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Affidavit of Kent A. Gorham O1 CV 30 Page 2 processed and shipped from the New Elk site until sometime in March 1996. Review of the March 12, 1996 Division of Minerals and Geology (DMG) inspection states "The operator presently does not know the final decision of whether the mine will close and reclaim. Potential buyers still exist and the current date for a decision is April 15, 1996." 5. Review of the Temporary Cessation file for the New Elk mine reveal three letters from the mine operator; received by DMG March 19, 1996, September 16, 1996, and October 18, 2001. The September 16, 19961etter states "As you are aware, we are presently in the process of selling this property and will apply to transfer the permit to the new owner." 6. At some point the New Elk mine became a processing facility and loadout for coal from the Lorencito Canyon mining operation. The initial DMG written findings for approval of the Lorencito permit state "Coal will be shuttled by rail from the rail loadout at the mouth of Lorencito Canyon to the New Elk mine site (permit no. C-81-012) located approximately 8 miles to the west. Coal will then be washed in the prep plant and loaded onto unit trains for transportation to market." The original plan was for underground operations to begin in the P3 portal in Cow Canyon. This coal mined by underground methods would require washing in the preparation plant at the New Elk site. Therefore, at some point after DMG began review of the initial application in mid January 1997 and the initial approval of the Lorencito mining operation in November 1997, the New Elk mine site became part of the overall mining plan related to operations at Lorencito Canyon. 7. The Lorencito operation did not begin operations immediately upon approval for reasons unknown. The DMG inspection reports document that operations continued in temporary cessation at the New Elk mine awaiting coal production from the Lorencito operation. During temporary cessation, the mine continues to be bound by the mining permit issued by the DMG, as well as any other requirements of State water discharge permits (CDPS) and air permits. The New Elk site remained in temporary cessation until a letter w s received on October 18, 2001 notifying the DMG that operations would resume. Kent A. Gorham STATE OF COLORADO ) ss. County of ~ y~- ) Subscribed and sworn to before me this 5 day of March, 2003. My commission expires ~~r22 .3 aC0 ~• Notary Public