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MINREC, INC. <br />2768 COMPASS DRIVE, SUITE 301 <br />GRAND JUNCTION, COLORADO 81506 <br />PHONE: (303) 245-4101, FA 242-7908 <br />RED CANYON MINES <br />Property Owner <br />P.O. Box XXX <br />Cedaredge, CO 81434 <br />Dear Sir: <br />This letter is written to notify you of a few issues regarding the <br />reclaimed Red Canyon Mine. Grand Mesa Coal Company mined the <br />property from 1979 through 1985. They developed the property <br />approximately one half mile to the north and one mile to the west. <br />The mine was sealed in 1985 and reclaimed in 1988. <br />The state permit for the coal mine will be maintained at least ten <br />years after reclamation was performed or until revegetation success <br />is achieved. The vegetation at the reclaimed mine site is doing <br />quite well, so revegetation success will probably be achieved <br />within the ten year period. After revegetation success is <br />achieved, procedures will be implemented to discontinue the state <br />coal mine permit. <br />Coal was extracted from the underground mine only during initial <br />mining which was about 500 feet wide. No retreat or secondary <br />mining was performed. Only about 508 of the coal was extracted so <br />that adequate coal pillars were left in place to support the <br />surface. Subsidence surveys have been performed in the past that <br />have confirmed that the surface is adequately supported. No <br />movement of the surface has been detected by the subsidence <br />surveys. You may or may not have been informed by Grand Mesa Coal <br />Company or the prior property owner that a portion of your property <br />was undermined. if you would like additional information regarding <br />the mining performed in the area, please inquire before the permit <br />is discontinued which will probably occur in 1998 or 1999. <br />If you would like additional irforn:ation regarding any of the above <br />issues, please write or call Jim Stover at (303)-245-4101. <br />Sincerely, <br />Jim Stover, P.E. <br />Consulting Engineer <br />