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been using for hay production so it match the information that WFC has been providing <br />DRMS and that WFC would make it right to us. <br />We also mentioned to Mr. Wolney and Mr. Gray since WFC had our property surveyed <br />to establish the legal boundaries, it clearly shows coal royalty had not been paid to <br />SMPA, and thus causes a ripple effect with both land and mineral right owners. We <br />produced the original Addendum to Assignment of Mining Lease to Mr. Wolney and Mr. <br />Gray to look at, Mr. Wolney then made a copy of Exhibit A. <br />In lieu of money, we supplied Mr. Gray with certain mined properties currently owned by <br />WFC to exchange for the money due since the coal not paid to SMPA was located on the <br />east side, where mining began in 1994. <br />Mr. Gray stated he would take the information back to Denver and reply to our proposal. <br />To date we have not had a reply to our proposal on settling the outstanding royalty and <br />interest due, nor have we received any correspondence in regards to the vegetation <br />production being taken off our property by the WFC farming contractor. <br />Utilizing the financial information supplied by WFC, SMPA received $746,798.95 in <br />royalties on 68.3 acres only. Western Fuels grossed $12,446.648.18 on that same <br />acreage, netting Western Fuels $11,699,849.15 after royalty payments. <br />Western Fuels - Colorado Revenue <br />Off from SMPA 68.3 acres not the <br />77.85 acres that was actually mined <br />2000 4,077.32 $ 17.81 $ 72,634.08 $ 4,358.04 <br />2001 182.26 $ 19.51 $ 3,555.89 $ 213.35 <br />Totals: 845,086.44 $ 17.07 $12,446,648.18 $ 746,798.95 <br />WFC owes us between 8 and 9.5 acres in coal royalty. We chose to use the more <br />conservative 8 acres in our estimation. Mr. Gray and Mr. Wolney said they could have <br />Page 2 of 4 <br />$ amount of <br />Annual Average <br />Western Fuels <br />Royalty <br />Coal Tans <br />Gross Realization <br />Annual Gross <br />paid to SMPA at <br />YEAR: <br />Mined: <br />per ton: <br />Revenue: <br />6% <br />1 994 <br />363.10 <br />$ 22.47 <br />$ 8,160.44 <br />$ 489.63 <br />1995 <br />98,326.87 <br />$ 13.88 <br />$ 1,364,444.51 <br />$ 81,866.67 <br />1996 <br />305,857.64 <br />$ 14,13 <br />$ 4,321,914.35 <br />$ 259,314.86 <br />1997 <br />386,331.31 <br />$ 15.14 <br />$ 5,849,576.42 <br />$ 350,974.59 <br />1998 <br />49,947.94 <br />$ 16.54 <br />$ 826,362.49 <br />$ 49,581.75 <br />1999 <br />- <br />$ - <br />$ - <br />$ - <br />2000 4,077.32 $ 17.81 $ 72,634.08 $ 4,358.04 <br />2001 182.26 $ 19.51 $ 3,555.89 $ 213.35 <br />Totals: 845,086.44 $ 17.07 $12,446,648.18 $ 746,798.95 <br />WFC owes us between 8 and 9.5 acres in coal royalty. We chose to use the more <br />conservative 8 acres in our estimation. Mr. Gray and Mr. Wolney said they could have <br />Page 2 of 4 <br />