Cline owns the Lossan coal mine project in northeastern British Columbia, Canada. The Lossan coal is metallurgical (steel making) coal with two grades – coking and pulverized coal injection (PCI). An independent Canadian National Instrument 43 101 Report shows an in-place raw coal resource of 239.6 million tonnes. Lossan is proximate to unit train rail service to year round Ridley Island Pacific international tide-water coal terminal (loading to 240,000 dwt vessels).

Cline owns the The Lossan Coal Project located in the Peace River Coalfield of northeastern British Columbia. The independent engineering Report prepared to Canadian Instrument 43 101 requirements has been prepared and delivered to the Company by Norwest Corporation, an independent engineering and consulting company. The environmental protection input and design contained in the Study was undertaken by Rescan Environmental Services Ltd.

The Study and C.I. 43 101 Report estimates total measured and indicated coal resources at the Lossan Coal Project at 186.1 million tonnes and total additional inferred coal resources at the Lossan Coal Project of 53.5 million tonnes as follows:

The Lossan coal deposit yields two coal quality products, one a medium volatile bituminous pulverized coal injection (“PCI”) product and the other being a metallurgical coking coal product.

The Lossan mine property is located proximate to a unit train rail service connecting to the Ridley Island bulk coal ship loading terminal at Prince Rupert on the British Columbia Pacific west coast. The Ridley Coal Terminal has significant excess annual coal loading capacity.

Following the calculation of the Lossan coal resource in place at 186.1 million tonnes of measured and an additional coal resource of 53.5 million tonnes indicated, Norwest Corporation delivered a feasibility study (the “Study”) at the request of the Company for the production of an initial 1.0 million tonnes of coal a year from the Lossan coal mine project over an initial 14 years (the “Lossan Coal Project”), the coal taken from the total of 239.6 tonnes of coal in place calculated in the Study. The reserve base for the study was as follows:

Among the key assumptions of the Study are a product yield of 74% being obtained, a waste to clean (product) coal strip ratio of 8.4:1 during the first two years of operation, increasing to an average of 10.2 bank cubic meters (BCM) of waste to one metric tonne of clean coal over the 14 year feasibility period, a project capital cost of approximately $57 million, an average price of US$80.00 per tonne of product PCI coal and US$90.00 per tonne of product metallurgical coal and an exchange rate of CDN$0.83 for US$1.00.

Statements in this presentation and report, other than purely historical information, including statements relating to NPV, IRR, the Company’s future plans and objectives or expected results constitute forward looking statements. Forward looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in mineral exploration and development. As a result, the results actually obtained by the Company will vary from those described in the forward looking statements and such variations may be material.