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. Water Level (Elevation Ft.l Date D2B D2B2 Jan 14, 2005 6044.0 - Janu 19, 2005 6044.0 - Febru 22,2005 6044.6 - March 31, 2005 6043.6 - May 3, 2005 6044.0 - June 15, 2005 6044.5 - Jul 11, 2005 6043.6 - Au ust 24, 2005 6044.6 - October, 17, 2005 6045.0 - April 19, 2006 - 6053 Ma 25, 2006 6047 - June 7, 2006 - 6066.7 Jul 26, 2006 6047 6070.7 October 17, 2006 6045 - December 27, 2006 6047 6070.7 After a review of the data, we believe that the transfer of water from D seam to the B seam has had little effect on the B seam water level. See also the discussion regazding the H-10 well where that monitor well has remained dry. • Exhibit 2 -Groundwater Information also contains the results of transferred water samples obtained on June 13, 2006. The data suggests no anomalies. SC-1 Well -Rollins Sandstone Monitor well SC-1 is located just east of the reclaimed Sanbom Creek mine portal area. Well SC-1 was completed in the Rollins Sandstone, which is located 40 to 50 feet below the B- Seam. Monitoring data were historically collected from well SC-1 prior to any substantial mining in the B-Seam of the Sanborn Creek Mine. The SC-1 well is located up-gradient relative to the Rollins Sandstone unit which is located stratigraphically under the footprint of the mining activities. Water in the Rollins Sandstone is confined to limited localized zones that are fractured and/or contained above the Rollins, as evidenced by water level measurements that aze well above the top of the sandstone member. Water quality is poor, with high total dissolved solids as sodium chloride. Inflow and recovery of the water level in the drill holes indicates very low permeability and porosity of the sandstone. There has been some vaziability in the water levels measured in well SC-1 but there has been no apparent trend or indication of impact. No significant difference in the 2006 monitoring results from baseline or historical measurements was noted in well SC-1. • 14