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~~ . ~O~/v~o Z © 1475 Pine Grove Rd Suite 109 M PO Box 774018 MONTGOMERYWATSON HARZA Steamboat Springs, Colorado 80477 Tel: 970 879 6260 Fax: 970 879 9048 To: Dr. Craig Van Kirk 10463 East Chinook Trail Parker, Colorado 80138 (303) 84]-1049 Subject: Review of Borehole Closure Requirements -Kerr Coal Company Date: June 10, 2002 Reference: Via: Fed X UPS US Mail Dr. Van Kirk -Pursuant to our phone conversations, enclosed are the following background materials relative to the borehole closure problem we are trying to resolve: • Typical Geologic Cross-Section (coal seam and overburden) • Geology Description (from Colorado Division of Minerals & Geology Permit) • Original Coal Exploration License Approval and Abandonment Requirements • Borehole Location Map • Consolidated Borehole Logs (unfortunately, this is all we have available) • USGS Memo (10/29/81) re: drillhole conditions and concerns at the time • BLM Chronology re: exploration license and subsequent communications • Borehole Reclamation Plan (MWH to BLM, 1/29/02) • BLM Letter re: Borehole Reclamation (BLM to Kerr Coal Company, 3/1/02) • BLM internal a-mail re: hydrologic conditions • Meeting Notes from 3/27/02 Meeting with BLM (MWH, 4/3/02) • Follow-up from 3/27/02 Meeting (MWH to BLM, 4!3/02, additional information on borehole completions and reclamation requirements) • BLM Letter stipulating borehole closure requirements (BLM to Kerr Coal Company, 4/29/02) • Letter from CT&E Geologic Services re: incremental cost of proposed BLM closure The following briefly summarizes the problem and key considerations: A surface coal mine in Northwest Colorado completed mining in 1993 and has now been closed and reclaimed. A number of exploration boreholes (approximately 26 for which the mine hats responsibility) completed in the late-1970's and early ~ 980's as wells for