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Matheson <br />Mining <br />Consultants, Inc. <br />Method <br />Western Fuels Association — New Horizon Mine <br />Condition Inspection of the Garvey Residence <br />25924 AA Road <br />Nucla, CO 81424 <br />August 21, 2012 <br />2801 Youngfield Street, Suite 171 <br />Golden, CO 80401 <br />303 - 456 -5638 <br />Toll Free 888 - 456 -5638 <br />Fax 303 - 456 -5639 <br />www.mathesonmining.com <br />Matheson Mining Consultants, Inc. (MMC) conducted a condition inspection of the Garvey <br />residence and detached garage located at 25924 AA Road. The full inspection is on the attached <br />DVD with voice comments. Attached to this letter is an inspection form noting the condition of <br />the foundation, siding, roof, drainage, and utilities. . <br />The residence is approximately 23 years old and the detached garage is newer. The residence is <br />in good condition. What was visible of the concrete foundation was in good condition. There <br />were a few chinking gaps in the exterior and a few sheetrock edging cracks and a few cracked <br />floor tiles near the east door and garage door. The detached garage had seven cracked window <br />panes in the roll up doors and a few cosmetic concrete cracks in the concrete pad. These <br />conditions are noted in the DVD. <br />The following report is based on an examination of only those portions of the premises which <br />were readily accessible and could be visually inspected. No inspection was performed in areas <br />which were obstructed, concealed or closed off. No inspection was performed in areas which <br />required the dismantling, removal or movement of any object including, but not limited to, floor <br />and wall coverings, sidings, ceilings, floors, furniture and appliances. <br />The condition of the premises may change after the date of inspection due to factors such as <br />weather, fire, moisture, leaks, actions taken by the owner or others, or the passage of time. This <br />report describes the condition of the premises at the time of inspection. <br />This report follows the order in which the premises were inspected. A "clear" comment <br />indicates that no cracking or other damage condition was visible at the time of this inspection. <br />