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REVISEDTECHNICAL REPORT

ON THEWOLVERINE PROJECT

for

WESTERN CANADIAN COAL CORP.

MARCH 2006

REVISED TECHNICAL REPORT ON THE WOLVERINE PROJECT FOR WESTERN CANADIAN COAL CORP. MARCH 2006

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ITEM 1 TITLE PAGE

Title of Report

Technical Report on the Wolverine Project

Project Location

The Wolverine Project is a metallurgical coal project under development in the Peace River

Coalfield of northeastern British Columbia, Canada. It is located approximately 725 km

northeast of Vancouver, and about 175 km northeast of the city of Prince George. The Project

is within the Peace River Regional District and Liard Mining Division of British Columbia about

20 km west of the town of Tumbler Ridge, British Columbia. The Project will be developed

adjacent to an existing CN Rail line that connects the Project with BC’s major coal export

terminals at Vancouver and Prince Rupert. In Item 26 of this Technical Report (TR), see Figure

1, General Location Map.

Author

The author of the report is Marston Canada Ltd. (Marston), a professional geological and mining

engineering services firm based in Calgary, Alberta, Canada and registered to practice

engineering under APEGGA Permit No. P-8327. Marston’s address is at 2431 – 37 Avenue NE,

Suite 430, Calgary, Alberta, Canada T2E 6Y7.

Effective Date of the Report

March 16, 2006


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ITEM 2 TABLE OF CONTENTS

PAGE

Item 1 Title Page 1-1 Item 2 Table of Contents 2-1 Item 3 Summary 3-1 Item 4 Introduction and Terms of Reference 4-1 Item 5 Disclaimer 5-1 Item 6 Property Description and Location 6-1 Item 7 Accessibility, Climate, Local Resources, Infrastructure and Physiography 7-1 Item 8 History 8-1 Item 9 Geological Setting 9-1 Item 10 Deposit Types 10-1 Item 11 Mineralization 11-1 Item 12 Exploration 12-1 Item 13 Drilling 13-1 Item 14 Sampling Method and Approach 14-1 Item 15 Sample Preparation, Analysis, and Security 15-1 Item 16 Data Verification 16-1 Item 17 Adjacent Properties 17-1 Item 18 Mineral Processing and Metallurgical Testing 18-1 Item 19 Mineral Resources and Mineral Reserve Estimates 19-1 Item 20 Other Relevant Data and Information 20-1 Item 21 Interpretation and Conclusions 21-1 Item 22 Recommendations 22-1 Item 23 References 23-1 Item 24 Date 24-1 Item 25 Additional Requirements for Technical Reports on Development Properties and Production Properties 25-1 Item 26 Illustrations 26-1

APPENDIX Certificate of Author Appendix-1


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LIST OF ILLUSTRATIONS

Figure Title Page

1 General Location Map 26-2 2 Wolverine Site Map 26-3 3 Coal Occurrences 26-4 4 Regional Geology 26-5 5 Perry Creek Area Stratigraphic Column 26-6 6 EB Area Stratigraphic Column 26-7 7 Perry Creek Geological Cross Sections 26-8 8 EB Geological Cross Sections 26-9 9 Wolverine Project Mine and Infrastructure 26-10 10 Perry Creek Resource Pit 26-11 11 EB Resource Pit 26-12 12 Perry Creek Area – Measured and Indicated Resources 26-13 13 EB Area – Indicated Resource Area 26-14 14 Perry Creek – Pit Status Map – End of Year 2018 26-15 15 EB – Pit Status Map – End of Year 2014 26-16 16 Surface Facilities Map – Perry Creek Area 26-17 17 Wolverine Coal Project Flowsheet 26-18


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LIST OF TABLES

Table Title Page

3.1 Wolverine Project Estimated Coal Resources and Reserves 3-3 6.1 EB Area – Coal License Details 6-2 8.1 Summary of Exploration Activities – Perry Creek Area, 1971 –

2002 8-28.2 Summary Of Exploration Activities – EB Area 8-4

11.1 Seam thickness Summary – Perry Creek Area 11-1 11.1 Seam Thickness Summary – EB Area 11-2 12.1 Summary of Exploration Activities – Perry Creek Property, 2001

– 2004 12-112.2 Summary of Exploration Activities – EB Property, 2000 - 2002 12-2 13.1 Seam Thickness Summary – Wolverine Project 13-1 14.1 Perry Creek Area Drill Hole Locations 14-3 14.2 EB Area Drill Hole Locations 14-5 14.3 Perry Creek Area Drill Hole Quality Data (air dried basis) 14-6 14.4 EB Area Drill Hole Quality Data (air dried basis) 14-10 18.1 Perry Creek Area – Typical Clean Coal Quality (adb) 18-1 18.2 Perry Creek Area - Typical Clean Coal Thermal Rheology 18-1 18.3 EB Area – Typical Clean Coal Quality (adb) 18-2 18.4 EB Area – Typical Clean Coal Thermal Rheology 18-2 18.5 Wolverine Target Product Quality and Predicted Plant Yields 18-3 19.1 Coal Resource Categories – Moderate Geology Type 19-2 19.2 Coal Seam Criteria – Moderate Geology Type 19-2 19.3 Perry Creek Area – Estimated Measured Coal Resources 19-3 19.4 Coal Resource Categories – Complex Geology Type 19-4 19.5 Coal Seam Criteria – Complex Geology Type 19-4 19.6 EB Area – Estimated Indicated Coal Resources 19-5 19.7 Wolverine Project Estimated Coal Resources and Reserves 19-8 19.8 Saleable Coal Quality Specifications and Predicted Plant Yields 19-10 25.1 Wolverine Project Production Schedule 25-2 25.2 Target Specifications for Wolverine Mine Coals 25-3 25.3 Initial Wolverine Project Capital 25-6 25.4 Wolverine Production Cost Estimates 25-7 25.5 Estimated Annual Cash Flow Summary – Wolverine Project

Base Case 25-8

25.6 WCC Base Case Price Sensitivity 25-10 25.7 WCC Base Case Operating Cost Sensitivity 25-10 25.8 WCC Base Case Capex Sensitivity 25-10

REVISED TECHNICAL REPORT ON THE WOLVERINE PROJECT FOR WESTERN CANADIAN COAL CORPORATION MARCH 2006

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ITEM 3 SUMMARY

Property Description, Location and Ownership

The Property consists of a coal lease in the Perry Creek Area and contiguous coal licenses in

the EB Area that WCC acquired originally in 2000 and 2001 that are located in the Peace River

Regional District of northeastern British Columbia, Canada. The Property is in the Inner

Foothills of the Canadian Rocky Mountains near the town of Tumbler Ridge, BC and about 725

km northeast of Vancouver, BC. The Property is readily accessible by provincial highway and

an all-weather forestry service road. See Item 26, Figure 1, General Location Map and Figure

2, Wolverine Site Map.

The coal resources in the Perry Creek and EB areas are part of the Peace River Coalfield. The

coal seams are contained in the Lower Cretaceous Gates Formation and were deposited in an

alluvial-deltaic environment about 145 million years ago. Gates Formation coals have been

mined extensively in the region, and the seams at Perry Creek and EB may be correlated with

the seams mined nearby. Regional tectonism from post-depositional mountain building have

folded the geological structures regionally and locally. At EB Area, significant reverse and thrust

faulting is interpreted in parts of the resource area. The local structures are of moderate and

complex geology types in the Perry Creek and EB areas, respectively, as defined by accepted

Canadian standards.

In the Perry Creek Area, the main coal seams in descending order are the E2, E3, F, G and J

seams with a cumulative average coal thickness of nearly 12.5 meters. The main seam of

interest is the relatively thick, basal J Seam, which includes about seven meters of coal in three

main plies. The remaining seams are generally from 1 to 2.5 meters in thickness.

In the EB Area the main coal seams are the D, C, and B seams. These three seams have a

total cumulative thickness of about 11.6 meters. The B Seam is the thickest and contains the

most coal resources in the Area. The B Seam is about 3 to 5.5 meters thick; the C and D

seams are about 3 to 4 meters thick.


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Exploration Concept

Exploration activities in the Perry Creek and EB areas commenced in the early 1970s, and

occurred at various times during the late 1970s and 1980s, and by WCC after acquiring the

Property in 2001. The early work was primarily exploratory and for characterizing coal quality,

and included mapping and drilling of areas with exposed Gates Formation or the lower coal-

bearing Gething Formation rocks. Denison Mines Ltd. and Quintette Coal Ltd. drilled and cored

22 holes in the Perry Creek Area. Nichimen and Ranger Oil drilled 45 holes and mined seven

adits in the EB Area. In 2001 through 2004, WCC completed 68 additional holes at the Property

in areas deemed amenable to open pit or underground mining and completed several resource

estimates and feasibility studies for mine development.

In all programs, geophysical logs were collected for nearly all drill holes and core samples were

analyzed for coal quality characteristics. Bulk samples and composites of core samples were

used for washability test work for plant design and to predict clean coal quality. In addition,

during these programs, WCC collected bulk samples and conducted test work for coal

processing plant design.

Exploration for resource delineation has been completed at the Perry Creek and EB areas

within proposed open pit mining areas. Future exploration work in both open pit areas will be for

mine development and detailed planning.

Based on the exploration information collected to date, WCC requested Marston to prepare a

mine feasibility study (Study) for open pit mines to be developed in the Perry Creek and EB

areas and estimate resources and reserves based on the results of the study. The Study

includes all available work to date by WCC on geology, geological modeling, geotechnical

studies, process plant design and engineering and mine facilities and infrastructure studies.

Development and Operations

WCC is in the process of developing an open pit mining operation at the Perry Creek Area. The

operation is planned in accordance with the Study that was undertaken on WCC’s behalf by

Marston. The mine has been designed to produce up to 2.7 million tonnes of metallurgical coal

per year for sale in export markets. The coal will be transported by rail from a processing plant


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and rail loadout at Perry Creek to Ridley Coal Terminal at Prince Rupert, BC or to the export

coal terminals at Vancouver, BC. Initial production will be from the Perry Creek location

commencing in 2006; however, WCC intends to open mining operations at the EB Area in 2009

to supplement Perry Creek coal production. Under Marston’s feasibility study, the pit at Perry

Creek is planned to produce coal from 2006 through the end of 2018; the EB Area pit is planned

to produce coal from 2009 through the end of 2014. To meet market specifications for saleable

metallurgical coal, all coal produced from the mines will be processed in a coal preparation plant

that is under construction at the Perry Creek Area.

Currently, WCC is seeking debt- and equity-based financing to support its development of the

Perry Creek site. Furthermore, actual capital development has started and is in the beginning

stages. Surface facilities and the preparation plant have been designed and contracts have

been let for their construction. Preliminary construction in the form of clearing various site,

earthwork and foundations is well underway.

Conclusions and Recommendations

Based on the results of the Study, Marston concludes that the Wolverine Project is

economic and will yield attractive returns at the Base Case price levels forecast by

WCC.

Based on the Study, the coal resource and reserve estimates for the Wolverine Project

are as shown on Table 3.1, Wolverine Project Estimated Coal Resources and Reserves.

Table 3.1 WOLVERINE PROJECT ESTIMATED COAL RESOURCES AND RESERVES

COAL RESOURCES

(Mt)COAL RESERVES

(Mt)

MEASURED INDICATED PROVEN PROBABLE

38.7 7.8 35.8 7.4

In Table 3.1, the Measured and Indicated resource estimates are inclusive of the resources

modified to produce the Proven and Probable reserve estimates. The reserve estimates are

stated in accordance with the directions of the British Columbia Securities Commission.


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Additional details regarding the estimated coal tonnage to be produced and sold from the

Project may be found in Items 18, 19, and 25.

For the Wolverine Project, the total estimated Proven and Probable reserves are 43.2 Mt. Perry Creek Area reserves amount to 35.8 Mt of Proven coal with an estimated

ash content of 30% on an air dried basis; EB Area reserves equal an estimated 7.4 Mt of

Probable reserves with an estimated ash content of 26% on an air dried basis.

The overall Project stripping ratio is projected to be 5.6 bcm per run-of-mine (ROM) tonne requiring the removal of 242.2 Mbcm of waste during the Project’s life. A total of 198.9 Mbcm of waste are scheduled for removal from the Perry Creek Pit

and 40.6 Mbcm of waste from the EB Pit. The waste total includes 2.7 Mbcm of topsoil

scheduled to be removed from waste dump areas and from the mine buildings, plant and

other infrastructure sites.

The estimated saleable coal quality of the Wolverine Project is shown on Table 3.2,

Saleable Coal Quality Specifications.

Table 3.2 SALEABLE COAL QUALITY SPECIFICATIONS

ProductQuality Specification

CLEAN COAL SPECIFICATIONS

WOLVERINE

CLEAN COAL SPECIFICATIONS

EBAsh (%, db) 7.5 ± 0.5 9.5 ± 0.5 Volatile Matter (%, db) 23.0 ± 0.5 23.0 Fixed Carbon (%, db) 79.0 ± 0.5 79.5 Sulfur (%, db) <0.55 <0.55 Free Swelling Index 7 to 8 6 to 7 ½

The EB Pit should be drilled to Measured status prior to commencing detailed pit

development planning. The current drilling is sufficient for the purposes of the Study that

underpins this Report; however, more detailed planning will require more data on the

coal seams and coal quality.


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Future drilling programs in the Perry Creek Pit should be planned to collect large

diameter core samples from the upper seams for additional quality and washability test

work to optimize future processing plant performance and yield.


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ITEM 4 INTRODUCTION AND TERMS OF REFERENCE

Introduction

Western Canadian Coal Corp. (WCC) is a Vancouver-based public company with shares traded

on the TSX Venture Exchange. WCC controls the Wolverine Group of properties that consist of

the Perry Creek, EB (also known as Mt. Spieker) and Hermann Areas. These areas contain

significant deposits of metallurgical coal. Extensive coal exploration and sampling programs

were carried out in the Perry Creek and EB Areas beginning in the early 1980s by previous

license owners and were continued by WCC in 2001 through 2004.

By 2002 the coal resources at Perry Creek were sufficiently defined to permit the preparation of

an initial feasibility study and NI 43-101 technical report for the Wolverine Project based on an

open pit, underground mine and preparation plant to be developed at the Perry Creek Area to

produce 1.6 million tonnes of metallurgical coal product per year. Subsequently, with the

increase in world coal prices, WCC determined that the Perry Creek open pit should be

significantly enlarged and a small open pit should be developed in the EB Area to provide

additional coal feed to a preparation plant to be built at Perry Creek. In addition, WCC

increased potential production from the Project to 2.7 million tons of coal per year. WCC plans

to utilize an existing CN Rail line adjacent to the Perry Creek Area to ship washed metallurgical

coal product in unit trains from Wolverine to existing BC coal export terminals at Prince Rupert

or Vancouver. There, the coal will be loaded onto ocean bulk carriers and transported to

customers in Japan, Korea and elsewhere in Asia.

Terms of Reference

WCC engaged Marston Canada Ltd. (Marston) to compile the available data and information

and produce an updated Wolverine Project feasibility study (Study) to produce up to 2.7 million

tonnes per year of coal from the resources in the Perry Creek and EB Areas. Marston was also

to produce this Technical Report (TR) to provide scientific and technical information developed

and described in the Study in accordance with National Instrument 43-101.


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For the Study, Marston was to perform the following scope of work:

a) Review all available mapping and geological data.

b) Review all available prior work by others related to exploration and geology of the Perry

Creek and EB Areas.

c) Visit the Perry Creek and EB sites.

d) Review WCC’s Perry Creek and EB geologic models for use in resource and reserve

estimates and feasibility-level mine planning and cost estimating.

e) Determine economic open pit limits for the coal resources in each area.

f) Estimate mineral resources for each area in accordance with NI 43-101 requirements.

g) Develop feasibility level mine designs and production sequences from the Perry Creek

and EB Areas.

h) Review and describe the coal processing plant design and infrastructure plans and cost

estimates developed by others and compile this information as part of the Study.

i) Estimate initial and annual capital and annual production costs and develop an

economic model of the Project in constant 2005 dollars.

j) Estimate Proven and Probable Coal Reserves based on the Study and in accordance

with NI 43-101 requirements.

For the Study, the mining plans for the Perry Creek and EB Areas were to include only open pit

designs. Development and coal production from each pit was to be maximized each year

considering constraints due the timing of mining permits, equipment delivery and commissioning

schedules, pit designs and the maximum preparation plant capacity.

Purpose

The purpose of this TR is to provide scientific and technical information developed

independently by Marston under the direction of an independent Qualified Person and

concerning WCC’s Wolverine Project based on the results of the Wolverine Project Feasibility

Study. This TR is in accordance with the requirements of National Instrument 43-101,

Standards for Disclosure for Mineral Projects.


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Sources of Information

To prepare the Study and this TR, Marston relied primarily on base information and exploration

and sampling data collected or generated by others and the references listed in Item 23 of this

TR. Key information sources are as follows:

Wolverine Project, Project Document, Volumes 1 to 9; by WCC, Cochrane Engineering

Ltd. (and others), May 2003.

Wolverine Coal Project, Perry Creek Feasibility Study, Document, Volumes 1 and 2, by

Norwest Corporation, January 2003.

WCC electronic data with respect to: drilling data, geology, coal reserves and mine

planning provided by WCC.

WCC Coal marketing and price forecast data in the form of indicative letters discussing

intent to purchase coal.

WCC information regarding rail and port charges in British Columbia.

Technical Report on the Wolverine Coal Project prepared for WCC by JHP Coal-Ex

Consulting Ltd. (Coal-Ex) and James Proc, P.Eng., with assistance from Daryl Thomas,

P.Eng (Cochrane Engineering Ltd.) and Kathleen Pomeroy, October 2003.

Discussions with key operating and technical personnel from WCC, including John

Hogg, Bill Burton, Kathleen Pomeroy, Gary Gould, David Lortie and Peter Cosgrove.

Field Involvement

Richard R. Marston, P.E. is the independent Qualified Person for this TR. He visited the Perry

Creek and EB Areas in June 2005 and observed current development activities and numerous

old drill hole sites, but he has not been involved in field exploration or related activities at the

Wolverine Project. He has experience in the general area having performed numerous geologic

modeling, reserve estimates and mine planning projects for Quintette Coal Ltd.’s nearby mining

operations from 1985 through 1987 and 1989 through 1990.


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ITEM 5 DISCLAIMER

Marston has relied on the following persons at WCC for information related to coal licenses,

mining permits and other environmental information, and coal markets and price information.

a) David Lortie, Senior Geologist – Coal licenses and boundaries. This information was

relied upon to establish limits on mining, waste dump and infrastructure locations, and to

estimate production royalty/mineral tax costs. This disclaimer primarily applies to all

items in this TR with regards to Project location and Items 19 and 25 as to cost

estimates.

b) Kathleen Pomeroy, V.P. Environmental Affairs – Mining permit and environmental

information. The information on the status and outlook of the various mining permits

were relied upon to establish the places and timing of development and mining in the

Perry Creek and EB Areas. This disclaimer applies primarily to TR Items 3, 19, 20 and

25.

c) Peter Cosgrove, Wolverine Project Manager – Environmental permitting, specifically with

respect to mine surface and coal preparation facilities. This disclaimer applies primarily

to TR Items 19, 20 and 25.

d) Gary Gould, Senior Mine Engineer – Mine permitting requirements and progress in

relationship to the mine plan. This disclaimer applies primarily to TR Items 19 and 25.

e) Bill Burton, V.P. Operations – coal price data and market information. The coal price

forecasts and market outlook were relied upon as the basis for estimating the economics

of Wolverine Project, and hence Proven and Probable Reserves. This disclaimer

applies primarily to TR Items, 3, 19, and 25.

f) Fausto Taddei, CFO and Corporate Secretary – Certain terms and conditions of coal

storage and sales agreements. This disclaimer applies primarily to TR Item 25.


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g) Paul Brent, Director, Commercial Development – coal and transportation contract

negotiations and pricing. This information was relied upon in developing the economic

model as part of determining delivered coal costs, coal pricing assumptions and the

terms and conditions under which coal is to be transported and sold. This disclaimer

applies primarily to TR Items 3, 19 and 25.


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ITEM 6 PROPERTY DESCRIPTION AND LOCATION

Description and Location

The Property consists of the Perry Creek Area and the EB Area, which are held respectively

under a coal lease and several contiguous coal licenses with a total area of 6,106 hectares.

The Property is located in northeastern British Columbia, Canada approximately 175 km

northeast of the city of Prince George and near the town of Tumbler Ridge, British Columbia. In

Item 26 of this TR, see Figure 1, General Location Map. The Property is within the Peace River

Regional District and the Liard Mining Division and is located on NTS Map Sheets 93-P/03W

and 93-P/03E. The Perry Creek Coal Lease and EB Area coal licenses are held in the name of

Western Coal Corp., a subsidiary of WCC. Locations of the Property Boundary and the Perry

Creek and EB areas are shown in Figure 2, Wolverine Site Map.

Title

The Perry Creek Area contains 3,128 hectares located at latitude 55º 05' 00" N and longitude

121º 15’ 00" W. WCC holds the area under Perry Creek Coal Lease No. 414696 from the

Government of British Columbia, which encompasses the previous contiguous coal license

numbers: 383177, 383718, 383179, 379594, 379595, 379596, 379601, 391199, 391200,

405130, and 410304. Under the Perry Creek Coal Lease, WCC has the rights to use the

surface and develop and produce coal for 30 years.

