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Aeviaw and Technical Analyei^ of Cyprus Orchard Valley Resource Recovery end Protection Plan Najor Revision, dated May 10, 1991. • Leseea Information Name: Cyprus Orchard Valley Cosl Corporation Attention: Nr. Ronald Stucki Address: P.O. Box 1299 Paonia, Colorado 81428 Legal and Historic Description Tha Cypru^ Otehard Valley Nine encompasses Federal Leases C-25079, C-27432, D-036955, and C-37210. These leaeea are included in previously approved resource recovery and protection plans (R2P2'e) submitted by Colorado Westmoreland Inc. (CWI), the previous lessee and operator of the Orchard Valley Nine. The original A2P2 for leaeea C-25079 and C-27432, dated Pabruary 17, 1981, was approved by the Assistant Secretary in March 1978. That R2 P2 was revised and expanded to lncluda the D-036955 and C-37210 lease areas through the mine plan revision dated September 1984. This 1984 revised A2P2 was approved by the Aeaietant Secretary in Juna 1985, and with minor raviaion^ is the R2 P2 that Cyprus Orchard Valley (COV) i^ presently operating under. Tha subject revised R2 P2, submitted for approval by COV, and which moat ba considered a major revision due to reductions in the recoverable reserve bass, is the result of a comprehensive reanalysis of the reserves on the property with reepeet to economic recovery in the preeeni coal market. Description of the Exiatinq Environment • Some of the background general information contained in the previous R2P2'e and summarized in the previous technical enalyee^ ie still applicable and will be expanded on from what has been learned of the property from CWI's and Cyprus' operation from 1985. In Juna 1985 the previous operator and leaeea, CWI, received approval for a mine plan covering Federal Coal Leases C-25079, C-27432, D-036955, and C-37210. Briefly, that mine plan called far room and pillar mining and pillar recovery of the D-seem from all areas of the leaeea using a minimum mining height of 5 feet and a maximum mining height of 12 feat. In areas where the D-seam split, extraction was to occur from the upper split, and in arses where the D-seem exceeded 12 feat in thickness, only the upper 12 feet of the seem was approved for extraction. This 'upper Beam only" extraction ie, of course, favorable from the resource conservation standpoint as it left open the possibility of future recovery of the lower portions of the seam and/or the lower split. With what was known of the reserve base and mining conditions st that tis:e, the requirement of upper D-seam only extraction was reasonable and lr~tbin tM range of maximum aconaoic recovery (MER) for the property. Unfortunately, CNI'e asperience in trying to carry out the upper seam only extraction has mat with little success. Our files for this operation contain numerous minor mine plan ravielone of the original mine plan, all of which relate directly or indirectly to CNI's and COV'^ inability to extract the upper portion of the D-seam safely and economically, within contract specifications. On Juna 1, 1986, a mina fire developed within the chain pillars of the main entries just in by the portal of the original Orchard Valley Mine. The fire resulted from the epontsneous combustion tendencies of the coal, the porous nature of the pillars due to a very pronounced cleat, and a large ventilation pressure differential across these pillars. To eliminate oxygen to the fire, the existing access portals were • promptly sealed with foam, and the decision was made to relocate new access entries to a site in the Saet Roateep Creek drainage, in the western portion of the property. Pollowinq an accelerated permit revision review, the new portal Bite was in place by