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Report on GCC Energy Coal Transport Options <br />Road Runner Report <br />Coal Product to Market Options, Table 1, is a summary of Opinion of Probable Cost (OPC). <br />This approach is appropriate for comparing different haulage methods and routes. However, the <br />level of detail shown in the table is not adequate to make a decision considering cost of capital to <br />GCC Energy, operating costs and different impacts to both GCC Energy and local citizens. It is <br />suggested that this table be modified to be an incremental analysis comparing all Options and <br />then select the two lowest total cost Options for further analysis. The second tier analysis would <br />expand the comparison of the two lowest cost Options by including more detailed costs and an <br />assessment of impacts for each as listed above. Higher cost Options would be categorized as <br />"considered but eliminated". This information would be suitable for inclusion in an <br />Environmental Assessment. This analysis may be the basis of joint collaboration between GCC <br />Energy and local citizens. <br />As an example, column (a) shows Near Term Improvements (Year 2015) as being equal to all <br />Options. This column can be eliminated in the incremental analysis as it is common to all <br />Options. Secondly, it would be appropriate to provide both capital and operating costs on an <br />annual basis by year for the 20 year life of the Mine that is assumed. Some schematic designs <br />should be included to support the cost assumptions and the operating conditions so that impacts <br />can be quantified. Sufficient detail should be provided with the schematic designs to be able to <br />show approximate dimensions and locations, facility types and descriptions, environmental <br />controls/mitigation measures, etc. <br />Impacts such as noise, dust, light, etc. are important to the citizens and will need to be <br />determined as part of the analysis. Elements of the analysis important to GCC Energy would <br />include capital/cost of capital, remaining life of the King II Mine, operating costs and controls <br />which address citizen concerns. This type of analysis is critical input to the Environmental <br />Assessment process which is ongoing. It is suggested that GCC Energy can provide operator <br />committed mitigation that can be implemented with each of the two "best case" Options. These <br />measures would then be part of the Environmental Assessment. <br />Adequacy of Available Information <br />Available information concerning comparison of haulage routes is not adequate for determining <br />the best option as described above. It would be helpful for GCC Energy to describe the mine life <br />and how it affects their transport options. The information provided shows that GCC Energy has <br />coal resources in their current federal and State of Colorado lease, resources they are attempting <br />lease adjacent to the existing federal lease boundary and resources that they are planning to <br />explore for. It is assumed that acquisition of these properties for future mining would provide a <br />resource base which would support a life of mine transport plan that is suitable for all parties. <br />Likely Best Option <br />MINE ENGINEERS, INC. 7 December 15, 2015 <br />