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National Kin Coal, LLC Telephone: Fax: Email: <br />g (970)385-4528 (970)385-4638 nkc@NKCmine.com <br />P.O. Box 2827 4424 County Road 120 <br />Durango, Colorado 81302 Hesperus, Colorado 81326 Q~ ~ <br />October 18, 2006 <br />State of Colorado <br />Division of Minerals and Geology <br />1313 Sherman Street, Room 215 <br />Denver, Colorado 80203-2273 <br />Attention: Tom Kaldenbach, Reclamation Specialist <br />Re: aid Quarter 2006 Surface Subsidence Inspections <br />3rd Quarter 2006 Huntington Ditch Inspections <br />Dear Tom: <br />9~~:.s,C~i/~~ <br />OCT 2 3 2006 <br />Division or r2eclamaZion, <br />Minim and Safety . <br />Inspections of areas over mined-out of the areas of the King Coal Mine revealed no new evidence of <br />subsidence cracks. <br />An inspection and subsidence survey was performed on August 16, 2006 by Mike Crawford, Tom <br />Kaldenbach and Dan Meadors of the Crawford Ranch property. This survey again revealed no movement <br />over most of the property. Open subsidence cracks a few inches wide by a few hundred feet long cross <br />part of the pasture near the western part of the Tipotsch lease. Some minor cracks were observed <br />intersecting the south and west berms which make up the sides of a stock pond which lies to the north and <br />east of the Marc Crawford house. Mr. Crawford said the pond leaked eazlier in the yeaz, but has since <br />held water without leakage. Mr. Crawford will monitor the situation to see if any further action is <br />necessary. <br />Inspections of other areas, including the Huntington and Crawford Ditches, revealed no adverse effects <br />from subsidence. <br />Please call if you have any questions. <br />Sincere <br />Tom Bird <br />Manager, Coal Services <br />National King Coal, LLC <br />