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Introduction <br />This report has been prepared for the Colorado Department of Mining and Geology, DMG, <br />in response to Stipulation 12 of Powderhorn Coal Company's, PNCC, Mining and Reclamation <br />Permit No. C - 81 - 041. This stipulation requires the submission of an annual report detailing the <br />results of PHCC's subsidence monitoring inspections. This report contains descriptions of the local <br />terrain, geology, mining practices and details of the surface subsidence inspections. <br />Topography <br />PHCC operates the Roadside North and South Portals located 4 miles northeast of Palisade <br />Colorado. The surface terrain is typical for an arid mountainous region with moderately sloping hills <br />giving way to massive sandstone cliffs. Vegetation is limited to various grasses, sagebrush, saltbrush, <br />and a small population of pinyon junipers. <br />Geology <br />In the near vicinity of the mine property the rock strata are composed of three formations; <br />the Mt. Garfield Formation, the Hunter Canyon Formation and the Wasatch Formation. <br />The most important formation is the Mt. Garfield Formation because it contains three coal <br />seams of economic significance. These seams are the Palisade, the Cameo, and the Carbonera seams. <br />The Palisade Seam is 3 ft. to 4 ft. thick near the abandoned Midwest mine and rapidly thins <br />to the west, south and east. The Cameo Seam overlies the Palisade Seam by 400 ft. to 450 ft. and <br />is currently the only seam being mined in the immediate area. The Cameo Seam ranges in thickness <br />from less than 5 ft. to over 10 ft. and is the thickest in the north western parts of the property. The <br />Carbonera Seam overlies the Cameo Seam by 38 ft. to 93 ft. and is characteristically a series of <br />detached seams rather than a single seam. The remaining 200 ft. to 400 ft. of the Mt. Garfield <br />Formation consists of interbedded to laminated carbonaceous silty, fine to very fine grained <br />sandstones and carbonaceous sandy siltstones. <br />Overlying the Mt. Garfield Formation is the Hunter Canyon Formation. It consists of massive <br />brown - buff and gray sandstones and soft gray shale and ranges from 375 ft. in the west to 1,400 ft. <br />in the east. <br />Directly above the Hunter Canyon Formation is the Wasatch Formation. It ranges from 280 <br />ft. to 790 ft. of variegated clay shales of fluviatile and lacustrine origin together with a few beds of <br />sandstone. The bulk of the formation is made of sandy and silty shales with sandstone constituting <br />less than 3 percent of the rocks in the formation. <br />Page 1 <br />