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<br />1058 FEET TO POINT OF BEGINNING, THENCE SOUTH
<br />53 DEGREES 20 MINUTES EAST 92 FEET, THENCE SOUTH
<br />74 DEGREES 15 MINUTES EAST 90.5 FEET, THENCE SOUTH
<br />72 DEGREES 45 MINUTES EAST 122 FEET, THENCE SOUTH
<br />16 DEGREES 45 MINUTES WEST 132 FEET, THENCE WEST
<br />245.5 FEET, THENCE NORTH 223 FEET TO POINT OF
<br />BEGINNING, AND EXCEPTING THEREFROM THE FOLLOWING
<br />DESCRIBED PROPERTY:
<br />A TRACT OF LAND IN THE SOUTHWEST '/. OF SECTION 31,
<br />TOWNSHIP 47 NORTH, RANGE 15 WEST, NEW MEXICO
<br />PRINCIPAL MERIDIAN DESCRIBED AS COMMENCING AT A
<br />POINT ON TOWNSHIP LINE WHERE SOUTHWEST CORNER OF
<br />SAID SECTION 31 BEARS WEST 1443 FEET, THENCE NORTH,
<br />PARALLEL TO THE WEST ,BOUNDARY LINE OF SAID
<br />SECTION 31, 800 FEET, THENCE EAST PARALLEL TO THE
<br />SOUTH~BOUNDARY LINE OF SAID SECTION 31, 300 FEET,
<br />THENCE SOUTH PARALLEL TO THE WEST BOUNDARY LINE OF
<br />SAID SECTION 31, 800 FEET, THENCE WEST ALONG SAID
<br />SOUTH BOUNDARY LINE OF SAID SECTION 31, 300 FEET,
<br />MORE OR LESS TO THE POINT OF BEGINNING, COUNTY OF
<br />MONTROSE, STATE OF COLORADO
<br />(the "Option Property") together with all rights and privileges to conduct surface, auger and/or
<br />. undergrourid mining activities and related operations.
<br />2. rm. The Coal Lease shall be in effect for twenty (20) years commencing on
<br />the lease Date stated above. Lessee shall have the right at any time, upon at least thirty (30)
<br />days advance written notice to Lessor, to terminate the Coal Lease effective on December 31
<br />of any year. The option on the Option Property shall terminate on April 15, 2004, unless
<br />sooner exercised by Lessors.
<br />3. Soecial Rights of Lessee. In addition to whatever rights Lessee may have by
<br />implication of law hereunder, Lessor specifically grants to Lessee (to the full extent Lessor is
<br />entitled to grant such rights) the following exclusive rights ("Rights"):
<br />(a) to drill, take core samples, survey, map and otherwise evaluate the Coal, and
<br />to perform environmental and cultural resource studies;
<br />(b) to m)ne, extract, remove, process, own, market or otherwise use the Coal,
<br />including mining by the strip, auger and/or any other methods now or hereafter in existence,
<br />without any liability to Lessor for any current or future damages (including surface support
<br />and damage or loss to other minerals or strata) to Lessor's estate;
<br />(c) of free access to, in, from and across the Property and the right to install,
<br />maintain, use and change buildings, tipples, railroad facilities, conveyors, roads, haulage ways
<br />of all kinds, pumping stations, pipelines, power lines, ditches, storage facilities, substations,
<br />excavations, pits, openings, stock piles, mine refuse disposal areas, drains, dams, ponds,
<br />.) 3
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