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2.05 OPERATION AND RECLAMATION PLANS <br />2.05.1 OBJECTIVES <br />• This section provides a description of the surface and proposed underground <br />operations, the associated surface support operations, and reclamation activities that <br />LCC plans to conduct at the Lorencito Canyon Mine Area. The Jeff Canyon Surface <br />Mine initiated construction of ancillary support facilities, during the third quarter 2001. <br />Coal mining began using the area mining method in October of 2001. The mine plan <br />was amended in 2002 to allow a combination of area and contour mining within the Jeff <br />Canyon reserve. <br />Depressed coal market conditions resulted in the temporary cessation of mining in June <br />of 2002. The mine continued to conduct contemporaneous reclamation of areas <br />already mined with a reduced work force during the remainder of 2002. In July of 2003, <br />with no change in market conditions, the decision was made to fill in the pit area and <br />slope the highwall to final contour. This was done in such a manner as to both meet the <br />requirements of final reclamation and allow the easy re-excavation of the pit area and <br />rapid access to the mineable coal seams should market conditions improve <br />substantially. <br />In October of 2003, with most of the backfill and rough grading completed, the decision <br />was made to classify the operation as 'permanent cessation of mining' following <br />completion of final grading, topsoil placement, and seeding of all disturbed areas. In <br />addition, this will allow for bond reduction applications, and upon approval, reduction in <br />the bond amount held by the Division. <br />• This was done with the understanding that the operation may be reactivated at a later <br />date should market conditions improve substantially. The operator would at that time <br />submit a permit revision start-up plan to the Division that would include updated mine <br />plans and schedules, bonding calculations, and upon approval, an updated bond. <br />Discussion contained in the currently approved permit document regarding active <br />mining (extraction of coal) pertains to operations conducted during 2001-02, is for <br />historical reference, and may be reviewed as part of the above referenced permit <br />revision. <br />2.05.2 OPERATIONS PLAN -LIFE OF MINE <br />(1) Production Methods and Equipment <br />The life of mine plan is shown on Map 2.05.3-1, Mine Plan. This plan represents approximately <br />twenty years of mining reserves. Overall, the mine will have the capacity to produce <br />approximately 2.5 million tons of coal annually. The life of mine permit area contains <br />recoverable reserves in excess of 50 million tons. The operation and production schedule will be <br />dependent upon conditions encountered during early stages of mining and the successful <br />mazketing of coal to potential customers. <br />LCC coal production will be accomplished by the most efficient means to maximize the coal <br />resource and minimize the effects on the environmental resources. As a result, both surface and <br />underground room and pillar mining will be conducted simultaneously to extract coal from the <br />• Ciruela, Primero, and other minor seams in the upper stratigraphic column of the property. <br />Secondary or retreat mining is not proposed at this time. <br />2.05-I (Revised 10/29/03) <br />