Currently, a part of the area required for the WCC tailings pond and proposed Wolverine Forest

Service road realignment is outside of WCC’s Property boundary and held by Elk Valley Coal

under a coal license and by BC Rail. WCC has a BC License of Occupation covering the Elk

Valley Coal portion and a letter from Elk Valley Coal stating that it does not object to the area

being used for tailings disposal. For the remaining portion, WCC has had interim usage

agreements from BC Rail and is in final negotiations for a long-term use or leasing agreement.

The EB Area consists of 10 contiguous coal licenses that cover an area of 2,977 hectares. The

Area is located at latitude 55º 06' 00" N and longitude 121º 22’ 30" W. Details of the individual coal

licenses are summarized in Table 6.1, EB Area – Coal License Details. Under the coal licenses,


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WCC has the rights to enter onto the licenses to conduct exploration and related activities for the

terms of the licenses.

Table 6.1 EB AREA – COAL LICENSE DETAILS

Coal License No. Area (ha.) Map Series Acquired Expiry Date 381711 297 93P-03W Oct. 2000 Oct. 2006 381712 297 93P-03W Oct. 2000 Oct. 2006 381713 297 93P-03W Oct. 2000 Oct. 2006 381714 297 93P-03W Oct. 2000 Oct. 2006 381715 297 93P-03E Oct. 2000 Oct. 2006 381716 296 93P-03E Oct. 2000 Oct. 2006 381717 296 93P-03E Oct. 2000 Oct. 2006 379597 300 93P-03W Aug. 2000 Aug. 2006 379598 300 93P-03W Aug. 2000 Aug. 2006 379600 300 93P-03W Aug. 2000 Aug. 2006

Legal Survey of Property

WCC has not indicated that the Property boundary has been surveyed. However, applications

for the lease and other legal documents that include Property descriptions have been accepted

by the government regulatory agencies.

Location

Based on the WCC data provided to Marston, all known mineralized zones, mineral resources,

reserves, mine workings, existing tailings ponds, waste deposits and important natural features

and improvements within and relative to the outside boundaries of the Property are shown in

Item 26 on Figure 2, Wolverine Site Map and Figure 3, Coal Occurrences.

Royalties and Other Encumbrances

The Perry Creek Coal Lease is a 30-year lease of coal mining rights and is subject to the normal

provisions of Crown coal leases in the Province of British Columbia, including specified lease

rentals and coal production royalties. In addition, WCC may be subject to an additional

overriding royalty of 1.0% of revenues on some or all coal sales. By a motion filed on March 23,


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2005 with the Supreme Court of British Columbia, the company is contesting the validity of this

royalty agreement and has requested that the royalty be removed.

The EB coal licenses are subject to rentals and diligence work pursuant to provincial coal

regulations.

Portions of the Perry Creek and EB Areas are covered by petroleum and natural gas (PNG)

tenures. These tenures include both traditional oil and gas targets and coal bed methane

(CBM). Similar to other jurisdictions, British Columbia considers CBM to be natural gas.

Therefore, the BC Ministry of Energy and Mines considers CBM to be Crown property unless

freehold rights can be demonstrated. CBM can therefore be conveyed through provincial

petroleum and natural gas tenures under the Petroleum and Natural Gas Act.

The proposed Gates Formation coal resources identified at Perry Creek and EB are unlikely to

be economic sources of CBM due to their relatively shallow depth. Deeper Gething Formation

coal seams on the Property may have CBM development potential. However, exploration for

and development of CBM requires the agreement of the coal tenure holder (Energy and

Minerals Division Information Letter 99-05). In situations where agreement cannot be reached,

the government would impose a dispute resolution mechanism such as mediation or arbitration.

Environmental Liabilities

WCC is currently developing the Project in the Perry Creek Area subject to a mining permit.

Environmental liability for reclamation and other work to meet permit obligations is significant

and will grow as the Project develops and begins production. Readers should consult the

mining permit and related documents for the significant current and eventual environmental

liabilities to which the Property will be subject. The EB Area is currently inactive, and Marston is

not aware of any significant current environmental liabilities in the EB Area.

Permits

To Marston’s knowledge, WCC has obtained the necessary permits and approvals to develop

and commence production of 1.6 million tonnes per year from the Wolverine Project with mining

to commence initially in the Perry Creek Area. In May 2005 WCC submitted an application to


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amend the EA Certificate and the Mine Permit to allow an increased production rate of 2.4

million tonnes per year. WCC anticipates that the mining permit revision will be issued without

significant problems or delays.

To mine in the EB Area, WCC must first obtain all permits and approvals. Currently, the primary

step to regulatory approval for a mining project in British Columbia includes obtaining an EA

Certificate under the Environmental Assessment Act. This consists of a review that is

coordinated by the EAO and an assessment of completeness of the project baseline study and

environmental impact assessment.

The company must also obtain approval of the Mine Plan and Reclamation Program, also

referred to as a Mine Permit, under the Mines Act, regulated by the Ministry of Energy and

Mines (MEM). Concurrent environmental assessment and permitting is an option under the

British Columbia Environmental Assessment Act. Additional required approvals, along with the

environmental jurisdictions, are listed below. The majority of these approvals are obtained in

conjunction with the Mine Permit.

APPROVALS REQUIRED FOR A MINING OPERATION IN BRITISH COLUMBIA

Environmental Assessment Act – Environmental Assessment (EA) Certificate MEM – permit approving the Mine Plan and Reclamation Program (Mine Permit) MEM Coal Act (coal lease) – Approval to develop and operate a mine on Crown land SRM (LWBC) Water Act (water license) – Authorizing diversion, impoundment and use

of water SRM (LWBC) Water Act (Section 9 Act Approvals) – Authorizing diversion of water SRM (LWBC) Land Act (Crown Land Lease) – Authorizing use of Crown Land for the

plant site and tailings pond (facilities off the Coal Lease) SRM (LWBC) Land Act (Amendment to Crown Land Lease) – Authorizing installation of

drainage control structures MWLAP Environmental Management Act (Effluent Permit – Construction and Operation)

– Authorization to discharge treated mine water from settling ponds and sewage treatment plant effluent

MWLAP Environmental Management Act (Air Permit) – Authorizing air emissions from the project

MWLAP Wildlife Act – Authorizing removal of beaver ponds and lowering water table in tailings pond area

MoF Forestry Act (License to Cut) – Authorization to harvest merchantable timber.______________________________________________________

Note: EAO Environmental Assessment Office MWLAP Ministry of Water, Land and Air Protection MEM Ministry of Energy and Mines MoF Ministry of Forestry. SRM Sustainable Resource Management LWBC Land & Water British Columbia Inc.


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Application for approvals of a mining project in British Columbia can also trigger requirements

under the Canadian Environmental Assessment Act (CEAA), if approvals are required in areas

of federal jurisdiction. Federal agencies have determined that the Wolverine Project did not

trigger requirement for a federal approval and therefore did not require a federal comprehensive

project review. CEAA review for the Project is limited to a review of the explosives storage

facility.


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ITEM 7 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The Property is located in the Inner Foothills of the Canadian Rocky Mountains. The regional

topography is a belt of hills and low mountains dominated by a series of northwest to southeast

elongated ridges. The Perry Creek Area is located at elevations of 830 meters to 1,700 meters

on the northern and eastern slopes of Fortress Mountain (elev. 1,999 meters). The area

topography consists of moderately to steeply sloping ground that is all below the tree line. The

area is well timbered with poplar and minor amounts of birch along the lower slopes, and

lodgepole pine, spruce and fir at higher elevations. The highest point in the EB Area is Mt.

Spieker (elev. 1,935 meters) with moderately to steeply sloping ground that descends to an

elevation of about 1,675 meters. About half of the EB Area is above the tree line with alpine

vegetation including juniper, dwarf pine, moss and occasional grassy meadows. Lower

elevations are densely forested with spruce and pine.

The Property is readily accessible by road and rail. The all-weather, graveled Wolverine Forest

Service Road connects the Property year-round with BC Highway 29 between the towns of

Chetwynd and Tumbler Ridge, which is about 8 km from the Service Road entrance. The

Forest Service Road enters the Property at the southeastern end of the Perry Creek Area and

extends west to the Wolverine Project plant and office site. In Item 26 of this report, see Figure

2, Wolverine Site Mine. The EB Area is 10 km northwest of the Perry Creek Area and is

accessible via the Perry Creek Road, which intersects the Wolverine Forest Road near the

entrance to the Property. A CN Rail line is adjacent to the southern border of the Perry Creek

Area. This line joins CN’s main line at Prince George, B.C. 250 km to the southwest.

The Property is about 13 km from the town of Tumbler Ridge and about 85 km from the town of

Chetwynd by ground transportation via Highway 29 and the Wolverine Forest Service Road.

The area has a continental highland climate featuring short, warm summers and long, cold

winters. Average July and January temperatures reported for Tumbler Ridge are +21ºC and –

5ºC, respectively, although cooler temperatures may be expected in the higher altitudes at Perry

Creek and EB. During January to March, cold spell temperatures will decline to lows in the

range of –30ºC with periods of high winds on ridge tops. Tumbler Ridge averages 334 mm of


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rain and 1.85 meters of snow per year, and snow pack persists from October to June. Mining

operations at Perry Creek and EB are planned for year-round.

WCC advised that it controls surface rights to access and mine the Perry Creek Area under a

valid BC coal lease. WCC also controls surface rights to access and explore the EB Area under

several contiguous BC coal licenses, see TR Item 6 for more detailed information.

Power, water, potential tailings storage areas, potential waste disposal areas, and potential

processing plant sites are or will be available at the Perry Creek Area. WCC plans to extend

power to the site from an existing BC Hydro 230 kV transmission line and substation located

12 km from the Perry Creek Area. The power line extension will be located next to the

Wolverine Forest Service Road. Water will be obtained from several deep wells in the Perry

Creek Area for processing and treated for potable use. Processing plant tailings will be stored

in the Perry Creek Area in an impoundment to be constructed near the plant. Mine waste

disposal will be in dumps constructed during mining and adjacent to the proposed open pits at

Perry Creek and EB. Highway haul trucks will transport coal mined from the EB Area on the

existing graveled Perry Creek Road approximately 17 km to the processing plant at Perry

Creek. Proposed open pits, dumps and infrastructure locations are shown in Item 26, see

Figure 9, Wolverine Project Mine and Infrastructure. The proposed processing plant site, rail

loading facility and other mine infrastructure to be constructed at Perry Creek is shown on

Figure 16, Surface Facilities Map – Perry Creek Area.

Mining personnel are available locally from the towns of Tumbler Ridge and Chetwynd, and

from nearby First Nations bands. Tumbler Ridge was constructed originally to support the now-

closed Bullmoose and Quintette coal mines. Tumbler Ridge has a population of about 2,500 to

3,000 people depending on the season and has infrastructure sufficient for a population of up to

6,000. Most mine support services are also available there. Chetwynd supports an estimated

regional population of 9,000 people.


8-1

ITEM 8 HISTORY

The prior ownership of the Property and ownership changes is as follows. The original coal

licenses for the Perry Creek Area were acquired by Denison Mines Ltd. (Denison) and assigned

to Quintette Coal Ltd., a joint venture company between Denison and an international

consortium of steel companies. Quintette referred to the Perry Creek Area as a part of its

Wolverine North exploration area and conducted exploration programs there during the 1980s.

Quintette developed large open pit coal mines southeast of the Perry Creek Area that operated

from 1983 through 2000. During 1989 – 1990, Quintette’s ownership changed as part of a

significant financial reorganization and subsequently Quintette allowed the coal licenses for the

Perry Creek Area to lapse. WCC acquired the Perry Creek licenses in 2000 and 2001.

The coal licenses for the EB Area were originally acquired in 1970 and 1971 by Brameda

Resources Ltd. (Brameda), a subsidiary of Teck Corporation (Teck). The licenses were part of

a block assembled that would eventually become the Bullmoose Mine. In 1975 the licenses

were optioned to Nichimen Resources Company. At that time, the property was known as East

Bullmoose and consisted of 36 coal licences covering an area of approximately 10,500

hectares. The name of the area was changed to Mt. Spieker in 1977 to avoid confusion with

Teck’s Bullmoose Mine. Ranger Oil Limited (Canada) took over as operator in 1978 and

conducted exploration until 1982. Ranger Oil was unsuccessful in attracting an experienced

mining company as a partner for development of the property, and the coal licences were turned

back to Teck/Brameda in the mid-1980s. The licenses lapsed during 1995 through 1998. WCC

acquired the licenses in 2000.

The type, amount, quantity and results of exploration and/or development work undertaken by

WCC and the previous owners of the Property is summarized in Table 8.1, Summary of

Exploration Activities – Perry Creek Area, 1971 – 2002. During the 1970s, Denison carried out

regional mapping and exploratory core and rotary drilling at its Quintette licenses including the

Perry Creek Area. Eight core holes were drilled at Perry Creek in 1971 and an additional three

holes were drilled in 1974. Denison also excavated two trenches to sample coal outcrops. In

1987 and 1988, Quintette performed an exploration program at Perry Creek that included drilling

and sampling of 11 core holes with a total drilled length of 3,917 meters. Various assessment


8-2

reports were completed on this fieldwork that contain details of the exploration activities, data

collected, geological interpretations, and coal quality parameters.

WCC has conducted extensive exploration and development work in the Perry Creek Area since

the summer of 2000. This work has included reconnaissance mapping, delineation rotary and

core drilling, bulk sampling using large diameter core holes, plus associated activities such as

geophysical logging, coal analyses and washability testing, surveying and access trail

construction and maintenance. To date, WCC has drilled 50 holes with over 4,550 meters of

total drilling length. Each hole was completed using a rotary drilling rig with coring capability,

and cores were recovered from designated coal seams in certain holes.

Table 8.1 SUMMARY OF EXPLORATION ACTIVITIES – PERRY CREEK AREA, 1971 – 2002

Year Owner DrillHoles

Depth (m)

HoleType (Size)

Geophys. Logs Trenches Bulk

SamplesBC EMPR

Assessment Report No.

1971 Denison 8 2,114 8 D (HQ+NQ) d,g,n,c 597

1974 Denison 3 611 3 D (HQ) d,g,n,c 2 (m) 606 1987 Quintette 5 260 5 R d,g,n,c 739

1988 Quintette 6 932 2 D (HQ),4 R d,g,n,c,r 746

2001 WCC 17 2,761 12 R,5 R/C d,g,n,c,r

2002 WCC 20 1,035 16 R, 4 R/C d,g,n,c,r 2 (m)

28 R/C (150 mm)

4.2 t

2003 WCC 3 282 3 R/C d,g,n,c,r 3 R/C

2004 WCC 10 475 10 R/C d,g,n,c,r 2 R/C (Comp.)

Totals 72 8,470 4

Notes: BCEMPR – BC Ministry of Energy, Mines & Petroleum Resources D – Diamond Drill Hole, R – Rotary Drill Hole, R/C – Rotary With Cored Sections, t – sample tonnes T(m) – Trench (mechanized) d,g,n,c,r. – density, gamma ray, neutron, caliper, resistivity


8-3

Geophysical logs were collected from all drill holes to determine strata characteristics and

identify coal zones. In most cases, a suite consisting of density, gamma ray, neutron, caliper,

resistivity and hole deviation logs was obtained. However, in drill holes with poor wall

conditions, logging was carried out through the drill rods and thus the types of geophysical logs

that could be obtained were limited in these holes. WCC also re-logged several holes from

previous programs. Dip meter logs were obtained from seven of the holes drilled in 2001 to

confirm structural geological interpretations.

In 2002 a portal site was excavated at an outcrop of the J Seam in preparation for a proposed

adit and bulk sample. For the purposes of Table 8.1, the portal excavation at the adit site is

indicated as a “trench” because the project was abandoned in favor of large diameter core

sampling, which was carried out in December 2002. For the bulk sampling program, 28 holes

were drilled in clusters of five to 11 holes at four different sites. In total, WCC recovered 270

meters of 150 mm-diameter cores were recovered from 1,009 total meters of drilling. From this

core, 4.2 tonnes of J Seam bulk sample was obtained with core recovery of 99%. Similar

programs were carried out in 2003 and 2004 to collect additional samples from the upper seams

– E2, E3, F and G as well as the J Seam.

Significant exploration work has also been conducted in the EB Area by WCC and the previous

owners. Teck performed preliminary reconnaissance mapping in the area in 1971. Mitsui

Mining Corp., acting on behalf of Nichimen and Brameda, conducted exploration on the property

from 1975 to 1976 and in 1977 on behalf of Nichimen and Ranger Oil. Ranger Oil continued

exploration in the EB Area from 1978 to 1982. WCC conducted a drilling program in the EB

Area in 2001.

The exploration activities to date in the EB Area are summarized in Table 8.2, Summary Of

Exploration Activities – EB Area, 1971-2001 on the next page.


8-4

Table 8.2 SUMMARY OF EXPLORATION ACTIVITIES – EB AREA, 1971 – 2001

Year Owner DrillHoles

Depth (m)

HoleType (Size)

Geophys. Logs Trenches Bulk

SamplesBC EMPR

Assessment Report No.

1975 Nichimen Brameda 3 876 D (NQ) d,g,n,c 2 (m) 552

1976 Nichimen Brameda 3 415 D (NQ) d,g,n,c 2 (m) 553

1977 Nichimen Ranger 9 1,611 D (NQ) d,g,n,c 555

1978 Ranger 18 3,963 D (HQ) d,g,n,c,r 24 (m+h) 3 A 556

1979 Ranger - 557

1980 Ranger 7 1,205 D (HQ) d,g,n,c,r 4 A (60 t) 558

1982 Ranger 5 319 D(HQ+AX) d,g,n,c,r 559

2001 WCC 21 2,244 18 R, 3 R/C d,g,n,c,r

Totals 66 10,633 28 7 (60t)

Notes: BCEMPR – BC Ministry of Energy, Mines & Petroleum Resources D – Diamond Drill Hole, R – Rotary Drill Hole, R/C – Rotary With Cored Sections (m) – Trench (mechanized), (h) – Trench (hand), A – Adit (t = tonnes). d,g,n,c,r. – density, gamma ray, neutron, calliper, resistivity geophysical logs.

In total, 10,633 meters of drilling has been performed in the EB Area. A total of 28 trenches

were excavated by hand, bulldozer and backhoe. Seven adits were constructed in the four

major coal seams identified in the EB Area for a total length of 365 meters. From three of these

adits, bulk samples totalling 60 tonnes of coal were removed for process testing.

Various geological assessment reports have been prepared and submitted to the BC

Environment of Energy, Mines and Petroleum. The main report on the geology and resources

was prepared in 1978. The results of the 1978 program were reportedly used as the basis for a

pre-feasibility mining study. However, this study is not in the public domain.


8-5

WCC’s subsequent exploration in the EB Area was directed towards in-fill drilling and providing

more coal quality data from core and bulk samples.

The results of the exploration work performed to date have been the discovery and delineation

of significant coal resources in the Perry Creek and EB Areas. In Perry Creek, five coal seams

were defined for mining: J, E2, E3, G and F; in EB, the coal resources exist in four coal seams:

A, B, C, and D. In addition, sufficient samples have been collected to determine that a saleable

metallurgical coal product may be produced from these coal resources. These results are

described more fully in other Items in this TR, see Items 3, 9 – 16, 18 and 19.

WCC has is currently developing an open pit mine, processing plant and related infrastructure in

the Perry Creek Area pursuant to a feasibility study described in this TR. As of the date of this

TR, WCC has completed environmental studies and obtained mining permits and significant

areas at Perry Creek have been cleared for the plant, mine facilities and other infrastructure and

the initial mine development areas. Construction has commenced on the plant, mine facilities,

other infrastructure and mining equipment. There was no previous mine development in the

Perry Creek Area or the EB Area.

To the extent known by the author, historical resource and reserve estimates for the Property

are as follows. In 1982, Quintette Coal Ltd. reported 72 Mt of Gates Formation “theoretical coal”

to a depth of 500 meters in its Wolverine North ‘A’ and ‘B’ areas which included Perry Creek.

This estimate is speculative under GSC 88-21 and does not meet the requirements of CIMDS or

NI 43-101. WCC has conducted several mining studies and estimated resources in the Perry

Creek Area as follows.

Date Author Resource Category In Situ Coal (Mt)

December 2000 Pika Geologic Inc. Indicated InferredSpeculative

3.018.913.8

January 2003 Norwest Corp. MeasuredIndicated

31.41.6

October 2003 Perry, J.H., Proc, J., et.al.

MeasuredIndicatedInferred

18.5314.20

1.15


8-6

In the EB Area, Ranger Oil estimated coal resources of 19.3 Mt within its “E.B. 1 Pit” sub-area,

which covers a substantially similar area as the EB Area resources stated in this report. The

Ranger Oil estimate is stated to be coal within an open pit limit of 12 bank cubic meters of waste

per tonne of in situ coal. This estimate is Inferred or Speculative under GSC 88-21 and does

not meet the requirements of CIMDS or NI 43-101. WCC estimated coal resources for the EB

Area in 2003. See Perry, J.H and Proc, J. In the B, C and D seams, WCC estimated 16.6 Mt of

Indicated coal and 1.7 Mt of Inferred coal.

In the October 2003 Report, WCC also states reserves of 17.1 Mt of ROM coal and 8.1 Mt of

ROM coal from open pit mine plans in Perry Creek and EB, respectively. Although the figures

were based on a preliminary feasibility study, the estimates were not categorized as Proven or

Probable and therefore do not meet current CIMDS standards.

