2011-10-28_PERMIT FILE - C1981012A (7)

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These past sulfur analyses are consistent with results of the 2010 drilling program at New Elk Mine. Table 4A shows average total sulfur values by seam within the permit area ranging from 0.45 to 0.50 percent. These sulfur values are low, typical of freshwater swamp environments within deltas wherein these seams were developed. Higher sulfur values in coal are often attributed to swamps that have been inundated by brackish and marine environments in the lower part of the deltas. In addition, freshwater depositional environments have lower trace element concentrations. Coals in the New Elk Mine are very low in sulfur when compared to other US coal - producing basins. Visible pyrite which is common in coal- bearing strata in most basins was uncommon in the cores collected during the 2010 drilling campaign. During the 2010 drilling program sulfur forms were determined on various float fractions of the seams of interest. The results in Table 4B show that the most abundant sulfur form is organic and the pyritic sulfur is extremely low. These low sulfur values indicate that acid mine drainage is unlikely. Furthermore, acid mine drainage has not been an issue according to information from adjacent mining operations. Table 4A. Average Chemical Analysis of the Coal Seams (Raw, arb) Seam Volatile Matter Fixed Carbon Ash Sulfur Allen 32.0 46.6 18.2 0.47 Apache 31.6 50.9 14.6 0.50 Maxwell 29.8 42.9 23.8 0.46 Blue 31.4 45.4 19.7 0.45 Table 4B. Average Sulfur Form by Seams (1.4 float fraction, arb) Seam Pyritic Sulfate Organic Total Allen 0.04 <0.01 0.48 0.52 Apache 0.03 <0.01 0.49 0.52 Maxwell 0.03 <0.01 0.51 0.53 Blue 0.02 <0.01 0.51 0.53 2.04.6 (3a) (iii) (D) Immediate roof and floor samples for all seams also reflect very low sulfur values indicating that the associated rocks are not prone to acid mine drainage (Table 4C). TR56 2.04 -11f Revised 1/10/11