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INTRODUCTION <br />GEX Colorado Inc. currently holds Federal Lease No. C-078049 consisting of <br />• B00 acres located in the Palisade Coal District, Mesa County, Colorado. <br />Included in the lease area is approximately 142.9 acres of mined out area <br />and active workings (Roadside Mine). The seam being mined is the Cameo "B" seam, <br />which dips 5% in a N 25o E direction. <br />There has been no mining in the Cameo "C" seam. There is no mining planned <br />for the "C" seam in the lease area. This seam also dips 5% in a N 25° E direction. <br />LOCATION AND DESCRIPTION <br />Federal lease No. C-078049 is located approximately 4 miles northeast of <br />Palisade, Colorado, near the Cameo Exit on I-70. The lease is on the east side <br />of I-70. <br />• Legal Description: United States Coal Mining Lease, Serial No. C-078049, <br />covering the following acreage: <br />Township 10 South, Range 98 West, Mesa County, CO <br />Section Description Approx. Acreage <br />26 E~ 320 <br />35 NFii,,, S~ NW 4, F ~ SW';,, SFSy 480 <br />Total acreage for Coal Lease C-078049 800 <br />COAL QUALITY <br />The coal in the Cameo "B" seam is classified as high volatile bituminous with <br />low sulfur and moderately high ash content. 7'he results of seven channel samples <br />taken in 1976 are shown below: <br />Sample Analysis - Cameo "B" Seam: <br />Average Moisture 7.2% <br />Average Volatile Matter 36.3% <br />• Average Fixed Carbon 46.4% <br />Average Ash 10.2% <br />Average Sulfur 0.6% <br />Average BTU per pound 11,630 <br />