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Climate <br />The regional climate of the New Horizon area is typical of intermountain regions. It is <br />characterized by cold winters, hot summers, low rainfall, and short growing seasons. The <br />mine receives approximately 12 inches of precipitation in an average year. The majority of <br />the precipitation falls between October and May. <br />Regional Geology <br />The New Horizon Mines are located neaz the axis of the Nucla Syncline (San Miguel <br />Syncline), a shallow, broad synclinal fold running northwesterly for 65 miles. No evidence <br />of faults has been observed in drill holes at New Horizon Mine 2 or at [he New Horizon <br />Mine 1 area. The Nucla Syncline is 10 to 15 miles southwest of the major regional geologic <br />feature of the area, the Uncompahgre uplift. The region lies in the Dolores River basin. <br />The mines are located two to four miles northeast of the San Miguel River. Gently rolling <br />terrain traverses the area and the mines occupy a predominantly southwestern exposure. <br />The mines are located in the Nucla-Naturita coal field. The coal is found in late Cretaceous <br />sediments. The youngest Cretaceous rocks in the area consist of Marcos shale, a dark grey <br />marine shale, present only on isolated hilltops south of the town of Nucla. Two hundred feet <br />of Dakota sandstone outcrops extensively along the axis of the Nucla syncline. This <br />formation consists of a yellowish-gray, fissile sandstone and conglomeratic sandstone <br />interbedded with dark grey shale and coal. There are two coal seams within 100 feet of the <br />base of the Dakota (Figure 2). The lower Cretaceous unit in the azea, the Burro Canyon <br />Formation, is sepazated from the Dakota by an unconfonnity. The Burro Canyon is <br />comprised of white, grey and light brown sandstones and conglomerates interbedded with <br />green and purplish shales, siltstones, mudstones and thin beds of limestone. This formation <br />has a maximum thickness of 200 feet and outcrops on rims of canyons west and northwest of <br />the mine. This formation is difficult to differentiate from the Dakota in this area and is <br />commonly considered hydrogeologically similaz. The Jurassic Morrison Formation is <br />composed of 250 feet to 600 feet of varicolored siltstones and mudstones with beds of <br />limestone and sandstone. <br />The New Horizon Mine 1 produced coal from both the upper and lower Dakota coal seams. <br />The upper Dakota coal seam ranges in thickness from 1.6 feet to 3.3 feet and is separated <br />from the lower Dakota seam by 7 to 11 feet of interbedded sandstone and shale. The lower <br />Dakota seam varies in thickness from 5.9 feet to 7.9 feet. The base of the lower Dakota <br />coal is 83 feet above the top of the Burro Canyon Formation. The coal dips 1° to 2° <br />southwest and strikes N 25°W to N 45° W. <br />The New Horizon Mine 2 will primarily produce coal from the lower Dakota coal seam and <br />may utilize the upper Dakota coal seam during subsequent permit terms if the seam is thick <br />enough and of sufficient quality. The lower Dakota coal seam at New Horizon Mine 2 <br />ranges in thickness from 4.2 feet to 6.9 feet and is 99 feet above the top of the Burro <br />Canyon Formation. The coal dips 4.5° 5W along a strike of N 45°W. <br />4 <br />