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E~~i4 • S coe~compa~r Seneca Coal Company June 25, 2007 Grassy Creek Holding Company, LLC P.O. Box 774406 Steamboat Springs, Colorado 80477 RE: Seneca II Mine Pre-Law Area Bond Release Request To Whom It May Concern; Seneca Coal Company, 37796 Routt County Road 53, P.O. Box 670, Hayden, Colorado 81639, (CDMG Permit No. C-80-005, approved September 23, 1981) is requesting release of bond liability on 259.1 reclaimed acres of Pre-Law area currently within the permit boundary at the Seneca II Mine. Surety bonds in the amount of $1,49],736 are currently in place of which $1,183,794 is being requested for release. The approved reclamation plan can be reviewed in its entirety in the Seneca II Mine Permit Application Package located in the Hayden Public Library, Haydrn, Colorado. All affected lands within Seneca II Mine fall within pre-law, interim program and permanent program categories. The regulatory programs are identified as follows: • • Mined prior to August 3. 1977. (Pre-Law) • Mined and reclaimed after August 3, 1977 and prior to May 3, 1978. • Mined and reclaimed after May 3, 1978 and prior to the approval of the applicable regulatory program ox issuance of the permanent program permit (September 23, 1981). (Interim Program) • Mined and reclaimed after September 23, 1981. (Permanent Program) For the purposes of this Bond Release request, only the lands mined prior to August 3, 1977 (Pre-Law) aze included. The Colorado Division of Reclamation, Mining and Safety previously released Phase I liability on the adjacent lands permitted under the SMCRA permanent program. The following is a brief summary of the Pre-Law area reclamation that was completed. Backfilling and grading was conducted beginning in 1972 and was completed prior to August 3, 1977. The majority of the grading work was performed with dozers and motor graders. In some cases grading was done with scrapers and draglines. All areas affected by the surface ruining operations, except as specifically exempted by the CDMG, were regraded on a timely basis to a stable configuration that conformed with the approved reclamation plan and posturining land use (livestock grazing and wildlife habitat). For the most part, grading was done along contour to also minimiae erosion. Any time operations wue conducted on steep slopes that could present safety concerns to the operators, then grading was done in a direction other than parallel to contour. The Seneca II Mine is located approximately nine (9) miles southeast of Hayden, Colorado. The specific azea (259.1 acres) to which this bond release request applies is included within the Pemmt Area located as follows: • Seneca Coal Company • P.O. Box 870 • Hayden, Colorado 81639 Telephone (970) 278-5200 • FAX (970) 278-5222