2010-12-17_REVISION - C1981019 (130)

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Coal Quality Data Review for Colowyo Coal Company l� U • 2) The drilling data suggests that the overall dry basis Btu /lb in the Collom area is about 45 Btu /Ib lower than in the active mine area. The drilling data suggests that the overall as- received basis Btu /lb in the Collom area is about 158 Btu /lb lower than the active mine area However, the as- received basis values are influenced greatly due to the wide variance in moisture. 3) The Collom area drill hole data (in the drill hole database) does not illustrate any clear affects of oxidation or burn as a result of being near the surface. However, HGC observed in some drill hole files that quality data for oxidized seams have excluded or removed from the database. While these data are not used during coal quality modeling, they do provide information about the breadth and depth of oxidation for a specific drill hole area. Therefore, for the sake of completeness HGC recommends that these data be added to the Drill Hole Data during the course of the 2004 exploration project. 4) The W.R. Grace (Grace) drill holes in the Collom area have significantly lower Btu /lb values for specific ash values than the KEC and Utah data. Therefore, some question arises about the validity of these data. A number of planned 2004 exploration drill hole will be adjacent to locations of Grace drill holes. HGC recommends comparing the results of the 2004 data to the results adjacent Grace (and Utah) holes to determine a) if the older data can be reasonably used in reserve calculations and /or b) can the data be factored to improve its estimation of the coal reserve. 2.0 Base Data HGC compiled the coal quality information from drill hole data and from Colowyo production data. HGC subdivided the coal quality data into two groups representing the current mine area (Mine Area) and the Collom area ( Collom). HGC simply used coordinates to isolate the two study areas. The Mine Area included the July 2004 Page 4 of 16