To the author’s knowledge, there has been no production from the Property.


9-1

ITEM 9 GEOLOGICAL SETTING

The regional geology of the area is typical of the Peace River Coalfield. Coal occurs within the

Lower Cretaceous Gething and Gates Formations, see Figure 4, Regional Geology. The

Gething Formation is part of the Bullhead Group and is exposed in the EB Area. Regionally, the

primary coal seams of interest are found in the Gates Formation, see Figure 5, Perry Creek

Area Stratigraphic Column, and Figure 6, EB Area Stratigraphic Column.

The Gates Formation sediments were deposited in an alluvial deltaic environment about 145

million years ago. Sedimentation is believed to have occurred from erosion of uplifted areas to

the west along the subsiding shoreline of an ancient lake to the east. Along this northeast-

southwest trending shore, low-lying areas became marshy and over time thick peat bogs

formed. These bogs subsided and were covered by later sedimentation. With pressure and

heat at depth, the peat layers became coal seams. Subsequent uplifting of the region brought

the seams to near surface in with crop lines exposed due to erosion. Gates Formation coals

have been mined extensively in the region. The seams at Perry Creek may be correlated with

seams mined at Quintette Coal to the southeast, and the seams at EB may be correlated with

seams mined at Bullmoose Mine to the northwest.

Similarly to other coalfields in the Rocky Mountain Foothills, the strata in the Perry Creek and

EB Areas were subjected to post-depositional faulting and folding. In the Peace River Coalfield,

this tectonism is generally associated with the mountain building of the Laramide Orogeny. In

general, compressive forces generated by uplifting to the west and acting in a northeast

direction caused repeated thrust faulting and folding generally striking in a northwest-southeast

direction. In the Peace River Coalfield, such thrust faults and folding typically result in coal

deposits with Moderate and Complex geology types. Geology types are as defined in Paper 88-

21 of the Geological Survey of Canada, entitled “A Standardized Coal Resource/Reserve

Reporting System for Canada” (GSC 88-21). On the Property, the Mesa Thrust Fault is the

predominant structural feature and it separates more complex structures that occur west of the

fault and in the EB Area from more moderate structures east of the fault and in the Perry Creek

Area, see Figure 4.


9-2

In the Perry Creek Area, the main coal seams in descending order are the E, F, G and J seams

with a cumulative average coal thickness of nearly 12.5 meters, see Figure 5. At Perry Creek

the geological structure of the open pit resource area is an open, asymmetrical, syncline that

lies between the Wolverine River and Perry Creek valleys. See Figure 7, Perry Creek

Geological Cross Sections. Fold plunge angles are generally gentle and range between 4° to

10° to the northwest and southeast. The dip increases rapidly on the northeastern limb to

approximately 25° to 30°. Across most of the southwest limb, dips are generally less than 15°

but steeper dips are encountered westwards, reaching approximately 25° to 30° towards the

crest of the Perry Creek anticline. The southwest limb of this anticline is interpreted to attain a

dip of up to 45° and is beyond the Perry Creek resource limits. Under GSC 88-21, the geology

type of the Perry Creek Area is Moderate.

In the EB Area, the four main coal seams are the D, C, B and A seams, with the D, C and B

seams of primary interest, see Figure 6, EB Area Stratigraphic Column. These three seams

have a total cumulative thickness of about 11.6 meters. The complex geology of the EB Area is

interpreted to include moderate, westerly-dipping strata within the southwestern and

northeastern portions of the area. Where the dips of these strata flatten, anticlinal and synclinal

axial zones are formed that plunge gently to the southeast. The shallow-dipping portion of the

flexure exhibit rolls with dips that range up to 13º. On the adjacent western and eastern limbs,

dips are interpreted to be 25º to 40º. See Figure 8, EB Geologic Cross Sections. Three major

faults are interpreted across the proposed EB Pit. The northwest-trending, westerly-dipping

faults are projected to have vertical displacements of up to 70 meters to 80 meters at the

southern edge of the proposed pit area. In drill holes, the main faults were indicated by

repeated coal seam strata and anomalous interburden thicknesses. In addition to these major

structures, coal seam thickening indicates that relatively minor faulting may also be present

locally.


10-1

ITEM 10 DEPOSIT TYPES

The mineral deposit type being investigated at the Wolverine Property is bituminous coal that

occurs in consistent seams of mineable thickness in sedimentary rock formations. The coal

seams were deposited in an alluvial deltaic environment and therefore vary somewhat in

thickness and ash content.

The rock formations on the Property are folded and faulted due to post-depositional tectonic

activity. The Perry Creek structure consists of a broad, open fold with a dip of less than 30

degrees and no evidence of significant faulting. The Perry Creek Area is therefore of Moderate

geology type under GSC 88-21. The EB Area is affected by several reverse faults that displace

steeply dipping fold limbs in several places. For this reason, the EB Area geology type is

Complex under GSC 88-21.

The geologic model being applied in the investigation is similar to any bedded sedimentary

deposit model. The coal seams are prevalent and continuous in the Gates Formation of rocks.

The Gates Formation occurs over a relative large region and the seams under investigation

were mined at large open pit mines nearby.

Surface mapping and aerial photography are used to define regional and local structures. Coal

seam outcrops and surface geology are also surveyed and mapped. Drill holes and

geophysical logging are used to verify and measure the thickness and characteristics of the

seams at depth. Core samples are primarily used to determine the coal quality of the deposits;

however, historical exploration work has also included bulk samples from adits.

Future development work at Perry Creek and EB will include additional drilling and sampling in

support of detailed mine planning and scheduling.

REVISED TECHNICAL REPORT ON THE WOLVERINE MINE PROJECT FOR WESTERN CANADIAN COAL CORP. MARCH 2006

11-1

ITEM 11 MINERALIZATION

The mineralized zones encountered on the Property are low- to medium-volatile bituminous coal

seams that with standard processing to remove impurities will yield coking coal suitable for use

in steel making.

In the Perry Creek Area, the mineralized zone that is the subject of this technical report occurs

within an area measuring approximately 3 km wide and 3.5 km along strike. Within this area,

four main coal seams have been identified as E Seam, F Seam, G Seam, and J Seam in

descending stratigraphic order. The seams are continuous over the area

The E Seam and J Seam are divided into multiple coal plies that are separated by rock partings,

see Figure 5. The E Seam contains up to seven thin coal and coaly-shale layers over a total

thickness of between six meters to seven meters. The E2 and E3 seam plies are of economic

significance and each ply may consist of one coal layer or several layers separated by thin rock

bands. The J Seam comprises the main coal resource in Perry Creek and consists of three

plies J1, J2 and J3. The ranges in thickness for each of these seams or plies are shown below

in Table 11.1.

Table 11.1 SEAM THICKNESS SUMMARY - PERRY CREEK AREA

THICKNESS (m) SEAM MINIMUM MAXIMUME2 0.2 2.0 E3 0.4 1.9 F 0.5 2.3 G 0.4 1.1 J1 0.7 2.1

J1/21 0.7 4.0 J2 1.3 7.8 J3 1.7 2.8

Note: 1) J1/2 data applies only to the southern portion of the deposit where the rock band separating J1 from J2 is less than 0.5 meters thick.

REVISED TECHNICAL REPORT ON THE WOLVERINE MINE PROJECT FOR WESTERN CANADIAN COAL CORP. MARCH 2006

11-2

In the EB Area, the B, C, and D seams are of primary interest. A relatively thin ply named the

C-2 occurs between the B and C Seams and the bottom A Seam have also been identified in

the Area but are not included as resources in this technical report. The primary seams are

continuous over the area except where displaced by three identified thrust faults, see Figure 8.

Table 11.2 shows the thickness range of each seam in the EB Area.

Table 11.2 SEAM THICKNESS SUMMARY - EB AREA

THICKNESS (m)SEAM

MINIMUM MAXIMUMD 2.9 4.1 C 3.1 5.3 B 3.2 5.6

The surrounding rock types are sedimentary units of the Gates Formation that are typically

sandstone, siltstone and shale. In the Perry Creek Area, conglomerate or conglomeratic beds

also occur, notably the Fortress Mountain unit in the overburden above the E 2 Seam, the

Wolverine Unit directly below the F Seam and a thick conglomerate channel separating the J2

and J3 seams over a portion of the area. The Fortress Mountain conglomeratic sandstone and

the J2/J3 conglomerate have been identified as potential acid generating materials and will

require suitable disposal in waste dumps surrounding basic rocks.

The Gates Formation coal deposits are geologically controlled by the size of the depositional

basin, the length, type and activity of the various depositional environments that formed the

Gates Formation, and post-depositional events such as uplift and compression, and erosion.

The coal seams are exposed at crop lines in both areas due to erosion, but are relatively

continuous over the exploration areas. Discontinuities are due primarily to geologic structures

such as faulting or changes in depositional environment that affected peat formation.

Environment of deposition also affects the in situ characteristics of the coal and is directly

related to the amount and composition of partings, which are rock bands within the seams. For

most seams on the Property, partings must be removed from the mined coal through processing

to produce a marketable product.


12-1

ITEM 12 EXPLORATION

WCC has conducted exploration on the Wolverine Area properties since the summer of 2000.

This work includes reconnaissance mapping, delineation rotary and core drilling, bulk sampling

using large diameter core plus associated activities such as geophysical logging, coal analysis

and washability testing, surveying and access trail construction and maintenance.

In the Perry Creek Area, most of the initial work by WCC was directed towards the delineation of

the J1, J2 and J3 Plies of J Seam within the western, shallow-dipping limb of the Perry Creek

syncline. This part of the syncline has long been identified as having underground mining

potential and, more recently, has been recognized as having significant open pit mining

potential. Later field work in the Perry Creek Area was performed to verify historical work and

obtain additional information on the E, F and G seams above the J Seam. WCC’s field work in

the Perry Creek Area is summarized in Table 12.1.

Table 12.1 SUMMARY OF EXPLORATION ACTIVITIES – PERRY CREEK PROPERTY, 2001 – 2004

Year DrillHoles

Depth(m)

Hole Type (Size)

Geophysical Logs Trench Bulk

Sample2001 17 2,761 12R/5RC d, g, n, c, r 2002 20 1,035 16R/4RC d, g, n, c, r 1T(m) 28R/C(6”) 4.2 t2003 4 179 4RC 4R/C(4”) 1t2004 27 1,149 27RC 18R/C(6”)

9R/C(9”) 4.5tTotal 68 5,124 1T 9.7 t

D – Diamond Drill Hole, R – Rotary Drill Hole (R/C - With Cored Sections, t = tonnes) T(m) – Trench (mechanized) d, g, n, c, r. – density, gamma ray, neutron, caliper, resistivity geophysical logs

Geophysical logs were prepared for each of the drill holes. In most instances, a suite consisting

of density, gamma ray, neutron, caliper, resistivity and hole deviation logs were obtained.

Several holes exhibited poor wall conditions. For these holes, logging was carried out through

the drill rods; this limited the types of geophysical logs that could be obtained. Several holes

from previous programs were also re-logged. Dip-meter logs were obtained from seven of the

holes drilled in 2001 to confirm structural geological interpretations.


12-2

Examination of database printouts, geophysical logs and a selection of descriptive core logs

confirm consistency in coal seam identification, correlation and thickness across the surface

resource area. The stratigraphy encountered at Perry Creek is consistent across the deposit,

with the exception of the conglomerate occurring between the J1 and J2 coal plies.

In the EB Area, in 2001 WCC completed a total of 2,244 meters of drilling and sampling. The

primary objective of this program was to improve confidence in the EB Area geology and coal

resource and to better evaluate the prospective strip ratio of a proposed open pit. WCC’s field

activities are summarized in Table 12.2

Table 12.2 SUMMARY OF EXPLORATION ACTIVITIES – EB PROPERTY, 2000 – 2002

YearDrill

HolesDepth

(m)Hole Type

(Size)Geophysical

Logs2001 21 2,244 18R/3R/C d, g, n, c, r

R – Rotary Drill Hole (R/C - With Cored Sections) d, g, n, c, r – density, gamma ray, neutron, caliper, resistivity geophysical logs.

Drilling was completed using a rotary drilling rig. Coring through designated coal seams was

carried out in three holes in the same manner as described above for Perry Creek. Cored

intervals typically ranged between 1 and 10 meters in length.

As result of this work, WCC verified the historical information indicating the existence of

significant coal resources in both areas and obtained additional information on the structure and

quality of the resources.

Based on the historical and WCC information significant coal resources were interpreted in the

Perry Creek and EB Areas.

WCC managed the exploration programs in both areas with drilling performed using local drilling

contractors familiar with drilling in western Canada coal fields.


12-3

Although Marston personnel did not observe WCC’s exploration work, the programs appear to

have been carried out in a professional manner and to reasonable standards appropriate for

delineation of coal resources. Marston’s Qualified Person visited the Perry Creek and EB Areas

and observed drill hole sites and other evidence of the historical and WCC exploration activities

at both areas. Marston discussed with WCC personnel WCC’s programs and field procedures

and found them to be reasonable.

Marston reviewed the base data collected from the WCC and earlier programs and the

associated geological reports. Based on the evidence available, Marston believes that the data

is reliable and adequate for the purposes of estimating resources and reserves. Seam

thickness measurements are based on geophysical logs and seam core samples; coal quality

measurements are based on core samples shipped to reputable laboratories experienced and

familiar with coal quality testing and standards. For these reasons, Marston believes that the

seam thickness and coal quality information provided and reviewed is reliable and certain.


13-1

ITEM 13 DRILLING

As described in Item 8, numerous drilling programs occurred on the Property during the 1970s

and 1980s. More recently, WCC drilled the Perry Creek and EB Areas after WCC acquired the

Property in late 2000.

Most of the drilling performed to date at the Property consisted of rotary diamond drilling with

core samples collected for the entire length of the hole or of selected seams. Some Quintette

holes were rotary drill holes without coring. In all cases, the drill holes were logged using

geophysical (density, gamma ray, neutron, caliper, resistivity) tools to obtain reliable seam

thickness measurements and strata characteristics. Core angles were measured of rock and

coal strata to obtain true thickness measurements of the seams. All core samples were sent to

independent laboratories for testing. In WCC’s 2003 and 2004 programs, large diameter core

samples were taken of the seams in Perry Creek from numerous holes drilled in clusters to

obtain bulk samples for process testing.

The extent of the drilling at the Property is shown on Figure 3, which shows all drill holes that

intersected coal. Drill holes with no coal are not shown. Drill hole density is highest in relatively

shallow areas of the Property that contain coal resources. Drill hole locations for the coal

resources are shown in Figure 12, Perry Creek Area Measured and Indicated Resources and

Figure 13, EB Area Indicated Resources. See also Figure 7, Perry Creek Geological Cross

Sections and Figure 8, EB Geological Cross Sections that show drill hole locations in section

and through the major coal seams of interest.

In summary, the drilling programs at the Property have delineated significant coal resources

contained in several seams. Based on the drilling, the coal seam true thicknesses are as

follows.

Table 13.1 SEAM THICKNESS SUMMARY – WOLVERINE PROJECT

TRUE THICKNESS (m) SEAM MINIMUM MAXIMUM

Perry Creek Area

E2 0.2 2.0


13-2

Table 13.1 (cont.) SEAM THICKNESS SUMMARY – WOLVERINE PROJECT

TRUE THICKNESS (m) SEAM MINIMUM MAXIMUM

Perry Creek Area

E3 0.4 1.9 F 0.5 2.3 G 0.4 1.1 J1 0.7 2.1

J1/21 0.7 4.0 J2 1.3 7.8 J3 1.7 2.8

EB Area

D 2.9 4.1 C 3.1 5.3 B 3.2 5.6

Note: 1) J1/2 data applies only to the southern portion of the deposit where the rock band separating J1 from J2 is less than 0.5 meters thick.

At Perry Creek, the Gates Formation rocks plunge to the southeast at about 4 degrees to 10

degrees as part of the Perry Creek Syncline. On the predominant southwest limb of the Perry

Creek Syncline, the coal seams dip at about 15 degrees and at about 30 degrees on the

northeast limb. In the EB Area, the Gates Formation rocks plunge relatively gently to the west.

Seam dips vary up to 13 degrees in the main area of the resource to steeper dips of 25 degrees

to 40 degrees on the limbs of the structure and between interpreted reverse faults.


14-1

ITEM 14 SAMPLING METHOD AND APPROACH

Sampling at the property has consisted primarily of core sampling from rotary diamond drill

holes. In nearly all drill holes, core samples were taken from the seams intersected, and in

some holes samples were taken of the surrounding rock that may form dilution during mining.

Bulk samples were collected from large diameter core holes clustered near each other. In the

EB Area, Ranger Oil also completed several adits into exposed coal seams and collected bulk

samples of each seam. Last, during field mapping, trenches were excavated on several coal

seam outcrops and channel samples were cut from the exposed seams.

The details of location, number, type, and nature of samples collected are shown on Table 14.1

for the Perry Creek Area and Tables 14.2 for the EB Area. In the Perry Creek Area, drill holes

for resources are generally spaced on section lines about 400 to 600 m apart with a typical

spacing of about 150 m to 200 m along each section line. Drill holes are more clustered along

crop lines where bulk samples were collected using large diameter core holes. In Item 26 of this

report, see Figure 12, Measured and Indicated Resources for drill hole locations in the Perry

Creek Area. In the EB Area, drill holes were located along section lines that were generally 175

m to 200 m apart with drill holes spaced 125 m to 325 m apart on section. Each section has at

least 3 and typically 4 or more drill holes. See Figure 13, EB Area Indicated Resource Area for

EB Area drill hole locations.

Because samples are prepared at independent laboratories from full core samples, core

recovery of less than 100% could materially impact the reliability of the results. As well,

selective sampling that omits or removes inseparable rock partings could also materially impact

the reliability of the results. In both cases, sample coal quality results could be biased.

Marston was not present during the sampling at the Property. However, based on a review of

the data and reports and discussions with WCC personnel, it appears from the information

provided that core recovery was reasonable and that sampling was performed by experienced

geologists following standard industry practice. For this reason, Marston believes that the

samples were representative and that sample bias is within laboratory and industry standards

for coal quality tests.


14-2

In general, samples were collected from nearly all coal seams identified in cores of 0.5 m and

greater. Within seams, sample intervals varied according to coal and non-coal plies. As well, in

some drill holes, samples were taken of rock above and below the coal seams to determine the

quality of potential out of seam dilution that would occur during mining. Bulk samples were full

seam samples including all coal and non-coal plies that would be mined. In general, the coal

seams at the Property are all of similar rank; i.e., low to medium volatile bituminous coal, but the

seams have significantly different ash contents and different parting intervals with high ash

content that must be mined with the coal. Typically, if sampled separately, these non-

removeable partings are included in sample composites for the purposes of estimating

resources and resource quality.

Lists of individual samples and composite bulk samples are shown on Table 14.3 for the Perry

creek Area and Table 14.4 for the EB Area.

