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Collom Area Geology Pre - Feasibility Report <br />2.0 Surface Control and Coal Control <br />The proposed CMA covers approximately 1,669 acres. The entire Collom <br />exploration area covers more than 7,600 acres. KEC through two land <br />holding companies (Kennecott Coal Company and Colowyo Coal Company) <br />controls the Collom surface lands, see Figure 2.1. <br />Within the proposed CMA, Colowyo controls approximately 598 acres of coal <br />under leases from the US Bureau of Land Management (BLM) and the State <br />of Colorado, as lease numbers C- 0123475 and 257 -S13 Jubb, respectively, <br />see Figure 2.2. This leased coal also resides within the Colowyo Mine's <br />currently approved Logical Mining Unit (LMU). The remaining 1,069 acres of <br />coal within the proposed CMA belong to the US Bureau of Land Management <br />(BLM). <br />Colowyo filed a 1,230 acre "Lease by Application" (LBA) with the BLM in <br />November 2004. The tentative date for the Federal Lease sale is scheduled <br />for June 28, 2006. While the sale of this Federal coal is on a competitive <br />basis, no other companies have currently expressed interest in the lease <br />area. In addition, no other companies elected to participate in the <br />exploration license obtained in 2004. <br />It should be noted, that until the Federal coal lease has been obtained, coal <br />within these areas cannot be classified as 'resources" or "reserves ", even <br />though detailed geological, mine design and cost studies have been <br />performed. Therefore, for the purpose of this report, highly qualified and <br />investigated coal will be classified as 'uncontrolled resources" and <br />"uncontrolled reserves ". <br />In addition, the latest CMA pit design extends beyond the extent of the <br />current Collom LBA. Therefore, either the LBA configuration or pit geometry <br />needs modification prior to the LBA lease sale to ensure the Colowyo controls <br />all coal planned for mining. <br />August 2005 Page 3 of 38 <br />