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Collom Area Geology Pre - Feasibility Report <br />0 8.0 Coal Reserve and Reserve Estimates <br />8.1 Resource and Reserve Parameters <br />Estimation of coal resources and reserves in the CMA is dependent upon various <br />parameters outlined in Table 8.1 <br />Table 8.1 <br />Key Resource and Reserve Parameters <br />Parameter <br />Resource Value <br />Reserve Value <br />Measured /Proved Distance <br />750 feet <br />750 feet <br />Indicated /Probable Distance <br />750 - 1500 feet <br />750 - 1500 feet <br />Inferred Distance <br />1500 - 3000 feet <br />n/a <br />Default Coal Density <br />81.7 Ibs /cu. Ft. <br />81.7 Ibs /cu. Ft. <br />Min. Surf Mineable Seam Thick <br />2 feet <br />2 feet <br />:Surface Mining Coal loss <br />0.5 feet per seam <br />0.5 feet per seam <br />Surface Product Moisture Factor <br />+0.75% <br />:Surface Product Ash Factor <br />+0.75% <br />• Surface Product Heat Factor <br />-160 Btu /lb <br />The distances used to report measured, indicated and inferred coal resources <br />as well as proven and probable coal reserves reflect the distances used in the <br />"2004 Year -End Resource and Reserve Report for the Colowyo Mine ". <br />Colowyo developed a series of adjustment factors to estimate the ROM or <br />Product coal quality of the Collom resources and reserves. Colowyo adds a <br />factor of 0.75% to the As- received (total) Moisture, and as- received Ash <br />values to determine Product Moisture and Product Ash. A factor of 160 <br />Btu/1b is subtracted from the As- received Btu /lb to determine Product Btu /lb. <br />As mentioned above, the CMA coal resources and reserves occur on leased <br />and unleased Federal Coal. Coal resources and reserves existing on unleased <br />coal cannot be stated as true controlled "resources ". Therefore, the coal <br />resource and reserve estimates presented here are labeled "controlled" or <br />• "uncontrolled" for areas of lease and unleased coal, respectively. <br />August 2005 Page 31 of 38 <br />M <br />