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Three coal seams of economic importance are found in the Williams Fork Formation, These seams are in ascending order, the Wolf Creek, Wadge and Lennox coals. The Wolf Creek coal lies too deep to be mined by surface methods within the permit area. The Wadge coal is to be mined as part of this operation, The Lennox coal is discontinuous and will be mined where economically feasible. Bedrock ground water aquifers have been identified as, the Wolf Creek coal seam, the Wadge coal seam and the Wadge overburden including the discontinuous Lennox coal seam. All aquifers exhibit water table conditions near the outcrop. However, observation wells installed down dip indicate the aquifers are all under artesian conditions with increased pressure related to increased depth. Quality in all aquifers is poor and undesirable for use as either a drinking or irrigation supply. Ground water occurs in the alluvium associated with Hubberson Gulch within and adjacent to the permit boundary. Quality of this water prohibits its use for drinking and severely limits its use for irrigation. The mine permit boundary encompasses two surface watersheds. Most of the mine site and all the areas to be disturbed will drain into Hubberson Gulch and an unnamed tributary to Dry Creek. The numerous small drainages are ephemeral in nature. Hubberson Gulch, downstream of the mine site to its confl uence with Dry Creek, is intermittent, A small area on the eastern edge of the permit boundary drains to Sage Creek, an intermittent stream. As previously discussed, there is no disturbed area drainage directed to Sage Creek. Both Sage Creek and Dry Creek confl uence with the Yampa River near Hayden, Colorado. The average annual precipitation at the mine site is approximate]y 16 inches. The precipitation is consistent throughout the year with no significant dry periods. The mean annual temperature is 42°F. The average maximum and minimum temperatures are 66°F and 17°F respectively, Regionally, wind directions run east-west following the Yampa River Yalley. More localized wind patterns trend along the side valleys. The current and historic land use of the area in which the operation is located is grazing land for livestock and habitat for wildlife. Regional land use patterns are oriented in three relatively distinct bands. Irrigated cropland is closely associated with the floodplain of the Yampa River. To the south, non-irrigated crops are grown on the sloping upland surfaces. The area nearest the mining operation is mostly hilly and mountainous terrain and used primarily as rangeland for livestock grazing and wildlife habitat. No cropland will be disturbed by actual mining. The soils found within and adjacent to the mine plan area are typical of soils found in the cold, semi-arid regions of the Western United States. The soils are generally moderately deep (20 to 40 inches) to shallow (10 to 20 inches) and have developed in weathered, interbedded fine sandstone, siltstone, and shale, and in local slope wash and colluvium, Most of the soils are Borollic Vertic Camborthids, Lithic Cryoborolls, and Pachic Cryoborolls. -4-