STATE OF WYOMING COAL MINING LEASE

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Exhibit 10.9

P.L. #20
Amended January 6, 1998

STATE OF WYOMING
COAL MINING LEASE

        THIS INDENTURE OF LEASE ENTERED INTO THIS 2nd day of April, 2005, A.D. by and between the STATE OF WYOMING, acting by and through its Board of Land Commissioners, party of the first part, hereinafter called the lessor, and

Caballo Rojo, Inc.

party of the second part, hereinafter called the lessee.

        Section 1.     PURPOSES.     The lessor, in consideration of the rentals and royalties to be paid and the covenants and agreements hereinafter contained and to be performed by the lessee, does hereby grant and lease to the lessee the exclusive right and privilege to mine, extract and remove all of the coal deposits in or under the following described land, to wit:

640.00 All Section 16, Twp. 47N, Rg. 71W, 6 ^th  p.m.

consisting of 640.00 acres, more or less, Campbell county, together with the right to construct, and maintain thereon all work, buildings, plants, waterways, roads, telegraph, telephone and power lines, tipples, hoists or other structures necessary to the full enjoyment thereof, including the right to transport coal through the underground workings on the premises above described, subject however, to the conditions hereinafter set forth.

        Section 2.     TERM OF LEASE.     This lease, unless terminated at an earlier date as hereinafter provided, shall remain in force and effect for a term of ten (10) years beginning on the 2nd day of April 1, 2005 and expiring on the 1st day of April, 2015.

        Section 3.     IN CONSIDERATION OF THE FOREGOING, THE LESSEE COVENANTS AND AGREES:     

        (a)     BOND     When the lease becomes an operating lease or actual operations for the mineral are to be commenced, the bond shall be furnished in such a reasonable amount as the Office of State Lands and Investments shall determine to be advisable in the premises. The operating bond shall preferably be a corporate surety bond, executed by the lessee, the surety being authorized to do business in the State of Wyoming. A cash bond may be furnished on the consent of the Office of State Lands and Investments if the lessee is unable to obtain a corporate surety bond. Form of bond will be furnished by the Office of State Lands and Investments. The State will require two executed copies of the bond, therefore as many additional copies should be made as will be required by the lessee and the bonding company.

        (b)     PAYMENTS     To make all payments accruing hereunder to the Office of State Lands and Investments, 122 West 25th Street, Herschler Building, Cheyenne, Wyoming 82002-0600.

        (c)     RENTALS     Prior to the discovery of commercial quantities of coal in the lands herein leased, to pay the lessor in advance beginning with the effective date hereof, an annual rental of ONE DOLLAR ($1.00) PER ACRE OR FRACTION THEREOF PER YEAR for the 1st through the 5th year inclusive and TWO DOLLARS ($2.00) PER ACRE OF FRACTION THEREOF PER YEAR for the 6th through 10th years inclusive—or renewal thereof; provided, however, that if the said lands are not on a commercial mining basis and so operated at the end of

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two (2) years from the date hereof, such rental may be increased at the option of the lessor, to such an amount as the lessor may decide to be fair and equitable.

        After the discovery of commercial quantities of coal in the lands herein leased to pay to the lessor in advance, beginning with the first day of the lease year succeeding the lease year in which commercial discovery was made, an annual rental of TWO DOLLARS ($2.00) PER ACRE OR FRACTION THEREOF PER YEAR unless changed by agreement, such rental so paid for any one year to be credited on the royalty for that year.

        Annual rentals on all leases shall be payable in advance for the first year and each year thereafter. No Notice of Rental Due shall be sent to the lessee. If the rental is not received in this office on or before the date it becomes due, Notice of Default will be sent to the lessee and a penalty of 50¢ per acre or fraction thereof for late payment will be assessed.

        The lessee is not legally obligated to pay either the rental or the penalty, but if the rental and penalty are not received in this office within thirty (30) days after the Notice of Default has been received by the lessee, the lease will terminate automatically by operation of law. Termination of the lease shall not relieve the lessee of any obligation incurred under the lease other than the obligation to pay rental or penalty. The lessee shall not be entitled to a credit on royalty due for any penalty paid for late payment of rental on an operating lease.

