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EXPLORATION PLAN <br />This Notice of Intent addresses two distinct exploration areas. The Dry Fork area has surface <br />lands managed by the Gunnison National Forest and minerals administered by the Bureau of <br />Land Management, The Lions Mesa azea has surface lands privately held by Mountain Coal <br />Company, and privately owned minerals leased by Mountain Coal Company. The azeas aze <br />described below and will be henceforth referred to as Dry Fork and Lions Mesa respectively. <br />The proposed Dry Fork exploration azea is located approximately 11 miles east of Paonia, <br />Colorado and 6 miles southeast of the town of Somerset, Colorado. The area lies within a portion <br />of T.14S. R.90W. 6~ Prime Meridian, Gunnison County, Colorado. The proposed exploration <br />area is located south and east of the existing West Elk Mine as shown in Figure lA. A legal <br />description of the proposed area is presented within the license application. Locations of the five <br />proposed sites are shown in Table 1. The area applied for is east and contiguous to a current coal <br />license held by Mountain Coal Company (C-1362) and north of a proposed exploration license <br />applied for by Ark Land Company (COC-62540). The proposed exploration license area also <br />includes part of the proposed Dry Fork Lease By Application tract (submitted 9-11-03). <br />The proposed Lions Mesa azea is located approximately 9 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. <br />R.90W. 6~ Prime Meridian, Gunnison County, Colorado. The proposed exploration area is <br />located south and east of the existing West Elk Mine as shown in Figure lA. A legal description <br />of the proposed azea is presented within the application. Location of the proposed site is shown <br />in Table 1. The site is within a current coal lease held by Mountain Coal Company and south of <br />the proposed Dry Fork Coal Exploration License (CEL) applied for by Ark Land Company <br />(COC-62540). The proposed exploration site is within Section 15 and also includes access roads <br />in parts of Sections 4, 5, 9, 10, and 15. <br />The primary goal of the exploration activity is to further refine coal seam occurrence, coal <br />quality, methane gas quantity, and to test for the presence or absence of geologic discontinuities. <br />Exploration drill holes from I970's to the present exist within the proposed exploration areas that <br />provide a preliminary evaluation of the geologic conditions. Additional data is required for <br />detailed evaluation of the coal reserve. <br />Surface Topoeraphy <br />The elevation of the proposed Dry Fork exploration azea ranges from 8100 ft. in the drainage of <br />Dry Fork of Minnesota Creek and increases southeastward to 9100 ft. on Coal Creek Mesa. The <br />terrain is comprised of steep slopes and benches within the Wasatch and Mesa Verde Formations <br />and the colluvial rock talus slopes derived from the Deep Creek headwaters slide azea south of <br />the proposed exploration azea. Deep Creek and the east flank of Coal Creek Mesa form the most <br />conspicuous features within the proposed exploration azea. Deep Creek a perennial stream <br />draining northward into Ravens Gulch and thereby into the North Fork of the Gunnison River. <br />Dry Fork of Minnesota Creek drains west and south into Minnesota Creek. Minnesota Creek in <br />turn joins the North Fork of the Gunnison River at the town of Paonia. <br />2 <br />