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/~ ~1 XBOW M1NING, LLC ^ 3737 Hwy 133 P.O. Box 535 Somerset, Colorado 81434 ~el (970)929-5122 Fax (970)929-5177 `., ~ ~ ~ /~ r~ March 23, 2007 MARL 9 2UU7 Mr. Dan Hernandez ~1Vjs~on of Rana;nauoq Senior Environmental Protection Specialist M'~~~9 and Safety Colorado Division of Reclamation, Mining and Safety 1313 Sherman Street, Room 215 Denver, Colorado 80203 Re: NOI X-2005-223-06. Exploration Project Update, Oxbow Minim, LLC. Dear Mr. Hernandez, The purpose of this letter is to provide an update to the subject 2005 NOL Due to poor availability of drill rigs in 2005, drilling activities were not initiated unti12006. 2006 was a successful drilling year. Approved Proeram Update 1. ECM-OS-27 -Drilled in 2006 and plugged, graded and seeded. A borehole completion report is attached. 2. ECM-OS-28 -Drilled in 2006 and plugged, graded and seeded. A borehole completion report is attached. 3. ECM-OS-39 -Drilled in 2006 and plugged, graded and seeded. A borehole completion report is attached. While an angle hole was also planned at this location to further define the presence of burn, no such hole was drilled. 4. ECM-OS-43 -Drilled in 2006 and plugged, graded and seeded. A borehole completion report is attached. All temporary light use roads were also reclaimed and seeded. 5. ECM-OS-44 -Drilled in 2006 and plugged, graded and seeded. A borehole completion report is attached. All temporary light use roads were also reclaimed and seeded. While an angle hole was also planned to further define the presence of burn, no such hole was drilled. 6, 7. ECM-OS-45 and 45A -Drilled in 2006 and plugged, graded and seeded. Borehole completion reports are attached. All temporary light use roads were also reclaimed and seeded. The second borehole was an angle hole drilled to further define the presence of burn. As all of the boreholes were located on lands managed by the BLM, the required BLM seedmix was used in the fall of 2006. • Page 1