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Twentymile Coal, LLC (TC) <br />Narrative <br />Lease by Modification Application Wolf Creek Reserve — April 2014 <br />range from 1,200 feet to 1,400 ft. <br />Directly below the Wadge Seam in the planned mine area is a persistent and laterally <br />continuous layer of material of clay -sized particles. Beneath this clay is a zone of alternating <br />thick shales, claystones, siltstones, and intermittent lenticular sandstones. The shales are <br />generally continuous and the sandstones discontinuous. Near the base of this zone of <br />alternating beds is the Wolf Creek Seam. Within the planned mining area, the Wolf Creek <br />Seam splits into four distinct benches. The seam thickness ranges from zero to twelve feet <br />and displays good consistent lateral continuity only in certain delineated areas. Exploration <br />holes drilled within and near the planned mining area are identified on Plate 3. Drilling <br />operations encountered ground water within the Twentymile Sandstone, the strata <br />immediately above and including the Wadge Seam, and in the Trout Creek Sandstone, <br />however no significant ground water flows were encountered in either the Wadge/Wolf <br />Creek interburden or in the Wolf Creek Coal Seam. <br />Some major lineaments in the underlying Precambrian units are projected to occur within the <br />area and may have some association with possible faulting within the Mine Permit Area. As <br />indicated on Plate 2, faulting has been identified in the area to the east and west of the mine <br />plan area, with the western faults paralleling the mains. Structure data was modeled on both <br />the top and bottom of the Wadge and Wolf Creek Seams and there was virtually no <br />difference in trend. The structure drawing illustrated on Plate 4 is drawn on the bottom of the <br />Wolf Creek Seam. <br />Underground mining operations in the Wolf Creek Seam within the planned mining area are <br />expected to encounter similar geologic conditions and hazards to those that TC encountered <br />and successfully dealt with in the overlying Wadge Seam. Known faults form the boundaries <br />of the planned mining area to the east and west, and are not expected to impact the proposed <br />operations. The Wolf Creek Seam does contain splits and partings, which will limit mining <br />in certain areas, however, the occurrence and extent of these features is well delineated by <br />drilling operations, has been considered and addressed by the proposed mining plans, and the <br />parting materials can be effectively separated from the coal in TC's existing washplant, based <br />on washability testing. <br />Similar to the previously mined Wadge Seam, the Wolf Creek Seam does not contain or <br />release any significant quantities of methane gas (based on methane desorption testing). <br />Given drilling results which indicate no significant water in either the Wadge/Wolf Creek <br />Interburden or the Wolf Creek Coal Seam, mine water inflows are not expected to be a <br />significant concern. As previously noted, there is an accumulation of water in a portion of <br />the overlying Wadge Seam workings which will need to be drained prior to undermining this <br />area. TC plans to drain this water and transfer it to other areas of sealed mine workings in <br />the Western Mining District. <br />WCR BLM Lease App Narrative 0414.doex Page 6 <br />