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PQabody <br />Twentymile Coal Company 29515 Routt County Road #27 <br />Oak Creek, CO 80467 <br />970.879.3800 <br />Giving reasonable consideration to the preliminary information we have received, we are proceeding <br />diligently to try to resolve this situation. The following summarizes specific steps taken towazd resolution: <br />1) In October 2003, following a site visit and discussions with the Barkers, Mr. Rick Mills drafted a <br />letter to the Barkers proposing preliminary terms for off-setting right-of-way agreements providing <br />the Barkers with documented legal right-of--entry to their property over Empire surface and access to <br />the Bazker property for reclamation maintenance and monitoring and repair of any surface <br />subsidence damage. <br />2) RAG commissioned an independent appraisal of the of the Bazker property in January 2004 to <br />determine fair market value, as a basis for any future lease/purchase negotiations <br />3) Peabody Energy's legal counsel, Mr. Moms W. Kegley, has been briefed on the issues involved and <br />has contacted Mr. Robert Bassett of Holland and Hart to assist in negotiations with the Barkers and <br />resolution of the related legal issues. Mr. Bassett was previously involved in this situation with Cory <br />Bromley of RAG, and so is familiar with the issues involved. <br />4) I contacted David Berry of the Division on 6/8/04 to discuss current status, options for resolution, <br />and timeframes, and agreed to keep Mr. Berry informed re: related ongoing activities <br />5) Mr. Bassett has contacted Ms. M. Julia Hook of Fognani, Guibord, & Homsy, the Barker's most <br />recent legal counsel, to discuss their perspective, desires, and a potential way ahead relative to <br />mutual access ageements and resolution of outstanding issues. <br />While other options exist and maybe pursued as appropriate, as a first step Peabody Energy is pursuing the <br />off-setting right-of-way agreements discussed with the Barkers in October 2003, through our respective <br />legal counsels. We are also considering application for liability release and a permit boundary revision to <br />remove those Bazker lands not affected by surface disturbance activities from the permit azea. <br />As indicated by the preceding summary, we have initiated specific activities and are developing specific <br />plans to address the right-of--entry issue on apro-active and timely basis. We feel that the outstanding right- <br />of-entry issue can be resolved but, as a new owner, need a reasonable period of time to work on resolution. <br />We appreciate your consideration of this request and would welcome your input or the opportunity to <br />discuss any questions or related issues. <br />Best re s, <br />Jerry et` <br />Twentymi ffal Company -Environmental Supervisor <br />cc: David Berry/CDMG <br />Chuck Burggraf/TCC <br />Mike Berdine/TCC <br />Mike Kegley/Peabody Energy <br />Bob Bassett/Holland & Hart <br />