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Peak Project Management, LLC <br />3800 County Road 63.9 <br />Trinidad, CO 87082 <br />Telephone/Fax: (719) 848-4975 <br />Cell: (719) 859-0111 <br />e-mail: ronthompsonQsensonics.org <br />December 27, 2002 <br />Mr. Kent Gorham <br />Division of Minerals and Geology <br />1313 Sherman St., Rm. 215 <br />Denver, CO 80203 <br />Re: Golden Eagle Mine <br />2002 Annual Report -Methane Assessment <br />Dear Mr. Gorham: <br />RE~F~~RD <br />DES 3 ~ ?~? <br />Division of Miners/send DeelB9Y <br />Enclosed is the Annual Report, Methane Assessment Golden Eagle Mine Area. The report presents field <br />monitoring data from project inception though 2002. The report primarily addresses the area east of the <br />Golden Eagle Mine. Data from the Chavez property is also included (monitoring points B26, B27, B28, <br />B36, B37, and B38). <br />East Area <br />The report concludes that "since the two CBM wells have been reclaimed in October 2000, levels of <br />methane in the surface soils have been decreasing." Further, the report proposes "to terminate all future <br />monitoring since the area is not the responsibility of the mine" because the cause is attributed to the two <br />CBM wells and the area lies outside the permit boundary. <br />Basin concurs with the reports conclusions. Of the 32 monitoring sites in the area east of the mine, 15 sites <br />have documented methane concentrations to have decreased from 75-100% methane to less than 0.9% <br />methane, six sites exhibited decreases in methane concentrations by 10% to 50%, with the remaining <br />eleven sites decreasing in methane concentrations by 10-25%. Basin also concurs with the <br />recommendation to discontinue monitoring. The project was begun to determine if mining was [he cause <br />of methane migrating into the soils. Results indicate [hat mining is not the cause. However, Basin intends <br />to monitor these sites one more time (in August of 2003). <br />Chavez Property <br />Methane accumulations in the soil surrounding an exploration drill site on the Chavez property exhibited <br />concentrations of 19-75% methane when monitored in 1999. The presence of methane was attributed to <br />an incomplete abandonment of the exploration drill hole located within the affected area. Basin committed <br />to and in November 2001 redrilled and pressure-grouted this borehole. Grouting was completed in phases <br />[o insure that the grout would not be washed out by groundwater (encountered in several water bearing <br />zones). <br />