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Addendum to the Collom Area Geology Pre - Feasibility Report <br />Colowyo drilled approximately 18 holes within the Phase 4/I -Pod area. The <br />Phase 4/I -Pod area is located to the east of the Collom Mine Area between <br />West Fork Jubb and Wilson Creek. <br />Results from the 2004 exploration drilling showed thick occurrences of good <br />quality I -seam and L -seam in the Phase 4/I -Pod area. As a result, the area <br />became a high priority exploration prospect. <br />The exploration drilling illustrated well - developed I -seam across most of the <br />Phase 4/I -Pod area. The additional drilling also enabled reclassification of <br />large volumes of coal from 'Indicated" to "Measured" and "Inferred to <br />"Indicated ". <br />As part of the exploration review, Shannon and Wilson, Inc reviewed the <br />geotechnical data pertaining to the KM layer in the Phase 4/I -Pod area. Upon <br />compiling all available data, Shannon and Wilson, Inc. determined that the <br />KM layer is extremely weak. They indicated that mining to the L -seam would <br />require complete removal of the KM from outcrop to final highwall locations. <br />The mining ratios to accommodate complete removal of the KM are very high <br />and effectively make the resource through the L -seam unrecoverable. <br />Shannon and Wilson, Inc. also indicated that the KM layer is so weak that the <br />KM might adversely affect mining to the I -seam. <br />With this information in addition to time constraints related to South Taylor <br />Mine development, RTEA tabled additional engineering and geological <br />exploration in the Phase 4/I -Pod area. <br />The available documentation from Shannon and Wilson, Inc with respect to <br />the KM layer in the Phase 4/I -Pod area resides at the Colowyo mine. <br />2.3 Little Collom Gulch X -Seam Exploration <br />September 2006 Page 5 of 25 <br />