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2.03.6 -RIGHT OF ENTRY AND OPERATION INFORMATION <br />The King II Mine is located within Sections 35 8v 36; Township 35 N, <br />Range 12 W, N.M.P.M., in La Plata County, Colorado. The surface and <br />minerals of the area to be mined are owned by the State of Colorado and <br />the Dept. of the Interior, Bureau of Land Management. All mining <br />activities of the King II Mine lie to the north side of Hay Gulch, <br />approximately 4.5 miles southwest of Hesperus, Colorado, as identified <br />on U.S.G.S. 7.5 Minute Quadrangles for Thompson Park, Hesperus, <br />Mormon Reservoir, and Kline. None of the leases or legal right to enter <br />are the subject of pending litigation. <br />LEGAL DESCRIPTION OF PERMIT AREA <br />Section 36, T.35 N., R 12 W., N.M.P.M. comprising 640.00 acres. (State <br />of Colorado, State Board of Land Commissioners Coal Mining Lease CO- <br />3388) <br />Section 35, T.35 N., R 12 W., N.M.P.M. comprising 80.00 acres. (U. S. <br />Dept. of the Interior, Bureau of Land Management Coal Mining Lease <br />COC-62920) <br />• SOURCE OF LEGAL RIGHT TO ENTER <br />National King Coal, LLC holds coal lease CO-3388, applying to the permit <br />area described above, which was issued by the State of Colorado, State <br />Board of Land Commissioners on September 13, 2004. National King <br />Coal, LLC also holds coal lease COC-62920, applying to the permit area <br />described above, which was issued by the Dept. of the Interior, Bureau of <br />Land Management on November 1, 2002. <br />These leases grant National King Coal, LLC rights to access and mine the <br />property for coal, in addition granting the right to use as much of the <br />surface of the property as necessary in support of coal mining. The right <br />to subside the surface is also granted. <br />Copies of these leases are included in Appendix 1. Further terms and <br />rights are contained within the lease documents. <br />These leases are not the subject of pending litigation. <br />The surface and mineral estate have not been severed for this property. <br />U <br />National King Coal, LLC King II Mine <br />Section 2.03.6 <br />Page 1 October, 2005 <br />