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the phase III bond release on the North block based upon failure to meet the diversity standard. In our discussion, Larry and I came to the determination that a diversity index would not be subject to a 90% achievement. You either meet the diversity standard or you don't, no 90% with a 90% confidence. We also considered how would Colorado Yampa Coal Company be able to achieve the diversity standard if the approved standard was equal to the diversity standard approved at the Eckman Park Mine. Eckman Park's diversity standard reads, "The species diversity standard for pastureland states that alfalfa shall not exceed 75% relative production and perennial grasses shall provide at least 25% relative production. Also no single species shall exceed 75% relative cover." If Colorado Yampa Coal Company should try to change the Mine 3 diversity standard to mimic that of Eckman Park; the diversity standard would be achieved. However, the Division has repeatedly stated that if an operator wants to change their reclamation success standard at the time of bond release, we probably wouldn't let them. Lany and I played through the scenario further. Say, DMG denies the Phase III bond release on the North block based upon the diversity standard. Then Colorado Yampa Coal Company submits a revision to change the diversity standard to that of Eckman Paris. What basis does the Division have for denying the revision? Furthermore, Colorado Yampa Coal Company takes it to the Board. How do we explain our stance to the Board based upon this abstract concept of a diversity index? Add into the equation that the post-mining land use is pastureland. Can the Division make the finding that a monocuture of smooth Brome (which essentially is what the data describes) is any less suited to support the post-mining land use of pasture than a stand with a higher diversity? If the post-mining land use were rangeland, the unsuitability of a monoculture would be easier to defend. And if we approved the extremely lax diversity standard on Eckman Paris, Mine 1 and 2, which are in the same landscape, same landowner (Cyprus Yampa Valley), managed by the same cattle operation (trout Creek Ranch), and encompass a greater area, why wouldn't the same standard be applicable to the Mine 3 permit as well? Then add the setting priority argument, 'rf the Division approves a change in reclamation success standard at the time of bond release for one mine, what message does it send to all operators? So, the gist of this memo is, the Rules tell me I must deny the Phase III bond release for the northern block at Mine 3. I can approve Phase II on the northern block, and depending upon what the diversity data for the southern block shows, I could likely approve both Phase II and III bond release on the southern block. Let's talk about this. • Page 2