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Twentymile Coal, LLC (TC) <br />Narrative <br />Lease by Modification Application Wolf Creek Reserve — April 2014 <br />Twentymile Park ground water basin. The relevant ground water information from these <br />permits is incorporated into this application by reference. <br />The planned underground mining operations could result in localized and temporary drainage of <br />ground water from the Wadge overburden within a defined cone of depression. There are also <br />known accumulations of water in the sealed Wadge Seam mine workings over both the northern <br />and southern portions of the Wolf Creek Reserve. TC's development and mining plans for the <br />Wolf Creek Reserve include controlled drainage of these ground water pools, with transfer of <br />the water using the existing mine water handling systems to sealed and abandoned mine <br />working in the Western Mining District. Generally, other water -bearing units will not be <br />affected since intermediate thick, low permeability shales in the geologic sequence limit vertical <br />water transmission between units. Following completion of mining in each mining district, <br />mined -out areas are generally sealed and allowed to flood, with gradual reestablishment of a <br />dynamically stable piezometric surface within both the water -bearing unit and the mined -out <br />areas. <br />Ground water drainage to the mine workings, use of mine inflow water for mining operations, <br />and oxidation effects associated with contact between ground water and exposed coal and <br />overburden materials may result in changes in ground water quality and chemistry including <br />increases in TDS and metals. Generally, these effects will be buffered by dilution from <br />continued inflows, and contact mixing with undisturbed ground water sources. <br />Any localized reduction in piezometric surfaces and/or changes in water quality and chemistry <br />should not adversely affect water users since there are currently no ground water users within <br />the Wolf Creek Reserve or adjacent areas. <br />TC's existing ground water monitoring system, along with the additional Wadge/Wolf Creek <br />Interburden well(s) will be utilized to document and assess any mining -related impacts to <br />ground water in surface alluvial/colluvial deposits, the Twentymile Sandstone, Wadge <br />Overburden, Wadge/Wolf Creek Interburden, and Trout Creek Sandstone. <br />3. Intended Use of the Coal <br />TC has an exceptional reserve base that lends itself to high productivity and consistent coal <br />quality. The Wadge and Wolf Creek seams are bituminous coal with a high heating value and <br />low ash and sulfur content, important qualities for utility customers in meeting strict clean air <br />requirements. TC has an established connection to the UPRR system, providing economical <br />coal transportation to utilities throughout the United States, and providing potential export <br />opportunities. As a result, approximately 95 percent of TC's coal is shipped to various utility <br />customers for electrical power generation. The remaining five percent is used in the <br />manufacturing of industrial products. <br />The anticipated production rate for the Wolf Creek Reserve is approximately 5.3 million tons <br />per year, and will be determined annually by market and transportation conditions for Colorado <br />WCR BLM Lease App Narrative 0414.docx Page 15 <br />