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Coal Quality Data Review for Colowyo Coal Company <br />• <br />1.0 Introduction <br />1.1 Introduction <br />Highland GeoComputing, LLC (HGC) conducted a review of the coal quality <br />data as part of a larger geological investigation of the Collom reserve are at <br />the Colowyo Mine. The objective of the coal quality review was primarily to <br />locate, isolate and analyze potential discrepancies between the Collom coal <br />quality data and the coal quality data within the current Colowyo mine area. <br />Secondary objectives of the study included finding and correcting <br />typographical errors, locating missing or incomplete data and determining <br />methods for using the existing quality data for detailed geological modeling <br />and mine planning. <br />1.2 Conclusions and Recommendations <br />• Based on the results and conclusions of the coal quality review for Colowyo, <br />HGC makes the following recommendations regarding the Collom area coal <br />quality. <br />• <br />1) The future product moisture of the deposit remains unclear. This is due in <br />large part from uncertainty in the origin of the Utah International (Utah) <br />moisture basis. The lack of equilibrium moisture values for the KEC data in <br />the area inhibits utilizing equilibrium data. <br />This study does indicate that the coal quality of Collom will behave similarly <br />to the quality in the active mine areas. The data collected during the 2004 <br />exploration program should provide a good foundation for comparing existing <br />moisture values (both total and equilibrium) for deduction of product <br />moistures for the Collom reserve area. Therefore HGC, recommends the <br />product moistures by determined when the 2004 analytical results are <br />available. <br />July 2004 <br />Page 3 of 16 <br />