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Denver Coal Club The Powder River Basin: Its Current Status and Prospects Burnham Coal, LLCMarch 21, 2013

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Burnham Coal, LLCMarch 21, 2013 Disclaimer Its tough making predictions, especially about the future. - Yogi Berra, variations by Casey Stengel, Mark Twain, et. al. predicting the future is easy. It's trying to figure out what's going on now that's hard. Fritz R. S. Dressler

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Burnham Coal, LLCMarch 21, 2013 Powder River Basin Mine Location Map

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Burnham Coal, LLCMarch 21, 2013 For the first time since 1978, PRB producers are experiencing a prolonged decline in production

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Burnham Coal, LLCMarch 21, 2013 Dont expect increased production in 2013

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Burnham Coal, LLCMarch 21, 2013 Long term planned and potential production capacity has not decreased

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Burnham Coal, LLCMarch 21, 2013 Existing mines and projects

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Australian interest in U.S. coal (the grass is always greener): Ambre Energy buys 50% interest in Decker and Black Butte mines acquisition of the remaining 50% of Decker is Pending Australian-American Many Stars project in Montana County Coal ltd., wants to develop two coal mines in the PRB Continental Coal Ltd. Is in discussions with the Crow Nation to acquire a large coal deposit in Montana. Burnham Coal, LLCMarch 21, 2013

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Current cost related trends Burnham Coal, LLCMarch 21, 2013

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Burnham Coal, LLCMarch 21, 2013 Productivity began falling in 2001 42.0 TPMH 28.3 TPMH

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Burnham Coal, LLCMarch 21, 2013 Ratios are climbing

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Burnham Coal, LLCMarch 21, 2013 Reserves are getting more expensive

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Burnham Coal, LLCMarch 21, 2013 Thoughts on companies and mines

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Where will the coal go? Burnham Coal, LLCMarch 21, 2013

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Burnham Coal, LLCMarch 21, 2013 Domestic markets are not expected to improve

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Burnham Coal, LLCMarch 21, 2013 Are exports the answer?

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Forecasts everybody agrees that the demand is there. But lets look at history. Burnham Coal, LLCMarch 21, 2013

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Burnham Coal, LLCMarch 21, 2013

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Los Angeles Export Terminal (LAXT) Utah exports jump from 0.5 Mt in 1987 to 3.0 Mt in 1993. Work starts on LAXT in 1993. Utah exports peak at 5.3 Mt in 1996. Port opens in 1997. LAXT closes due to lack of business in 2002. Burnham Coal, LLCMarch 21, 2013

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U.S. Coal Export History Burnham Coal, LLCMarch 21, 2013

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Historically, the U.S. has been the swing supplier Burnham Coal, LLCMarch 21, 2013

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U.S. producers have an transportation disadvantage from mine to port. Burnham Coal, LLCMarch 21, 2013

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West Coast Transportation Routes Burnham Coal, LLCMarch 21, 2013

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Great Lakes - Gulf Coast Transportation Routes Burnham Coal, LLCMarch 21, 2013

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And a transportation disadvantage from port to customer. Burnham Coal, LLCMarch 21, 2013

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The U.S. has a seaborne disadvantage to Asia Burnham Coal, LLCMarch 21, 2013

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Burnham Coal, LLC Port Capacity and Proposed Expansions (Mt) March 21, 2013

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Environmental opposition to ports: EPA wants full review of Oregon coal-export project Oregon governor wants study of coal-export impacts Port of St. Helens eyed for coal terminal, Columbia Riverkeeper mounts no campaign RFK Jr. calls coal corrupting at Portland rally Burnham Coal, LLCMarch 21, 2013

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Environmental opposition is not limited to ports: Federal coal sales in Powder River Basin draw suit Montana agency challenged over coal mine permits Backers of Tongue River Railroad told to resubmit application Seattle City Council Votes Unanimously (and Symbolically) Against Coal City of Helena Oks coal-train letter to Amy Corps Missoula City Council supports study of coal trains effects Spokane wants more study of coal trains At chambers request, county commissioners back coal development (Yellowstone County, MT) Burnham Coal, LLCMarch 21, 2013

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Final question Burnham Coal, LLCMarch 21, 2013

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Source: Peabody 8-K, May 17, 2012 Burnham Coal, LLCMarch 21, 2013

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Final thought Burnham Coal, LLCMarch 21, 2013

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There is nothing stable in human affairs: therefore, avoid undue elation in prosperity and undue depression in adversity. - Socrates Burnham Coal, LLCMarch 21, 2013

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Contact Information: Bob Burnham Burnham Coal, LLC 16357 W. 76 th Ave Arvada, CO 80007 303.517.7826 bob@burnhamcoal.com Burnham Coal, LLCMarch 21, 2013