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Addendum to the Collom Area Geology Pre - Feasibility Report <br />• "reserves" However, these resources lack the economic planning required to <br />classify these resources as reserves HGC reports these resources as "highly <br />qualified" coal resources. <br />5.3 Estimated Collom Mine Area Reserves <br />In HGC's opinion, none of the coal within the Collom Mine Area can be stated <br />as a "reserve ". As mentioned above, Marston designed a pit shell and <br />performed significant mine engineering and costing over the entire Collom <br />Mine Area. However, since Colowyo only controls a small portion of the <br />Collom Mine Area HGC does not believe that controlled coal tonnage meet <br />the reserve criteria. Specifically, HGC believes that Collom fails to meet full <br />tenure requirements (lease control) and the current levels of engineering, <br />scheduling and economics do not reflect reserve requirements. <br />• Once, Colowyo acquires the LBA and updates the pit design, schedules and <br />economics the Collom Mine Area could be re- classified as reserves. <br />5.4 Estimated Collom Mine Area Resource Base <br />HGC estimates the leased portion of the Collom Mine Area contains <br />approximately 84.2 million tons of coal resources, see Table 5.2. This <br />tonnage estimate includes all seams from surface through the GB seam <br />within the polygonal extent of the Phase 1 & 2 pit. Table 5.3 presents the <br />As- Received basis coal quality estimated for the Collom coal resources. <br />September 2006 Page 16 of 25 <br />