        (d)     ROYALTY     To pay a royalty on all coal mined from the land herein leased, either in kind or value as the lessor may elect of 12 ¹ / 2 % on coal mined by surface mining operations and 8% on coal mined by underground mining methods.

        Royalty shall be payable on the gross value at the mine on all coal mined. Gross value for the purpose of royalty calculation means the unit sale or contract price times the number of units sold. In calculating gross value the sales price shall be prima facia evidence of such gross value. No deduction shall be allowed for fees, taxes, assessments or similar levies imposed by the State of Wyoming, its political subdivisions, any other state or the federal government, nor for the expense of mining, processing and loading the coal in merchantable condition at the mine ready for shipment. If the coal is not sold and valued at the mine, transportation from the mine to the point of sale or delivery may be deducted in determining value. In the event there is no sale of the coal or the Board of Land Commissioners determines that the sales price does not truly reflect the value of the coal, it may make its own determination of value and require that royalties be paid on the basis of the value determined by the Board.

        If the lessor elects to take its royalty in kind, such coal shall be good merchantable coal delivered for shipment at the mine.

        (e)     MONTHLY PAYMENTS AND STATEMENTS     Unless a different time schedule is approved by the Board of Land Commissioners, to make payment on or before the twentieth (20th) day of the calendar month succeeding the month of production, for royalties on all coal mined from the land; and to furnish sworn monthly statements therewith showing in tons the amount of all coal mined, accompanied by the mine weights; and such other information as may be called for by the form of report prescribed by the lessor. These statements are to be subject to verification by examination of books and records of the lessee.

        (f)     UNDERGROUND WORKINGS     That in the underground workings for coal all shafts, inclines and tunnels shall be well timbered (when good mining requires timbering); that all underground timbering placed in the mine shall be kept in good condition and at no time shall such timbering be removed unless al of the coal in the lands have been removed; that at the termination of this lease all underground timbering shall became the property of the lessor without compensation therefor to the lessee; that all parts or workings, where the coal is not exhausted and for good reasons not being worked, will be kept free from water and waste material; and that the

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underground workings shall be protected against fire and flood and should creeps and squeezes occur they shall be checked without delay; to leave such solid blocks of coal as may be necessary to support the cover and protect the slopes, air-courses, manways, and hauling roads to permit the lessee to mine coal from any lands which he may own or become owner of in adjacent sections of land; and the lessee shall have the use of the slopes, air-courses, manways and hauling roads for the purpose of mining in the adjacent sections provided the lessee shall pay the royalty for the blocks of coal so left for support for protection, if it shall be agreed that the blacks of coal so left shall be more for the benefit of the lessee than to the State of Wyoming, and all coal so paid for may be removed subsequently during the term of this lease without subjecting the lessee to the payment of an additional royalty therefor.

        (g)     STRIP WORKINGS     That all strip workings shall be operated in such a manner so as to remove all coal in the vein or veins worked; that strip mining shall be continuous across the property according to a definite plan and pattern submitted to and receiving the approval of the Office of State Lands and Investments; that all overburden removed shall, as mining progresses, be returned to original pit and leveled, so that all the expiration or surrender of the lease or termination of mining activities the land will approximate its previous configuration; that all roads and bridges built and necessary to mining operation on the land shall upon the expiration, forfeiture or surrender of said lease become the property of the lessor.

        (h)     WEIGHT—WEIGHT RECORD     That all coal mined or taken from the premises, upon being hoisted and trammed, shall be weighed and the weight thereof together with the proper check number, entered in due form in books kept for such purpose by the lessee; and an accurate record of the weight of all coal mined from the land shall be kept and preserved separate from the records of the coal mined from other lands.

        The term "ton" as herein used means a ton of two thousand (2,000) pounds of unscreened coal, unless the lessor elects to compute a ton of coal at twenty-nine cubic feet of coal in the solid, or by the measurements of the space from which the coal is mined, deducting therefrom all space occupied by slate or other impurities, and in such case the computation shall be final and binding upon the lessee.

        (i)     MAPS AND REPORTS     Upon demand, to furnis