Hole NAD 83 Northing NAD 83 Easting Elevation(m, amsl) Length (m) Hole Type

BS2002-1 6,105,313.2 612,043.7 952.4 38.9 6" COREBS2002-10 6,105,318.5 612,046.5 952.0 37.9 6" COREBS2002-11 6,105,319.7 612,047.8 951.9 38.2 6" COREBS2002-2 6,105,314.7 612,044.9 952.3 38.7 6" COREBS2002-3 6,105,315.8 612,046.0 952.2 38.4 6" COREBS2002-4 6,105,316.8 612,047.2 952.2 38.0 6" COREBS2002-5 6,105,318.5 612,048.5 951.9 38.0 6" COREBS2002-6 6,105,320.1 612,049.4 951.8 37.8 6" COREBS2002-7 6,105,315.3 612,041.9 952.6 38.2 6" COREBS2002-8 6,105,316.0 612,043.7 952.3 38.1 6" COREBS2002-9 6,105,317.3 612,044.8 952.1 38.5 6" COREBS2002-12 6,105,609.7 612,277.4 929.9 37.6 6" COREBS2002-13 6,105,604.1 612,273.4 929.9 36.4 6" COREBS2002-14 6,105,602.6 612,272.6 929.8 36.1 6" COREBS2002-15 6,105,600.7 612,271.8 929.8 36.0 6" COREBS2002-16 6,105,599.0 612,270.8 929.7 35.9 6" COREBS2002-17 6,105,597.3 612,269.7 929.6 35.9 6" COREBS2002-18 6,105,595.5 612,268.9 929.7 35.7 6" COREBS2002-19 6,105,551.4 612,231.7 934.7 35.7 6" COREBS2002-20 6,105,550.0 612,230.8 934.7 35.4 6" COREBS2002-21 6,105,548.3 612,229.9 934.5 35.3 6" COREBS2002-22 6,105,546.7 612,229.4 934.4 35.2 6" COREBS2002-23 6,105,544.5 612,228.2 934.4 34.9 6" COREBS2002-24 6,105,101.6 611,805.7 987.7 30.9 6" COREBS2002-25 6,105,104.0 611,807.4 987.5 31.5 6" COREBS2002-26 6,105,105.6 611,808.5 987.4 31.4 6" COREBS2002-27 6,105,106.9 611,809.8 987.2 31.5 6" COREBS2002-28 6,105,108.1 611,811.0 987.2 32.4 6" COREPRH01-10 6,105,044.6 611,244.1 1,169.1 124.0 ROTARYPRH01-11 6,105,697.0 611,992.3 979.3 104.0 ROTARYPRH01-12 6,105,618.8 611,787.1 1,015.1 116.6 ROTARYPRH01-13 6,105,507.6 611,185.3 1,165.4 159.4 ROTARYPRH01-14 6,106,550.1 611,276.5 1,117.5 188.9 ROTARYPRH01-15 6,105,374.0 610,877.3 1,270.2 190.0 ROTARY

PRH01-16C 6,106,385.6 611,145.7 1,121.3 209.0 CORE HQPRH01-17C 6,105,338.9 612,073.8 945.0 33.2 CORE HQPRH01-1C 6,105,706.7 611,307.8 1,126.3 162.5 CORE HQPRH01-2 6,106,005.5 611,583.3 1,063.5 196.3 ROTARY

PRH01-3C 6,105,549.4 612,268.4 925.7 272.1 CORE HQPRH01-4C 6,106,435.6 611,906.7 1,101.7 104.6 CORE HQPRH01-5 6,106,200.1 611,714.3 1,037.0 163.7 ROTARYPRH01-6 6,105,910.4 610,605.7 1,297.6 194.3 ROTARYPRH01-7 6,106,046.9 610,809.7 1,227.6 209.1 ROTARYPRH01-8 6,106,241.9 610,974.3 1,172.7 203.4 ROTARYPRH01-9 6,105,367.7 611,603.3 1,066.3 130.2 ROTARY

PRH02-01 6,105,465.2 612,255.4 920.9 16.2 ROTARYPRH02-02 6,105,451.0 612,273.9 919.0 13.1 ROTARYPRH02-03 6,105,274.5 612,150.0 923.7 10.4 ROTARYPRH02-04 6,105,311.9 612,113.6 928.5 15.9 ROTARYPRH02-05 6,105,586.6 612,419.4 912.1 19.2 ROTARYPRH02-06 6,105,553.6 612,446.6 910.6 16.1 ROTARYPRH02-07 6,105,629.6 612,363.2 917.5 31.4 ROTARY

PRH02-08C 6,105,477.4 612,228.9 927.2 24.4 COREPRH02-09 6,106,645.5 611,589.7 1,099.0 71.3 ROTARY

PRH02-10C 6,106,719.7 611,629.3 1,089.5 62.8 ROTARYPRH02-11 6,104,589.1 610,515.5 1,375.2 118.8 ROTARYPRH02-12 6,104,684.5 610,586.3 1,366.6 99.9 ROTARYPRH02-13 6,104,772.6 610,693.8 1,326.7 114.0 ROTARYPRH02-14 6,104,892.9 610,805.7 1,306.9 125.6 ROTARYPRH02-15 6,104,656.4 610,931.3 1,287.6 56.8 ROTARYPRH02-16 6,104,528.7 610,934.6 1,289.6 51.8 ROTARYPRH02-17 6,104,429.8 610,893.3 1,296.7 71.0 ROTARY

PRH02-18C 6,104,655.5 610,932.3 1,287.1 48.8 ROTARYPRH02-19 6,106,553.4 611,998.9 1,098.6 48.5 ROTARY

PRH02-20C 6,106,550.6 611,976.9 1,101.0 19.0 COREQPD88001 6,106,274.3 611,780.4 1,071.4 171.0 COREQPD88002 6,105,857.5 611,465.3 1,099.5 194.1 COREQPR87001 6,105,420.4 612,301.2 918.6 73.5 ROTARYQPR87002 6,105,188.7 611,953.5 954.5 60.5 ROTARYQPR87003 6,105,337.1 612,068.9 945.0 44.4 ROTARYQPR87004 6,105,483.0 612,211.1 930.3 37.9 ROTARY

REVISED TECHNICAL REPORT ON THE WOLVERINE PROJECT FOR WESTERN CANADIAN COAL CORP.MARCH 2006

PERRY CREEK AREA DRILL HOLE LOCATIONSTABLE 14.1

1 of 2


PERRY CREEK AREA DRILL HOLE LOCATIONSTABLE 14.1

QPR87005 6,105,655.3 612,326.4 923.5 43.3 ROTARYQPR88001 6,106,622.4 611,047.2 1,135.1 181.8 ROTARYQPR88002 6,106,511.4 611,452.6 1,101.5 171.3 ROTARYQPR88003 6,106,057.5 612,106.1 1,055.3 137.1 ROTARYQPR88004 6,106,741.1 611,401.0 1,092.3 70.8 ROTARYQWD7115 6,106,232.4 610,309.1 1,269.6 444.5 COREQWD7118 6,106,986.1 610,258.9 1,181.5 175.9 COREQWD7119 6,105,793.5 610,943.9 1,212.5 197.2 COREQWD7112 6,105,138.9 612,526.5 872.6 308.4 COREQWD7117 6,106,946.0 609,529.7 1,286.4 397.0 COREQWD7120 6,107,334.7 609,985.0 1,206.3 191.1 COREQWD7121 6,107,326.7 609,198.6 1,219.2 169.8 COREQWD7401 6,107,822.8 612,619.4 1,131.0 235.3 COREQWD7402 6,103,426.7 611,238.6 982.0 124.0 COREQWD7403 6,103,237.5 611,873.1 858.0 242.6 CORE

WDH1 6,104,225.2 611,398.2 953.5 230.0 COREBS2003-1 6,106,185.8 611,896.5 1,064.9 55.4 6" COREBS2003-6 6,106,185.8 611,896.5 1,064.9 36.0 6" CORE

PCBS2004-1 to 27 6,105,541.0 612,218.0 N/A 10 holes 9" CORE

2 of 2

Hole NAD 83 Northing NAD 83 Easting Elevation

(m, amsl) Azimuth Dip Length (m) Hole Type

ADIT-A1 6,107,514.8 601,871.0 1,608.0 166 0 63.0 ADITADIT-B1 6,107,730.8 602,254.0 1,625.5 316 0 74.5 ADITADIT-B3 6,107,537.8 601,816.1 1,624.7 0 0 26.0 ADITADIT-C1 6,107,766.2 602,122.1 1,665.9 345 0 63.0 ADITADIT-C2 6,107,596.8 601,816.1 1,664.7 338 0 32.0 ADITADIT-D1 6,107,678.3 601,775.6 1,689.8 345 0 34.0 ADITEB(MS)-1 6,108,224.1 601,744.7 1,767.7 0 -90 508.4 COREEB(MS)-13 6,107,711.1 601,186.2 1,686.5 0 -90 276.5 COREEB(MS)-5 6,106,669.6 601,566.4 1,534.5 0 -90 142.1 CORE NQEB(MS)-6 6,106,473.6 601,943.3 1,502.6 0 -90 157.3 CORE NQEB(MS)-9 6,107,988.4 602,113.2 1,708.9 0 -90 255.4 CORE

EB45 6,108,460.8 601,787.0 1,726.1 83 -89 100.9 ROTARYEB46 6,108,593.0 601,931.8 1,676.0 134 -89 52.6 ROTARYEB47 6,108,528.7 601,853.6 1,706.8 77 -89 40.5 ROTARYEB48 6,108,536.5 601,560.8 1,737.3 354 -90 125.9 ROTARYEB49 6,108,373.3 602,140.6 1,681.4 1 -89 31.3 ROTARYEB50 6,108,084.2 602,222.0 1,676.1 64 -88 65.1 ROTARYEB51 6,107,798.8 602,330.6 1,647.1 272 -88 43.1 ROTARYEB52 6,107,776.4 601,930.1 1,699.2 356 -88 98.3 ROTARYEB53 6,108,109.1 601,854.8 1,763.4 319 -89 147.5 ROTARYEB54 6,108,361.8 601,693.5 1,758.1 108 -90 130.9 ROTARYEB55 6,107,697.3 601,446.4 1,699.5 46 -88 153.5 ROTARYEB56 6,107,399.0 601,744.1 1,588.1 0 -90 9.0 ROTARYEB57 6,107,247.5 601,743.5 1,549.8 0 -90 15.0 ROTARY

EB58C 6,107,335.9 601,442.3 1,581.6 298 -90 132.9 COREEB59C 6,107,968.0 601,704.1 1,770.8 321 -90 176.3 COREEB60 6,106,967.8 601,566.1 1,550.9 108 -90 130.9 ROTARYEB61 6,106,913.2 601,751.7 1,530.7 359.8 -85 99.2 ROTARYEB62 6,108,172.9 601,507.3 1,811.5 169 -89 227.1 ROTARY

EB63C 6,108,266.8 601,633.6 1,778.5 315 -89 161.0 COREEB64 6,107,457.8 601,646.4 1,615.9 208 -89 105.3 ROTARYEB65 6,107,538.9 601,300.8 1,627.6 118 -88 197.9 ROTARYMS-16 6,107,675.8 600,645.3 1,689.9 0 -90 328.0 CORE NQMS-17 6,107,842.4 601,554.9 1,747.1 0 -90 161.0 CORE NQMS-18 6,108,036.6 601,365.6 1,827.4 0 -90 246.0 CORE NQMS-19 6,108,480.1 601,508.1 1,751.9 0 -90 161.0 CORE NQMS-21 6,107,710.3 601,693.8 1,702.3 0 -90 107.0 CORE NQMS-22 6,108,445.8 600,692.2 1,875.8 0 -90 430.0 CORE NQ

MS-25A 6,108,181.5 600,992.4 1,857.6 0 -90 386.0 CORE NQMS-27 6,108,230.3 600,289.4 1,806.7 0 -90 416.0 CORE NQMS-34 6,107,838.8 602,077.5 1,701.6 0 -90 103.1 CORE HQMS-35 6,107,222.2 601,565.9 1,560.6 0 -90 120.5 CORE HQMS-36 6,107,258.0 601,640.0 1,560.3 0 -90 160.3 CORE HQMS-37 6,108,239.7 602,059.1 1,716.1 0 -90 158.8 CORE HQMS-38 6,107,019.2 601,476.1 1,558.5 0 -90 137.9 CORE HQMS-40 6,107,652.5 601,803.9 1,679.3 0 -90 74.8 CORE HQ

ADIT-B2 6,109,402.7 600,151.1 1,731.7 150 0 42.0 ADITEB(MS)-10 6,109,798.9 600,819.9 1,675.6 0 -90 77.4 COREEB(MS)-11 6,110,500.5 601,456.9 1,760.7 0 -90 182.9 COREEB(MS)-12 6,111,272.8 601,741.4 1,722.4 0 -90 177.7 COREEB(MS)-14 6,107,402.2 602,764.1 1,462.1 0 -90 151.5 COREEB(MS)-15 6,109,567.4 603,218.5 1,821.9 0 -90 101.2 COREEB(MS)-2 6,107,417.5 599,496.5 1,553.5 0 -90 200.6 COREEB(MS)-3 6,107,393.0 598,746.4 1,359.7 0 -90 167.0 COREEB(MS)-4 6,107,025.6 603,178.0 1,443.7 0 -90 115.2 CORE NQEB(MS)-7 6,109,681.0 602,591.5 1,807.1 0 -90 276.1 COREEB(MS)-8 6,109,478.0 601,538.3 1,722.3 0 -90 112.2 COREMS-20A 6,110,208.2 601,873.4 1,904.8 0 -90 321.0 CORE NQMS-23 6,110,388.6 602,271.8 1,941.7 0 -90 70.0 CORE NQMS-24 6,110,196.6 602,523.4 1,944.9 0 -90 57.0 CORE NQMS-26 6,110,100.0 603,241.3 1,929.2 0 -90 49.0 CORE NQMS-28 6,109,645.8 598,925.2 1,750.1 0 -90 225.0 CORE NQMS-29 6,108,757.2 599,011.0 1,766.5 0 -90 310.0 CORE NQMS-30 6,109,390.2 598,443.2 1,560.8 0 -90 138.0 CORE NQMS-31 6,109,277.6 598,481.3 1,583.1 0 -90 187.5 CORE NQMS-32 6,109,796.0 598,762.3 1,666.0 0 -90 118.0 CORE NQMS-33 6,109,859.9 599,266.8 1,793.2 0 -90 252.0 CORE NQMS-39 6,108,891.9 605,087.0 1,831.2 0 -90 449.8 CORE HQMS-41 6,109,900.7 597,341.8 1,152.0 0 -90 37.7 CORE - AXTMS-42 6,109,334.5 597,238.7 1,181.0 0 -90 31.6 CORE - AXTMS-43 6,108,820.7 597,931.0 1,260.0 0 -90 79.0 CORE - HQMS-44 6,108,580.7 597,669.5 1,222.0 0 -90 87.5 CORE - HQMS-45 6,108,974.5 597,592.5 1,207.0 0 -90 83.6 CORE


EB AREA DRILL HOLE LOCATIONSTABLE 14.2

Sample Hole Seam Ash(%)

Vol.Matter

(%)

FreeCarbon

(%)

Moist.(%)

Sulfur(%)

Heat(kcal/kg) FSI HGI Specific

Gravity

C04-E2-1 BS2003-1 E2 37.2 16.9 45.4 0.62 0.58 3.0PC04-E2-a PCBS2004-23C E2 40.8 17.2 41.8 0.25 2.5

3001 QPD88001 E2 58.13002 QPD88001 E2 19.2C-104 QPD88002 E2 27.3 21.2 50.9 0.63 0.36 6.5

C04-E3-1 BS2003-1 E3 36.1 19.6 43.8 0.52 0.87 4.5PC04-E3-a PCBS2004-23C E3 48.8 16.1 34.9 0.27 6.0

3003 QPD88001 E3 19.3C-105 QPD88002 E3 44.1 16.6 38.4 0.89 0.49 3.5

C04-F-1 BS2003-1 F 22.6 21.5 55.1 0.72 0.61 1.0PC04-F-a PCBS2004-23C F 27.6 22.7 49.4 0.28 7.5

3004 QPD88001 F 18.3C-106 QPD88002 F 31.9 21.3 45.9 0.99 0.66 6.5

Comp. 15-1 QWD7115 F 32.1 22.3 45.2 0.43 0.69 5,493 5.5Comp. 17-1 QWD7117 F 24.1 23.1 52.6 0.28 1.05 6,194 4.5Comp. 18-1 QWD7118 F 32.8 21.8 45.0 0.4 0.51 5,577 5.0Comp. No. 1 QWD7119 F 19.4 24.9 54.9 0.84 0.52 7,623 6.5Comp. 20-1 QWD7120 F 42.5 18.5 38.6 0.46 0.74 4,704 4.0

C04-G-1 BS2003-6 G 10.2 23.6 65.8 0.46 1.11 8.5PC04-G-a PCBS2004-3C G 14.5 24.0 61.3 0.18 9.0

3005 QPD88001 G 8.43015 QPD88002 G 10.6Bulk BS2002-28 J 11.2 22.3 65.8 0.74 7.5

02452 PRH01-17C J1 12.9 21.1 65.7 0.31 0.53 5.08751 PRH02-08C J1 13.6 20.8 65.3 0.32 0.53 3.5C 999 PRH02-18C J1 16.3 21.5 61.6 0.55 0.31 1.41

C2003-1 PRH2003-1C J1 11.5 23.6 64.4 0.48 0.45 6.5 86 1.36C-101 QPD88001 J1 12.6 24.5 62.2 0.78 0.45 7.5C-107 QPD88002 J1 14.4 21.5 63.4 0.74 0.46 7.0 76.5

Comp. 15-2 QWD7115 J1 18.1 23.5 57.5 0.93 0.35 7,050 5.5Comp. No. 2 QWD7119 J1 23.0 19.9 56.4 0.72 0.3 6,327 5.0C04-J1/J2-1 BS2003-6 J1/J2 11.0 23.7 64.9 0.43 0.94 7.0

PC04-J1/J2-a PCBS2004-7C J1/J2 13.0 23.4 63.5 0.13 7.0BC2002-A BS2002-1 J1/J2 11.8 22.9 65.0 0.22 0.48 8.0C2002-1 BS2002-14 J1/J2 13.4 22.2 64.0 0.37 0.54 7.0

J1/J2 BS2002-2 J1/J2 9.4 23.4 67.0 0.21 8.0C2002-3 BS2002-21 J1/J2 14.0 22.8 62.9 0.39 0.52 7.0C2002-5 BS2002-26 J1/J2 12.6 21.8 65.2 0.42 0.42 7.0

J1/2 PRH01-3C J1/J2 11.3 22.2 66.1 0.4 0.48 7.0


PERRY CREEK AREA DRILL HOLE QUALITY DATA (air dried basis)TABLE 14.3

Page 1 of 4


Vol.Matter

(%)

FreeCarbon

(%)

Moist.(%)

Sulfur(%)


Gravity



8840 PRH02-01 J1/J2 37.0 1.41 1.58841 PRH02-01 J1/J2 14.7 0.49 7.08842 PRH02-01 J1/J2 12.7 0.43 5.08843 PRH02-01 J1/J2 10.8 0.45 5.08844 PRH02-01 J1/J2 17.1 0.44 7.58845 PRH02-01 J1/J2 6.4 0.4 8.08846 PRH02-01 J1/J2 37.0 0.43 6.58834 PRH02-02 J1/J2 6.8 1.54 3.58835 PRH02-02 J1/J2 9.6 1.53 2.08836 PRH02-02 J1/J2 81.1 1.47 1.08801 PRH02-04 J1/J2 13.3 1.58 1.08802 PRH02-04 J1/J2 8.5 1.38 3.08803 PRH02-04 J1/J2 8.0 1.49 3.58804 PRH02-04 J1/J2 7.5 1.39 1.58805 PRH02-04 J1/J2 6.8 1.38 8.58806 PRH02-04 J1/J2 22.1 1.34 7.58807 PRH02-04 J1/J2 5.3 1.36 7.08808 PRH02-04 J1/J2 17.6 1.33 8.08812 PRH02-05 J1/J2 14.0 1.49 4.58813 PRH02-05 J1/J2 16.0 0.49 2.08814 PRH02-05 J1/J2 9.6 0.51 8.58815 PRH02-05 J1/J2 6.8 0.53 7.08816 PRH02-05 J1/J2 67.8 0.54 1.08821 PRH02-07 J1/J2 11.4 0.39 7.08822 PRH02-07 J1/J2 60.4 1.54 1.08823 PRH02-07 J1/J2 9.6 1.36 5.08824 PRH02-07 J1/J2 5.6 1.31 7.58825 PRH02-07 J1/J2 4.0 1.4 5.58826 PRH02-07 J1/J2 81.3 1.41 1.0

02453 PRH01-17C J1FW 75.2 11.7 12.4 0.6 0.1704129 PRH02-18C J1FW 82.1 7.8 9.6 0.47 0.04 2.2616951 PRH01-3C J1HW 34.2 14.9 50.4 0.45 7.6702437 PRH01-16C J2 9.8 25.5 64.3 0.48 0.42 6.502454 PRH01-17C J2 17.7 20.3 61.5 0.53 0.38 3.502455 PRH01-17C J2 6.5 23.8 69.3 0.37 0.29 7.516960 PRH01-4C J2 5.3 26.3 68.0 0.41 0.49 7.08753 PRH02-08C J2 8.2 22.4 69.1 0.34 0.33 7.0C 995 PRH02-10C J2 4.7 26.8 67.9 0.61 0.63 1.29C 998 PRH02-18C J2 10.7 23.1 65.6 0.61 0.34 1.35

Page 2 of 4


Vol.Matter

(%)

FreeCarbon

(%)

Moist.(%)

Sulfur(%)


Gravity



04133 PRH02-18C J2 55.4 22.4 21.6 0.63 0.14 1.99C 997 PRH02-18C J2 8.1 24.2 67.0 0.64 0.32 1.34

C2003-2 PRH2003-1C J2 16.5 23.5 59.6 0.44 0.49 7.0 82 1.43C-102 QPD88001 J2 12.1 26.0 61.2 0.75 0.44 7.5 76.5C-108 QPD88002 J2 12.3 23.3 63.8 0.7 0.57 7.5 80

Comp. 15-3 QWD7115 J2 21.5 22.4 55.7 0.4 0.43 6,438 5.5Comp. 18-2 QWD7118 J2 11.0 24.6 64.0 0.39 0.52 7,790 6.5Comp. No. 3 QWD7119 J2 20.0 21.7 57.6 0.74 0.28 6,650 7.5

02456 PRH01-17C J2FW 85.5 6.2 7.7 0.6 0.1104145 PRH02-10C J2FW 24.5 22.2 52.6 0.68 0.57 1.4504146 PRH02-10C J2FW 88.4 6.3 4.6 0.75 0.12 2.4704136 PRH02-18C J2FW 91.2 5.8 2.5 0.56 0.09 2.548752 PRH02-08C J2P 27.8 18.5 53.3 0.36 0.52 7.03017 QPD88002 J2P 86.7

BC2002-B BS2002-1 J3 11.8 22.9 65.0 0.22 0.48 8.0C2002-2 BS2002-14 J3 9.7 22.0 67.9 0.41 0.5 7.0

BS-J3 BS2002-2 J3 9.7 20.8 69.3 0.26 6.5C2002-4 BS2002-21 J3 12.7 23.5 63.5 0.33 0.39 6.0C2002-6 BS2002-26 J3 9.4 22.1 68.2 0.33 0.31 7.5C04-J3-1 BS2003-6 J3 8.4 22.2 68.8 0.49 0.53 5.5

PC04-J3-a PCBS2004-7C J3 12.4 22.4 65.1 0.2 7.002438 PRH01-16C J3 8.0 23.0 68.6 0.44 0.31 5.502458 PRH01-17C J3 9.8 21.1 68.7 0.42 0.34 4.516957 PRH01-3C J3 17.9 18.4 63.2 0.5 0.44J3-1 PRH01-3C J3 9.1 22.1 68.4 0.42 0.45 7.0

