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NOTICE OF INTENT FOR EXPLORATION ACTIVITIES 1998 ELK CREEK EXPLORATION PROGRAM The proposed exploration activities will consist of trenching to locate and delineate the D-seam coal outcrop in Elk Creek Canyon, the completion of up to twelve exploration drillholes, and collection of core samples from the drillholes to chazacterize the D coal seam, associated roof and floor materials, and geotechnical conditions associated with proposed D-seam development and mining operations. All of the proposed exploration activities aze within the permitted area and will utilize existing roads for access and exploration disturbance will occur either on the roads or in existing disturbance area such that no additional surface disturbance will be required. The proposed exploration sites and activities are graphically illustrated on the attached Exhibit A-1. Exploration activities may be initiated as early as April 1998 and are expected to be completed by the end of September 1998. Trenching is required to locate the D-seam outcrop as a basis for location and design of new portals to access the D-seam. Proposed trenching will occur along the existing light-use road in Elk Creek Canyon with excavation of up to 200 feet of trench to a depth of approximately 20 to 25 feet. The trench will be backfilled and the road reestablished immediately following exposure and inspection of the coal seam at outcrop. Trenching will occur during low Elows and berms and/or silt fence will be used to prevent excess sediment contributions from the exploration disturbance area to Elk Creek. Exploration drillholes will be drilled using diamond core and rotary drilling methods with drillhole depths ranging from approximately 100 to 800 feet. In order to avoid potential sample contamination, drillholes will be completed to the extent possible with air, air-foam, or water as the circulation medium. If drilling muds aze necessary to maintain circulation and drillhole integrity, polymer muds which aze free of metallic compounds will be utilized. Upon completion of drilling and recovery of core samples, drillholes will be plugged and sealed, and the associated disturbance areas returned to their prior configuration and use in accordance with the methods and procedures outlined in Section 2.02. [f it is advantageous to complete any of the drillholes as monitoring wells, OMI will provide the DMG with completion information following completion of the exploration program. The following summarizes the anticipated reclamation costs associated with the 1998 Elk Creek Exploration Program: Plugging and Sealing Drillholes - 12 (4" x 300') ®$300/hole Backfilling Trench - 7,500 cy (200' x 40' x 25') ~ $0.60/yd. Backfilling Mud Pits - 12 ®24 cy (20' x 8' x 4') ®50.60/yd Regrading Trench Disturbance Area - 0.5 acre ®52,000/acre Regrading Drill Pads - 12 ~ 0.1 acre ®$2,000/acre Soil Replacement -Not applicable (previously disturbed areas) Revegetation -Not applicable (previously disturbed areas) 53,600.00 4,500.00 200.00 1,000.00 2,400.00 Total Estimated Reclamation Cost S 11,700.00