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Collom Area Geology Pre - Feasibility Report <br />5.0 Resource Area Targeting and Margin Rank Studies <br />Extensive coal resources exist in and around the Colowyo Mine Area (West <br />Pit) and the CMA. As a result, Colowyo has performed several projects to <br />assist in locating the most favorable mining areas. <br />5.1 Colowyo Cost Ranking Study <br />In 2003, Colowyo performed an internal review of potential mining targets <br />across the Colowyo properties. This study is known as the "Cost Ranking <br />Study ". This study outlined the CMA as the most favorable for mine <br />development and outlined the Collom Mine Phases 1, 2, 3 and 4. The Collom <br />Phase 1 & 2 Mine areas drove the scope of the 2004 Exploration Program, <br />however, Phases 3 and 4 were also drilled to expand the geological database <br />across the Collom Resource Area. The Collom Phase 1 & 2 areas have since <br />been renamed the Collom Mine Area (CMA). <br />5.2 Geological Resource Review <br />In early 2005, the <br />Collom Exploration <br />Team reviewed the entire <br />Colowyo <br />geological model to <br />identify areas of <br />potential future short -term <br />resource <br />development. This <br />review consisted <br />of identifying 13 different <br />locations <br />across the Colowyo properties with varying mining potential. Colowyo and <br />the Collom Exploration Team consider most of the areas highlighted as long- <br />term resources. However, the Collom Exploration Team highlighted six <br />potential areas for additional study. <br />The Geological Resource Review highlighted the following short -term <br />resource targets: <br />• Lower Wilson I -Seam area for development by highwall miner and <br />continuous miner development. <br />• South Taylor surface mining to the E2 seam <br />August 2005 Page 17 of 38 <br />