16958 PRH01-3C J3 53.6 37.4 8.8 0.3 0.15J3-2 PRH01-3C J3 9.1 22.1 68.4 0.42 0.45 7.0

16961 PRH01-4C J3 8.6 24.4 66.6 0.45 0.3 7.08847 PRH02-01 J3 11.9 0.44 1.58848 PRH02-01 J3 7.9 0.45 3.58849 PRH02-01 J3 9.6 0.43 1.58850 PRH02-01 J3 5.0 0.4 5.08837 PRH02-02 J3 8.1 1.45 3.08838 PRH02-02 J3 10.1 1.42 2.58839 PRH02-02 J3 32.4 1.47 6.58830 PRH02-03 J3 22.4 2.06 1.58831 PRH02-03 J3 13.8 2.1 1.58832 PRH02-03 J3 5.6 1.46 7.08833 PRH02-03 J3 31.5 0.63 4.5

Page 3 of 4


Vol.Matter

(%)

FreeCarbon

(%)

Moist.(%)

Sulfur(%)


Gravity



8809 PRH02-04 J3 9.0 1.4 5.08810 PRH02-04 J3 9.0 1.38 1.08811 PRH02-04 J3 7.8 1.36 1.58817 PRH02-05 J3 16.7 0.45 2.08818 PRH02-05 J3 15.3 0.5 2.08819 PRH02-05 J3 27.4 0.45 1.58820 PRH02-06 J3 16.7 0.56 1.08827 PRH02-07 J3 12.0 1.36 2.08828 PRH02-07 J3 11.8 1.32 4.58829 PRH02-07 J3 77.3 1.26 1.08755 PRH02-08C J3 8.3 20.8 70.6 0.39 0.35 3.0C 994 PRH02-10C J3 8.1 22.8 68.6 0.6 0.46 1.34C 996 PRH02-18C J3 9.0 21.0 69.2 0.77 0.23 1.34

C2003-3 PRH2003-1C J3 13.1 21.3 65.1 0.47 0.3 5.0 79 1.38C-103 QPD88001 J3 13.1 26.3 60.0 0.66 0.3 7.0 80C-109 QPD88002 J3 10.0 21.4 67.9 0.73 0.32 7.0 74

Comp. 15-4 QWD7115 J3 14.6 25.3 59.6 0.45 0.25 7,206 3.5Comp. 17-2 QWD7117 J3 10.8 22.6 66.3 0.29 0.41 7,634 6.0Comp. 18-3 QWD7118 J3 9.9 23.4 66.2 0.52 0.26 7,762 5.5Comp. No. 4 QWD7119 J3 17.8 23.6 58.0 0.62 0.32 6,739 5.0Comp. 20-2 QWD7120 J3 14.4 20.7 64.5 0.41 0.35 7,334 5.0Comp. 21-1 QWD7121 J3 11.7 22.1 65.7 0.54 0.33 7,545 5.5

02475 PRH02-10C J3FW 69.9 11.4 18.1 0.56 0.18 2.0704141 PRH02-18C J3FW 89.8 7.2 2.5 0.52 0.03 2.4902457 PRH01-17C J3HW 79.5 8.5 11.5 0.59 0.2716956 PRH01-3C J3HW 82.2 6.9 10.1 0.79 0.2804147 PRH02-10C J3HW 90.4 6.2 2.7 0.71 0.2 2.5404137 PRH02-18C J3HW 91.2 6.0 2.2 0.58 0.1 2.56

Page 4 of 4

Sample Hole Seam Ash (%)VolatileMatter

(%)

FreeCarbon

(%)

InherentMoisture

(%)

Sulfur(%) FSI HGI Specific

Gravity

A bulk ADIT-A1 A 16.4 20.5 62.5 0.6 0.5 6.5A SEAM ADIT-A1 A 16.4 5.3 6.5

59M 0.260 ADIT-A1 A 25.6 19.6 54.2 0.6 0.4 4.0 1.51BC ADIT-A1 A 13.7 21.4 64.3 0.6 0.48 7.0 1.39

60M 0.52 BC ADIT-A1 A 11.7 21.5 66.0 0.8 0.57 5.5 1.3762M 0.39T ADIT-A1 A 18.7 20.3 60.1 0.9 0.47 5.0 1.4462M 0.41C ADIT-A1 A 18.3 20.3 60.8 0.6 0.49 5.5 1.4362M 0.49B ADIT-A1 A 13.7 21.1 64.5 0.7 0.49 4.5 1.463M 0.37T ADIT-A1 A 13.0 21.0 64.4 0.7 0.49 7.0 1.3963M 0.57T ADIT-A1 A 11.4 21.9 65.9 0.8 0.48 6.5 1.37

comp ADIT-A1 A 15.7 20.5 63.1 0.7 0.53 5.5 78 1.4ADIT_B1-A ADIT-B1 B 17.6 0.44 7.5ADIT_B1-B ADIT-B1 B 45.6 0.61 1.0ADIT_B1-C ADIT-B1 B 17.1 0.46 5.0ADIT_B1-D ADIT-B1 B 16.8 0.32 5.0ADIT_B1-E ADIT-B1 B 8.0 0.39 1.0ADIT-B2-A ADIT-B2 B 22.3 0.42 4.5ADIT-B2-B ADIT-B2 B 12.7 0.38 5.0ADIT-B2-C ADIT-B2 B 10.3 0.51 7.0ADIT-B2-D ADIT-B2 B 6.7 0.48 7.0ADIT-B2-E ADIT-B2 B 5.1 0.61 6.5ADIT-B2-F ADIT-B2 B 6.4 0.73 5.5

ADIT-B2-AA ADIT-B2 B 18.2 0.36 4.0ADIT-B2-BB ADIT-B2 B 22.9 0.51 3.5ADIT-B2-CC ADIT-B2 B 16.7 0.4 4.5ADIT-B2-DD ADIT-B2 B 9.4 0.36 6.0ADIT-B2-EE ADIT-B2 B 5.8 0.52 6.5ADIT-B2-FF ADIT-B2 B 5.3 0.67 8.0ADIT-B3-1 ADIT-B3 B 16.4 22.8 60.1 0.7 0.37 6.5 1.43ADIT-B3-2 ADIT-B3 B 30.9 18.8 48.9 1.4 0.42 3.0 1.57ADIT-B3-3 ADIT-B3 B 21.5 19.2 58.6 0.7 0.39 2.5 1.5ADIT-B3-4 ADIT-B3 B 11.3 23.1 64.6 1 0.44 4.5 1.41ADIT-B3-5 ADIT-B3 B 9.2 24.4 65.7 0.7 0.49 6.5 1.37ADIT-B3-6 ADIT-B3 B 6.8 24.7 67.5 1 0.49 7.5 1.34ADIT-B3-7 ADIT-B3 B 8.9 24.6 65.8 0.7 0.53 8.5 1.36comp-6444 ADIT-B3 B 22.4 0.36 3.5SAMPLE B ADIT-B3 B 15.0 3.7 6.0comp-6321 ADIT-B3 B 15.0 21.9 62.5 0.6 0.36 6.0comp-6508 ADIT-B3 B 15.4 21.9 61.9 0.8 0.4 6.5 83 1.4ADIT_C1-A ADIT-C1 C 15.3 0.63ADIT_C1-B ADIT-C1 C 55.7 0.31ADIT_C1-C ADIT-C1 C 20.6 0.39 1.0ADIT_C1-D ADIT-C1 C 66.4 0.3 1.0ADIT_C1-E ADIT-C1 C 9.8 0.6 7.5ADIT_C1-F ADIT-C1 C 21.0 0.68 0.5ADIT-C2-8 ADIT-C2 C 22.8 21.2 55.2 0.8 0.77 7.0 1.45ADIT-C2-7 ADIT-C2 C 11.8 24.7 62.6 0.9 0.53 8.5 1.36comp-6211 ADIT-C2 C 23.6 21.4 54.3 0.7 0.51 6.5 72 1.46comp-6318 ADIT-C2 C 32.2 5.5 4.0comp-6319 ADIT-C2 C 32.2 19.0 48.0 0.8 0.47 4.0


EB AREA DRILL HOLE QUALITY DATA (air dried basis)TABLE 14.4

Page 1 of 6


(%)

FreeCarbon

(%)

InherentMoisture

(%)


Gravity



ADIT-C2-6 ADIT-C2 C 8.9 24.3 65.7 1.1 0.44 7.5 1.34ADIT-C2-5 ADIT-C2 C 77.7 9.4 11.6 1.3 0.2 2.23ADIT-C2-4 ADIT-C2 C 14.2 22.8 62.3 0.7 0.49 4.5 1.4ADIT-C2-3 ADIT-C2 C 19.5 22.1 57.5 0.9 0.38 4.0 1.45ADIT-C2-2 ADIT-C2 C 37.3 19.2 42.6 0.9 0.46 2.0 1.63ADIT-C2-1 ADIT-C2 C 21.5 22.6 55.0 0.9 0.74 6.5 1.45

channel ADIT-D1 D 24.5 20.7 53.8 1 0.38 6.5 75 1.48ADIT-D1-6 ADIT-D1 D 13.1 22.4 63.5 1 0.4 7.0 1.38ADIT-D1-5 ADIT-D1 D 27.7 20.3 50.7 1.3 0.49 6.5 1.52ADIT-D1-4 ADIT-D1 D 40.5 18.2 39.6 1.7 0.29 3.0 1.66ADIT-D1-3 ADIT-D1 D 23.4 21.3 54.4 0.9 0.32 3.5 1.5ADIT-D1-2 ADIT-D1 D 18.3 22.8 58.0 0.9 0.34 3.5 1.45ADIT-D1-1 ADIT-D1 D 28.6 22.4 47.9 1.1 0.38 4.5 1.52

comp ADIT-D1 D 28.0 4.5BULK ADIT-D1 D 28.0 20.3 50.9 0.8 0.4 4.5

EB-1-01 EB(MS)-1 D 15.4EB-1-02 EB(MS)-1 D 17.2EB-1-03 EB(MS)-1 C 27.3EB-1-04 EB(MS)-1 C 24.1EB-1-05 EB(MS)-1 B 15.8EB-1-06 EB(MS)-1 A 12.3EB-13-D EB(MS)-13 D 35.2EB-13-C EB(MS)-13 C 28.2EB-13-B EB(MS)-13 B 14.1

Sample "C" EB(MS)-5 C 18.5 20.8 60.7 0.43 3.5Sample "B" EB(MS)-5 B 18.0 21.3 60.7 0.21 2.0

EB-5-A EB(MS)-5 A 11.9Sample "D" EB(MS)-6 D 27.8 22.8 49.4 0.31 5.0

EB-6-D EB(MS)-6 D 27.8 0.42 6.0EB-6-C EB(MS)-6 C 35.1EB-6-B EB(MS)-6 B 10.8EB-9-D EB(MS)-9 D 28.8EB-9-C EB(MS)-9 C 37.3EB-9-B EB(MS)-9 B 17.9EB-9-A EB(MS)-9 A 16.202413 EB59C DHW 70.6 10.4 18.2 0.85 0.7702411 EB59C D1 17.7 23.1 58.4 0.78 0.52 7.002410 EB59C DHW 76.3 9.7 12.8 1.14 0.0902412 EB59C D0 17.7 22.7 58.8 0.77 0.36 5.502419 EB59C CHW 87.1 8.8 3.3 0.77 0.1202417 EB59C C 38.6 17.3 43.4 0.7 0.37 1.002416 EB59C C 12.0 24.2 63.2 0.62 0.42 6.502415 EB59C C0P 86.4 6.7 6.1 0.81 0.2202418 EB59C C0 14.6 24.0 60.7 0.79 0.82 7.002421 EB59C B 27.8 19.9 51.7 0.53 0.26 2.502422 EB59C B 6.7 25.6 67.1 0.54 0.32 7.017001 EB59C BFW 87.2 8.6 3.8 0.47 0.0702423 EB59C A 19.8 19.1 60.6 0.48 0.37 3.5

MS-16-D MS-16 D 35.4 19.9 43.7 1 0.35 4.5 71.9 1.59 MS-16 D 19.5 21.8 58.0 0.7 0.46 4.5 1.49

Page 2 of 6


(%)

FreeCarbon

(%)

InherentMoisture

(%)


Gravity



10 MS-16 D 9.4 25.2 64.4 1 0.53 7.5 1.3311 MS-16 D 27.7 21.0 50.1 1.2 0.4 5.5 1.5312 MS-16 D 52.3 16.2 29.7 1.3 0.26 1.0 1.8513 MS-16 D 44.0 19.3 35.4 1.3 0.3 2.0 1.7314 MS-16 D 75.7 11.1 11.6 1.6 0.12 0.0 2.2515 MS-16 D 32.5 17.9 48.8 0.8 0.32 1.0 1.6116 MS-16 D 10.7 27.1 61.4 0.8 0.34 7.0 1.3217 MS-16 D 21.1 22.5 55.6 0.8 0.31 4.0 1.5318 MS-16 D 15.5 24.7 59.0 0.8 0.35 7.5 1.4220 MS-16 D 10.9 27.6 60.7 0.8 0.46 8.0 1.37

MS-16-C MS-16 C 30.2 20.7 48.3 0.8 0.42 4.5 73.3 1.4936 MS-16 C 14.7 24.1 60.4 0.8 0.54 5.5 1.3637 MS-16 C 45.7 16.3 37.2 0.8 0.36 1.0 1.6938 MS-16 C 20.1 23.1 56.0 0.8 0.44 6.0 1.4439 MS-16 C 13.2 22.0 64.2 0.6 0.46 3.0 1.3740 MS-16 C 80.5 6.5 5.9 1.1 0.14 0.0 2.5741 MS-16 C 9.8 24.1 65.4 0.7 0.48 7.0 1.3

MS-16-B MS-16 B 17.5 21.3 60.5 0.7 0.36 5.0 80.2 1.4546 MS-16 B 11.0 24.4 64.0 0.6 0.48 6.0 1.3942 MS-16 B 14.9 22.9 61.5 0.7 0.33 3.5 1.4143 MS-16 B 89.4 6.0 3.6 1 0.11 0.0 2.6144 MS-16 B 22.1 21.8 55.4 0.7 0.3 2.5 1.4745 MS-16 B 9.9 25.9 63.5 0.7 0.32 7.0 1.37

MS-16-A MS-16 A 8.0 22.6 68.7 0.7 0.54 6.5 85.8 1.291 MS-17 D 13.6 22.3 63.3 0.8 0.52 4.5 1.45

MS-17-D MS-17 D 30.5 20.2 48.3 1 0.43 4.5 71.2 1.542 MS-17 D 10.3 26.4 62.4 0.9 0.46 7.5 1.363 MS-17 D 71.4 12.0 14.9 1.7 0.23 0.0 2.134 MS-17 D 15.3 24.4 59.4 0.9 0.38 7.0 1.395 MS-17 D 27.8 19.2 52.2 0.8 0.32 1.0 1.576 MS-17 D 10.9 26.0 62.2 0.9 0.33 7.5 1.367 MS-17 D 25.9 18.9 54.4 0.8 0.32 1.0 1.518 MS-17 D 12.2 28.4 58.5 0.9 0.45 8.0 1.37

MS-17-C1 MS-17 C 40.5 17.6 41.0 0.9 0.36 1.5 62.2 1.6921 MS-17 C 11.2 20.8 46.8 1.2 0.63 4.0 1.423 MS-17 C 17.8 14.5 27.0 0.7 0.23 1.0 1.5524 MS-17 C 26.5 19.3 52.8 0.8 0.35 1.5 1.4525 MS-17 C 10.9 17.4 41.0 0.7 0.2626 MS-17 C 17.4 23.1 58.9 0.6 0.38 4.0 1.45

MS-17-C2 MS-17 C 33.9 19.8 45.4 0.9 0.4 5.5 69.1 1.5327 MS-17 C 81.8 8.0 6.2 1 0.12 0.0 2.5328 MS-17 C 9.8 24.5 65.0 0.7 0.54 8.0 1.3129 MS-17 C 44.4 17.1 37.5 1 0.65 5.5 1.7630 MS-17 B 15.3 23.6 60.4 0.7 0.4 7.0 1.4

MS-17-B MS-17 B 17.6 21.2 60.5 0.7 0.34 5.5 80.9 1.4631 MS-17 B 69.9 11.8 17.6 0.7 0.26 0.0 2.2732 MS-17 B 22.6 21.9 54.8 0.7 0.32 4.0 1.5133 MS-17 B 18.5 20.8 60.0 0.7 0.31 1.5 1.4134 MS-17 B 11.0 24.0 64.3 0.7 0.2 2.0 1.38

MS-17-A MS-17 A 12.6 22.0 64.7 0.7 0.55 4.5 75.4 1.39

Page 3 of 6


(%)

FreeCarbon

(%)

InherentMoisture

(%)


Gravity



66 MS-18 D1 16.4 22.4 60.0 1 0.61 5.5 1.44MS-18-D1-1 MS-18 D1 39.1 17.5 42.2 1.2 0.4 3.5 69.8 1.6MS-18-D1-2 MS-18 D1 44.0 18.0 36.8 1.2 0.4 1.0 68.4 1.63

67 MS-18 D1 73.0 12.0 13.1 1.9 0.19 0.0 2.3368 MS-18 D1 31.8 17.7 49.4 1.1 0.56 3.0 1.5769 MS-18 D1 30.9 19.9 47.9 1.3 0.46 4.5 1.5570 MS-18 D1 71.4 11.3 15.6 1.7 0.19 0.0 2.171 MS-18 D1 40.5 19.1 39.2 1.2 0.38 1.5 1.62

MS-18-D2 MS-18 D2 31.6 21.9 45.5 1 0.41 5.5 73.3 1.5872 MS-18 D2 16.0 24.8 58.2 1 0.51 6.5 1.3973 MS-18 D2 71.8 11.8 14.8 1.6 0.15 0.0 2.1974 MS-18 D2 16.3 23.5 59.3 0.9 0.41 5.5 1.475 MS-18 C 35.9 18.2 44.9 1 0.43 1.0 1.64

MS-18-C-1 MS-18 C 35.9 18.2 44.9 1 0.43 1.0 63.6 1.64MS-18-C-2 MS-18 C 29.4 20.9 48.8 0.9 0.47 5.5 1.57

76 MS-18 C 14.9 23.2 61.0 0.9 0.43 4.5 1.3877 MS-18 C 83.9 9.0 5.9 1.2 0.14 0.0 2.3578 MS-18 C 13.7 23.9 61.4 1 0.62 7.0 1.3379 MS-18 C 64.7 13.7 20.4 1.2 0.52 1.0 1.9

MS-18-B MS-18 B 18.8 23.1 57.3 0.8 0.46 5.5 84.4 1.4280 MS-18 B 27.0 19.9 52.1 1 0.48 4.5 1.4981 MS-18 B 10.9 23.8 64.1 1.2 0.37 4.0 1.3649 MS-19 D 18.2 22.2 58.8 0.8 0.65 5.5 1.49

MS-19-D MS-19 D 32.3 20.5 46.4 0.8 0.33 1.5 69.8 1.550 MS-19 D 84.9 7.8 6.3 1 0.14 0.0 2.4351 MS-19 D 15.3 24.7 59.4 0.6 0.52 7.0 1.3952 MS-19 C 9.3 24.4 65.4 0.9 0.82 7.5 1.37

MS-19-C1 MS-19 C 42.9 17.5 38.6 1 0.39 2.0 91.3 1.7MS-19-C2 MS-19 C 35.3 19.1 44.7 0.9 0.37 4.0 70.5 1.52

53 MS-19 C 61.9 13.4 22.9 1.8 0.38 1.0 1.8554 MS-19 C 39.9 17.4 41.9 0.8 0.57 1.0 1.6955 MS-19 C 50.5 16.0 32.6 0.9 0.34 1.0 1.756 MS-19 C 12.8 23.3 63.2 0.7 0.45 5.0 1.457 MS-19 C 87.4 7.1 4.4 1.1 0.12 0.0 2.2558 MS-19 C 9.0 23.5 66.7 0.8 0.48 6.5 1.3259 MS-19 C 36.7 17.1 45.3 0.9 0.42 3.0 1.6760 MS-19 C 6.7 26.6 65.9 0.8 0.65 9.0 1.2761 MS-19 C 56.3 14.0 28.7 1 0.46 2.5 1.7562 MS-19 B 23.0 20.2 55.8 1 0.5 3.0 1.44

MS-19-B MS-19 B 19.2 22.2 57.9 0.7 0.4 5.0 83 1.4763 MS-19 B 21.0 20.7 57.5 0.8 0.31 1.0 1.4464 MS-19 B 7.5 23.9 67.7 0.9 0.42 7.5 1.3165 MS-19 A 7.7 22.4 69.1 0.8 0.57 7.0 1.32

MS-19-A MS-19 A 7.7 22.4 69.1 0.8 0.57 7.0 84.4 1.3286 MS-21 D 16.3 23.0 59.5 1.2 0.53 7.5 1.36

MS-21-D MS-21 D 32.0 20.3 46.6 1.1 0.42 5.0 79.6 1.5587 MS-21 D 69.2 11.9 17.0 1.9 0.15 0.0 2.1588 MS-21 D 16.8 23.2 59.0 1 0.44 5.5 1.489 MS-21 D 26.2 19.1 53.8 0.9 0.44 1.0 1.5490 MS-21 D 12.3 25.2 61.5 1 0.47 6.0 1.43

