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0 EXECUTIVE SUMMARY <br />Project Focus <br />During 2003 a study of options to extend coal reserves at the Colowyo Coal Company (CCC) <br />operation was undertaken. The study identified the Collom resource area as the preferred <br />option for future development. Subsequently, CCC initiated a technical work program on <br />Collom to meet the requirements for Pre - Feasibility and provide the basis for approval to <br />commence a Collom Feasibility Study in 2005. CCC requested interim review by Rio Tinto <br />Technical Services (TS) to address the following question; <br />What is the current status of Pre - Feasibility Study work on <br />the Collom resource at Colowyo? <br />Approach <br />Rio Tinto Technical Evaluation Guidelines, Study Definition Guidelines, Guidelines for Project <br />Development and Project Evaluation Guidelines documents, available from the TEG intranet <br />site hftp: / /teg.riotinto.ora provide reference for project Pre - Feasibility Study requirements. <br />Paul Tooth (TS Brisbane) and Mike Whateley (TS Bristol) visited Colowyo during the week of <br />11 to 15 October 2004 to review the Collom study work in relation to these Guidelines, as <br />well as generally accepted technical good practice within Rio Tinto coal operations. HSEC <br />aspects of the Collom project have not been reviewed at this time. <br />Major Findings <br />Whilst some of the Collom project work has been completed to Pre - Feasibility level, most is <br />still at Order of Magnitude level. Completion of additional technical work to meet Pre - <br />Feasibility requirements by mid -2005 is considered realistic. The Collom project shows a <br />substantial negative NPV on current Rio Tinto assumptions and will likely need to reflect <br />improved economic viability to progress into Feasibility Study <br />Future Actions <br />The recommended priority actions are; <br />- Develop a more comprehensive overall Collom project development schedule <br />- Confirm the potential for higher priced sales contracts to improve the project's <br />economic viability <br />- Undertake a statistical evaluation of the continuity of key coal geology data <br />- Undertake an economic margin ranking study on the Collom resource <br />- Develop more detailed waste stockpile and water management designs <br />- Develop a project Risk Register <br />• - Compile a consolidated Pre - Feasibility Study report <br />Additional recommended actions are provided i Section 4 <br />RIO <br />TINTO <br />TS Ref: DRAFT Version: 1 I Technical see iees <br />