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SUPPLEMENTAL INFORMATION 3) Basis of Right to Enter for Exploration and Reclamation 2005 Notice of Intent (NOI) Table 1 details proposed corehole locations and surface and coal ownership at these sites. A map is also attached illustrating exploration locations. All of the proposed drill sites are on lands where the curface is owned and controlled by Cottonwood Land Companv a wholly-owned subsidiary of Peabody Energy. In addition, JCC will access coreholes PDSOSCHOl, PDSOSCH02, and PDS7SSCH63~tt rougFi Cottonwood Land Company surface. Peabody Energy, or subsidiaries, holds the coal lease(s) from Axial Basin Ranch for the three proposed drill sites: PDSOSCHOl, PDSOSCH02, and PDSOSCH03. Lease provisions allow the leaseholder to utilize as much of the surface as is needed to conduct mining and related operations. 4) Description of Land to be Affected The three exploration sites aze located in Township 5 North, Range 88 West, Sections 30 and 31. The proposed exploration activities will occur in areas previously disturbed by surface mining activities (Hayden Gulch (HG) Mine, so no additional cultural resource cleazances are required. Review of the proposed locations by the Colorado Division of Wildlife did not identify any potentially impacted resources requiring avoidance or specific mitigation measures (refer to accompanying documentation). The coreholes will intercept the Twentymile and/or Middle Sandstones, which are near the up-dip outcrop. No impacts are anticipated to these units as a result of the exploration activities, and no significant groundwater flows have been encountered by previous drilling in the area. 5) Describe Exploration Activities It is anticipated that the drilling program will be conducted during the summer/fall of 2005 and 2006 when weather conditions for field activities are most favorable. Based upon weather conditions, some drilling may have to be postponed until the spring/summer of 2007. Routt County Road 53 will provide primary access to the project azea, with secondary access routes used as indicated on the enclosed map. Exploration activities are estimated to require less than two weeks of drilling per hole, for each of the sites. The proposed exploration program will be modified and tailored as necessary depending upon the results of the initial drilling, rig availability, and weather conditions. Road Construction: Existing roads and trails will be used to minimize exploration-related surface disturbance. Significant alterations of existing roads aze not anticipated. It is not anticipated that any new road construction will be required to access the sites since the proposed activities will occur during the period August through October, when favorable ground conditions prevail. Mobile equipment, typically a small bulldozer, will be utilized for routine road maintenance. Bonding estimates for this project have been addressed (see 2005 NOI Table 3). 2005 NOI Table 3 details potential disturbance areas and associated topsoil volumes. Drill Site Construction: Topsoil will be removed as necessary and windrowed or stockpiled adjacent to each drill site to avoid contamination. Given the anticipated short duration between topsoil salvage and replacement at each site, no interim seeding is anticipated. Constructed drill pads for all the sites will be approximately 150 x 150 feet, with an associated total disturbance azea of approximately 0.5 acres for each site. 2005 NOI Table 2 details topsoil depths and yardages to be salvaged at each site for drill pad construction. After topsoil has been removed, the pad areas will be leveled with a small dozer to accommodate the drill rig and associated equipment. The proposed exploration sites aze typically located on gently sloping areas, with slopes ranging from flat to approximately 10 percent, so the associated leveling work required at each site will be minimal. Mud pits will be excavated within the pad aeeas following topsoil salvage and leveling work. Material excavated from the mud pits will be segregated from the topsoil and retained within the boundary of the drill pad. Sediment control will be achieved by retaining runoff within the drill pad area to the extent possible and inscribing diversion ditches above the pads, when required. Mud pits will be totally incised (ie: no embankment) and are sized to contain all G:\Environmental\EXPLORATION WORK\EXPLR 2005 BIG ELK private land\Big Elk NOI App. Fotm.doc Page 6 of 8