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4) The aforementioned laws exempt certain surface <br /> coal mining operations "within or adjacent to" <br /> alluvial valley floors from the criteria "not <br /> interrupt, discontinue or preclude farming , <br /> not materially damage the quantity or quality of <br /> surface or ground water ."• <br />5) The term "adjacent" has been determined by OSM to <br /> be an area defined by 30 CFR 701.5 and delineated <br /> at operator discretion for a proposed area of <br /> operation or permit (See, Exhibit D hereto); <br />6) As of January 1, 1977, Empire Energy Corporation <br /> held the coal mining rights to~property so <br /> identified on Exhibit A (See, Exhibit C hereto); <br />7) As of August 3, 1976, Empire produced coal in <br /> commercial quantities from its Eagle Mine Comples <br /> (See, Exhibits E and G hereto); <br />8) As of January 1, 1977, and continuing to date Mine <br /> No. 5 was an integral part of the "mining <br /> operation" which included planned production from <br /> Mines 5, 6, 7, 8 and 9 processed as a single <br /> product through a single unit train loading <br /> facility (See, Exhibits F and I through Q hereto); <br />9) On March 24, 1977, Empire Energy Corporation <br />received a life-of-the-mine Development and <br />Extraction Mining Permit from the State of <br />Colorado for its No. 9 Mine which also is a part <br />of the "mining operation" (See, Exhibit H hereto); <br />10) Significant financial and legal commitments were <br />made to develop the multiple seam project and mine <br />complex prior to January 1, 1977, (See, Exhibits <br />F, G, and H hereto); and <br />11) The leasehold described in Exhibit B and shown on <br />Exhibit A contains the mining operation which in <br />aggregate is the coal production capability of <br />2,800,000 tons per year from the multiple seam <br />complex located within the leasehold (See, Exhibit <br />P hereto). <br />12) The Eagle Mine Complex consisting of the Eagle <br />Mines No. 5, 6, 7, 8, and 9 are exempt from the <br />requirements of Section 510 (b) of the FSMCRA. <br />13) That the area shown on Exhibit A has been <br />\_ identified as an alluvial valley floor by an <br />independent consultant and shown in Exhibit S. <br />12 <br />