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SUNSET TRAIL AREA EXPLORATION PLAN <br />3482.1(A)(3)(iii)-Narrative Description of Proposed Exploration Area <br />The proposed exploration area is located approximately 11 miles east of Paonia, Colorado and 7 <br />miles southeast of the town of Somerset, Colorado. The area lies within a portion of T. 14S. R.90W. <br />6th Prime Meridian, Gunnison County, Colorado. The proposed exploration area is located south <br />and east of the existing West Elk Mine. Locations of the 12 sites are shown in Table 1 and on Map <br />1. The area for ten holes is within existing coal leases held by Mountain Coal Company, LLC (C- <br />1362) and Ark Land LLC (COC -67232). <br />Surface Topography <br />The elevation of the proposed exploration area ranges from 8250 ft. in the drainage of South Prong <br />Creek and increases southeastward to 9800 ft. near the western flank of Mt. Gunnison. The terrain <br />is comprised of moderate slopes and benches within the Wasatch and Mesa Verde Formations and <br />the alluvial and colluvial slopes derived from the Mt. Gunnison intrusive along North and South <br />Prong Creek and Lick Creek drainages. These drainages flow west and northwest into Minnesota <br />Creek. Minnesota Creek in turn joins the North Fork of the Gunnison River at the town of Paonia. <br />Geology <br />The proposed Sunset Trail exploration application area lies along the southeastern edge of the <br />Piceance Basin within the Somerset Coal Field, occurring on the Minnesota Pass U.S.G.S. 7 1/2 <br />minute quadrangle map. <br />Initial geological work in this area was done by W. T. Lee (1912) who reported his findings in <br />"Coal Fields of Grand Mesa and the West Elk Mountains, Colorado" (USGS Bulletin 510). Later <br />in 1948, Vard H. Johnson published a USGS map of the Paonia Coal Field incorporating drill hole <br />data generated through a USGS and U.S. Bureau of Mines drilling program. The following year <br />Johnson further described the geology of the Minnesota Creek area in USBM Technical Paper 721. <br />More recently, in 1989, C.R. Dunrud compiled a coal resources map of the region (USGS Map C- <br />115). Additionally, the Colorado Geological Survey has published a report on the coal resources <br />of the Somerset Coal Field (CGS OFR 98-6 and Resource Series 38). <br />The general stratigraphy of the exploration area consists of members of the Wasatch Formation of <br />Tertiary age overlying Mesa Verde Formation of the Upper Cretaceous age (see Figure 1, <br />Generalized Stratigraphic Cross -Section). Capping most of the higher terrains are colluvial <br />deposits from Mt. Gunnison. Below the colluvium, rocks of the Wasatch Formation are exposed <br />in limited locations. The uppermost member of the Mesaverde Formation is the Ohio Creek <br />member. It is exposed along many of the steeper slopes with the Barren Member of the Mesa Verde <br />formation cropping out lowest in the exploration area. The Upper and Lower Coal Members of the <br />Mesa Verde Formation are the major coal -bearing units in the area. In ascending order are the A <br />(King), B (Somerset), and C (Bear) coal beds of the Lower Coal Member and the D (Oliver), E <br />(Hawks Nest), and the F Seam coal beds of the Upper Coal Member. All of these seams have all <br />been historically mined within the North Fork Valley. Within the exploration area only the E Seam <br />is known to be of mineable thickness. The extent of these coal beds beneath the exploration area <br />is only marginally defined. The Rollins Sandstone is the lowest member of the Mesaverde <br />Formation present in the exploration area. Beneath the Rollins Sandstone is the Cretaceous Mancos <br />Shale. <br />2 <br />