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Collom Area Geology Pre - Feasibility Report <br />6.1 Geostatistical review of Collom drill hole data <br />RTTS recommended a geostatistical review of the Collom drill hole data to <br />determine acceptable drill hole spacing distances for feasibility level resource <br />and reserve classification. <br />To enable RTTS to perform the geostatistical review of Collom, Colowyo <br />provided RTTS with the complete Colowyo /Collom drill hole database in <br />spreadsheet format. Colowyo also provided RTTS with two sets of mining <br />production data. The first data set consisted of roof elevations and seam <br />thicknesses collected directly from the Colowyo mine by Colowyo surveyors. <br />The second data set consisted of Colowyo in -pit coal quality data collected by <br />sampling blast hole drill cuttings. <br />RTTS reported the findings of the geostatistical review in the memorandum <br />"GB3038 - Geostatistical review of Collom drill hole data ", residing in <br />Appendix G. The memorandum indicates that the drilling data through 2004 <br />satisfied RTTS requirements for Pre - Feasibility level development of the CMA. <br />The memorandum further states that a drill hole spacing of approximately <br />2,000 feet is required for Feasibility level development of the CMA. Colowyo <br />also permitted additional 2005 drill holes for the CMA, the Phase 4 -I Pod and <br />Little Collom North areas. Additional holes will be permitted as necessary to <br />satisfy RTTS recommendations as part of the 2006 Exploration Plan. <br />6.2 Review of Collom Moisture <br />Reviews of the Collom moisture have been performed by several groups <br />including Glenn Miller and Associates (GEM) as part of the GEOCID project in <br />1998, Steve Korte in 2002, and again in 2004 by the Collom Exploration <br />Team. The GEOCID and Steve Korte reviews are referenced respectively as <br />items 4 and 5 in the 'Outline of Historic Geological and Environmental <br />Documents of the Collom Area" in Appendix E. The Collom Exploration Team <br />memorandum regarding Collom moisture resides in Appendix G under <br />"Quality Review - July 2004 ". <br />August 2005 Page 20 of 38 <br />