2008-10-22_PERMIT FILE - C1996084A

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The MSHA identification number for the Lorencito Canyon Mine, OS-04712, has been deactivated by MSHA. There are no purchasers or holders of leasehold interest of record under a real estate contract for property overlying areas which NECC's mining activities will affect during the next five (5) years. There are no outstanding interests in lands, options, or pending bids on interest held or made by NECC for lands which aze contiguous to the area covered by the permit. 2.03.5 COMPLIANCE INFORMATION Neither, NECC or any of its affiliates or persons controlled by or under common control with it, has had a mining permit for surface coal mining operations suspended or revoked within the last five years. Nor have any such entities forfeited a mining bond or similaz security deposited in lieu of a bond in connection with any surface mining operations. Cline Mining has not received any notices of violation within the last five years. New Elk Coal Company LLC was issued NOV CV-2008-005 on August 26, 2008 for failure to control surface runoff on the out slope of the refuse disposal fill. The violation was terminated September 23, 2008. Civil penalty is pending review. 2.03.6 RIGHT OF ENTRY AND OPERATION INFORMATION NECC's right to enter and conduct coal mining operations is not subject to any pending litigation. Lorencito Coal Company, LLC (LCC) has leased its right to conduct coal mining operations to NECC; Coal ownership is leased to A.P. Maxwell by the landowners (Exhibit 2). This lease has been assigned to LCC. Exhibit 2 provides the lease agreement of the landowner and A. P. Maxwell and LCC and NECC. Assignments of the A.P. Maxwell lease are listed below. 1. Lessor's consent of assignment of interests as recorded at the offices of the Las Animas County Clerk on October 1, 1996, Reception Number 620720, Book 935, Page 120. 2. Assignment of 50 percent interest from A.P. Maxwell to Taiheiyo (U.S.A.), Inc. as recorded at office of the Las Animas County Clerk on October 1, 1996, Reception Number 620723, Book 935, Page 128. 3. Assignment of 50 percent interest from A.P. Maxwell to Lorencito Coal Company, LLC, as recorded at the office of the Las Animas County Clerk on October 1, 1996, Reception Number 620722, Book 935, Page 123. 4. Assignment of 50 percent interest from Taiheiyo (U.S.A.), Inc. to Lorencito Coal Company, LLC, as recorded at the office of the Las Animas County Clerk on . October 1, 1996, Reception Number 620721, Book 935, Page 126. MR-12 2.03-8 (Revised 10/07/08)