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Coal Quality Data Review for Colowyo Coal Company <br />• <br />Also, while reviewing these data, HGC noticed that the Utah coal quality data <br />sheets listed the moisture values as "Air- Dried ". Unfortunately, none of <br />these data contained any mention of "Air -Dry Loss ", which is always <br />associated with Air -Dried or residual moisture. Therefore, a question arises <br />whether these data are truly Air -Dried moisture values or mislabeled Total <br />Moisture values. <br />HGC reviewed available Utah geological reports and drill hole files to <br />determine if the moisture data are Air -Dried values. HGC could not find any <br />definitive statements regarding the source of the moisture data. In HGC's <br />opinion, the Utah drill hole moisture values should be assumed to be "Air <br />Dried" values. Therefore, comparing total moisture values collected by KEC <br />against Air -Dried moisture values of the Utah data is invalid. <br />• If the Utah moisture data are Air -Dried values, then this explains why the <br />Utah moisture values are consistently lower than the KEC moisture values. <br />After the thorough review of the base coal quality data, HGC believes that <br />the Colowyo database contains raw and original coal quality data. The <br />Colowyo drill hole database has facilities to calculate and utilize product <br />moisture values without altering the raw geological data. <br />3.0 Coal Quality Data Analyses <br />HGC performed a number of data analyses across the Colowyo data sets. <br />These included: <br />1) A review of the Proximate Analysis totals of all samples with full <br />proximate analyses. <br />2) Preparation of Dry and As- Received basis -cross plots between Ash <br />versus Btu /lb in the Collom Area data. <br />3) Preparation of regression curves from the Collom Area data (by <br />• company), Mine Area DH, and Production Data for comparison. <br />July 2004 Page 6 of 16 <br />