Page 4 of 6


(%)

FreeCarbon

(%)

InherentMoisture

(%)


Gravity



91 MS-21 D 22.2 20.2 56.7 0.9 0.37 3.0 1.5392 MS-21 D 13.2 24.6 61.1 1.1 0.54 7.0 1.493 MS-21 C 41.0 17.9 39.7 1.4 0.5 4.5 1.54

MS-21-C1 MS-21 C 41.3 17.9 39.8 1 0.39 2.0 62.2 1.72MS-21-C2 MS-21 C 31.9 19.7 47.3 1.1 0.45 3.0 65 1.48

94 MS-21 C 37.2 14.6 26.5 1.7 0.39 1.0 1.7895 MS-21 C 41.7 16.5 40.8 1 0.32 1.0 1.796 MS-21 C 15.6 22.7 60.6 1.1 0.39 5.5 1.4197 MS-21 C 87.1 7.3 4.1 1.5 0.13 0.0 2.5598 MS-21 C 10.0 23.5 64.8 1.7 0.54 4.5 1.3599 MS-21 C 47.4 17.9 38.0 1.7 0.5 1.0 1.7100 MS-21 B 14.4 21.9 62.8 0.9 0.45 5.0 1.37

MS-21-B MS-21 B 16.6 23.3 59.3 0.8 0.31 5.5 78.8 1.44101 MS-21 B 34.9 16.0 48.5 0.6 0.31 1.0 1.6102 MS-21 B 18.6 21.8 58.3 1.3 0.3 4.0 1.43103 MS-21 B 16.7 21.8 60.5 0.31 2.5 1.46104 MS-21 B 7.0 25.4 66.6 1 0.36 5.5 1.32

MS-21-A MS-21 A 14.8 22.6 61.6 1 0.47 6.5 80.2 1.42113 MS-22 D 21.7 23.1 54.3 0.9 0.69 8.0 1.44114 MS-22 C 25.2 19.8 54.2 0.8 0.51 6.0 1.5115 MS-22 B 21.8 21.1 56.3 0.8 0.37 4.0 1.46

MS-22-B MS-22 B 13.7 23.2 62.4 0.7 0.43 4.5 87.8 1.39116 MS-22 B 8.3 23.8 67.1 0.8 0.41 7.5 1.32117 MS-22 B118 MS-22 B 6.0 23.9 69.3 0.8 0.47 6.5 1.31119 MS-22 A 12.3 22.0 65.1 0.6 0.62 4.0 1.34

MS-25A-D MS-25A D 38.9 19.0 41.1 1 0.36 3.5 66.4 1.63124 MS-25A D 46.4 15.4 37.2 1 0.35 2.0 1.7125 MS-25A D 25.0 2.47126 MS-25A D 25.0 22.3 51.9 0.8 0.46 5.0 1.49

MS-25A-B MS-25A B 15.0 22.6 61.7 0.7 0.47 5.5 98.2 1.39127 MS-25A B 23.0 23.0 53.3 0.7 0.46 4.5 1.49128 MS-25A B 10.9 24.2 64.2 0.7 0.42 7.0 1.37129 MS-25A B 5.8 24.4 69.1 0.7 0.47 7.0 1.32

MS-25A-C MS-25A A 9.8 22.5 66.8 0.9 0.68 7.0 82.3 1.36130 MS-25A A 9.8 22.5 66.8 0.9 0.68 7.0 82.3 1.36

MS-27-D MS-27 D 42.1 17.6 39.4 0.9 3.0134 MS-27 D 58.0 14.2 26.4 1.4 0.73 1.0 1.36135 MS-27 D 15.4 25.6 58.0 1 0.73 8.0 1.31136 MS-27 D 29.5 20.2 49.4 0.9 0.43 5.0 1.46137 MS-27 B 19.4 22.0 57.7 0.9 0.39 2.5 1.36

MS-27-B MS-27 B 13.1 22.4 63.9 0.6 0.32 4.0 81.6 1.37138 MS-27 B 18.5 21.2 59.0 0.9 0.36 2.5 1.35139 MS-27 B 7.2 25.7 66.2 0.9 0.27 7.5 1.26140 MS-27 A 12.6 22.5 64.1 0.8 0.49 6.5 1.31501 MS-34 D 12.5 21.7 64.6 1.2 0.53 4.0 1.38

MS-34-D MS-34 D 16.5 20.9 60.2 2.4 0.37 1.0 79 1.47502 MS-34 D 63.6 0.19 2.06503 MS-34 D 15.5 20.6 61.6 2.3 0.43 1.45504 MS-34 C 34.5 16.8 47.0 1.7 0.32 0.0 1.66

Page 5 of 6


(%)

FreeCarbon

(%)

InherentMoisture

(%)


Gravity



MS-34-C MS-34 C 30.4 18.2 50.3 1.1 0.44 1.5 75 1.55505 MS-34 C 17.3 21.1 60.8 0.8 0.41 4.0 1.42506 MS-34 C 89.7 0.11 2.58507 MS-34 C 21.0 19.4 58.9 0.7 0.44 5.0 1.47508 MS-34 C 14.8 22.4 61.9 0.9 0.58 7.0 1.39509 MS-34 C 58.1 0.42 1.9510 MS-34 B 15.3 20.9 62.8 1 0.4 2.0 1.43

MS-34-B MS-34 B 15.3 20.9 62.8 2.2 0.4 2.0 79 1.43512 MS-34 A 12.6 19.5 66.5 1.4 0.55 1.5 1.4

MS-34-A MS-34 A 12.4 19.2 65.4 3 0.54 1.5 77 1.4MS-35-B MS-35 B 12.2 23.3 64.1 0.4 0.38 5.5 78 1.39MS-35-A MS-35 A 15.3 21.5 62.8 0.4 0.48 6.5 77 1.41MS-37-D MS-37 D 24.6 21.0 53.7 0.7 0.44 7.0 75 1.49MS-37-B MS-37 B 13.1 22.2 64.3 0.4 0.38 7.0 90 1.4MS-37-A MS-37 A 11.1 21.3 67.2 0.4 0.73 5.0 80 1.36MS-38-D MS-38 D 21.9 22.0 55.4 0.7 0.55 6.5 71 1.44

337 MS-38 C 67.2 11.3 20.4 1.1 0.59 1.0 2.01MS-38-B MS-38 B 12.9 22.2 64.4 0.5 0.44 5.5 83 1.4MS-38-A MS-38 A 20.7 18.5 60.4 0.4 0.48 5.0 82 1.46MS-40-B MS-40 B 12.9 23.7 62.8 0.6 0.37 4.5 77 1.39MS-40-A MS-40 A 14.0 22.4 63.1 0.5 0.48 6.0 74 1.39

Page 6 of 6


15-1

ITEM 15 SAMPLE PREPARATION, ANALSYSIS, AND SECURITY

There is little information regarding sample preparation and security for most of the exploration

activities performed on the Perry Creek and EB properties. However, the work was rendered by

established and reputable mining companies at the time, and with respect to sample

preparation, it can reasonably be expected that samples taken during the various work

programs would have met then current industry standards. The standards are comparable to

those prevalent in the present and the results from sampling and quality are generally

considered reliable. Furthermore, the work performed more recently tends to confirm and

reinforce previous results lending confidence to all the work performed.

Since acquiring the property recently, WCC has sought to more fully define the coal quality

characteristics from each site. Specific holes were sampled individually and sent to the

laboratory as quickly as possible. Cores from the remaining holes were placed into a series of

Mini-Bulk bags, and at Perry Creek they were separated on the basis of whether or not they

were from J1/2 Ply or J3 Ply as well as on actual seam basis. In one drill hole (BS2002-28),

core was also recovered from G Seam. Selected roof and floor rock samples were also taken.

Drilling was conducted on a 24-hour basis. Core logging and sampling took place at the rig-site,

immediately after removal of the core from the core barrel. During the night shift, generalized

descriptions of the core were obtained while more detailed descriptions were carried out on core

obtained during the day shift. The samples were kept at each of the bulk sample sites until the

end of the program, at which point they were collected and shipped to Calgary.

The samples from Perry Creek and EB were tested over a period exceeding 30 years at a

variety of reputable labs and assay centers, including:

Cyclone Engineering and Sales in Edmonton, Alberta

Commercial Testing and Engineering in Vancouver, British Columbia

Warnock Hersey Professional Services in Calgary, Alberta

Birtley Coal and Minerals Testing in Calgary, Alberta

Loring Laboratories in Calgary, Alberta


15-2

WCC, Teck, QCL, and Mitsui are all professional and knowledgeable companies with

reasonable sampling, preparation, security and analytical practices consistent with those

recognized to be reasonable and appropriate in the mining industry. This opinion is based on:

(a) the materials reviewed and the data verification process conducted in the preparation of this

report; and (b) the use of testing facilities and laboratories by all the companies engaged in

exploration of this property that are recognized in Canada and internationally for coal analytical

work and high standards.

Marston reviewed geologic and sampling data but did not participate in any part of the

exploration or analysis programs. Based on this review, the companies who carried out the

programs and the laboratories used for the analytical work, Marston believes that the sampling,

sample preparation, security and analytical procedures were adequate and within industry

standards.


16-1

ITEM 16 DATA VERIFICATION

For the Study and this TR, Marston relied upon data supplied by WCC and the information

described and referenced in Items 5 and 23. The key WCC technical and scientific data to be

verified was topographic mapping, drill hole and sample locations, WCC’s geologic models, in

situ coal quality analyses, and coal washability results used for process plant design and to

predict saleable product yield.

For topographic mapping, WCC provided digital terrain models for the Perry Creek and EB

Areas as triangulated surfaces. For Perry Creek, WCC’s models were based on a LiDAR

survey with points at 1 m spacing by an independent aerial survey company. For the EB Area,

the model was based on publicly available data. WCC’s topography model for Perry Creek

compared well with the base LiDAR survey data and surveyed drill hole collar elevations. For

the EB Area, WCC’s digital model compared reasonably with drill hole collar elevations.

Marston verified the drill hole data by comparing copies of original driller’s logs on file at WCC

with the WCC electronic data files provided. The data logs and files were also compared with

geophysical logs for selected holes to verify seam location and apparent thickness. WCC’s

geological models of each coal seam and major rock units was compared with the drill hole

logs. The base drill hole data compared well with WCC’s geological models.

For the coal quality data, Marston compared WCC’s electronic data with copies of original

independent laboratory reports or summaries of such reports. Similarly, coal washability data

provided by WCC was compared with the independent laboratory reports. In all cases, the data

compared well. For the Study, Marston used this data to prepare in situ coal quality models of

the seams and to project product yield by seam for comparison to WCC’s assumptions.

Marston’s product yield projections compared well with WCC’s yield estimates.

Richard Marston, the Qualified Person for this TR, visited numerous drill hole sites in the Perry

Creek Area. The drill holes could be identified by tags or markings at each site or by reference

to survey locations and maps. At nearly every drill hole site, the hole could be located due to

casing exposed at the collar. In the EB Area, several older drill hole sites and the old

Nichimen/Ranger Oil camp were found. At the camp, many old core boxes remained and could


16-2

be associated with specific drill holes from attached metal ID tags. However, the boxes and

remaining cores had been discarded haphazardly and were in very poor condition. In the EB

Area, access to WCC’s drill sites was not possible due to snow melt causing very poor road

conditions at the time of the visit.

The primary limitation on the verification work described above is that it was not

contemporaneous with the actual field work; i.e., Marston was not present at the time that the

data was collected and reported. However, Marston found no reason to believe that the data as

presented was not collected in a reasonable manner and to reasonable industry standards.


17-1

ITEM 17 ADJACENT PROPERTIES

This report does not include information on adjacent properties.


18-1

ITEM 18 MINERAL PROCESSING AND METALLURGICAL TESTING

For process plant design and product yield estimates, WCC and previous owners commissioned

independent coal laboratories to perform standard washability testing on coal core samples and

bulk samples. See Items 14 and 15 of this TR for a discussion of sampling and testing. The

coal washability tests were performed following ASTM standards for coal testing. Based on this

work, a summary of typical metallurgical product coal quality values by coal seam in the Perry

Creek Area is shown on Table 18.1, Perry Creek Area – Typical Clean Coal Quality (adb) and

Table 18.2 – Perry Creek Area - Typical Clean Coal Thermal Rheology.

Table 18.1 PERRY CREEK AREA – TYPICAL CLEAN COAL QUALITY (adb)

Ply RM Ash VM FC S CV FSI HGI% % % % % kcal/kg

E2 0.74 10.51 23.37 65.38 0.40 7648 5 ½ 83E3 0.80 9.61 23.73 65.86 0.64 7736 7 87F 0.70 9.06 26.49 63.75 0.72 7799 6 ½ 84G 0.48 8.44 23.41 67.67 1.05 NA 7 ½ 91J1 0.77 8.64 22.46 68.13 0.41 7857 7 ½ 80J2 0.70 5.97 25.00 68.33 0.31 8220 8 82J3 0.59 6.74 23.13 69.54 0.27 8056 7 82

Table 18.2 PERRY CREEK - TYPICAL CLEAN COAL THERMAL RHEOLOGY

Max. Fluidity

Max. Fluidity

StartSoft.

FinalFluid Range

InitialDil.

Max. Dil.

Max Dil.

Max. Cont.

Seam FSI (ddpm) 0C 0C 0C 0C 0C 0C % % E2 5 ½ 129 462 419 490 71 439 473 51 25 E3 7 186 461 421 490 69 440 482 55 25 F 6 ½ 1246 456 407 491 83 425 482 140 25 G 7 ½ NA NA NA NA NA NA NA NA NA J1 7 ½ 218 463 418 492 74 442 478 64 24 J2 8 518 464 418 496 78 440 481 82 28 J1/2 8 277 466 428 499 71 NA NA NA NA J3 7 71 462 423 490 67 447 479 27 25

Abbreviations – “Soft.” – Softening; “Dil.” – Dilatation; “Cont.” - Contraction.


18-2

Based on this data, the Perry Creek seams have caking (swelling and plastic) properties, which

identify the coals as being of metallurgical quality. As tabulated, the FSI values of 5 1/2 to 8 are

very favourable for coking. Considering coal rank and type, the seams are moderate in fluidity

and plastic range. Maximum dilatation is also moderate.

In the EB Area, adit bulk samples were used to produce a clean coal product by pilot scale

washing of each seam. The clean coal products from the bulk samples were produced at an

independent laboratory’s pilot scale wash plant. A summary of the clean coal analyses from the

bulk sample tests is presented in Table 18.3, EB Area – Typical Clean Coal Quality (adb) and

Table 18.4, EB Area – Typical Clean Coal Thermal Rheology.

Table 18.3 EB AREA – TYPICAL CLEAN COAL QUALITY (adb)

Table 18.4 EB AREA – TYPICAL CLEAN COAL THERMAL RHEOLOGY

Max. Fluidity

Max.Fluidity

StartSoft.

FinalFluid Range

InitialDil.

Max.Dil.

MaxDil.

Max.Cont.

Seam FSI (ddpm) 0C 0C 0C 0C 0C 0C % % D 8 ½ 444 475 435 513 78 380 467 114 27 C 7 ½ 335 474 436 509 73 384 473 82 23 B 6 ½ 422 471 418 511 93 377 467 43 22

Abbreviations – “Soft.” – Softening; “Dil.” – Dilatation; “Cont.” - Contraction.

The coal thermal rheology values indicate that the EB Area seams have caking (swelling and

plastic) properties of metallurgical coals. As tabulated, the FSI values of 6½ to 8½ are favorable

for coking. Considering the coal rank and type, the seams are moderate in fluidity and plasticity

range. Maximum dilatation is also moderate.

Ply RM Ash VM FC S CV FSI HGI% % % % % kcal/kg

D 0.40 8.70 25.90 65.00 0.51 7838 8.5 77C 0.90 8.90 24.10 66.10 0.60 7793 7.5 77B 0.70 8.60 22.90 67.80 0.40 7822 6.5 78


18-3

Based on the coal washability test work, WCC has commissioned several coal preparation plant

engineering firms to provide flowsheets, plant designs and estimated product yields from run-of-

mine Perry Creek and EB Area coals. The WCC coal preparation plant flow sheet uses

standard coal processing equipment including heavy media cyclones for coarse coal, water only

cyclones and spirals for intermediate sizes and flotation for fine coal recovery. WCC currently

plans to wash Perry Creek coals separately from EB Area coals. As well, J Seam coal will be

washed separately from all other coal seams; and B Seam coal will be washed separately from

coal other EB Area seams.

For the most current preparation plant design by the Sedgman engineering firm, the predicted

product quality and plant yields on a dry basis for coal from each area are shown on Table 18.5,

Wolverine Target Product Quality and Predicted Plant Yields.

Table 18.5 WOLVERINE PRODUCT TARGET SPECIFICATIONS AND PREDICTED PLANT YIELDS


Perry Creek Product

EBProduct

Proximate Analysis (db) Ash (%) 7.5 ± 0.5 9.5 ± 0.5 Volatile Matter (%) 23.0 ± 0.5 23.0 Fixed Carbon (%) 79.0 ± 0.5 79.5 Sulfur (%) <0.55 <0.55 FSI 7 to 8 6 to 7 ½ Plant Yield (%, db) 67 58

The resulting saleable coal based on the yields shown above is 22.8 Mt for the Perry Creek

Property and 4.9 Mt for the EB Property resulting in total saleable coal for the Wolverine

Property of 27.7 Mt at 8 % ash (db).


19-1

ITEM 19 MINERAL RESOURCES AND MINERAL RESERVE ESTIMATES

In accordance with NI 43-101, for estimating coal resources and reserves of the Wolverine

Project, Marston has applied the definitions of “Mineral Resource” and “Mineral Reserve” as set

forth in the CIM Definition Standards adopted November 14, 2004 (CIMDS) by the Canadian

Institute of Mining, Metallurgy and Petroleum Council.

Under CIMDS, a Mineral Resource is defined as “… a concentration of natural, solid, inorganic

or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a

grade or quality that is has reasonable prospects for economic extraction. The location,

quantity, grade, geological characteristics and continuity of a Mineral Resource are known,

estimated or interpreted from specific geological evidence and knowledge.” Mineral Resources

are subdivided into classes of Measured, Indicated, and Inferred, with the level of confidence

reducing with each class respectively. Coal resources are always reported as in-situ tonnage

and are not adjusted for mining losses or mining recovery.

A Mineral Reserve is defined as “… the economically mineable part of a Measured or Indicated

Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must

include adequate information on mining, processing, metallurgical, economic and other relevant

factors that demonstrate, at the time of reporting, that economic extraction can be justified. A

Mineral Reserve includes diluting materials and allowances for losses that may occur when the

material is mined.” A Mineral Reserve is subdivided into two classes, Proven and Probable with

the level of confidence reducing with each class respectively. The CIMDS provides for a direct

relationship between Indicated Mineral Resources and Probable Mineral Reserves, and

between Measured Mineral Resources and Proven Mineral Reserves. Inferred Mineral

Resources cannot be combined or reported with other categories.

CIMDS also states it is acceptable to use GSC Paper 88-21 as a framework for the

development and categorization of coal resource estimates, but that the GSC Paper 88-21

categories should be converted to the equivalent CIMDS categories for public reporting.

Marston applied the GSC 88-21 parameters of deposit type, geology type, coal thickness,

overburden depth, distance from data point, and coal parting thickness to evaluate and classify


19-2

reserves at the Perry Creek and EB areas. Except as stated herein, Marston is not aware of

any modifying factors exogenous to mining engineering considerations (i.e. competing interests,

environmental concerns, socio-economic issues, legal issues, etc.) that would be of sufficient

magnitude to warrant excluding reserve tonnage below design limitations or reducing reserve

classification (confidence) levels from proven to probable or otherwise.

Resource Estimates – Perry Creek Area

For the Perry Creek Area, the coal seams are of Moderate geology type under GSC 88-21.

Therefore, Marston applied the criteria shown in Tables 19.1 and 19.2 to the Perry Creek coal

resource estimates.

Table 19.1 COAL RESOURCE CATEGORIES

ASSURANCE OF EXISTENCE CRITERIA FOR MODERATE GEOLOGY TYPE

CategoryDistance from

Nearest Datapoint(m)

Measured 0 to 450 Indicated 450 to 900 Inferred 900 to 2,400

Table 19.2 COAL SEAM CRITERIA – MODERATE GEOLOGY TYPE

Maximum rock parting thickness 0.3 m Minimum coal bed thickness 0.45 m Minimum aggregate seam thickness 0.5 m

Using WCC’s geological model as verified by Marston, Marston used a standard Lerch-

Grossman analysis to develop a conceptual pit design to a cutoff strip ratio limit of 18 bank

cubic metres (bcm) of waste per product tonne of coal. The resulting conceptual pit is shown on

Figure 10, Perry Creek Resource Pit. The distribution of drill holes within this pit is sufficient to

classify all of the coal resources within the pit as Measured, see Figure 12, Perry Creek Area

Measured and Indicated Resources.


19-3

For the Perry Creek conceptual pit design, Marston used the following criteria.

Overall Highwall Slope 37o to 52.5 o depending on pit area Footwall Slope Equal to dip of J3 Seam (typically 15 o to 25 o)

Based on the conceptual pit design for the Perry Creek Area, the resulting coal resource

estimates by seam are presented in Table 19.3, Perry Creek Area – Estimated Measured Coal

Resources.

