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EXHIBIT <br />STATE OF COLORADO <br />John W. Hickenlooper, Governor <br />Christopher E. Urbina, MD, MPH <br />Executive Director and Chief Medical Officer <br />Dedicated to protecting and improving the health and environment of the people of Colorado <br />4300 Cherry Creek Dr. S. <br />Denver, Colorado 80246-1530 <br />Phone (303) 692-2000 <br />Located in Glendale, Colorado <br />hftp://www.cdphe.state.co.us <br />September 12, 2012 <br />Laboratory Services Division <br />8100 Lowry Blvd. <br />Denver, Colorado 80230-6928 <br />(303) 692-3090 <br />Corporation Service Company, Registered Agent <br />Peabody Sage Creek Mining, LLC <br />1560 Broadway, Suite 2090 <br />Denver, CO 80202 <br />°F cO�o <br />0 <br />1876 <br />Colorado Department <br />of Public Health <br />and Environment <br />Certified Mail Number. 70121010 00021774 3415 <br />RE: Service of Notice of Violation/Cease and Desist Order, Number: I0-120912-1 <br />Dear Corporation Service Company: <br />Peabody Sage Creek Mining, LLC is hereby served with the enclosed Notice of Violation / <br />Cease and Desist Order (the "NOV/CDO"). This NOV/CDO is issued by the Colorado <br />Department of Public Health and Environment's Water Quality Control Division (the <br />"Division") pursuant to the authority given to the Division by §§ 25-8-602 and 25-8-605, C.R.S., <br />of the Colorado Water Quality Control Act, (the "Act"). The Division bases this NOV/CDO <br />upon findings that Peabody Sage Creek Mining, LLC has violated the Act, and/or Permit <br />regulations promulgated pursuant to the Act, as described in the enclosed NOV/CDO. <br />Pursuant to §25-8-603, C.R.S., Peabody Sage Creek Mining, LLC is required, within thirty (30) <br />calendar days of receipt of this NOV/CDO, to submit to the Division an answer admitting or <br />denying each paragraph of the Findings of Fact and responding to the Notice of Violation. <br />This action could result in the imposition of civil penalties. The Division is authorized pursuant <br />to § 25-8-608, C.R.S., to impose a penalty of $10,000 per day for each day during which such <br />violation occurs. <br />Please be advised that the Division is continuing its investigation into this matter and the <br />Division may identify supplementary violations that warrant amendments to this NOV/CDO or <br />the issuance of additional enforcement actions. <br />