Ann: Interim Financial Statements and MD&A , page-2

Don't know why they bothered to pay 1 million for this option. It never made sense this far out from production. Just an easy way to blow a million dollars :(

The Company expensed a previously capitalized $1.0 million fee in the current period as it allowed an option to acquire 1.0 Mtpa in port capacity at Ridley Terminals to expire. Had the Company exercised this option it would have incurred additional risk associated with minimum throughput payments, and paid an additional $4.0 million deposit.

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Now we know what they are doing with South Vista ... nothing.

Vista Extension is located on the northeast boundary of Vista and covers 14,432 hectares. An initial resource estimate on Vista Extension resulted in Measured and Indicated resources of 173 Mt and inferred resources of 969 Mt. The Company acquired Vista Extension for $13.0 million in 2012. To date exploration and evaluation expenses on Vista extension have been nominal and Coalspur has deferred a future drilling program and a pre-feasibility study on this project. The Company has no immediate plans to evaluate this property further.

Vista South covers 23,287 hectares and is located approximately 6km southwest of Vista. The Company believes Vista South has the potential to host a significant coal resource, which could provide value by leveraging off the planned infrastructure at Vista, providing for mine expansion or an extension of the project life. The Company spent $1.3 million to complete an exploratory drilling program on Vista South during the six months ended June 30, 2012. The Company has no immediate plans to evaluate this property further.