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Mr. Jim Mattern February 1, 2007 Page 3 properties assumed, boundary conditions, groundwater conditions assumed, and the simulated mining sequence. Figure 1 shows the stages of mining that were simulated in the model. G-Strike Pit Calibration Analysis Results from the analyses are also present in G-Pit landslide analysis report.' Key results are summarized here to illustrate our understanding of conditions leading to landslide. The first part of the analysis was to calibrate the material properties to the localized failure that occurced in Gs-6 Cut highwall in September 2005. To match the extent of failed rock, it was necessary to assume residual strength properties for the weak mudstone seam immediately above the main L-Seam under elevated pore pressure conditions (i.e., GWT = 10 feet (ft) below surface). The predicted failed zones after mining Gs-6 Strike Cut are shown in Figure 2. The layer shown is only the I2-K interburden sandstone layer for which fractures were observed to have opened within the tensile failure zones (i.e., red and magenta colors). The residual strength condition assumed bedding plane shear strength of zero cohesion and tension and friction of 5° for only the weak mudstone seam These strengths are quite low. The ensile failure in this figure indicates that failed sandstone extends 280 ft up-dip from highwall face. This distance oorcesponds quite well to the limit of observed surface cracking. Displacements greater than about O.15 ft were isolated to the immediate highwall face area when peak strengths for the weak mudstone seam were assumed. However, small displacements extended as far as 3,000 ft updip when residual strength conditions were assumed, as shown in Figure 3. Only minor displacements were predicted below the weak mudstone seam resulting in differential displacements across the seam. This differential displacement agreed well with both the inclinometer GIN21 readings, the TDR reading at OS-GI-CCR core hole, in both downhole location and in magnitude. The model predicts the weak mudstone seam to fail a significant distance updip. The same failure is not predicted in the l2-K interburden sandstone layer immediately above the weak mudstone seam (Figure 4). [t is interesting that the location of the two historic escarpments can be identified by the failed rock regions to the southeast and southwest are predicted by the model from this figure. To summarize the calibration analysis, high pore pressures and low strengths are required on the weak mudstone seam to match the observed failure in the Gs-6 strike highwall face. The model predicts the overall slope to be stable after the Gs-6 strike cut was made and prior to the Gd-2 dip box cut being made. G-Dip Pit Analysis Preliminary Conclusions The model was then extended to simulate dip mining to the east of the G-Pit area. The model indicates that the small amount of mining in Gd-2 box cut results in significant increase in down hill displacements (Figure 5). This movement results in active tensile failure at the top of hill where tensile cracking was observed. Active shear failure along bedding planes continues on Agapito Associates, Inc.