Table 19.3 PERRY CREEK AREA – ESTIMATED MEASURED COAL RESOURCES

Seam Volume(Mbcm)

Sp.Gravity

Resources(Mt)

Ash Content (%, db)

E2 2.1 1.46 3.0 26.2 E3 2.1 1.61 3.4 39.6 F 3.4 1.40 4.8 20.3 G 2.0 1.30 2.6 9.1 J1 3.2 1.42 4.5 15.3

J1/J2 Parting 0.2 2.30 0.5 80.0 J2 8.5 1.38 11.8 12.3 J3 5.8 1.36 7.9 11.2

Oxidized Coal 0.2 1.39 0.3 17.0 Totals 27.5 1.41 38.7 17.6

The “J1/J2 Parting” is high ash material that is too thin to separate during mining. “Oxidized

Coal” is coal located near croplines or along fault zones that has been weathered to the extent

that it will not produce metallurgical coal. However, this coal may be sold at a lower price as a

thermal coal or used in the proposed coal dryer at the Perry Creek processing plant.

In Table 19.3, the Measured resource estimates are inclusive of the resources modified to

produce the Proven reserve estimates described in this TR.

Resource Estimates – EB Area

For the EB Area, Marston estimated coal resources also in accordance with GSC 88-21.

However, under GSC 88-21, the geology type of the EB Area coal deposit is Complex.

Therefore, the criteria shown in Table 19.4 and 19.5 have been applied to the EB Area resource

estimates.


19-4

Table 19.4 COAL RESOURCE CATEGORIES

ASSURANCE OF EXISTENCE CRITERIA FOR COMPLEX GEOLOGY TYPE

Category MaximumDatapoint

Spacing (m)

MaximumCross SectionSpacing (m)

Measured 200 150 Indicated 400 300 Inferred 800 600

Table 19.5 COAL SEAM CRITERIA – COMPLEX GEOLOGY TYPE

Maximum rock parting thickness 0.6 m Minimum coal bed thickness 0.6 m Minimum aggregate seam thickness 1.0 m

For the EB Area, using the WCC geological model as verified by Marston, Marston designed a

conceptual pit to a cutoff strip ratio of about 15 bcm of waste to one product tonne. The

reduced cutoff strip ratio for the EB conceptual pit reflects the added cost to haul run of mine

coal from the EB Area to the coal preparation plant at Perry Creek. However, the EB

conceptual pit was further constrained to the south by a gas pipeline which is believed to be

uneconomic to move. For this reason the resulting conceptual pit design in the EB Area was

reduced in size significantly and is shown in Item 26 of this TR on Figure 11, EB Resource Pit.

The EB conceptual pit design was based on the following criteria.

Overall Highwall Slope 52.5o

Footwall Slope Equal to dip of B Seam (slightly dipping to 25 o)

Within the EB conceptual pit design, the distribution of drill holes is sufficient to classify all of the

EB coal resources as Indicated under GSC 88-21, see Figure 13, EB Area – Indicated

Resource Area.

Based on the EB conceptual pit design and WCC’s geological model, the estimated Indicated

coal resources by seam for the EB Area are shown on Table 19.6, EB Area – Estimated

Indicated Coal Resources.


19-5

Table 19.6 EB AREA – ESTIMATED INDICATED COAL RESOURCES

Seam Volume(Mbcm)

Sp.Gravity

Resources(Mt)

Ash Content (%, db)

D 1.0 1.46 1.5 26.8 C 1.6 1.51 2.5 31.8 B 2.2 1.36 3.0 16.4

Oxidized Coal 0.5 1.43 0.8 23.9 Total 5.4 1.43 7.8 24.0

In Table 19.5, the Indicated resource estimates are inclusive of the resources modified to

produce the Probable reserve estimates described in this TR.

Coal Reserve Estimates

For the Study, WCC requested Marston to design ultimate pits for the Perry Creek and EB

Areas based on a forecast long-term average sales price of US$70 per product tonne or $87.50

per tonne at a foreign exchange rate of C$1.25 per US$1.00. Marston refined the conceptual pit

designs into final pit designs using Lerch-Grossman analyses and the following preliminary

production cost criteria.

Perry Creek Area

Waste Related Cost $ 3.49 per bcm

ROM Related Cost $ 6.25 per ROM tonne

Clean Coal Related Cost $ 24.30 per clean tonne

EB Area

Waste Related Cost $ 3.25 per bcm

ROM Related Cost $ 13.05 per ROM tonne

Clean Coal Related Cost $ 24.30 per clean tonne

For each area, Marston further refined the resulting Lerch-Grossman pits into final wall designs

considering access and other practical mining limitations.

Marston developed a production scheduling database consisting of logical mining benches and

blocks within the ultimate pit designs for the Study. The volumes of coal and waste in each

mining block were derived from the WCC geological model. In situ coal quality was derived for


19-6

each coal block based on the coal quality data by drill hole. The coal resource volumes and

tonnage estimates were then modified using the following mining criteria.

a) Mining bench height – 10 m

b) Minimum coal mining thickness – 0.6 m

c) Minimum removable parting thickness – 0.5 m

d) Out-of-seam dilution (OSD) – 15 cm to 40 cm per seam/waste contact depending on

seam dip and lithology of waste rock contacts

e) OSD quality - 80% ash with an in situ specific gravity of 2.3

f) Coal loss – 15 cm to 30 cm per seam/waste contact depending on seam dip and

lithology of waste rock contacts

g) Mining recovery – 90% of seams dipping at more than 10°

h) Product yield - Based on ROM ash, dry basis versus yield functions for each seam with

adjustments for fine coal circuit and thermal dryer additions.

Using the scheduling database, Marston developed a logical mining sequence and production

schedule to produce up to 2.7 Mtpy of metallurgical coal product from the run-of-mine coal

mined from the Perry Creek and EB areas. Both mines will be developed with conventional

open pit mining methods using hydraulic excavators and off-highway rear-dump haulage trucks

for waste and coal mining.

Mining is scheduled to begin in 2006 in the Perry Creek Area. The overall plan at Perry Creek

is to mine to the ultimate pit in phases to maximize early coal production at a relatively low strip

ratio with increasing strip ratios as later pit phases are mined. Production from Perry Creek is

maximized at 3.6 Mt per year (Mtpy) of ROM coal and decreases to 2.8 Mtpy in 2009, at which

point production starts from the EB Pit and grows to a rate of 1.2 Mtpy. The maximum design

capacity of the Wolverine coal processing plant is about 4 Mtpy, which is achieved when the EB

Pit is at full production.

The Wolverine Project mine plans and production schedule include: 35 million tonnes of run-of-

mine (ROM) coal and 198.9 million bcm of waste moved in the Perry Creek Pit from 2006 –

2018; 7 million tonnes of ROM coal and 40.6 million bcm of waste excavated in the EB Pit from

2009 – 2014; and 2.7 Mbcm of ex-pit topsoil removal from facilities and dump areas during

development. The final pits and waste dumps resulting from the mine plans are shown in Item


19-7

26, see Figure 14, Perry Creek Pit Status Map – End of Year 2018, and Figure 15, EB Pit Status

Map - End of 2014. As shown, the majority of the mine waste will be dumped outside of the pit

areas; however, a significant area of the EB Pit and parts of the Perry Creek Pit are available for

backfilling during the mine life.

As part of the Study, Marston estimated annual production costs for the life of the mines. Based

on the mining sequence and production schedule, Marston estimated annual work effort in

terms of equipment and labour hours required to achieve the annual waste volumes and coal

tonnages scheduled. Direct operating costs were then estimated based on the annual

equipment and labour hours and unit equipment and labour costs. All mine support and

maintenance, coal processing and loading, supervision and administration and other direct

mining costs were estimated annually. Indirect mining costs including permitting and bonding,

final reclamation and closure accrual, insurance, taxes, fees and similar costs were also

estimated annually.

Coal processing costs were based on a process flow sheet developed by Cochrane Engineering

of Vancouver, BC, which was subsequently modified by WCC’s EPC contractor, Sedgman of

Pittsburgh, Pennsylvania, USA. Cochrane and Sedgman are experienced coal preparation

plant engineering firms, and Marston also reviewed and verified the plant designs and

assumptions. The Wolverine processing plant flow sheet incorporates current preparation plant

design practices and state-of-the-art process equipment to selectively remove undesirable

mineral matter contained within the coal seam and the out-of-seam dilution that is mined along

with the coal and thus produce a saleable metallurgical coal product. The proposed plant

design capacity is 550 tonnes per hour. However, the plant design has included consideration

for expanding the plant feed capacity to 730 tonnes per hour with minimal modifications. The

Wolverine plant as built will be capable of producing 2.7 million clean tonnes per year with room

for extra equipment to support an expansion to 3.0 million clean tonnes per year. The coal

dump and plant site layout including the coal tailings pond, rail loading and mine facilities are

shown in Item 26, see Figure 16, Surface Facilities Map – Perry Creek Area. The major

facilities from mine to the train loadout are shown on Figure 17, Wolverine Coal Project

Flowsheet.

Marston developed a capital schedule with detailed initial capital estimates compiled from data

provided by WCC and its independent plant and facilities engineers and quotes for mining


19-8

equipment provided by equipment vendors. Marston also estimated replacement and major

rebuild capital required to maintain production for the life of the mines.

For the Study, Marston estimated annual offsite costs including transportation, port and

marketing costs based on information provided by WCC. All metallurgical coal product

produced at Wolverine is scheduled to be loaded onto unit trains and transported by rail to the

Ridley Terminal at Prince Rupert, BC. The Westshore Terminal at Roberts Bank, BC and the

Neptune Terminal in Vancouver, BC are also available if required.

WCC also provided a forecast of sales prices, which averaged US$70 per tonne over the life of

the mine plan with higher initial prices decreasing to lower prices in the middle and later years of

the plan. Based on these prices and the estimates of mining costs, Marston developed an

economic model for the Project of estimated annual after-tax cash flows. The income tax model

was based on current BC mineral tax, federal and provincial regulations.

Based on the after-tax annual cash flows, Marston estimated a significant positive net present

value for the Project at a discount factor of 11%. This discount factor represents the expected

return of a diversified investor seeking to invest in the metallurgical coal and steel industry. The

discount factor is estimated from a risk free interest rate plus a risk premium based on the

average beta of international coal and steel company stocks as compared to market average

returns.

Based on the Study and its economic results, the coal resource and reserve estimates for the

Wolverine Project are as shown on Table 19.7, Wolverine Project Estimated Coal Resources

and Reserves.

Table 19.7 WOLVERINE PROJECT ESTIMATED COAL RESOURCES AND RESERVES

COAL RESOURCES (Mt)

COAL RESERVES (Mt)

MEASURED INDICATED PROVEN PROBABLE

38.7 7.8 35.8 7.4


19-9

In Table 19.6, the Measured and Indicated resource estimates are inclusive of the resources

modified to produce the Proven and Probable reserve estimates.

For the Wolverine Project, the total estimated Proven and Probable reserves are 43.2 Mt. Perry Creek Area reserves amount to 35.8 Mt of Proven coal with an estimated

ash content of 30% on an air dried basis; EB Area reserves equal an estimated 7.4 Mt of

Probable reserves with an estimated ash content of 26% on an air dried basis.

The overall Project stripping ratio is projected to be 5.6 bcm per ROM tonne requiring the removal of 242.2 Mbcm of waste during the Project’s life. A total of

198.9 Mbcm of waste are scheduled for removal from the Perry Creek Pit and 40.6

Mbcm of waste from the EB Pit. The waste total includes 2.7 Mbcm of topsoil scheduled

to be removed from waste dump areas and from the mine buildings, plant and other

infrastructure sites.

Qualified Person

Marston Canada Ltd., the author of this Technical Report, is a Canada corporation and

professional engineering firm registered as such in Alberta, Canada. Marston Canada is an

affiliate of Marston & Marston, Inc., a professional mining engineering firm specializing in

geological sciences, resource and reserve estimates and mining feasibility studies. Marston

was formed in 1977 by professional mining engineers and currently consists of about nearly 60

full-time employees including certified professional geologists, registered professional mining,

civil and geological engineers, minerals economists and support staff.

Richard R. Marston, P.E. (Missouri), Marston Canada’s President is the Qualified Person

responsible for the preparation of this Report. He is a professional mining engineer registered

in Missouri, USA. He graduated from Queen’s University at Kingston, Ontario in 1981 with a

B.Sc. – Mining Engineering and has nearly 25 years of experience in coal mine geology,

geologic modeling and engineering, modeling, reserve estimating, mine design and planning.

He was assisted in the preparation of this report by employees of Marston Canada Ltd. and

Marston & Marston, Inc. including D. David Marston, P.E. (geology, resource and reserve


19-10

estimates), Rick Reeves (economic analyses, reporting), Ryan Ulansky (geological modeling

and mine planning) and Wally Schultz (coal processing and mine infrastructure review).

Coal Quality

The estimated saleable coal quality of the Wolverine Project saleable coal is shown on Table

19.8, Saleable Coal Quality Specifications.

Table 19.8 SALEABLE COAL QUALITY SPECIFICATIONS

AND PREDICTED PLANT YIELDS


Perry Creek Product

EBProduct

Proximate Analysis (db) Ash (%) 7.5 ± 0.5 9.5 ± 0.5 Volatile Matter (%) 23.0 ± 0.5 23.0 Fixed Carbon (%) 79.0 ± 0.5 79.5 Sulfur (%) <0.55 <0.55 FSI 7 to 8 6 to 7 ½ Plant Yield (%, db) 67 58

The resulting saleable coal based on the yields shown above is 22.8 Mt for the Perry Creek

Property and 4.9 Mt for the EB Property resulting in total saleable coal for the Wolverine

Property of 27.7 Mt at 8% ash (db).

Discussion on Material Affects of Issues on Mineral Resource Estimates

A basic assumption of this Report is that the estimated coal resources in the Perry Creek and

EB areas have a reasonable prospect for development under existing circumstances and

assuming a reasonable outlook for all issues that may materially affect the mineral resource

estimates.

Failure to achieve reasonable outcomes in the following areas could result in significant

changes to the resources and reserve estimates presented in this TR.


19-11

WCC must obtain customers and achieve current and forecast market prices for the

saleable coal reserves in the Perry Creek and EB Areas.

WCC must obtain adequate financing to complete development of the Perry Creek and

EB Areas substantially as planned in the Study.

WCC must obtain regulatory approvals and mining permit revisions to increase its

annual production rates and to mine and dispose of potential acid-generating waste

layers above significant areas of the J2 and J3 Seams.

WCC must obtain the necessary permits to develop the EB Area. The permitting

process will require extensive baseline work, permit applications and approvals

processing.


20-1

ITEM 20 OTHER REVELANT DATA AND INFORMATION

There is no other relevant data and information required to make this Technical Report

understandable and not misleading.


21-1

ITEM 21 INTERPRETATION AND CONCLUSIONS

Interpretation

The exploration data reviewed for the Perry Creek and EB areas are sufficient to construct a

reasonable interpretation of the geology of each area and to construct geologic and coal quality

models sufficient for this report. Marston reviewed the available studies and geological data on

file with WCC. The exploration and geological work in each area is thorough and conforms to

reasonable standards. Finally, the results of the exploration and its interpretation have been

consistent over time, lending confidence to the conclusions that have been reached. These

conclusions include:

Based on the data available and the geologic interpretation, Marston concludes that

the Perry Creek resource is of Moderate geology type. Moderate geology type is

described as structures with broad, open folds with bedding dips generally less than

30 degrees; minor faulting may be present but is uncommon, generally with

displacements of less than 10 meters, see Paper 88-21 of the Geological Survey of

Canada, entitled “A Standardized Coal Resource/Reserve Reporting System for

Canada” (GSC 88-21).

Based on the data available and the geologic interpretation, Marston concludes that

the EB coal resource is of Complex geology type due to the interpretation of

significant major fault structures in the area.

WCC’s geologic models for the Perry Creek and EB areas reasonably represent the

drill hole and other data provided and are a reasonable interpretation of that data.

The WCC models are sufficient for use as the basis of resource and reserve

estimates, and for feasibility study-level mine planning and cost estimates.

WCC’s projected coal preparation plant yields are reasonable for the Perry Creek

and EB coal seams. Marston’s conclusions are based on a review and analysis of

the available testing data and Marston’s previous experience at nearby coal mines.


21-2

Based on the spacing of the available geological data and the limits of the estimated resources,

Marston concludes that the estimated resources for the Perry Creek are Measured, and for the

EB Area the estimated resources are Indicated.

Conclusion

Based on the results of the Study, Marston concludes that the Wolverine Project is economic

and will yield attractive returns at the saleable coal price levels forecast by WCC. WCC’s

Wolverine Project contains estimated Proven and Probable reserves of over 43 Mt of coal.


22-1

ITEM 22 RECOMMENDATIONS

Based on the Study results described in this TR, Marston recommends that WCC continue

developing the Wolverine Project. Marston was not tasked with providing WCC a market

outlook or supply/demand projections with respect to Wolverine’s anticipated coal product.

However, the price expectations WCC is utilizing in its corporate and mine planning appear to

be reasonably consistent with price expectations used by other mine operators and market

participants. Project design and planning is well underway, with important and critical items

being addressed. Marston considers the Wolverine Project to be viable.

Marston recommends WCC undertake the following actions in the course of the project’s

development as part of optimizing Wolverine’s performance and economic returns. Future

drilling programs in the Perry Creek Pit should collect core samples from the upper seams for

additional quality and washability test work. Data for these seams is relatively sparse and

additional data may provide a better understanding of the seam characteristics to allow for

improved blending of coal products and product quality. This program should consist of five to

ten large diameter core holes distributed evenly over the pit area and coal quality and

washability testwork on the core samples from all holes. The cost of the program is likely to be

$250,000 to $500,000.

Prior to commencing detailed pit development planning, additional drilling should be completed

in the EB Area to upgrade the resource confidence to Measured. The current drilling is

sufficient for the purposes of the Study and this TR; however, more detailed planning will require

more data on the coal seams and coal quality. Also, the extensive geotechnical data for this pit

should be compiled, reviewed and analyzed to determine if pit wall configurations may be

improved in more detailed mine planning. This will require additional drill holes in the steeply

dipping and faulted areas of this deposit. The program is likely to require about 10 drill holes

and associated laboratory work at a total estimated cost of $300,000 to $500,000.

Based on the results of the Study, Marston believes that the character of the Property is of

sufficient merit to justify the programs recommended above.


23-1

ITEM 23 REFERENCES

References cited or used in the preparation of this Technical Report include:

Cochrane Process Flow Diagram, March 31, 2005; and Plant General Arrangement Drawings.

Cochrane Design, March 31, 2005; Criteria Document Appendix A, Washability Data.

Cochrane May 2004 Preparation Plant Report.

Environmental Assessment Office of BC, December 13, 2004, “Wolverine Coal Project - Assessment Report.”

Norwest Corporation, January 27, 2005, “Wolverine Coal Project: Permit - Level Geotechnical Designs for the Tailings Facility and Coarse Reject Pile.”

Norwest Corporation, May 2005, Wolverine Project “Project Document” Plant and Coal-handling Infrastructure.

Perry, J.H and Proc, J., “Technical Report on the Wolverine Coal Project on Behalf of Western Canadian Coal Corp., A report to satisfy the requirements of the Canadian Securities Administrators for National Instrument 43-101, Standards of Disclosure for Mineral Projects” : esp. re: sections 4 and 5, pp. 4-12 through 5-27–,” (Oct. 28, 2003).

Piteau Associates Engineering Ltd. and Western Canadian Coal, May 2003, “Wolverine Project, Project Document – Geotechnical, Perry Creek Pit.”

Piteau Associates Engineering Ltd., November 2004, “Wolverine Coal Project, Water Management Facilities Design Report – Plantsite and Perry Creek Open Pit and Waste Dump Areas.”

Piteau Associates Engineering Ltd. –Stewart, A. F., September 21, 2005: “Wolverine Project - Geotechnical Pit Slope Design Revisions for the Perry Creek Pit.”

Piteau Associates Engineering Ltd. – Hogarth, J.D. and Stewart, A.F., November 4, 2004: “Wolverine Project - Geotechnical Pit Slope Designs for Development of the Perry Creek Pit.”

Salman Partners, January 2005, “Western Canadian Coal”, (Power Point Presentation).


23-2

Western Canadian Coal, May 2003, “Wolverine Project, Project Document – Executive Summary.”

Western Canadian Coal, May, 2003, “Wolverine Project, Project Document – Environment & Regulatory.”

Western Canadian Coal, May 11, 2004, “Wolverine Coal Project – Additional Information Project.”

Western Canadian Coal, July 6, 2004, “Wolverine Coal Project, Environmental Assessment – Addendum Report.”

Western Canadian Coal, December 3, 2004, “Wolverine Coal Project – Application for a Mines Act Permit Approving the Mine Plan and Reclamation Program.”

Western Canadian Coal Wolverine Project Sedgman Proposal No. 2419.

Western Canadian Coal, February 2005, (Power Point Presentation).

Western Canadian Coal, Feb 24-25, 2005, “Public Information Meeting – Tumbler Ridge & Chetwynd”, (Power Point Presentation).


24-1

ITEM 24 DATE

The effective date of this report is March 15, 2006.


25-1

ITEM 25 ADDITIONAL REQUIREMENT FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION

Mining Operations

The coal will be produced from two open pit coal mines to be developed in the Perry Creek and

EB areas of the Wolverine Property, see Figure 2, Wolverine Site Map. WCC has received

initial mining and environmental permits to begin operations at Perry Creek. All coal mined from

both areas will be transported by truck to a coal preparation plant located immediately

southwest of the Perry Creek Pit.

