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SUPPLEMENTAL INFORMATION 3) Basis of Right to Enter for Exploration and Reclamation Table 1, Location, Drillhole Dimensions, and Ownership, details proposed corehole locations and surface and coal ownership at these sites. A map is also attached illustrating exploration locations. All but one of the proposed drill sites are on lands where the surface and minerals are owned by the State of Colorado. Site PDS-06-08 is located on surface owned by BTU EC, a wholly-owned subsidiary of Peabody Energy. For the State (ands, Lease C-3182 allows BTU-EC, as the leaseholder, to utilize as much of the surface as needed to conduct mining and related operations (includes exploration). 4) Description o£ Land to be Affected The ten exploration sites are located in Township 6 North, Range 91 West, Sections 29, 30, 31, and 32, as shown on Maps 1 and 2. Six of the ten proposed exploration sites are in areas previously disturbed by surface mining activities (Trapper and Williams Fork Mines). No additional cultural resource clearances are required for these sites. A cultural review completed in 2005 for the 4 remaining sites found no cultural resources requiring protection. 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 proposed exploration activities, and no significant sustained groundwater flows have been encountered by previous drilling in the area. Surface Toooeraohy -The general topography of the area is characterized by a relatively gentle north-northeast facing dip-slope, extending from the Williams Fork Mountains to the south to the Big Bottom Valley of the Yampa River. Localized topographic features associated with the Williams Fork Anticline and Round Bottom and Big Bottom Synclines result in north-south trending valleys and ridgelines, including the valleys of both the northward flowing Williams Fork River, which joins [he Yampa River along the southern margins of Big Bottom, and the Yampa River, which flows southward from this confluence. Topographic relief in the proposed exploration area is approximately 1,300 feet, ranging from 6,130 feet to 7,400 feet. Geoloeic Setting, -Economically important coal-bearing strata of the project azea are part of the Williams Fork Formation of the Mesaverde Group. The coals of primary economic interest are designated as the Lower and Middle Coal Groups, and include the E, F and H coal seams. These units and their stratigraphic sequence are illustrated by Figure 1, Typical Stratigraphic Column. The proposed exploration area is located between the Axial Basin Arch, to the southwest, and the Sand Wash Basin, to the northeast. Stratigraphically, the Lower Coal Group was deposited between two regressive sandstone deposits. Surface expressions of these two sandstone units, the Middle Sandstone Member of the Williams Fork Formation, and the Trout Creek Sandstone Member of the Iles Formation appear as prominent cliff-forming units throughout the Williams Fork Mountains. The coal seams in the project azea are associated with the Williams Fork Anticline and Big Bottom Syncline, which both trend and plunge to the northwest. On the limbs of the synclinal basin, dips range from approximately 8 to 12 degrees, steepening on the west flank of the Williams Fork Anticline to a maximum of approximately 45 degrees. Significant faulting exists to the north and south of the project area, and along the axis of the Williams Fork Anticline. C:\D000ments and Settings\jrb\Local Settings\Tempomry Internet Files\OLK259\2006 Empire NOI Appl Forrn Rl.doc Page 6 of 15