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E~ Seneca Coal Company June 2, 2006 State of Colorado -Board of Land Commissioners Department of Natural Resources 620 Centennial Building 1313 Shennan Street Denver, Colorado 80203 RE: Seneca II-W Mine Phase I Bond Release Application To Whom It May Concern: Seneca Coal Company, 36600 Routt County Road 27, P.O. Box 670, Hayden, Colorado 81639, is requesting release of Phase I bond liability on 761.2 reclaimed acres of its total 4,093.0 acres currently within the permit boundary at the Seneca II-W Mine (CDMG Pernrit No. 682-057, appmved December 31, 1985). A surety bond in the amount of $9,707,373 is currently in place of which $2,329,115 are being requested for release. Pursuant to Rule 3.03.1, a peunittee may request Phase I Bond release upon successfuil completion of backfilling, regrading and drainage control in accordance with the approved reclamation plan. Those portions of the mine for which Phase I bond release is requested were backfilled and graded from the beginning of mining, in 1990, through 2005 in accordance with the Colorado Division of Minerals and Geology (CDMG) Hiles and regulations. The approved reclamation plan can be reviewed in its entirety in the Seneca II-W Mine Permit Application Package located in the Hayden Public Library, Hayden, Colorado. • All affected lands within Seneca TI-W Mine fall within the permanent program category. For the puzposes of this Phase I Bond Release request, the term "reclaimed" means those disturbed/mined areas where successful completion of backfilling, regrading and drainage control, in accordance with the approved reclamation plan, has been completed. The Phase I reclamation activities have produced a stable landform in compliance with the approved conditions in the CDMG Permit No. C-82-057 The following is a brief summary of the Phase I reclamation that has been completed. Backfilling and grading was conducted from 1990 through 2005 and was generally completed within 180 days following coal removal and was generally within two (2) spoil ridges behind the active pit. The majority of the grading work was performed with dozers and scrapers. In some cases the major backfilling was done with scrapers and dragiines. All areas affected by the surface mining operations, except as specifically exempted by the CDMG, were regraded on a timely basis to a stable configuration that conforms with the approved posimining land use (livestock grazing and w8dlife habitat). For the most part, goading was done along contour to also minimize erosion. Any time operations were conducted on steep slopes that could present safety concerns to the operators, grading was done in a direction other than parallel. to contour. Exhibit C in the Phase I Bond Release application provides representative cross-sections showing final topography configuration. Amore detailed discussion of the overall mining and reclamation can be found in the Seneca II-W Mine Permit Application, specifically Tab 12, Operation Plan and Tab 20, Backfilling and Grading. Included in the postmine regrading operation was the constmction of small swales and hummocks to minimize erosion and to conserve soil moisture and to promote revegetation. Small stock tanks aze also utilized in the postmine goading operations to minimize erosion and to provide water for livestock and wildlife. The locations of these stock ponds are shown on Exhibit B in the Phase I Bond Release application. The designs and certified as-builts for the permanent . stock ponds can be reviewed in the Seneca II-W Mine Permit Application Tab 13, Facilities. Seneca Coal Company • P.O. Box 670 • Hayden, Colorado 81639 Telephone (970) 276-3707 • FAX (970) 276-3014