The Company owns the existing New Elk Coal Company LLC coal property surface assets, including the Coal Preparation Plant, silos, buildings, railway right of way, surface real estate, mining equipment, conveyor systems, electrics and coal waste dump all related to the New Elk Coal Company LLC coal Resource properties, and the contiguous New Elk coal resource deposits, are located near the town of Trinidad in Los Animas County, southern Colorado, U.S.A.

The acquisition of the New Elk Surface Assets by Cline is the first stage in its acquisition of all of the coal properties and coal resources of New Elk Coal Company LLC, now proceeding. The New Elk Surface Assets are key in the development of the New Elk coal resources, and fundamental to the Cline plan to bring the New Elk Coal resources into commercial production without delay. Cline has the right to purchase all of the existing coal mine properties, coal resources and related assets of New Elk Coal Company, and includes a 100 kilometer area of interest.

The New Elk Mine was opened in 1951 by the CF&I Steel Company to provide metallurgical coking coal for its blast furnace iron and steel production plant at Pueblo, Colorado. The CF&I plant was converted to direct electrolytic reduction of steel in 1981 eliminating its need for coking coal and the mine was sold to Wyoming Fuels who continued operation of the mine through 1989; the coal preparation plant, which was built in 1984 to improve product coal specification, continued operating with coal from other nearby mines until 1996.

The remaining New Elk Coal Properties include New Elk’s substantial metallurgical and thermal coal resources of 315,000,000 total tons of NI 43-101compliant in-place coal, detailed below, within 18,555 contiguous acres, a comprehensive earlier data base by CF&I Steel Company, and a current coal mining permit. Cline will now proceed to bring the New Elk coal mine to production without delay.

Behr Dolbear & Company Ltd. (“Behre Dolbear”) was commissioned by and has delivered to Cline a Canadian National Instrument 43-101 Technical Report on the New Elk coal resources in compliance with the requirements of the Toronto Stock Exchange. The independent Qualified Person responsible for authoring the Technical Report and summarizing the technical material presented in this release is Mr. Gardar G. Dahl, Jr., C.P.G., a senior associate of Behre Dolbear. Mr. Dahl is an established coal consultant with more than 40 years experience in coal exploration, mining and sales, both in surface and underground operations. Behre Dolbear is one of the oldest, continually operating minerals industry consulting firms in the world, offering fully integrated management consulting and technical advisory services specializing exclusively in the minerals industries from offices around the world. Behre Dolbear has performed numerous coal assignments globally for major and junior mining companies alike.

The detailed results of the NI 43-101 coal resource calculation by Mr. Dahl is as follows:

(coal resources below are in millions of tons)

Note: Density Factor = 85lb/ft³