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"CONFIDENTIAL INFORMATION" <br />Page Four <br />• CALCULATION OF RECOVERABLE P.ESERVE BASE, CAMEO "B" SEAM <br />Recoverable reserve base is calculated on a SOZ recovery rate. <br />Equation used to calculate recoverable reserve base for the Cameo "B" seam <br />in the lease area: <br />(Area in Acres) x (Avg. Thickness) x (Avg. Density = 90 lbs/f t3) x <br />1 Ton <br />(2000 lbs) x (50% Recovery Rate) = Recoverable Tons <br />Estimated reco~•~ra~le reserves for the Cameo "B" seam in the lease area: <br />Area (Acres) <br />Measured 1157.77 <br />Indicated 1161.16 <br />Inferred 20.20 <br />TOTALS 2339.13 <br />A~rg. Thickness <br />(Feet) Tons <br />7.46 8,465,000 <br />9.22 10,493,000 <br />5.70 113,000 <br />19,071,000 <br />r 1 <br />LJ <br />CALCULATION OF COAL RESERVE BASE, CAMEO "C" SEAM <br />The coal reserve base for the "C" seam was calculated from drill hole data using <br />the following equation: <br />3 <br />(Area in Acres) x (Avg. Thickness of Seam) x (Avg. Density = 90 lbs/ft ) x <br />1 Ton <br />(2000 lbs) = Tons <br />Estimated coal reserve base for Cameo "C" seam in lease area: <br /> Avg. Thickness <br /> Area (Acres) (Feet) Tons <br />Measured 757.03 .4,66 6,915,000 <br />Indicated 1358.58 4.55 12,117,000 <br />Inferred 444.39 2.50 2,178,000 <br />TOTALS 2560.00 21,210,000 <br />• <br />