originally anticipated. We have obtained a franchise agreement from the State of Queensland which gives us rights to produce coking coal from the vast reserves that we have discovered in the 1333 square-mile area in which we have an authority to prospect. Under this agreement Central Queensland Coal Associates, a joint undertaking in which Mitsubishi has a 15% interest and Utah Development Company, our wholly-owned subsidiary, an 85% interest, is the operating vehicle with Utah acting as Manager. BENEFITS TO STATE Under our agreement with the State of Queensland the State will be compensated in several ways. First, it will receive a royalty of 5 a ton. Second, the co-venturers will advance to the State sufficient funds, presently estimated at approximately $40 million, to equip and operate a 140-mile railroad, the advance to be repaid in 13 years out of the freight revenues charged to us for hauling the coal from the mine to the port. Our estimates indicate that the profits to the State on this rail haul will be considerable. Third, we agree at the election of the State to make available at our cost any steam coal that we uncover and produce in the process of our coking coal operations. Obviously the benefits to the State incrementally go far beyond the actual dollars paid to the State because of the benefits that flow from the new investment, the new payrolls, new taxes, and the new facilities which make possible transportation and shipping in areas now lacking such service. We would -10-