The mine plans and production schedules are based on pit shells that assume coal prices of

$87.50/tonne and complex is designed to produce up to 2.7 Mtpy of metallurgical coal product

from coal mined from the combined Perry Creek and EB areas. The planned operation would

be an open pit mine utilizing shovel and truck methods and equipment. The mine will use

standard open pit mining equipment that will be primarily diesel fuel-powered. The proposed

fleet includes hydraulic excavators for waste stripping and coal mining, rotary drills for waste

drilling and blasting, rear-dump off-highway mine trucks with 177-t payload capacities and

standard auxiliary equipment such as dozers, graders, fuel and lube trucks, maintenance trucks

and other items.

The resulting production schedule is shown on Table 25.1, Wolverine Project Production

Schedule. Coal production is scheduled to begin in the Perry Creek Area in the first half of 2006

and continue through the end of 2018. Production is scheduled to commence from the EB Pit in

2009 and continue through the end of 2014. During this period, the Wolverine Project is

scheduled to produce over 2.7 Mtpy of product coal. The average clean coal strip ratio varies

from about 5 bcm per product tonne to 10 bcm per product tonne with an average of 8.7 bcm

per tonne for the plan period.

Significant backfilling is planned for the Perry Creek Pit; however, room remains at the pit floor

to potentially develop portals to access and underground mine remaining coal resources, if coal

prices and economic circumstances at the end of open pit operations are favorable for this

course of action.


25-2

Table 25.1 WOLVERINE PRODUCTION FORECAST

Period 2006 H1 2006 H2 2007 2008 2009 Average 2010 - 2018

Waste (Kbcm) 5,319 6,753 16,540 17,260 25,706 18,958

ROM Coal (Kt) * 407 1,836 3,601 3,605 4,131 3,295

Clean Coal (Kt) 0 1,154 2,384 2,275 2,624 2,142 * Run of Mine Coal.

The mining equipment has been selected to carry out unit operations that are designed to

minimize coal loss and dilution. Coal wedge removal, contact cleaning and excavation is

planned to be performed with hydraulic backhoes operating in modes that are designed to

eliminate any blasting or dozing of the coal seams. Backhoe operating modes should change

as seam dips change to optimize coal recovery.

The Perry Creek Pit will require a total labor force of 245 people by 2008, which includes 40

supervisors and administrative staff. During the peak production years, the Perry Creek labor

force will fluctuate between 245 and 270 people depending on production rate, stripping ratios

and haulage distance. An additional 21 people will be required in 2008 to start the EB Pit, and

at peak production will require a total of 91 people including five supervisors and staff. The total

peak mine labor requirement during the plan period is 345 people when both mines are

operating.

Production from EB Pit will be hauled 17 km by contract haulage companies to the Perry Creek

preparation plant. The existing Perry Creek Road and forest service road network are well-

maintained due to natural gas and coalbed methane wells in the area.

Recoverability

All run of mine coal will be processed in the preparation plant. As with most coal preparation

plants, this will be a gravity based separation process that removes rock and non carbonaceous

material from run of mine coal. The preparation plant is designed to use standard coal washing

and thermal drying technology to produce a clean metallurgical coal product with an average of


25-3

7.9% ash on an air-dried basis and 8% total moisture. Final target product specifications will be

as shown in Table 25.2.

Table 25.2 TARGET SPECIFICATIONS FOR WOLVERINE MINE COALS

Coal Quality Parameter Perry Creek EB

Proximate Analysis (db)

Ash (%) 7.5 ± 0.5 9.5 ± 0.5

Volatile Matter (%) 23.0 ± 0.5 23.0

Fixed Carbon (%) 79.0 ± 0.5 79.5

Sulfur (%) <0.55 <0.55

FSI 7 to 8 6 to 7 ½

Coarse and fine (minor) tailings from the preparation plant will be transported to designated

storage areas on the mine site. Average projected clean coal yield from run of mine production

is 64.1%

The proposed processing method is standard and typical for beneficiating coal from non-coal.

See Item 18, Mineral Processing and Metallurgical Testing, for further information.

Markets for Wolverine Coal

At the Wolverine Project, WCC will primarily produce a medium volatile metallurgical coal for

coking as part of the steel making process. This is a premium product that generally commands

a price at the high end of coal price ranges. In addition, WCC will produce a minimal amount of

thermal coal. The split between the premium metallurgical product and thermal product is

expected to be 99% medium volatile metallurgical coal and 1% thermal coal.

The metallurgical coal will be sold to customers in Japan and other Asian Pacific Rim countries.

Prospective customers include Japanese steel manufacturers, Pohang Iron and Steel (POSCO)

and other prominent steel producers in the region. The thermal coal will be sold on the local

spot market and utilized to fuel the thermal dryer facility at Wolverine’s coal preparation plant.


25-4

The preparation plant is adjacent to an existing CN Rail line formerly owned and operated by

BC Rail to service the nearby Quintette and Bullmoose coal mines, which are now closed due to

reserve depletion. Clean coal from Wolverine will be loaded onto unit trains and transported

about 1,000 km to Ridley Terminal at Prince Rupert, British Columbia where it will be loaded

onto oceangoing bulk carriers. If required, Wolverine coal may also be transported to coal

loading terminals at Vancouver. Under these sales arrangements, WCC will retain ownership of

the coal product until it is loaded into the ocean going vessels at the port. WCC has agreed the

appropriate terms and conditions with the CN Railroad and the management of Ridley Terminal

with respect to transporting, storing and loading the coal for final shipment.

Western has established a marketing representative based in Australia to address the Asian

markets, and another representative in Pittsburgh, PA, USA to address the North American and

Atlantic market segments.

Contracts

WCC has one existing sales contract for its Dillon Mine, and it has been negotiating additional

sales agreements for production from Wolverine. In export markets, metallurgical coal is

typically sold under annual, and in some cases longer term contracts with generally annual

repricing mechanisms, contracts after commercial production has commenced.

Environmental Considerations

WCC currently has posted a reclamation bond in the amount of $365,000, which is applicable to

its Dillon Mine, the last installment of which was posted at the end of October 2005. WCC will

be required to post additional bonds as the Wolverine Project develops. Once operations have

begun, remediation and reclamation of the site will be required in accordance with federal and

provincial regulations. Required bonding amounts generally increase with disturbed area during

the course of mining operations and eventually bonded amounts are released as reclamation is

successfully completed.

WCC has undertaken comprehensive baseline studies and it received an Environmental

Assessment Certificate M04-01 in January 2005 from the provincial authorities. Due to the


25-5

planned increase in mine production from 1.6 to 2.4 Mtpy, WCC has applied for an amendment

to this Environmental Assessment Certificate, approval for this amendment is still pending. In

addition to the Environmental Assessment Certificate, Wolverine has received permit C-223

which approves the Wolverine mine and reclamation plans. As part of the process, WCC has

undertaken public and First Nations consultations. WCC expects all necessary permits and

amendments to be in place prior to scheduled mining operations at Wolverine.

Royalty and Tax Assumptions

Federal income taxes are calculated in accordance with the revised tax regulations, which are

being phased into effect in Canada, with full effectiveness scheduled for 2007. The new tax

code is substantially different from the previous code in that mining companies are no longer

allowed to claim a 25 percent deduction from taxable income utilizing a “resource allowance”;

however, mining companies now enjoy a lower corporate tax rate of 21 percent. The 4 percent

surcharge on federal income taxes is still applicable, which makes the overall tax rate for

Canadian mining companies 21.84% at the federal level. In another change from the previous

tax code, provincial royalties are now deductible for federal income tax purposes in Canada;

however, provincial taxes remain non-deductible. All these new tax code effects are

incorporated in the model. The provincial income tax rate in British Columbia is 12 percent.

Royalty costs reflect required payments to the province of British Columbia for the mining of

coal on Crown-owned lands. According to the November 2004 edition of the British Columbia

Ministry of Provincial Revenue “Mineral Tax Handbook,” provincial coal revenue liabilities

consist of a Net Current Proceeds (NCP) tax and a Net Revenue Tax (NRT). Based on

information contained in the “Mineral Tax Handbook,” NCP royalties were assessed as 2% of

annual net revenue with net revenue defined as total gross revenue less cash operating costs

exclusive of royalty payments. The NRT tax was calculated as 13% of profit in excess of a

“normal return on investment over the life of the mine.”

Mine Capital and Operating Cost Estimates

Marston prepared capital cost estimates for the mine equipment based on budget quotations

from mining equipment suppliers. Marston compiled all other capital cost estimates for

infrastructure and facilities from independent engineering firm, Westmar Consultants, Inc.


25-6

Westmar’s estimates are based on previous studies by other engineering firms including

Norwest Corp., Cochrane Engineering and Sandwell International Inc. and are considerably

detailed. In comparison with other projects of a similar nature, Westmar’s estimates are

reasonable and supported with sufficient detail for this Study. Sedgman will build the plant

under a turnkey contract for a fixed amount, which Marston believes to be adequate to construct

the planned facility. The estimated capital costs for the Perry Creek Mine are shown on Table

25.3, Initial Wolverine Project Capital.

TABLE 25.3 INITIAL WOLVERINE PROJECT CAPITAL

(Constant 2005$ x 1000)

CAPITAL BY PROJECT AREA 2006 H1 2006 H2 2007 2008 2009Mining Equipment $51,893 $20,105 $8,866 $17,783 $9,007Service & Support Equipment $9,007 $0 $0 $1,243 $736Mine Office, Facilities and Haulroads $59,139 $2,460 $1,380 $6,644 $0Preparation Plant & Tailings Pond $66,155 $0 $0 $0 $0Engineering, Construction Management $35,230 $0 $0 $7,151 $0Other Owner's Costs $12,962 $0 $0 $6,500 $0Contingency $29,882 $0 $0 $5,000 $0

TOTALS $265,125 $22,565 $10,617 $44,379 $9,867 Cumulative $265,125 $287,690 $298,307 $342,686 $352,553

CAPITAL BY PIT Total Perry Creek Pit $265,125 $22,565 $10,617 $2,782 $4,035Total EB Pit $0 $0 $0 $41,597 $5,832

TOTALS $265,125 $22,565 $10,617 $44,379 $9,867

Mine operating costs were estimated for the proposed mine plans based on estimated

equipment work effort, operating hours and labor hours required to accomplish the work

planned each year. Hourly equipment operating and labor costs were derived based on the

current costs of commodities, wages and overheads prevailing in 2005 in northeastern British

Columbia. Third party costs (including transportation, utilities, loading, sales, etc.) were all

provided by WCC and the amounts appear to be reasonabley representative of the market for

the services provided.

Annual Production FOR (Free On Rail at the train load out) and FOB (Free On Board at the

port) Cash Costs (including crown royalties) are shown in Table 25.4, Wolverine Production

Cost Estimates.


25-7

Table 25.4 WOLVERINE PRODUCTION COST ESTIMATES (C$/tonne)

Period 2006 H11 2006 H2 2007 2008 2009 Average

2006 - 2018

Cash Cost FOR 0.00 $36.69 $35.84 $35.24 $39.59 $36.29

Coal Transport and Sales 0.00 $23.54 $23.28 $22.92 $22.92 $23.69

Cash Cost FOB 0.00 $60.23 $59.12 $58.16 $62.51 $59.98 1Production costs in 2006 H1 are capitalized.

Economic Model and Sensitivity Analyses

Marston constructed an economic model of the Project to estimate internal rates of return and

net present values based on annual cash flows. Marston also developed a tax model based on

BC mineral tax regulations and BC provincial and federal income taxes. The Base Case

economic model is summarized on Table 25.5, Estimated Annual Cash Flow Summary –

Wolverine Project Base Case. As shown, 2006 is divided into half-years. The first half of 2006

includes funds already spent on mine development in 2005. Also, cash costs in non-production

years are also included in the capital expenditures line item. The model shown in Table 25.5

includes all proven and probable reserves projected to be mined utilizing the mine plan

developed by Marston in the Feasibility Study for a mine life of approximately 12½ years.

Revenues in Marston’s cash flow model are based on a price series that was provided by WCC

and reviewed by Marston. Marston was not tasked with providing WCC a market outlook or

supply/demand projections with respect to Wolverine’s anticipated coal product. However, the

price expectations WCC is utilizing in its corporate and mine planning appear to be reasonably

consistent with prices expectations being utilized by other mine operators and market.

The key outcomes of the financial analysis conducted by Marston are:

Under the Base Case price assumptions, the Wolverine Project has an estimated after-

tax internal rate of return of 15.7%.

ITEM

2006

H1

2006

H2

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

TOTA

L

TON

NE

S S

OLD

(kt)

-

1,

154

2,38

42,

275

2,62

42,

725

2,64

02,

716

2,71

62,

127

1,77

11,

763

1,76

61,

054

-

-

27,7

17

SALE

S PR

ICE

(C$/

t FO

B P

ort)

-

$1

43.9

8$1

17.6

6$8

2.37

$82.

16$8

2.33

$82.

36$8

2.32

$82.

34$8

2.49

$82.

51$8

2.56

$82.

56$8

2.56

-

-

$89.

86

RE

VE

NU

E (F

OR

MIN

E)

-

13

8,98

7

22

4,98

4

135,

237

15

5,47

5

159,

180

15

4,29

1

158,

622

15

8,64

5

124,

592

10

3,75

3

103,

365

10

3,56

9

61,8

18

-

-

1,

782,

519

TOTA

L C

AS

H C

OS

TS-

42,3

35

85

,447

80,1

76

10

3,90

4

100,

944

10

1,56

6

106,

851

10

5,07

3

77,8

19

73

,173

72,8

88

50

,684

24,1

53

-

-

1,

025,

014

Cas

h C

ost P

er T

onne

$0.0

0$3

6.69

$35.

84$3

5.24

$39.

59$3

7.04

$38.

46$3

9.34

$38.

69$3

6.58

$41.

32$4

1.34

$28.

69$2

2.91

$0.0

0$0

.00

$36.

29

EB

ITD

A (n

et o

f roy

altie

s)1

-

96

,652

139,

537

55

,061

51,5

71

58

,236

52,7

25

51

,771

53,5

72

46

,774

30,5

80

30

,477

52,8

85

37

,665

-

-

757,

505

EB

ITD

A p

er T

onne

$0.0

0$8

3.76

$58.

53$2

4.20

$19.

65$2

1.37

$19.

97$1

9.06

$19.

73$2

1.99

$17.

27$1

7.29

$29.

94$3

5.72

$0.0

0$0

.00

$29.

88

CA

PIT

AL

EX

PE

ND

.228

7,54

5

22

,565

10,6

17

44

,379

9,86

7

7,00

3

4,73

0

3,21

2

7,51

6

1,04

3

2,82

5

1,48

5

320

490

5,08

7

4,34

5

403,

596

Pre

-tax

Cas

h Fl

ow(2

87,5

45)

74

,088

128,

920

10

,682

41,7

04

51

,233

47,9

95

48

,559

46,0

55

45

,731

27,7

55

28

,992

52,5

65

37

,175

(5,0

87)

(4,3

45)

344,

477

Cum

ulat

ive

(287

,545

)

(213

,458

)

(84,

537)

(73,

856)

(32,

151)

19,0

82

67

,077

115,

636

16

1,69

1

207,

422

23

5,17

7

264,

169

31

6,73

4

353,

909

34

8,82

2

344,

477

Inco

me

Taxe

s (C

ash)

Fede

ral T

axes

-

-

-

-

2,71

2

10,2

85

9,

308

9,

393

10

,089

8,59

7

5,40

8

5,54

9

10,6

39

7,

525

-

-

79

,504

Pro

vinc

ial T

ax-

-

-

-

1,

490

5,

651

5,

114

5,

161

5,

544

4,

724

2,

971

3,

049

5,

845

4,

135

-

-

43

,684

TOTA

L IN

CO

ME

TA

X-

-

-

-

4,

202

15

,937

14,4

22

14

,554

15,6

33

13

,321

8,37

9

8,59

8

16,4

84

11

,659

-

-

123,

188

Afte

r-Ta

x C

ash

Flow

(287

,545

)

74,0

88

12

8,92

0

10,6

82

37

,503

35,2

96

33

,573

34,0

05

30

,422

32,4

10

19

,376

20,3

94

36

,081

25,5

15

(5

,087

)

(4

,345

)

22

1,28

9

Cum

ulat

ive

(287

,545

)

(213

,458

)

(84,

537)

(73,

856)

(36,

353)

(1,0

57)

32,5

17

66

,522

96,9

44

12

9,35

4

148,

730

16

9,12

5

205,

206

23

0,72

1

225,

635

22

1,28

91 C

ash

Cos

ts in

H1

2006

, 201

9 an

d 20

20 a

re ro

lled

up in

to th

e m

ine

cape

x., a

s co

mm

erci

al p

rodu

ctio

n co

mm

ence

s in

H2

2006

and

end

s in

201

8.2 C

apex

sho

wn

in 2

019

and

2020

repr

esen

ts m

ine

recl

amat

ion

expe

nditu

res.

(All

figur

es a

re in

C$0

00s

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25-9

Project payback occurs in approximately 5 years on a zero return basis.

Marston also developed sensitivity analyses for changes in coal prices, operating costs and

capital costs, which are shown on Tables 25.6 through 25.8, respectively.

Variation from Base Case Pricing Before Income Tax IRR After Income Tax IRR

-15.00% -0.7% -1.8%-10.00% 7.0% 4.7%-5.00% 13.8% 10.4%0.00% 20.2% 15.7%5.00% 26.3% 20.4%10.00% 32.2% 24.9%15.00% 38.0% 29.3%

Variation from Base Case Operating Cost Before Income Tax IRR After Income Tax IRR

-15.00% 27.1% 21.1%-10.00% 24.9% 19.3%-5.00% 22.6% 17.6%0.00% 20.2% 15.7%5.00% 17.7% 13.6%10.00% 15.1% 11.5%15.00% 12.4% 9.3%

Variation from Base Case Capex Before Income Tax IRR After Income Tax IRR

-15.00% 21.6% 16.8%-10.00% 21.2% 16.4%-5.00% 20.7% 16.0%0.00% 20.2% 15.7%5.00% 19.8% 15.3%10.00% 19.3% 14.9%15.00% 18.9% 14.5%


(All figures in 2005 C$ and 000s unless shown differently)

Table 25.8WCC BASE CASE SUMMARY OF ECONOMIC ANALYSES - CAPEX. SENSITIVITY

Table 25.7WCC BASE CASE SUMMARY OF ECONOMIC ANALYSES - COST SENSITIVITY



Table 25.6WCC BASE CASE SUMMARY OF ECONOMIC ANALYSES - PRICE SENSITIVITY


1

ITEM 26 ILLUSTRATIONS

Figure 1 General Location Map Figure 2 Wolverine Site Map Figure 3 Coal Occurrences Figure 4 Regional Geology Figure 5 Perry Creek Area Stratigraphic Column Figure 6 EB Area Stratigraphic Column Figure 7 Perry Creek Geological Cross Sections Figure 8 EB Geological Cross Sections Figure 9 Wolverine Project Mine and Infrastructure Figure 10 Perry Creek Resource Pit Figure 11 EB Resource Pit Figure 12 Perry Creek Area – Measured and Indicated Resources Figure 13 EB Area – Indicated Resource Area Figure 14 Perry Creek – Pit Status Map – End of Year 2018 Figure 15 EB – Pit Status Map – End of Year 2014 Figure 16 Surface Facilities Map – Perry Creek Area Figure 17 Wolverine Coal Project Flowsheet

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APPENDIX

Certificate of Author


Appendix-1

Richard R. Marston, P.E. President and Principal Consultant

Marston Canada, Ltd. 2723 – 37 Avenue NE Suite 122

Calgary, Alberta, Canada T1Y 5R8 TEL: 403.262.7436 FAX: 403.262.7439

Email: [email protected]

CERTIFICATE of AUTHOR

I, Richard R. Marston, P.E., do hereby certify that:

1. I am President and Principal Consultant of:

Marston Canada, Ltd. 2723 – 37 Avenue NE Suite 122

Calgary, Alberta, Canada T1Y 5R8

2. I graduated with a Bachelor of Applied Science - Mining Engineering, from Queen’s. University, Kingston, Ontario, in 1981. In addition I have a J.D. from Washington University, St. Louis, MO, 1989 and I am a member of the Missouri Bar, admitted 1989.

3. I am licensed as a professional engineer in Missouri, USA and member of the Society of Mining Engineer of A.I.M.E. and of the Canadian Institute of Mining, Metallurgy and Petroleum.

4. I have worked as a mining engineer for a total of 21 years since graduation from Queen’s University.

5. I have read the definition of “qualified person” as defined in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I am responsible for the preparation of Items 1 through 26 of the technical report entitled Technical Report on the Wolverine Project for Western Canadian Coal Corp. – December 2005 (the Technical Report) relating to the results of the feasibility study of the Wolverine Project for Western Canadian Coal Corp. I visited this Property for a day in June of this year and observed the existing development work and historical drill sites.

7. I have had no prior direct involvement with the Property that is the subject of the Technical Report.

8. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical Report, the omission to disclose which makes the Technical Report misleading.


Appendix-2

9. I am independent of the issuer applying all of the tests in section 1.5 of NI 43-101.

10. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

11. I consent to filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.

Dated this 15th Day of March, 2006.

[Signed by Richard R. Marston, P.E.]__Signature of Qualified Person

_Richard R. Marston, P.E.Print name of Qualified Person

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