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' (DRAFT - GEOLOGY AND RESERVE REPORT) <br />(SUITABLE FOR MLRD RULE 2.04.6 REQUIREMENTS) <br />.r <br />INTRODUCTION <br />Scone of Wprk <br />Panorama Resource Services, Inc. fPRS) was retained in July 1983 <br />to conduct exploration activities relative to coal properties <br />dedicated to the Animas and Helen Mines of Sundance Coal Company. <br />Activities were coordinated to allow investigation of resources <br />that may constitute the reverse base of new mines in <br />stratigraphically and topographically higher coal seams. The <br />scope of this report, however, is limited to the exploration <br />activities and results pertaining to the reserve base of the <br />Raton Creek )Mines. <br />The purpose of this report is to document the proven and probable <br />reserves of Vermejo Formation seams, and provide geologic <br />insights necessary to augment effective surface and underground <br />mine planning. In both cases we have utilized sodern coal <br />formational concepts and the data currently available to arrive <br />at the best possible understanding of the reserve base and its <br />minability. <br />~~ Property Description <br />Mine Nomenclature <br />The nomenclature of the Raton Creek Mines has undergone <br />various changes. Prior to the acquisition of the property, <br />Animas Coal Company operated a small underground mine (the Helen <br />Mine) in the Lower Starkville Seam on the north face of <br />Starkville Gulch. This mine is now used as a parts warehouse. <br />After the Sundance acquisition, the RmonCrcekNo.lMinc(Permit Map 6) <br />was opened on the south face of the Starkville Gulch in th• Lower <br />Starkville Seam and was later driven upwards to the Upper <br />Starkville Seam. RntoncrcekNo,iMine is still applicable to this entry. <br />Sundance Coal Company opened a new No.2Mine underground mine (Permit <br />Map 6) on the north face of the gulch to the west of the Animas <br />Coal Company Helen mine. This mine had been operating in the <br />Lower Starkville Seam but is now inactive. The name Helen II <br />Strip has come~to be used for surface minable reserves <br />surrounding the liel en underground mine. Consequently, Re~on Crcck No.l Mine <br />refers to underground entries on the south face and Rn~on creek No.?Mint <br />~.o either underground or future surface mining on the north <br />face of Starkville Gulch. <br /> <br />1 <br />78 Revised 5/93 <br />