certainly one of the lowest cost producers in the United States and in a very favorable position from the standpoint of reserves. Our ore in the Gas Hills area has been produced by open pit methods and that in Shirley Basin by solution mining. However, we expect in the near future to convert Shirley Basin to an open pit mining operation and to put in a mill there about the size of our Lucky Mc mill in the Gas Hills area. Our target date here is to be in operation in 1971. NAVAJO. As early as 1950 Utah concluded that the growing demand for energy in the West, coupled with technological strides in the generation and transmission of electricity were going to create a need for large low-cost coal deposits to augment other sources of energy. By 1954 we had located two such coal deposits, one in New Mexico on the Navajo Indian Reservation and another near Craig, Colorado. More recently we have added a third deposit near Kanab, Utah. It took some time to convince others 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. 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 mine in the United States. These agreements run for 35 years with the utility companies having an option to extend for another 15 years.