 8 1/2 million tons annually, making our Navajo Mine the largest single coal mine in the United States. These agreements run for 35 years, with the utility companies having an option to extend for another 15 years. It is significant to note that our reserves of subbituminous coal at Navajo are 1. 1 billion tons, of which less than 30% has been committed to service the existing contracts. As far as we are concerned, we have just begun to fight. With incomplete but relatively conclusive evidence at my command, I believe that our price for coal under these contracts is the lowest in the United States and that our production costs are even lower, leaving us with a profit that compares very favorably with the larger coal producers. We want all this kind of business we can get. We believe that the earnings from these contracts have a quality all their own, for they are protected by escalation clauses for the 35-year period and tied to the utility business in a growing area. -10-