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<br />~~ 3.0 GENERAL GEOLOGY AND MINERAL RESOURCES <br />' The Deserado Mine Logical Mining Unit is located in Rio Blanco County, Colorado in Townships 2 <br />and 3 North, Range 101 West. Fgure 3-1 shows the general location of the Deserado Mine <br />' Federal coal leases. The Deserado Mine area is semi-arid with precipitation averaging 8.93 inches <br />per year. Mean summer time temperature is about 67 degrees F. and mean winter temperature is <br />about 29 degrees F. <br />t Blue Mountain Energy and has drilled 281 holes at 217 different locations on or adjacent to the <br />' Deserado Mine Logical Mining Unit. Some of these holes were twinned to recover core for coal <br />quality determination. Structural and stratigraphic interpretations are based on the exploratory <br />drilling and surface geologic mapping information. <br />3.1 Structural Geology <br />' The Deserado Mine area is located on the southwest flank of fhe Red Wash Syncline, an <br />asymmetrical flexure on the northeast flank of the Rangely Anticline. The axis of the syncline trends <br />' northwest/southeast and plunges to the southeast into the much larger synclinal structure of the <br />Piceance Basin. <br />N Plate 2, °Structure Contour on Top of D Coal" shows the elevation (feet above mean sea level) and <br />attitude of the top of the D coal seam. Posted elevations represent the top of the coal and are <br />based on property-wide seam correlations. As indicated on this map, strike and dip are generally <br />consistent. Strike of the coal beds within most of the mine area is approximately North 46 degrees <br />West. Dip within most of the mine area is approximately 7 degrees to the northeast. AS the <br />' synclinal axis is approached, dip becomes nearly horizontal. North of the synclinal axis, dip reverses <br />steeply to the southwest, forming steeply dipping east/west trending hogback ridges along the north <br />' limb of the syncline. No evidence of faulting was detected during field mapping or exploration <br />drilling. Because of the degree of folding in the Red Wash Syncline, the presence of localized <br />shallow angle bedding plane and/or strike slip faults is a possibility. If present, such faulting is not <br />' likely to create major obstacles to mining <br />A detailed study of aerial photographs revealed a considerable number of lineaments (linear <br />' features) throughout the mine area. The linear features observed included topographic alignments, <br />vegetative alignment, tonal and color alignments. The only alignment identified in the field to date <br />' is a well defined joint pattern which strikes North 65 degrees West. <br />1 <br />. 6 <br />1 <br /> <br />