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PQpQ-4 BTU EMPIRE CORPORATION August 30, 2004 Janet Binns -Environmental Protection Specialist Division of Minerals and Geology 1313 Sherman Street, Room 215 Denver, Colorado 80203 (303) 866-3567 701 Market Street Suite 733 St. Louis, Missouri 8 31 01-1 826 314.342.3400 RE: BTU Empire Corp., Eagle Mines (Permit No. C-81-044) -Permit Renewal (RN-04), Request for Extension of Decision Date Dear Ms. Binns: With this letter, we aze requesting that the decision date for the pending Permit Renewal (RN-04) for BTU Empire Corporation's (Empire) Eagle Mines be extended to February 28, 2005. While Empire had hoped to resolve the outstanding mutual access and right-of--entry issues for the Bazker lands through mutual discussion and negotiation, this approach has been unsuccessful and Empire has found it necessary to file suit in District Court to confirm its right-of--entry to perform reclamation maintenance and monitoring. The requested extension reflects the anticipated time interval necessary for resolution of this issue by the Court. As you are aware, Empire has been involved in discussions with Ms. Julia Hook, the attorney representing the Bazkers, over the past several months, in an effort to resolve mutual access and right-of--entry issues for the lands owned by the Barkers and by Empire, within the current Empire permit boundazies. Our mutual discussions have included consideration of the following options that would have addressed the outstanding right-of--entry and access concerns, while meeting the specific needs and requirements of both parties: 1) A mutual access agreement 2) Anew lease for the Bazker property 3) Empire's purchase of all or a portion of the Barker property 4) Various combinations of Options 1 through 3 Following a meeting on July 21, 2004 at which these options were discussed, Ms. Hook contacted Empire with an offer of a 20-year lease with unrealistic minimum costs over the life of the lease. Given that the Barker's purchased the subject lands from Ruth Bazker in 2003 for a reported $30,000, the lands were appraised by a Certified Real Estate Appraiser at $140,000 ($220/acre) in 2004, and Empire's need for and use of the lands would be limited to reclamation maintenance and monitoring of the 1.9 acre tract reclaimed in 2003, the terms proposed by the Bakkers were determined to be unrealistic and unacceptable. Empire submitted acounter-offer to either lease the entire azea at a rate well-above typical land lease rates for the area, or to purchase a 35.5-acre buffer tract at a per acre value previously determined by the Barkers as acceptable for the entire tract (approximately Sx mazket value) with accompanying mutual access rights. Empire's counter-offer was rejected by the Barkers, and a subsequent overture to pursue a negotiated settlement was similazly rejected.