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-- MINREC, INC. <br />2768 COMPASS DRIVE, SUITE 101 <br />`'. GRAND JUNCTION, COLORADO 81506 <br />PHONE: (303) 245-4101, FA 242-7908 <br />Property Owner <br />P.O. Box XXX <br />Cedaredge, CO 81434 <br />Dear Sir: <br />RED CANYON MINES <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 property <br />from 1979 through 1985. Most of the mining was performed prior to 1982. <br />The mine was sealed in 1985 and reclaimed in 1988. The mine portals were <br />located in the N/2SW/45W/4 of Section 12. The mine workings are located <br />in the following areas: <br />Township 13 South, Range 95 West, 6th P.M. <br />Section 11: SE/4NE/4, SW/4NE/4, SE/4NW/4, NE/4NW/4 <br />Section 12: N/2SW/4SW/4, NW/45W/4, SW/4NW/4 <br />The mine workings were developed using four to seven entry systems. The <br />width of the mine workings range from about 200 to 500 feet. Only about <br />508 of the coal was extracted. Adequate coal pillars were left in place <br />to support the surface. Subsidence surveys were performed in 1982, 1985, <br />1986 and 1989. No movement of the surface was detected by the subsidence <br />surveys. There is a remote possibility that subsidence could occur in <br />the areas mined defined above, and in the following surrounding areas: <br />Township 13 South, Range 95 West, 6th P.M. <br />Section 11: <br />Section 12: <br />S/2NE/4NE/4, S/2NW/4NE/4, E/2NW/4NW/4, <br />E/2SW/4NW/4, E/2NE/4SE/4 <br />S/2NW/4NW/4 <br />The state permit for the coal mine will be maintained at least ten years <br />after reclamation was performed or until revegetation success is <br />achieved. The vegetation at the reclaimed mine site is doing quite well, <br />so revegetation success will probably be achieved within the ten year <br />period. After revegetation success is achieved, procedures will be <br />implemented to discontinue the state coal mine permit. <br />If you would like additional information regarding the mining performed <br />in the area, please inquire before the permit is discontinued, which will <br />probably occur in 1998 or 1999. <br />If you would like additional information 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 />