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ENVIRONMENTAL ANALYSIS REPORT The proposed exploration activities will result in minimal impact to the environmental resources of the area. The proposed activities include drilling, sampling, togging, and reclamation of exploration holes. There are no known geologic hazards at any of proposed drill-pad sites. Pad sites selection was partly based the generally flat terrain. There are no known hydrologic hazards at any of the proposed drill-pad sites. No sites are located within a water course flood plain zone and all pads will be set back at least 50-feet from any stream or dry wash. The exploration activities will involve drilling through sandstone units, which may function as aquifers in the area (dependent on rechazge, transmissivity, and lateral continuity). Upon completion of the drilling activities, the holes will be grouted from bottom to top to eliminate the potential for any long-term cross- contamination concerns associated with penetrating multiple sandstone units. Previously completed vegetation investigations for the area (1990/1992 Vegetation Baseline Report, Yoast tLfrne, ESCO Associates, 1993) did not identify any currently listed threatened or endangered plant species potentially occurring within the project area. More recent listings include Ute Lady's Tresses (Spiranthes diluviaJis). Habitat for Ute Lady's Tresses is defined as occurring at elevations less than 6,500 feet. All disturbance and activity associated with this project will occur at elevations above 6,500 feet. A recent check of the Colorado Natural Heritage Program (CNHP) index indicates that there are no rare plant species occurring within the project area. The only CNHP rare plant species with some potential for occurrence in proposed project area are Harrington beazdtongue (Penstemon harringtonii) and Autumn willow (Salix .serissima). Habitat for Harrington beardtongue typically occurs at elevations between 6,800 and 9,200 feet, and while much of the area is within this elevation range no occurrences of Harrington beazdtongue have been identified in this area. Habitat for Autumn willow is defined as occurring between 7,800 and 9,300 feet. While elevations in the area approach 7,500 feet, no occurrences of Autumn willow have been identifted in the project area. Previously completed wildlife investigations for the area (Yoast Mine 1993 Wildlife Baseline Slardies, Powder River Eagle Studies, [nc., 1994) noted there were occasional occurrences of Bald Eagle (Halieaeetus leucocephalus) in the project area, which is expected. There is a bald eagle nesting site on the Yampa River north of the project area by several miles. The Greater Sandhill Crane (Grus Canadensis), a Colorado species of concern, is known to nest northeast of the project area along Sage Creek and the Yampa River. However, there is no suitable nesting habitat in the project area. Cranes are typically observed loading and feeding in agricultural fields and improved pastureland in the project area during April and May. The Upper Colorado River Basin, including the Yampa River, has been identified as providing critical habitat for four (4) endangered fish species: Colorado Pike minnow (Pytchocheilus la~cius), Humpback chub (Gila cypha), Bonytail chub (Gila elegans) and Razorback sucker (Xyrauchen texanus). No water depletions are anticipated as a result of the proposed exploration activities; therefore, no project-related impacts are anticipated to the endangered fish species identified. Lastly, two (2) candidate species were noted for the area: boreal toad (Bofo boreas boreas) and Canada lynx (Lynx canadensis). Boreal toad habitat typically occurs at elevations exceeding 7,500 feet, and while elevations in the area approach 7,500 feet no occurrences of boreal toad have been identified in this area. Portions of the area may provide suitable lynx habitat (elevation and vegetation type) during the winter months, however again, no occurrences of lynx have been identified in this area, and no winter-time activities are proposed. Given this information, CCR submits that the exploration and reclamation described in this application will not jeopardize the continued existence of any threatened or endangered species listed pursuant to Section 4 of the Endangered Species Act of 1973 (16 U.S.C. ]533) or the Nongame, Endangered or Threatened Species Conservation Act (Section 33-8-101 et seq. C.R.S. 1973), or result in the destruction or adverse modification of critical habitat for those species. Revised 7/10/07