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Investigation into Continued Damage at the Solitario Ranch Page 2 Scope of Work The current assignment for Jim and Ann Tatum, the property owners, is to observe the most recent damage to the house and ancillary facilities, and determine if it is a continuation of the previous damage to their property. The prior damage was caused by coal mine subsidence. This conclusion was reached by engineering investigation and supported by a state court judgment. Compensation The hourly rate for engineering professional services is $75 per hour, the rate for services as an expert is $150 per hour. Site Observation The investigation into the damage at this house has been ongoing since before 1994 and has continued to date. The Tatum property is located in close proximity to the Golden Eagle Mine, operated by Basin Resources. It is an underground coal mine utilizing room and pillar and longwall mining methods. The mine has been closed and reclamation work is nearly completed. Underground excavation had been conducted within 350 feet to the south of the house and within 2000 feet to the north of the house, according to maps and surveys provided by the company, or available in public files. The principal of Pioneer Engineering, Carlton Gerity made several trips to the Tatum's Solitario ranch over the past several months to inspect continued damage to the main house. The first was September 21, 2000, which coincided with a site visit by OSM Specialist, Henry P. Austin. Mr. Austin was present to inspect the house and to write a notice of violation to the State of Colorado concerning subsidence damage to the house. The second visit was November 21, 2000, and the ongoing damage was reviewed with Mr. Jim Tatum. The third visit was December 5 & 6 where the damage to the house was assessed with Basin Resources representatives. This meeting was the result of a Notice of Violation that was issued by the Colorado State Department of Mines and Geology to Basin Resources for the continued damage to the house and waterline. The current damage is entirely consistent with the previous damage, which was caused by coal mine subsidence. This determination was made by professional assessment; by Las Animas County District Court, and by the U.S. Department of Interior, Board of land Appeals. There are cracks in some of the same locations as was previously damaged, the easterly and northerly sides of the house. There are cracks in the archway on the first floor at the transition between the single story and two story sections of the house. There are cracks in the downstairs office, bedrooms and dining room. There is damage in new areas in the kitchen and garage. These are detailed in photos taken by Mr Austin. There is also some evidence of some ground movement along the railroad to the south of the house; a small tree has recently fallen down the embankment along with several rocks. In addition to the damage to the house, the main water supply line to the house developed leaks that appeared to the south of the house, in the form of a spring in the pasture. This phenomenon had never been observed before, and was first