2001-07-16_GENERAL DOCUMENTS - C1980007

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generally lenticular in nature. Although typically fine to coarse grained, the sandstones may locally be conglomeratic. The Mesaverde Formation is unconformably overlain by the Tertiary Age Rudy or Wasatch Formation. This formation consists of red to buff-colored shales, red sandstones, and red to gray conglomerates. The sediments of this formation are weathered volcanic rocks. The alluvium of the North Fork of the Gunnison River consists of Quaternary Age deposits of mixed coarse sand, cobbles and boulders. These coarse sediments are composed primarily of igneous and metamorphic rock types, and have their source area in the headwaters and upper reaches of the North Fork. This coarse alluvium is capped by finer sands and silts. The North Fork alluvium in the area of the Hawk's Nest, Bear, West Elk and Somerset Mines is fairly narrow in width and is between 50 and 70 feet thick. About a mile below the town of Somerset, Colorado, the width of alluvium increases while the thickness of alluvium decreases to about 35 feet. Since the three main minable seams (B. E, and F) on West Elk's property directly overlie one another, their structural characteristics are virtually identical. The F Seam strikes north 60 degrees west and dips three to five degrees northeast across the lease block. In the Jumbo Mountain area, the B Seam has an average dip of 4.6 degrees in a north 25 degrees east direction. The major cleat orientation within the F and B Seams is north 70 degrees east. This face cleat is prominent and consistent throughout the existing F and B Seam workings. Fracture sets and cleat orientations of the E Seam are also the same. The major cleat direction in the nearby Bear and Somerset mines is from North 70 to 75 degrees east and is probably representative of the face cleat direction in the Jumbo Mountain area. In March 1996, MCC experienced a large inflow of water in the B East Mains while mining through a fault/fracture system. The inflow was estimated at approximately 350 gallons per minute (gpm) initially, increasing to a maximum of approximately 800 gpm from the roof and floor. The fault area is a series of small faults oriented in a N60°E direction. The fault showed an apparent vertical displacement of 6 feet. In April 1996, MCC encountered the same fault in a subsequent entry, the inflow was estimated to be a maximum of 2,500 gpm. The flows have since moved down-dip on the fault and were measured at less than 100 gpm in December 1998. In January 1997, more than 8,000 gpm of water upsurged from the mine floor from a 10-foot cut through a fault area in the first Southeast Headgate off the Box Canyon Mains. Water flooded the mine and some equipment was lost. Water from this inflow was eventually pumped to the surface and discharged to the North Fork of the Gunnison River. Mine water inflow from this area also moved down-dip as the fault was mined through at topographically lower locations. At the end of 1998, the flow was approximately 130 gpm. Only minor faulting of limited vertical displacement has been observed in the Blue Ribbon, Bear, and Hawk's Nest Mines. However, in the Orchard Valley Mine, a fault with a displacement of 50 feet was encountered during mining. Drill hole data indicate the presence of other faults in the life-of-mine area with similar displacements. One major fault has been 12