Baolong Mine (formerly Wushan Mine) is located in the southeast of Wushan County, 17 km from Baolong Town and administration falls under the jurisdiction of Baolong Town. The mining permit covers a total area of 2.87 km2 with permitted elevation between 200m and 900m. The district comprised some rugged, mountainous terrain with steeply incised valleys. Limited lowlands have some gently rolling areas. The lowest point is on the Baolong River at 160m and highest point is at Liyinyang east of Baolong River with an elevation of 1,717m. The trucking distance from the Mine site to the local Baolong dock site at Putaoba is 25km.
The permits allow production from the Lower Permian Liangshan Formation K1 seam and the Upper Permian Wujiaping Formation K2 seam, which are 360m apart, vertically.
In this area, historical K1 seam raw coal has averaged 6.5%; ash has averaged 38.29%; volatiles have averaged 7.9%; total sulfur has averaged 5.03%; CV has been between 4,100 kcal/kg to 4,760 kcal/kg averaging 4,420 kcal/kg; and phosphorous has averaged 0.004%. The historical K2 seam raw coal moisture has averaged 4.39%; ash has averaged 25.2%; volatiles have averaged 8.55%; total sulfur has averaged 1.82%; CV has been between 4,200 kcal/kg to 6,620 kcal/kg averaging 5,420kcal/kg; and phosphorous has averaged 0.014%. Future production at Baolong Mine is anticipated to have similar quality.
The Company also owns an exploration license, which covers 23.12km2 and is directly adjacent to the Baolong mining permit area. The coal seams on that license are expected to be the same as the Baolong mining area.